Home > FX > Barron’s, Nice Timing!

Barron’s, Nice Timing!

The post below was written by Evan Lazarus from T3LIVE.COM regarding the April 26th Barron's cover and it looks like they have nailed yet another turning point, at least for the time being…….now these guys aren't always this accurate as contrarian indicators, but I mean they shouldn't, right? They have lots of  'experts' working over there………right?

If I can dig it up I will post a piece of research I once did pertaining to magazine covers, namely involving mom-n-pop publications like TIME, Newsweek, etc. I remember in many instances these covers marked multi-year and in a couple of instances even multi-decade turning points! I am in no way suggesting that this is the case today, I am just simply pointing out the power of this indicator.

The Magazine Cover Indicator was first brought into popularity by Paul Montgomery, who had performed extensive research dating back to 1914. By clicking on the above hyperlink you will arrive at his web site where you can read past samples of analysis in which his firm utilizes several unconventional methods for deriving investment theses. Indeed, very fascinating stuff! Here is an article written some years ago where Paul discusses the statistical significance of his findings——-> Click        

Moving on to Evan's article……….

by Evan Lazarus

This post is not about charts, but rather about magazine covers that tell a story of market sentiment. One of the magazine covers that always catches my attention is Barron's which is released every Saturday of the week.

As you can see in the big picture to the right (Barron's March 9th, 2009 cover) shows a Bull lying dead on the floor as if he had fallen of the Empire State Building. It was official, Barron’s had declared the bull dead. Coincidentally, that very same month, the market proceeded to begin what would be a multi-month massive snap back rally.

Having picked up this weekend’s copy of Barron’s (the smaller picture of a bear being run over by a bus being driven by a bull of course), immediately brought a cynical laugh to my otherwise boring Saturday morning.

This cover makes me think that market sentiment may now be at or near extreme levels (just like in March 09). If I could stand on the rooftops and shout a piece of advice at the mom and pop investors of the world, it would be to tread the markets very lightly right now or even get to a position of protection.

Come on Barron’s. Fool us once, shame on you. Fools us twice….I don’t think so. Are you here to completely destroy the retail investing public?

Now, this post is not meant to rouse up all the conspiracy theorists but I think active traders need to look at this overtly bullish market sentiment with a glass half empty approach. With the markets having retraced a lion’s share of the 2008 massacre not to mention we are just a stone’s throw away from the 200 Day Moving average (in the S&P’s) traders need to be ready for a potential multi-week/month turn here in the markets as this would not be completely unexpected.

Stay tuned to see how this story develops and thank you Barron's for what I'm sure will amount to another dead wrong and ill-timed cover story.

Categories: FX
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