tag:blogger.com,1999:blog-1227919517269937208.post6538526400826194935..comments2023-09-17T08:37:58.006-06:00Comments on The Good News Economist: Bull Run Begins This WeekEldon Masthttp://www.blogger.com/profile/15444008509086050220noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-1227919517269937208.post-39335145808145156602009-01-19T22:27:00.000-07:002009-01-19T22:27:00.000-07:00With pension funds, 401(k)'s, IRA's, housing, and ...With pension funds, 401(k)'s, IRA's, housing, and every other measure of household wealth down and unemployment on the rise, wishing for more consumer spending could further dislocate the economy. What America needs is a sustained period of saving and reinvigorated industrial output.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-21326038782295017832009-01-19T18:32:00.000-07:002009-01-19T18:32:00.000-07:00Thanks Cuervos,There there is a great article on c...Thanks Cuervos,<BR/><BR/>There there is a great article on causation, correlation, and chance here...<BR/>http://plus.maths.org/issue31/features/stickland/index.html<BR/><BR/>emEldon Masthttps://www.blogger.com/profile/15444008509086050220noreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-9694521344203029022009-01-18T22:25:00.000-07:002009-01-18T22:25:00.000-07:00I think you mean there is no causation.Mathematica...I think you mean there is no causation.<BR/>Mathematically, there is a correlation.<BR/><BR/>If you look <A HREF="http://finance.yahoo.com/q/ta?s=USO&t=5y&l=on&z=l&q=l&p=&a=&c=%5EDJI" REL="nofollow">here</A> you can see that there was a negative correlation from June 06 to Jan 07 and then positive correlation up until a month ago.<BR/><BR/>In fact, the 22 day cycle broke (went below .5) starting on Dec 8, 2008 and there was no correlation until Jan 7, 2009 when when it popped up to .52<BR/><BR/>As of Friday, the USO/DJI correlation is sitting at .78<BR/><BR/>Also, if you look at the 10 day correlation, it is a leading indicator of the 22 day.<BR/><BR/>Using options as a tell, it appears that there is at least a $3-7 range drop in the price of USO so expect another drop in the DOW shortly.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-13788186183379690212009-01-18T20:44:00.000-07:002009-01-18T20:44:00.000-07:00Thanks again for reading Joe.@Cuervos, always good...Thanks again for reading Joe.<BR/><BR/>@Cuervos, always good to hear from you, although there really is no correlation at all between oil prices and the DOW. Again have a look at 1974-75 as a guide. (not the last six months) Poor Nixon didn't even light the Christmas tree cause oil was so "scarce" back then...<BR/><BR/>and the gasoline lines, what a pain.<BR/><BR/>emEldon Masthttps://www.blogger.com/profile/15444008509086050220noreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-62250858348909308042009-01-18T16:29:00.000-07:002009-01-18T16:29:00.000-07:00I suppose anything's possible but the likelihood t...I suppose anything's possible but the likelihood that this will be a bear market rally outweighs any other interpretation of the scant statistics you have presented.<BR/><BR/>The <A HREF="http://finance.yahoo.com/q/ta?s=AAPL&t=1y&l=on&z=l&q=l&p=&a=&c=" REL="nofollow">AAPL drop</A> happened back in September<BR/><BR/>As for the Middle East situation, look that sounds all nice and good in a comfy macro setting but the correlation between the DOW and the USO is astounding and the answer is as plain as the nose on your face. <BR/><BR/>Peep this: <BR/>For the period of Jan08/Jan09 there is a .9 correlation between the price of crude (using USO ETF as a proxy) and the DJIndex<BR/><BR/><B>However</B> for the period of the last six months (when the price of crude topped and began sinking) the correlation is a staggering .93!<BR/><BR/>Put bluntly, you won't see the DOW move up until you see the price of crude begin to move up again and that correlation should hold for about three to six months.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-30741647143201876812009-01-18T13:55:00.000-07:002009-01-18T13:55:00.000-07:00Great post, as always. Thanks for keeping things i...Great post, as always. Thanks for keeping things in perspective. Is it also possible the markets will keep mirroring 1974-1975, as you pointed out on January 2nd? (1975 was an upward movement!) -JoeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-41497459413671303522009-01-18T09:58:00.000-07:002009-01-18T09:58:00.000-07:00Regarding Obama, I guess it's possible that his ov...Regarding Obama, I guess it's possible that his overt hostility to private enterprise will be more than cancelled out by the embarrassing media adulation. They'll do whatever they can to ensure Obamanomics isn't a failure.Anonymousnoreply@blogger.com