Bill Gross- on market returns

Investors should acclimate themselves to years of lower-than-normal returns in both stocks and bonds, Pimco's Bill Gross told CNBC.

As part of the firm's forecast of a "new normal" in the slow-growth economy, Gross, co-CIO at the largest bond management firm in the world, said returns probably will be half of the normal 8 percent or so annualized profits to which investors have become accustomed.

"We should expect less as opposed to more-new normal as opposed to old normal," he said in an interview. "We should expect that the private economy is delevering on a global basis. That means consumption and household income growth will be less than it has in prior years.

"And that means ultimately in terms of risk assets, whether it's stocks or high-yield bonds or even bonds themselves that those types of returns will reflect a slower rate of growth. In other words, instead of 8 to 10 percent in terms of return for risk assets, you should expect 4 to 6 percent. Reduce your expectations."

With the 10-year Treasury note yielding just shy of 4 percent, Gross said that number would work as a realistic expectation for growth.

"A company like Pimco hopefully can produce something beyond that because that's our historical track record and that's something investors look for us to do."

But he cautioned that investors "looking to send their children to college or retire on those types of returns, that's going to be a stretch. You just have to reduce your expectations."

Jack Bogle, founder of the Vanguard funds group, was less pessimistic about market returns, though he's troubled by the inability of Congress to come up with reforms to the financial system.

"We ought to be able to get from these earnings levels maybe earnings growth of 6 percent and total returns from stocks a little bit over 8 percent, and I think that's a reasonable forecast," he said. "The fundamentals of stock returns ought to be about 8 percent and 4 percent in the bond market.

$90

Oil is acting very strong at each level of support since it went down to $70. I would not be surprised for us to break through $90 as we approach the important driving season

Oil

Number to watch on OIL IS 84.30

BIDU flag

X coil

Chart:FSLR

Double top possible!!!!

Last week of the quarter

The 1180 level that I have been talking about held on last week as upside resistance, but whether or not this will be the ultimate high before wave 3 starts remains to be seen.

As the chart above shows, we now have a weekly RSI divergence, and along with the volume divergence we have been seeing for a few weeks, and the weak seasonality that the end of March can bring, we now have the best chance to see a deeper pullback then what we have seen so far since the March 2009 lows. This of course does not mean it will happen, but at least we have some convergence of factors pointing to a probability.

1180- BINGO

Notice the high today was 1180 that number mentioned last week as the 127 level and the target for the bulls. Notice how we sold off hard after hitting that number.


http://marketjedi.blogspot.com/2010/03/next-resistance.html

GS

following up on the BAC comment here is a chat of GS. Note it seems to be lagging the upward move of the market. Does it catch up or is this a sign?

BAC

Yesterday BAC said they will initiate a new plan for home owners under water. I think this is positive for BAC and I am goign to say this stock goes higher on this news. Next real important level on the upside might be $20. I has bee basing good at not violating the $15 level which was very important for the stock.

I would buy some calls here on BAC here for a little upside

Housing- New lows

WASHINGTON – Sales of new homes fell unexpectedly to the lowest level on record in February as stormy winter weather kept buyers on the sidelines. The weak results make clear the difficulties facing the housing industry as it tries to recover from the worst slump in decades.

The Commerce Department reported Wednesday that new home sales fell 2.2 percent last month to a seasonally adjusted annual sales pace of 308,000.

It was the fourth consecutive month of declines and the worst showing on records dating to 1963. January's results, meanwhile, were revised upward slightly to a pace of 315,000.

Economists surveyed by Thomson Reuters had expected sales would rise to an annual rate of 320,000.

Overbought

The S&P 500 is heading towards that 1180 area I mentioned weeks ago, but it feels like the rally is on fumes. Volume is contracting, and momentum is diverging.

I believe that a pullback is imminent for the market, but how many hours are in an "imminent"? for now, I am going to be watching these key decision areas for signs of stalling out and a "potential" rollover.

Patience is key here!!!!!!!!

Next resistance

1180 for the S&P is the 127.2% external Fibonacci retracement, and the next level of resistance to respect.

Yesterday

No Surprise

No surprise the FED has said nothing new. I think keeping rates so low so long will come home to roost but what do I know. The economy is in a flat rate now and I think it will be like that for a long time.

FED Meeting

Remember upward bias of the market with the FED meeting today. I haven't looked at much as I am sick as a dog.

Out of commission

Out of commission with severe sinus attack and cold. This one is bad and i usually deal with one serious attack per year almost on call this time of year.






New highs for the SPY were hit last week, but as we can see on the chart, the volume is weak on this advance. This is not a bullish scenario, but trying to pick the top of this advance is going on about a year now, has been a fool's game, and an expensive one.

I believe a pullback is brewing, but what I believe has nothing to do with how the market will act. I'll wait for signs that the Bears are making a stand, and then look to get on board a continuation pattern, if it sets up.

the lame volume and grinding action in the market is making follow through and volatility non existent. If history is our guide, it won't last forever, it will only feel that way!
Until then, trade cautiously in this brutally choppy market.

Boring

Nothing much is going except for Oil. This structure has been in action for weeks but it finally went higher. I am really thinking that so early in the year and oil at this level doesn't sit well with those who are calling for lower oil prices. Most of you know I am a long term oil bull.

I will do some charts later to see what is the next level higher. We definitely need a close above $82.30 to scare the shorts out of this trade.

Back

I am back but feeling sick (Voice gone) from the hectic traveling. Oh well such is life to make a buck :) Wish I was a movie star :)
Anyways not much working here- market is just whiplashing around in a range still. Seems like no one wants to make any huge bets Why should you!!!

OIL: Target hit

Finally hit the $82 target here on Oil. Took awhile to break through the resistance but that was the target on the structure.

This week

Still away in beautiful California but here is an update





The S&P 500 broke through the 78.6% Fibonacci retracement of its push down from the January highs, which now suggests a retest of the previous highs is coming. \

One of the stronger signs in the market currently is the action of the Russell 2000, which is the one major index that has broken out to fresh highs. When the small caps lead, it tends to be a bullish sign on the short term.

Watch for a retest of highs by the Dow, NASDAQ and S&P and see how that test acts. If we fail to break with good volume, it may be a double top, strong small caps or not.

watch early weakness Monday for a buying op that carries over from last week's strength.

Wednesday - Pause

We have now reached the 78.6% Fibonacci retracement of the swing down since mid-January, and have back to back pause days there. this sets the market up for a put up or shut up move. Either we continue the grind it higher, or the bulls are rebuffed and we swing back to the downside. More sideways congestion is also possible, but not probable since we are at a key inflection point.

We may be on hold until after the Job Numbers either way, which are set to be released pre-market on Friday, March 5th. Will this number really make a difference?

Resistance

1125 is currently resistance-

Will be traveling tomorrow till next week tuesday

Broken

Here we go broken higher. Now the close is important as the last few times we have broken during the trading day but not closed above the resistance area.

Oil

Now over 80.30 need to break that 80.44 though.
Ben watching this thing like a hawk for the last 3 weeks

Oil

Well will this thing get to my $82 or not- $80 seem to have alot of selling pressure but I believe this is preview of Oil busting higher. I could definitely be wrong

Oil

a couple trading days ago I thought OIL would have broken through higher and head towards $82. I still think it was a shake out and we will still hit $82

March 1st

The S&P 500 is in a coil right below the 62% Fib Retracement of the swing down off the highs in mid-January. This puts us in wait and see mode for the time being.

If we get vertical extension with volume, watch the enxt fib retracement at 1128 for the next stopping point. If we were to roll back over, we could continue on the road that started in mid January