"Street Smarts" Make For Profits:

"Street Smarts" Make For Profits:
Sy Harding Is One Of The Few Winners So Far In 2008

By Peter Brimelow, Marketwatch | 11 November 2008

NEW YORK (MarketWatch)— There are diamonds in the ashes of the Crash of 2008. One of them is quietly turning bullish.

The Hulbert Financial Digest's investment-letter monitoring through Oct. 31 is now available. It's a disquieting spectacle. Only 12 letters of the 180-plus followed by the HFD have made money in 2008, And the top performer— Crawford Perspectives, up 33.6%— uses astrology.

On the other hand, none of the letters has demanded to be bailed out by the federal government. One of the few winners is Sy Harding's Street Smart Report. Over the year to date through October, Street Smart Report is up 3.6% by Hulbert Financial Digest count, vs. negative 32.9% for the dividend-reinvested Dow Jones Wilshire 5000. Over the past 12 months, the letter is up 5.26% vs. negative 36.31% for the total return DJ-Wilshire 5000. Over the past five years, the letter has achieved an annualized gain of 3.18%, vs. 0.78% annualized for the total return DJ-W 5000.

Street Smart Report focuses on technical indicators and patterns of market movement like the "Four Year Presidential Cycle" (which suggests the next two years will be strong [[THAT'S PATENT NONSENSE ON Brimelow's part! The Presidential cycle predicts that THE FIRST TWO PRESIDENTIAL YEARS (eg, 2009 AND 2010) are ALWAYS the weakest!: normxxx]]).

But editor Harding does allow himself some fundamental fulminations about the economy:

"As we have said several times in the last year, 'It isn't rocket science to expect that the worst housing meltdown in 30 years, the worst financial system crisis since the Great Depression, the bursting of the worst consumer debt bubble ever, the greatest government debt level in history, and a few other 'worst ever' conditions, would result in a worse than usual economic recession. Going back to the recessions prior to those mild events of 2001 and 1991, the recession of 1981-82 lasted for 16 months, and the unemployment rate reached 10.8%. The 1973-75 recession also lasted 16 months, during which unemployment reached 9.0%. If we are just entering a similar 16-month recession, it would not end until early 2010.' "

Harding says this ties in with his reading of stocks:

"The stock market is in a serious bear market, which will see its low for this year in the October/November timeframe, but will not see its final low until 2009 or 2010. That is that, like the bear markets of 2000-2002, and 1973-74, this one will also last for upwards of three years."

But, short-term at least, Street Smart is slipping back into the market. Wednesday night's hotline said its portfolios designed to catch the seasonal patterns are now 100% invested in Dow Diamonds ETF (DIA: 88.93) . Its non-seasonal Market Timing Strategy portfolio is 45% invested, with equal holdings of SPDR S&P 500 ETF.(SPY 92.63), PowerShares QQQ. (QQQQ: 30.77), iShares:Russ 2000 Idx. (IWM 49.45) and 5% in Goldcorp Inc. (GG: 22.98)

Harding's reason for [seasonal] buying: a signal last week from an esoteric indicator called Moving Average convergence/ Divergence (MACD), which basically compares different versions of moving averages [during his all re-entry period]. But he also comments on what he sees as "weekly patterns," writing,

"next week is the week before this month's options expirations week, and the week before tends to be negative. So we are probably in for the first dip which we planned to use to add to [non-seasonal only, which uses a plethora of indicators] holdings. We shall see."

Harding is also on a buy signal for gold. He is neutral on bonds. In the issue of Street Smart Report dated Oct. 20, Harding publishes a number of stock charts and, apparently purely on chart patterns, writes:

"We are practically salivating at the stocks and sectors that look to be on the bargain table. The following are just a few. We show them only as examples ..."

Among them: Yahoo Inc.(YHOO); General Electric Co. (GE); and Forest Laboratories Inc. (FRX)

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Normxxx    
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