Some of the work Mark Hulbert does is nothing more than telling us what the gurus in the universe he follows are thinking individually and, more frequently, in the aggregate. But of late, he also has been doing some far more interesting analysis in the “Yale Hirsch” mode – and the results are not satisfying if you are a bull.
The bullish case seems to rest on two platforms: (1) August was really bad therefore September should be good in reaction to that, and (2) “Everyone” now expects the current crop of politicos to suffer major setbacks in November and, since the market is a predictive mechanism, investors are positioning themselves today for what they believe will be wonderful news post-November (like an extension of the current tax rates and a reduction in pork-barrel spending by irresponsible pols.)
The Dow rallied more than 300 points the first two days of September so, making the usual straight-line assumption, bulls believe that today is the day to get invested, Hmmm. Let’s examine each of the above platforms in turn.