Tags: hussman | market | overvalued

Hussman: Stocks Will Fall as Market Still Overvalued‏

Tuesday, 03 Aug 2010 09:46 AM

Investors should brace themselves for the market pulling back, John Hussman says.

“We continue to observe a clear deterioration in leading indicators of economic activity,” he said.

Fundamentals will clearly beat out technicals in the market, he wrote on Hussman Funds’ website.

“Over the short term, my impression is that the technicals may hold sway for a bit," he said.

"The historical evidence suggests that fundamentals have ultimately trumped technicals when we’ve observed similar warnings from economic indicators in the past," he said.

"My impression is that the economic cold water could hit investors very abruptly, so that gains achieved over several weeks may be suddenly erased in a matter of a few days,” Hussman said.

Investors who need funds soon to buy houses or pay for college need to follow only one strategy — “get out,” he said.

Some indicators point to the recovery faltering, Bloomberg reported.

“There’s enough nervousness out there — sentiment is extraordinarily tentative. Even in the face of good news there’s a hesitation to embrace that,” said Robert Weissenstein, who oversees $130 billion as chief investment officer at Credit Suisse Group AG’s private banking unit in New York.

The market is still headed upwards, Reuters reported.

“The bulls are still in control of the market right now,” said Michael James, senior trader at Wedbush Morgan.

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Investors should brace themselves for the market pulling back, John Hussman says. We continue to observe a clear deterioration in leading indicators of economic activity, he said. Fundamentals will clearly beat out technicals in the market, he wrote on Hussman Funds ...
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