Japan reported GDP contraction of 4% for the 1st Quarter of 2009 which is the worst fall on record and equates to an annualised crash of 15%. However the fall is less than the widely expected fall of 4.2%, with the stealth stocks bull market continuing to recover from the March lows, which is suggestive of much better data in quarters 2 and 3 of 2009.

Japan's 1st quarter drop of 4% followed hard on the heels of severe contraction of 3.8% for Q4 2008 as the exports dependant economy was hit hard by the collapse in world trade which is most notably seen in the auto sector.

The economic slump has prompted a fresh wave of stimulus packages this year totaling $260 billion, are anticipated to kick in during the 2nd and 3rd quarters of 2009, which will be increasingly taken as the reasoning behind the japanese stock market's price surge of more than 33% in a little over 2 months in what I have termed as a global stealth stocks bull market, analysis of which has repeatedly iterated over the past 6 months that fundamentals are irrelevant at market junctures, which is clearly evident in the fact that the Japanese stock market has soared by 33% on DISASTEROUS economic data whilst so called 'analysts' continue to harp on and on about economic collapse, deflation and corporate earnings contractions in support of the LOSING position of fresh stocks bear market lows.

Meanwhile most of the herd having been convinced by the 'analysts' have remained waiting for good economic data to buy into by which time most if not all of the gains for the year are behind us.

Your ahead of the curve stealth bull market analyst.

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By Nadeem Walayat
http://www.marketoracle.co.uk

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 250 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

Comments

Omer
31 May 09, 07:23

Future Direction of Markets

Dear Nadeem

Excellent articles on this site, wish i had seen them back in december to March.

Many readers are still sitting on cash rather than stocks. But given the increase this week to ftse & dow, is it worth buying stocks now, or wait for a re-trace (will it come?)

Many authors (elliot wave people for example) still say we are in a bear market, and to expect a leg down/new low 'soon' !

Should investors wait now for some re-trace, or just go ahead and buy for long.med term?

Nadeem_Walayat
31 May 09, 21:30

Stealths Bull Market Portfolio

I can only comment on what I have done and am doing.

At the end of Jan my stocks portfolio was at 7% of liquid assets, now it it is 17%. I am to continue raising this to 22%.

The stocks stealth bull market is more than intact and the failure to correct is a SIGN OF STRENGTH, as I said in October last year, take the bear market trend to scale into investments, similarly no matter what the market does, I will continue to scale into my mega-trends of energy, agriculture and tek stocks.

Best.

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