In this article from The IRS Report in April 2008, Dr Roy Tipping demonstrates that his TMR is really on the ball.....

The bears are still in charge – don't be trapped by a dead cat bounce

I trust that you followed my advice –The IRS Report issue no. 279 – and thought hard about disposing of shares and moving into cash. Since that article in January the FTSE 100 Index is down 12% while the FTSE All- Share Index is down.11%. My gilts are 2% higher over the same period and have paid the first of two annual interest payments, 2.4%, in the same period. Where do I see the market decline finishing? There were possible support levels for the FTSE 100 Index at 5,850 and 5,500, the latter rather stronger than the former. With the index testing 5,495 as I write, I have to say that I share the pessimism of David Linton of Updata. I cannot see solid support much above the 3,600 level for the FTSE 100 Index and I think that any attempt by investors at bottom fishing amongst blue chips will be doomed in the near future.

Bankers’ blunders

There has been a horrible fascination and delight in watching formerly arrogant bankers, central and private, making futile efforts to reverse the bear market and save their own necks and speculative fortunes. Each attempt has brought a brief recovery – a dead cat bounce* – and then the relentless downward trend has resumed. So much money is now tied up in sovereign funds that liquidity is seriously compromised. When the market turns – and it may take 18 months or more – watch for oil money and Far Eastern wealth suddenly to start picking up bargains amongst Western household names. So is my computerised stockpicking program, TMR, calling it a day and refusing to find possible bargains? It is still a heavy seller, but in the three months since my last article, three interesting recommendations and one more speculative recommendation have popped out.

*The dead cat bounce is said to be derived from a Chinese saying that if a cat falls from a tall building it will bounce, but it will still be a dead cat. In fact, the term was invented by expat British fund managers in Hong Kong in the 1970s.