We outline various fundamental and technical characteristics of each of the three stages of a standard rally such that one could use the blueprint in identifying an imminent top. The table below leverages statistics compiled from the prior decade from various selloffs (i.e. > 7%) which have produced consistent patterns that help traders ascertain the potential depth and duration of the current downward move.
56. No One Is Coming To Save You...
Last night, Japan issued an update of its total public debt. The number was ¥983 as of September 30. Trillion. The bad news is that the long anticipated currency legend which will finally say "¥ in Quadrillions" is once more delayed. The good news, is that with the recently expanded BOJ QE8 and QE9, the excess monetization debt capacity, a lot of its going to sweep the aftermath of Fukushima under the rug, will promptly be filled, and we fully expect the December 31, 2012 debt update to finally bring us to the first instance of the word "quadrillion" used in the context of a modern, developed nation.
Earlier we asked a simple question:
What time is the all time highest UMich Consumer Sentiment out?
— zerohedge (@zerohedge) November 9, 2012
the answer is 9:55... and while not an all time high, LOLfidence, pardon, CONfidence just printed the highest number since July 2007!
Here's why you shouldn't trust sell-side research analyst expectations. Their 'normal' pattern is extrapolate trends in a lemming-like chase to be the headline-maker of the day ($1111 AAPL price-targets for instance) and then - when it's just too obvious (or when the company in question actually 'misses' what they extrapolated by a mile cough JCP cough) - they knee-jerk react at turning points - when it is already too late. So the next time someone on TV 'projects' value based on earnings or tries to convince you to part with your hard-earned money on a stock with great earnings prospects, perhaps this chart will remind you to reduce that exposure. The simple fact is - they do not know; and with the macro 'forest' becoming increasingly binary in its outlook, focusing on the micro 'trees' and supposed 'diversification' is irrelevant as correlations snap and as Goldman notes 'big revisions are the norm' as bottom-up earnings data (guided by the ever cautiously optimistic CEOs) is always slow to reflect much weaker macro data.
- RBS, UBS TRADERS SAID TO FACE ARREST WITHIN MONTH IN LIBOR CASE
Another day another sell-off…with equity markets in Europe trending steadily lower after it was reported that the decision on Greek aid will not be taken during the Eurogroup meeting scheduled for November 12. Still, EU official said that there will be no Greek default on November 16th (EUR 4.1bln redemptions) and that this redemption is to be "factored in" decision on disbursement. Separately, analysts at Fitch rating agency noted that while current Spain’s rating is appropriate, further action would more likely than not be to sub-investment grade. Moody’s also commented on the never-ending sovereign debt crisis today, stating that actions taken by the ECB only buying time for Euro region and that a decision on France will be communicated within a few weeks. As a result, bond and credit spreads widen further today, with SP/GE 10s spread at 450 level, which is of particular importance given that this is the level at which the LCH begins to review bonds for margin requirements. Deterioration in Italian paper was linked to next week’s supply. In turn, EUR/USD and GBP/USD trended lower, with the USD index up 0.12% at last check. Going forward, market participants will get to digest the release of the latest U. Michigan Survey (Nov P), as well as macro forecasts from Philadelphia Fed.
- Greek Aid Payment Call Won’t Be Made Next Week, EU Official (Bloomberg)
- Eurozone faces brinkmanship on Greece (FT)
- Pressure Rises on Fiscal Crisis (WSJ)
- The JC Penney massacre continues (BBG) - In other news, any minute now Bill Ackman will get that 15x return...
- SEC left computers vulnerable to cyber attacks (Reuters) cue "back door Trojan" jokes
- Former Goldman trader accused of fraud (FT)
- Elizabeth Warren's Inadvertent Best Friends: Wall Street and Republicans (BusinessWeek)
- Zurbruegg Says Managing SNB Currency Reserves Is Major Challenge (BBG)
- Obama ally leads push on fiscal cliff (FT)
- Britain threatens to block banking union (FT)
- PBOC’s Zhou Says China’s Economy Improving as Data Due (Bloomberg)
- China slaps duties on steel tube imports (FT)
- Obama to Make Statement on Economic Growth, Cutting Deficit (Bloomberg)