Friday, November 9, 2012

Anatomy Of A Market Collapse


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.




USA As Seen By Europe: The Next Greece?

By now everyone knows how Americans feel about America: one quarter of the population (the half of the less than half that voted) is convinced the US is plunging into a socialist void that would make the USSR proud, another quarter of the population is furious at the wealthy and demands that they be taxed up the wazoo because "they didn't build that" but certainly profited from it, and is demanding wealth and income redistribution, while the silent majority is quietly picking up whatever pieces it can, and batting down the hatches, seeing very well, beyond the fog of bias and subjectivity, the inevitable epic deleveraging disaster, followed by even more epic printing that is coming this way. But how does the rest of the world see the US, especially now that the fiscal cliff (and the much less discussed debt ceiling debate: why, we don't know - it was "merely" the debt ceiling that led to a 20% drop in 2011). Yesterday, German financial media Spiegel provided a glimpse into just how Europe, which is in deep feces itself, sees America. The verdict: the next Greece.

56. No One Is Coming To Save You...



Get Ready ~ Point Of No Return

from crabbydogtrix:



Chart Of The Day: One Quadrillion Or Bust


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.

Consumer Confidence Rises To Highest In Over 5 Years Just As Market Tumbles

Earlier we asked a simple question:


the answer is 9:55... and while not an all time high, LOLfidence, pardon, CONfidence just printed the highest number since July 2007!

On The Idiocy Of Sell Side 'Research' Lemmings

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.

The Market Tends To Rally Towards Year-End

Admin at Marc Faber Blog - 14 seconds ago
"But the market tends to rally towards year-end, and i think from a low of around 1360, we could have a rally to January, but I think sometime next year will be again lower." - *in Bloomberg TV* * *Related: SPDR SP 500 ETF (NYSE:SPY) *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

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Turmoil In The Next Couple Of Years

Admin at Jim Rogers Blog - 17 minutes ago
I would be very careful. The next couple years we're going to have turmoil and problems in most financial markets. - *in CNN * * *Related: SPDR Dow Jones Industrial Average ETF (DIA), SPDR SP 500 ETF (SPY), United States Oil Fund LP (ETF) (USO) *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.* 
 

Sprott Physical Silver Trust Prices Follow On Offering at $13.15


U.S. businesses seek a more competitive economy

Eric De Groot at Eric De Groot - 47 minutes ago
International competitiveness of a country or region is a function of labor force skill, natural competitive advantages, relative tax rates, political stability, rule of law, sound leadership, etc. America's position as a dominant economic power will continue to erode as long as capital finds advantages of doing business elsewhere. Uncompetitive taxes rates and an increasing number of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 
 

US Stock Market and Gold Headed in 2013 Despite Fiscal Cliff

Eric De Groot at Eric De Groot - 2 hours ago
Politicians guided by their crisis playbooks should produce yet another (half-ass) solution that kicks the can only as far as the next election. This leaves central banks (including the Fed) as the main economic problem solvers until 2016. This means liquidity, liquidity, and more liquidity. Jim is correct to suggest that The end result of this on other central banks... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Libor Arrests (Finally) Coming

Just out from Bloomberg:
  • RBS, UBS TRADERS SAID TO FACE ARREST WITHIN MONTH IN LIBOR CASE
Note the word "traders" - not CEOs, not COOs, not General Counsels, not Managers, not Supervisors... Traders. Because remember: it was a scheming 28-year old Frenchman that was the mastermind behind Goldman's CDO fraud for years. Nobody else. Just him. That said, we are looking forward to the latest minimum prison reality TV show: "How Many Cigarettes* For A Bollinger?"

Precious Metals Set For Higher Weekly Close And Seasonal Year End Rally

Gold is 3.35% higher and silver 4.53% higher this week in US dollars in the aftermath of Obama's re-election.  Gold in euros looks set to break out above €1,400/oz and is 4.1% higher and in sterling gold has risen 3.7% so far this week. Silver is 5.25% higher in euros and 4.8% higher in pounds. Gold and silver are set for higher weekly closes in all fiat currencies which may negate the recent bearish short term technical picture and set the precious metals up for the traditional yearend rally.  The data clearly shows that November is gold's strongest month and one of silver's strongest months. December, January and February are also strong months - prior to a period of weakness is often seen in March.

Daily US Opening News And Market Re-Cap: November 9

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.


Frontrunning: November 9


  • 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)

 

Overnight Sentiment: No Dead Cat Bounce

With expectations that Europe will once again become a flaming powderkeg after the US elections are over running high, Europe has so far not disappointed. And as usual, the focal catalyst of greatest pain remains Greece, which is only now learning what ZH readers knew days ago, namely that the Greek "austerity" vote was merely theater, and that Europe, i.e., Germany, has certainly not decided to release any of the much needed cash that Greece needs not only to run its society but to make a key bond payment on November 16. Confirming this was German finance ministry spokeswoman Marianne Kothe, who said on Friday that Eurozone finance ministers will probably not be able to decide at their upcoming Eurogroup meeting on Monday whether to disburse a badly-needed €31.5 billion loan tranche to Greece, as MNI reported earlier. "Speaking at a regular government press conference here, Kothe reminded that German Finance Minister Wolfgang Schaeuble needs the approval of the German Bundestag, the lower house of parliament, before being able to approve any further aid for Greece. “It will be difficult to achieve this by next Monday,” she said." In other words, the Greek default is suddenly in the hands of the German people, of whom at last check  about 60% wanted Greece gone. There is yet hope for Greece, with a story overnight running that George Soros is ready to commit "serious funds to aid Greece." Surely that generosity too will end well for the Greek people who by now must feel as if they are in the 5th circle of a NWO globalization hell.

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