Quote:
Originally Posted by Hisam135i
This should be a shaky week, with the eurozone being downgraded to AA+... Should be interesting to see how the market reacts tomorrow morning. Hopefully not going to be the same pattern that's been happening this month where it's a downward trend until midday then it picks up .. Either or, should be an interesting week  |
Yeah, I hope none of those intraday-algo bots reverse course anymore. My investment was up +11% Friday morning but halved it's daily gains to +5% by the end of the day.
All-in-all, my opinion is that this market is on it's way down. I don't care for the analysts or market professionals declaring this a Secular Bull run and that we should pump money into the market or miss out.
I'm not buying in on the top. That's rule #1. I short on the top.
My honest guess at why the market has been up in January? 401k Money. Once the 401k's come invested into the markets, I wouldn't be surprised seeing Europe resurface and the market crashing, with 401k money exchanging hands right into WallStreet. Just my personal opinion, of course.
Correction Time:
Here's an image I'm linking from somewhere else, but pay attention to the volume decrease from the Oct. 3rd lows of 1074 up till the January highs we're at currently. Volume is decreasing. This is not text-book definition of a bull-run on WallStreet. This is text-book definition of a corrective rebound in a Bear Market.
Furthermore:
Quote:
Factset reports that of the more than 10,500 ratings on S&P 500 stocks heading into 2012, 54% were buy ratings, 42% were holds -- but just 4% were sell ratings. That's right. According to the "experts," you're safe if you're hanging on to 96% of equities out there. Wrap your head around that one.
Original Story.
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Bull? More like Bull-Crap. Remember that the likes of Goldman Sachs and every other fund on wallstreet had projections of a "horrendous first 6 months in 2012" near the end of 2011. They got people to ditch their holdings, markets went soft in December and the big guys are now buying on-mass trying to tempt the retail investor back in.
90% of the low volume right now can be traced to Institutional trading (not a figure I yanked out of my ying-yang). Most likely guess for the intraday turn-arounds? Algorithim bots. But keep in mind we are constantly seeing a sell-off, then a turn-around buy back. There
IS selling pressure if you can see between the charts.
We have financials rallying this 2012 year, which is something we havent had in the last few quarters in 2011. BAC ran as high as +27% YTD, but as of Friday I believe it's closed around only +19%. There's already a change-over of longs to short positions, imo. JPM earnings came out on Friday and they were slaughtered last year with a -45% loss in revenue. And they were considered one of the "best" financial institutions out there currently admist a sea of laggard firms. This trading week we'll see earnings for the less spectacular banks. I'm not seeing this rally being supported by the financials much after their earnings come.
I am short this market currently. Should the market break in either direction, up or down, it
will be a
major break. I just happen to be on the side for a
breakdown rather than a
breakout. I see no reason for the markets to improve, only for Bernanke to keep it from falling apart and catching the falling knife. I just happen to think there's more knives to catch than Bernanke has hands.
P.S. With the Eurozone downgrades and France and Austria losing their prime Triple A's, the EFSF backed by those tarnished AAA countries also got cut down to AA+. What does that mean? Means either the EFSF has to reduce the amount of money it can back ($440billion currently) to $260B Euros, or get more Triple AAA countries to pump more backing money in. Who really thinks Germany is going to back more money in? They have no intentions (I believe) of muscling out $200B+ Euros of Tax payer money. That = Political suicide.
So of the $260B remaining, $40B has already been given away and $130B needs to go to Greece. Do the math.
The EFSF isn't $440B anymore, it's only $90 Billion. Think about it.
$90 Billion to cover Portugal, Italy, Spain, etc? Projections to STABILIZE the EU is at around
$1-2 Trillion Euros into the EFSF. The actual estimate is in the
$3.5-4 Trillion Euro mark. Even if you factor in the ECB's 3 year lending contracts at $460 Billion (of which 99% in back-logged into the ECB safety vault by the same banks who took those loans), and we are playing a game of chicken. Chickens are going to come back to roost.
Not to mention the Straits of Hormuz are continually headed down the wrong direction and sanctions have already been implicated by the big nations around the world. Most of Asia is already trying to find alternatives to Iranian Oil and Saudi Arabia is going to pick up the slack since it can pump up 12.5 Billion gallons a day to over. But who are the three largest users of Iranian oil in EU? Portugal, Spain, Italy.
It's just a mess.
Two things you need to jump start this market: 1) Consumer Spending, and 2) Housing Market.
The first is self-explanatory. Credit Card debts are, as of December, maxed at 151% capacity for the average American. The 200,000 TEMP jobs Obama keeps flaunting as a recovery in his economy is a red-herring. It's not there. And this month's employment report showed that increase back up to 399,000 jobless claims.
Trend line Break, anyone?
So what does the job sector need to see in terms of, say,
just recovering to pre-08 levels? Let's look at an 8 year forecast. Surely, by 2020, the job sector must be better, right? Look here:
For employment to even RETURN to pre-2008 levels, bringing with it increased disposable consumer income and savings,
by 2020 we'd need to create 400,000 a month! I believe that kind of growth has never existed in history (though someone correct me if my data is wrong). I dont believe even WWII created the amount of jobs we'd need for this recovery, seriously.
But all of you out there, working, know that the roughly 120,000 jobs being created currently have decreasingly lower wages:
SO WHERE, in this picture I have of the economy, will we keep afloat the US economy so dependant on 70% consumerism? Less jobs and lower pay? And WallStreet and Goldman Sachs are preaching over news-stations round the clock about how 2012 is the year of the Bull?
DON'T FALL FOR IT.
As for housing, at-best it will just bottom out after four years in decline:
finally. Fed projections are usually ultra-conservative and their FOMC Minutes from just last Quarter 4 in 2011 showed expected recovery in Housing sometime
2013-2014.
[Being honest here, this fact is being recovered by memory. It's fuzzy cause I read it 1.5 months ago. Could be 2020 projections, actually.]
Just felt like informing you guys lately. I havent written a good post on here in a while.
