SHORT TERM: US markets remain closed, DOW (YM) +68
Overnight the Asian markets lost 0.9%. European markets opened higher and closed +1.1%. US index futures declined further overnight, but rebounded into the early morning close: SPX (ES) +8.5 and NDX (NQ) +11.75 from yesterday’s close. US cash markets remain closed due the aftermath of Hurricane Sandy. Markets hope to open tomorrow. At 9:00 Case-Shiller housing prices were reported higher: +2.0% vs +1.2%. Bonds lost 4 ticks, Crude rose 35 cents, Gold added $3, and the USD was lower. Most of these asset prices are now about unchanged from friday’s close. Tomorrow: the ADP index at 8:15, and the Chicago PMI at 9:45. Be safe!
MEDIUM TERM: downtrend highly probable
LONG TERM: bull market
looks like an intermediate bullish rebounce/reversal could be starting here
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first day in a while we didn’t make a new low! yeehaw
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+1 and it feels like it’s been a long time coming 🙂
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Sure wish copper would come back to life – feels like the grim reaper already got it 😉
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Nice Fractal- same price, pattern and time as Friday
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High was 945, sold off 13 into 1230 and then…. Ok see y all next week after the party is over. Reminder- R’s voting was moved to 11/7 and if you missed the debates here is recap.
Have a sense of humor for the next couple days….. Peace 😉
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Thanks HD
Honestly I wonder if voting in hard hit areas will be effected from storm damage?
Cheers
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thx HD cheers!
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Thou Thinkest too much
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I liek the Rut as it seems to make a bottom after the ABC plus pop and descent. Roundish end to misery ?. Nikkei also strong as expected. I see some small cap pharmas on the run, ARWR is a scoop here post good news on Hep B treatment…
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I think the US might be the only market that can rally after a natural disaster
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mornin RC
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mornin Tony. we got a couple unexpected days off! we were semi-officially closed yesterday in credit-land. gonne be very quiet again today though since much of our counterparties will be lucky to get into the office, even if they happen to be open today.
generically though things are firm this am, with equities.
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agree should be a quiet day
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Europe rallied yesterday…
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but europe didn’t have a natural disaster. i meant US mkt rallying after the US has a natural disaster. heck we even sold off when Japan got a tsunami. but when we get one… ahhh let’s buy anyway! go America
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These disasters are generally a posiive for economies. After every severe hurricane in the US our markets have been up 3-6% 90 days later. Further they are generally a stimulus for every economy all over the world as the repair provides employment and the manufacture of goods.
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All the media reports is how many restaurants etc will not be getting back those lunches and how bad this is for the economy. You never hear about how many flashlights, batteries, bottled water and generators etc… get sold that NEVER would have been without the disaster – let alone the stimulus of the clean up and repair that goes on for months…
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Tommy, I couldn’t disagree more. That’s a view that I hear from street strategists as a way of arguing the bullish side every time there is a disaster. The facts do not support that view, however. I agree that you will see short term spending on goods and services that would not have been purchased otherwise. But that’s only half the story.
Expenditures on rebuilding is not the same as growing or investing. We need to spend just to get us back to the same level of economic production and/or wealth we were at before the crisis. Maybe it’s easier to understand on a smaller scale. Let’s say your house gets hit by a tornado and half of it blows away. Let’s say you have $100k in savings. Now, rather than spending any of that $100k on new investments or incremental purchases, you will have to spend some (or all) of it rebuilding your house to be back where it was. Now when you’re house is rebuilt, you are back to square one but minus $100k. Would you project that your future spending and investment activities will be higher now that you are broke or when you had $100k in the bank? No. In essence, natural disasters create a negative wealth effect. Spending at LOW and HD goes up today, at the cost of your wealth today and spending tomorrow.
If you know of one, I’d like to see a legitimate study that suggessts replacement spending is stimulative and proves out the net positive long term economic benefits of disasters.
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ANY spending is stimulative in an economy 70% driven by spending…
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Here’s an old article referencing this subject w/charts. Of course individually (stock) speaking you’re better off selling insurers and buying the HD & LOW arena, but net net there is a benefit longer term.
http://www.investmentu.com/how-the-stock-market-is-affect-by-natural-distasters.html
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if your time horizon for the life of an economy is 1-2 months, you are absolutely correct. in the real world, that’s incorrect. but clearly not worth the time debating the matter here; you’re welcome to believe what you like. cheers
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Tommy, all of those charts show a drop to new lows after the initial rallies. So don’t see how that’s evidence of long term stimulative behavior. And I would hardly call a one page article on “Investment U.com” with some SPX charts and a couple lines drawn as a “legitimate” study showing the economic benefits. But it does help explain how and why much of the investing public can get so misinformed about a host of economic concepts.
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There have been many more studies supporting the stimulative effect. Bottom line is markets have been 3-6% higher a couple months after disasters. This varies depending on whether we were in a bull or bear of course. Interesting these events more often than not occur near market bottoms which begs the question whether markets actually predict these events. Not gonna comment on that.
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“Bottom line is markets have been 3-6% higher a couple months after disasters.”
Never disagreed with that notion; my comments were only with regards to economics, not the market. Interesting notion about the prospect of markets predicting them though. Perhaps our collective psyche has greater intuition than we give ourselves credit for!
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Perhaps our collective psyche has greater intuition than we give ourselves credit for!
correct!
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Back in may I suggested the following pattern. And we got an “endless” QE3.
OLD DOW
1932 low – 1938 low = 6 years
1938 low – 1942 low = 4 years
NDX
2002 low – 2008 low = 6 years
2008 low – ?
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An “enless” QE3 is very bullish. So I suggested the DOW going well above 20,000.
However, QE3 has already started and NDX is in a correction mode.
It’s a bit confusing.
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I am still 150% short. But I guess I should be ready to go long at any time.
Let`s see. The market has the last word.
GL
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Watching the trend lines support
http://scharts.co/PAPVI5
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2009 was low so low in 2013 or 15… Lets see
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http://news.investors.com/investing-market-cycle-analysis/103012-631516-oneil-predicts-bull-market-supercycle.htm#ixzz2ApepSPF9
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O’Neil may be referring, in OEW terms, to Cycle wave [3].
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what level would that be, approximately,Tony?
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The multi-decade wave after Cycle [2] ends around 2016.
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Thanks Tony. Interesting how you have all those cycles organized within OEW! And 2016 will interestingly coincide with our political cycle…market could be a good catalyst for a major change then…
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homework =)
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haa..yeah, lots of it =)
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Tony – what level on the Global Dow Index would Cycle [2] low be around – 800+ish?
Thank you
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PB,
DJ World … hard to say
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Nice one… He really is first among equals as an investor/trader… Very intersting
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thanks Tony. seems like we’ve had a nice retest with some +d in the futures ..markets like reconstruction spending, don’t they ?.. http://screencast.com/t/50Uk85evlBf
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CB,
Sense a Gov’t emergency infrastructure package for NY/NJ.
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what a great idea,Tony! =)
And If anyone happens to be in the market for a new construction crane …always remember, guys: it was made by the lowest bidder… 😯
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Much closer to a confirmation
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Would that imply the a-b-c is out on the SPX and ii on the DOW is the preferred count?
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PB,
Still an abc of Int. ii down, as has been the preferred count all along … see DOW
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Oh – now I get it
Now it makes sense – I see the light – duhhhh
Thank you – glad I asked 😉
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Tony – do int ii’s retrace back to Major 2 area’s or is that too low a target?
Thank you
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A retracement that low may even eliminate the entire impulse wave.
Seems unlikely
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Tony
I noticed you chanced the “tone” in the Medium Term comment – what made you change that from yesterdays “down trend likely underway”?
Just curious – thank you
Cheers
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