S&P 500 Snapshot: Monday Meltdown
by Chart School - October 31st, 2011 4:35 pm
Courtesy of Doug Short.
The joyful mood of last week’s market is now history. The S&P plunged at the open, churned sideways until the final hour and then sold off in the final hour to close near its low, down 2.47%. On a brighter note, the index gained 10.77% for the month of October, which is the eighth best monthly close since the inception of the S&P 500 in March 1957.
On the other hand, the index slipped back into the red year-to-date, down 0.35% and is 8.09% below the interim high of April 29.
From an intermediate perspective, the index is 85.3% above the March 2009 closing low and 19.9% below the nominal all-time high of October 2007.
Below are two charts of the index, with and without the 50 and 200-day moving averages.
For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.
For a bit of international flavor, here’s a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.
These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.
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DiggOktoberfest: When The Music (Money) Stops Playing (Flowing)
by ilene - October 31st, 2011 4:34 pm
Courtesy of John Nyaradi.
By Wall Street Sector Selector Staff
Courtesy of Willem Weytjens, Profitimes.com
Last week, the markets rallied sharply on news that banks were willing to take a 50% haircut on their Greek Bond holdings.
It was a hell of a party, as many asset classes were joining “Oktoberfest” : Gold, Copper, Silver, Oil, Stocks,… The party was organized by Merkel and Co:
These kind of stimulus packages are like alcohol for the stock markets . They are fun and they make everything look better than it really is. The only problem is that if you get too much of it (alcohol) in a short time, the next day you will probably have a very bad hangover. The same is true with stock markets: when they rally too much over a too short time frame, the hangover will soon follow.
In an article I posted on September 11th, I wrote the following:
Let’s start off with a chart of the German DAX index. While price makes lower lows, the RSI sets higher lows on a daily basis.
This causes Positive Divergence. If the DAX would rally above the red resistance line, we could easily see 6000+ points on the DAX pretty soon. Most people are expecting a double dip scenario right now. And although we can’t rule out a double dip, it often pays to be a contrarian. We all know by now what happens when everybody expects something to happen. Usually, it doesn’t happen. Combine this potential falling wedge with the positive Divergence, and we have a good cocktail for higher prices. (Click here for the entire article and more charts)
Chart: Prorealtime.com
On August 12th, I posted the following chart of the dutch AEX index (for subscribers only) with the blue line being my expectations:
An updated version of this chart was posted on October 24th (for subsribers only):
We can see that price (and thus also the Moving Averages) acted almost EXACTLY as forecasted.
Following this sharp rise in stock markets over the past few weeks, prices are looking overbought in the short term, and price has now reached the 200EMA. When we look at the following chart, we can see that this 200EMA has often been an important level during both Bull AND…
Europe According To…
by Zero Hedge - October 31st, 2011 4:29 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
While we have shown this series of images by Bulgarian modern artist Yanko Tsvetkov previously, now that the question of European “unity” is more debatable than ever, and with a Greek referendum in effect guaranteeing the collapse of the Eurozone at least in its current framework, it makes sense to refresh on these pictures which straddle the thin line between reality and satire, which these days is one and the same. But no matter what, the important part is that everyone is hedged. Just ask MF Global… and MS.
Europe according to Greece:
Europe according to Germany:
Europe according to Italy:
Europe according to France:
Europe according to Spain:
Europe according to Switzerland:
Europe according to Britain:
Europe according to the US:
Europe according to Russia:
Europe according Poland:
Europe according Turkey:
Europe according to the Vatican:
and, as a special bonus, Europe according to Berlusconi:
Comments From Canadian Pacific on Pershing Square Investment
by Insider Scoop - October 31st, 2011 4:21 pm
Courtesy of Benzinga.
The following comments were provided by Canadian Pacific (NYSE: CP) on the Pershing Square investment in the company:
“While we have an active dialogue with many of our investors, our practice is not to comment on those discussions. As you may be aware, in a regulatory filing Friday with the U.S. Securities and Exchange Commission, Pershing Square Capital Management advised it had acquired 20.6 million shares of Canadian Pacific.
As with others, CP is open to the views of its shareholders. We will speak with Pershing Square to hear their input into our plan, already targeted at realizing greater efficiency and improved service reliability.
As we’ve been discussing for the past few quarters, especially heading into winter, it is important that each of you to continue focusing on strong performance on the Integrated Operating Plan, meeting our customer needs, and ensuring the safe operation of the railway.”
General Cable Board of Directors Authorizes Share Repurchase Program of up to $125M
by Insider Scoop - October 31st, 2011 4:07 pm
Courtesy of Benzinga.
General Cable Corporation (NYSE: BGC) announced:
“Given the Company’s solid balance sheet and the strong long-term fundamentals for global energy infrastructure investment, the Board of Directors has authorized management to purchase up to $125 million of General Cable common shares in the open market over the next year,” Kenny said. “We will utilize this buyback authority in the context of economic conditions and alternative capital uses. Concurrently, consistent with our growth strategy, we will stay on the offensive as our liquidity position coupled with strong operating cash flow allows us to continue to pursue the numerous global opportunities we see and anticipate.”
A123 Systems, Hydro-Quebec, and the University of Texas Settle Lithium Metal Phosphate Battery Chemistry Patent Dispute
by Insider Scoop - October 31st, 2011 4:06 pm
Courtesy of Benzinga.
A123 Systems (Nasdaq: AONE), Hydro Québec, and the Board of Regents of the University of Texas System, on behalf of the University of Texas at Austin (UT) today announced that they have settled their patent disputes regarding lithium metal phosphate technologies, entering into a Settlement Agreement and related Patent Sublicense Agreement that will resolve the existing litigations and create licenses going forward.
All litigations will be dismissed and a license under these patents will be granted to A123, as agreed by the parties, under the settlement.
Dollar blasts above falling resistance!
by Chart School - October 31st, 2011 4:05 pm
Courtesy of Chris Kimble.
CLICK ON CHART TO ENLARGE
Started the day off today reflecting that the Euro was facing stiff resistance. Last week I shared that the Dollar looked like it had shrank enough in the chart below…..
CLICK ON CHART TO ENLARGE
The breakout above resistance in the top chart and the breakdown in the Euro is not good for the risk trade!!!
Belden Announces Share Repurchase Agreement of $25M
by Insider Scoop - October 31st, 2011 4:02 pm
Courtesy of Benzinga.
Belden Inc. (NYSE: BDC) today announced that it has entered into a prepaid variable share repurchase agreement with UBS AG to repurchase $25 million of Belden common stock. The price of the shares repurchased will be determined based on a discount to certain volume weighted average trading prices of the Company’s common stock over the contract period.
The shares delivered to the Company under the repurchase agreement will be held as treasury stock when delivered. The $25 million payment under the repurchase agreement will be funded with available cash and is part of the $150 million share repurchase program announced by the Company in its second quarter earnings release.
Guest Post: MF Global: Comments From A Bank Executive
by Zero Hedge - October 31st, 2011 3:58 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Submitted by FMX Connect
MF Global: Comments from a Bank Executive
More from our Bank Exec friend, this time on MF Global after we tried to lay blame on Rubin, Thain and Corzine for blowing up their firms :
“MF Global. They named that company right. You probably didn’t see it first hand but Lehman, Bear and Merrill were doing the dumbest real estate deals “ever” in the run up to the implosion. Every real estate veteran saw it, and while AIG’s CDS exposure gets airplay, bad real estate lending is at the center of the disaster. So, Merrill was toast before Thain showed up. He was just the funeral director. Citi (with its 14 off balance sheet SIV’s @ $1 trillion) was an abomination in progress before Rubin arrived, the Enron of banking and each and every officer and board member should go to jail. But they won’t because they are all too powerful and very politically connected.
But Corzine takes the cake, jumping into European sovereign debt of all things. WTF ?? I mean, doesn’t he read zerohedge ? They blew the whistle in like 2008. From news reports, Corzine himself was the primary trader taking ever larger positions in government debt. That’s almost astounding. If you liked Bear Stearns leverage, you’ll love MF Global.”
In 2009 Greek Debt-to-GDP was 127%; Target for 2020 is now 120%; Is this Progress?
by ilene - October 31st, 2011 3:55 pm
Courtesy of Mish
Depending on your point of view, your holding of Greek debt, and whether or not you live in Greece, here is a humorous (or not so humorous) Google Translation on the Past and Future of Greece.
Based on official data from the Eurostat in 2009, when was the last census that pushed the deficit above 15%, Greece’s debt was 127% of GDP. Today, the Government is making earnest efforts to pull Greece out of the crisis according to statements of Chancellor Angela Merkel, mortgaging much to get the debt-to-GDP ratio to 120% by 2020.
And the obvious question that arises for all is, what is so much effort for a decade? To get to where we were in 2009?
The numbers and figures, unfortunately, speak for themselves.
Eurostat census estimates real unemployment will reach 20% by the summer of 2012, Greece will close 183,000 companies, increase cuts in wages and pensions, and over-tax all its citizens just to get 2020 debt to 2009 levels.
All Pain and No Gain
The author, George Kouros perfectly describes the ramifications of stretching out debt for a decade in pretense that a 50% "voluntary" haircut on bonds will solve anything.
Greece surely does need structural reforms, but the average Greek on the street sees all pain and no gain.
A hard default and debt forgiveness of 80% by the EU would show Greek citizens they were at least getting something in return for forced (but badly needed) structural reforms and austerity measures.
Instead, the average Greek understands everything is being done to protect German and French banks, and anything that helps Greece is nothing but a fortuitous accident.
Moreover, by fooling itself, the EU hurts itself. The longer the EU pretends haircuts are voluntary, that Greece can pay back these loans, and that Greece can be competitive with Germany, and there will be no hard default, the worse the crisis will become.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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