Tuesday, September 13, 2011

What Would a Bottom Look Like?

Traffic since September started has just been terrible. Should be bags of fun when the snow starts flying.

It was a fun opening NFL weekend. This is the most wide open year I can remember. Everyone says that every year, but it's actually true this time. Monday Night Football and an offensive show by the Patriots was a fun capper to the weekend. Keep it coming!

What Would a Bottom Look Like?
Right now everyone is looking at the same charts, the same areas of importance, and the same patterns. Everyone now is well aware of the major issue that is the Eurozone. When can the porkchopfest of a market stop? When will things turn around? I have no idea, but I do have an idea what kinds of things need to happen for the poor market action to start resolving. Here they are:

Some form of Closure for Euro debt
Whether it's a huge bailout escalation, or a default by some countries this issue has got to be put to bed, at least short term (6 months). The assault on the value of "notional" money is scaring people right now.

The US FED: Fish or Cut Bait
Bernanke and posse have been playing footsie with the markets; will they do operation twist?, will they stop buying stuff?, will they actually fire up the helicopters? Next week the FED needs to be clear what the plan is.

Stocks Have to Stop the Correlation Tango
For weeks either every stock goes up or every one goes down. This is absurd market action and useless investment wise except on the very shortest time spans.

Markets Must React to Lowered S&P Earnings Estimates
Earnings estimates are too high and some analysts are starting to lower them. How can you beat expectations if they are too high after all? Luckily from where we are price wise, this may be "in" the market if Euro fears can subside.

New Non-Coffee Stock Leadership and Market Volume
Coffee stocks are the new MOMO play and while it must be fun to play them, we are not going to get broad market participation if coffee stocks are the only game in town. Volume has been worse than nothing, buyers need to come in and set up base camp.

There are a few more and feel free to add your own in the comments section.

Have a good night.


Anonymous said...

Nice Job GYSC. Earl

EconomicDisconnect said...

Thanks Earl!

Jennifer Hillier said...

You're a Title Ninja! You have a knack for always coming up with the most attention-grabbing post titles.

You should give me some suggestions for my second book, Ninja.

EconomicDisconnect said...

Yes sensai, will do!

Jake said...

How likely do you see a bottom forming in the next month vs. over a protracted period?

GawainsGhost said...

There is no bottom. There is way too much inventory on the market, way too may overvalued assets, and way too much incompetence in management and politics. This is a bottomless pit.

But if you really want to scare yourself, GYC, check this out.


Robot libido? It's come to this.

By the way, the Patriots looked pretty good the other night, not like the Saints. Or the Cowboys, the team that's afraid to win. This is going to be a long season.

GawainsGhost said...


EconomicDisconnect said...

Jake, hard to say before FED next week. This morning more amorphous crap from Europe about doing "everything" to save Greece has futures pegged green. Everything is not a clear plan. Best guess is by mid October if I dont see some of the things I listed in the post a bottom will be lower from here.

The Sovereign Bohemian said...

GYSC, are you talking about clothed or unclothed bottom?

Good post man. What keeps me paralyzed with the stock market is what you are talking about with everything either going up or down together. (I know, not everything, but it feels like it.)

Since you are closer to Wall Street than me, can you drive over there and tell them to straighten up!

I just hope the government doesn't get us into some national emergency to take our minds off of the bottomless pit Gawains mentioned.

I'll be glad when your posts talk more about tops, than bottoms. :)