monday brainstorming

1. The price action is clearly hinting to the grande finale of wave 5 down within a bigger wave count. We are not talking the ultimate low but an interim low for 4-6 weeks tops as the panic selling below 1100 is imminent ans should be triggered by an European bank going broke most lliklely candidate is Dexia right now but all French banks are welcome to join the club. Greece has failed to fullfil the parameters for the current payout and still in sake of financial markets they might get the next 8 bil to buy some time for the banks but the hardliners will demand more haircuts by the banks which is iinevitable but Trichet does not want to take those losses on his turn ( another 4 weeks).  lot of Ego stands before a managable and decent solution, which is anyway the default of Greece within weeks.

The sentiment has turned as bearish as it gets but the fact that we lack that capitulation is a hint it will happen within the next 10 days also by astro means. a very likely day is around the Full Moon around the 13th which will be opposite Saturn. Its really a time frame between now and the 13th with a dip below the 1100 as the goal towards 1050. Covering shorts around in the 1050-70 is recommended.

Here another bullshit story from Bloomberg as we are not in anything like a recession but rather a depression with many legs and valuations for such scenarios are rather 6-7 times earnings and dividend yields of 5% and higher ( considering that 25% of currrent earning in financials are bullshit numbers anyway the whole evaluation is nothing but pğure propaganda).

 

S&P Valuations Below Average Recession Level

Q

By Lu Wang, Inyoung Hwang and Rita Nazareth – Oct 3, 2011 11:57 AM GMT+0300

A pedestrian passes in front of Standard & Poor’s Financial Services LLC in New York, U.S. S&P 500 profits fell an average of 12 percent on a yearly basis in the nine recessions since the 1950s, according to data compiled by Bloomberg. Photographer: Scott Eells/Bloomberg

The rout that erased $2.9 trillion from U.S. equities has pushed valuations in the Standard & Poor’s 500 Index 25 percent below the average level from the last nine recessions, even as profit estimates fall.

Companies in the benchmark gauge for American equities trade at 10.2 times 2012 forecast earnings, compared with the average in economic contractions since 1957 of 13.7, according to data compiled by Bloomberg. At the same time, analysts have cut projections for profits next year by 2.6 percent to $110.78 a share, the biggest eight-week drop since 2009, the data show.

Bears say analysts have just started paring earnings estimates and that shares will prove expensive when gross domestic product shrinks. Bulls say stock prices have fallen so much that even should earnings fail to increase in 2012, equities are inexpensive.

“What you’re seeing is a growth scare,” Wayne Lin, a money managerat Baltimore-based Legg Mason Inc., said in a telephone interview on Sept. 29. His firm oversaw $643 billion as of Aug. 31. “The question is, how much of that is priced in. I’d say that if we don’t have a double-dip recession, if earnings just stay flat, these valuations are reasonable. The market already expects those downgrades.”

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~ by behindthematrix on October 3, 2011.

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