Monday brainstorming

1. The EU solution did not address any f the problems and actually awarded a contry for cheating right from the beginning. The EU has various pools where you get investments co-funded with cheap credits but mostly direct money presents in the size of hundreds of billions every year. That was the main motivation for the most poor countries to join the EU to rob those pools. After Greece stole a few hundred billions along with other countries ( but the eastern European countries really improved their infrastructure) they now get n top the bailout funds. Well actually in both cases not the regular Greece people had the benefits as the robbery was done by the sophisticated elite ( sounds familiar, since one had to know his way around the system to get to that money).

Anyway the effect is now obviously that the other PIIGS are pissed off that the worst of all gets even more and they are stuck with higher interest and the full amount due – that will against the claim that this was a single special bailout lead to copy cat situations as it is already starting. The core problem still exists that the global financial system is broke along with many sovereigns who have lived beyond their means. Even Germany has reached 82% debt to GDP ratio and has the lucky situation that it can finance the debt burden due to the crisis with 2 % long term interest rates – still Germany is on its save way to reach 100% within the next 12-18 months as the trouble in the EU will grow.

Italy is coming under more pressure and a save bet is that Draghi will very soon  be cutting rates again to backstop these bankrupt financial system . Trichet hesitated to do that a second time and the leaving Captain did not want to leave the impression he screwed up a second time.

Sentiment is now a bit more neutral and the bearish edge is scaling back a bit but still some margin left. The wave A up was much bigger than I thought as we already reached what I had in mind for the overall correction. The current wave A should top out this week just above 1300 SPX ( probably as high as 1320) from where we will drop back to at least 1250 but possible is also 1220-30 again. Second half of November is EU trouble time again by Astro patterns ( but I checked the  USA specific distress pattern rather occurs by mid DEC) – hence we could get a wave B down towards 3rd week of Nov. followed by final wave C up within 2-3 weeks thereafter followed by a crash into Q1 2012 aiming for 900 SPX if not even lower. That we can determine one the top is set but after the most steep one month rally ( rather upside crash) on no real reasons other than empty promises from EU leaders who have not the means to follow through as the national populations do not support more bank bailouts. Banks are advised to abort any kind of  bonus pays if they want to be backstopped since the occupy wallstreet movement can grow into something much more powerful starting 2012.


MONDAY, OCTOBER 31, 2011 Blank Image
High bullish readings in the Consensus stock index or in the Market Vane stock index usually are signs of Market tops; low ones, market bottoms.
Last Week 2 Weeks Ago. 3 Weeks Ago
Consensus Index
Consensus Bullish Sentiment 47% 35% 34%
Source: Consensus Inc., P.O. Box 520526,Independence, Mo.
Historical data available at (800) 383-1441.
AAII Index
Bullish 43.0% 36.0% 39.8%
Bearish 25.0 34.6 36.4
Neutral 32.0 29.4 23.9
Source: American Association of Individual Investors,
625 N. Michigan Ave., Chicago, Ill. 60611 (312) 280-0170.
Market Vane
Bullish Consensus 49% 48% 47%
Source: Market Vane, P.O. Box 90490,
Pasadena, CA 91109 (626) 395-7436.
FC Market Sentiment
Indicator 51.4% 51.4% 51.9%
Source: First Coverage 260 Franklin St., Suite 900
Boston, MA 02110-3112 (617) 303-0180.
FC Market Sentiment is a proprietary indicator derived from actionable sell-side trade ideas sent by the sell-side to their buy-side clients over the First Coverage platform. Over 1,000 institutional sales people at more than 250 firms participate on the First Coverage platform and have contributed hundreds of thousands of ideas since inception. Each Idea is associated with a ticker or sector and is tagged bullish or bearish by the creator. This data is aggregated at the sector, industry and market level. The FC Market Sentiment score ranges from 0-100 (0=most bearish, 50=neutral, and 100=most bullish) and represents a completely objective, real-time view into what advice the sell-side is providing to their buy-side clients
Citigroup Panic/Euphoria Model

Market Sentiment



~ by behindthematrix on October 31, 2011.

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