I personally think the market is pricing in a failure with the fiscal cliff and the corresponding reduction in GDP. I'm not sure if itthis adjustment is complete, but if the fiscalcliff should be resolved, I think we could see some pretty good upside. But I also believe that if we go over the fiscal cliff, stocks will rally on that as well as we will have certainty to the downside at that point.
That is the question and really no-one knows. I expect this fiscal cliff stuff to drag on for a while, so the markets could be vulnerable to a larger pullback, but I still think the fundamentals are supportive of higher prices.
I just don't think what we're seeing right now is 'business as usual?' Market dynamics (eg, the 'usual' relationships between price, sentiment, VIX) are 'off.'
Had a power outage that completely F'ed up my operating system, so I'm using ie until I can get everything straightened out. Might just buy a new black box....
You've got a stock growing at 10% a year, 5% yield, maintenance profits ($16.5 million revenues) of over $14 million per year from existing customers, a solid consulting business. No debt, $143 million market cap, but EV of $110. Plus, solid management.
It's Israeli, so you're getting some weakness due to the Hamas fighting, but I think it is a buying opportunity. The stock is more than 50% owned by a Polish company, so they could move the business up there if they really needed to.
Yep, it will rally up a few points or so then continue on the trend reversal. Sooner or later the fear of the stupid cliff will subside and it will be time. I have to admit, they do a great job of fear mongering, but it has nothing to do with prices.
Apparently the cliff is great for marihoochie stocks. Up another 11.84%.....
I think we rally to the 50 DMA over the next 5 to 10 trading days. Then we drop hard to 1,320 and the selloff is over. so best guess: 1,350 > 1,420 > 1,320 > new highs.
"The question is at what level in the indexes will the reduction in GDP be fully 'priced in?' -8%? -10%? -20%? More?"
I would like to point out that indexes should not be put into the same category as individual sectors. Both gold and silver stand to gain from the fiscal cliff, since an increase in taxes will increase the rate of growth of Debt/GDP, as I have already explained before. Thus, the recent sell-off in GDXJ in the light of a flat SLV has only greatly increased the value of GDXJ.
I thought the entire point of the fiscal cliff was to slash growth of debt/GDP, not only is the cliff inflationary in the sense taxes will increase but it's also deflationary in the sense of spending cuts.
It won't happen anyway, something worse will become the substitute. ;)
The spending cuts are 4X more than the taxes, so I suspect that is what is scaring some. They should turn off CNBC/FOX/Bloomberg and smoke pot. If a person is going to choose to be paranoid they may as well have a reason. Then we could make some $$$.
And the only sound that’s left After the ambulances go Is Cinderella sweeping up On Desolation Row
I can’t say for sure whether the ambulances have all gone, but I’m picking up QQQ (Nasdaq 100)/ GDXJ (junior miners)/ BAC here @ 61.8x/ 21.1x/ 9.0x, and adding RYSPX (Rydex S&P 500) + RYPMX (Rydex Precious Metals) at the close.
"I'm in agreement with CP. If the fiscal cliff kicks in, the deficit goes down which would put pressure on PM's."
Nope. If you have missed the post I made about this in early November, I suggest you read the section titled "The Problem with Austerity" in the following article:
Don't see how people can argue that printing more money (QE Infinity) will cause gold prices to rise and printing less money (Fiscal Cliff) will also cause gold prices to rise.
I know the gold bugs say it is so (my one friend is a hard-core gold bug and tells me this all the time), but logically it just doesn't make sense.
I personally think the market is pricing in a failure with the fiscal cliff and the corresponding reduction in GDP. I'm not sure if itthis adjustment is complete, but if the fiscalcliff should be resolved, I think we could see some pretty good upside. But I also believe that if we go over the fiscal cliff, stocks will rally on that as well as we will have certainty to the downside at that point.
ReplyDeleteThe question is at what level in the indexes will the reduction in GDP be fully 'priced in?' -8%? -10%? -20%? More?
DeleteThat is the question and really no-one knows. I expect this fiscal cliff stuff to drag on for a while, so the markets could be vulnerable to a larger pullback, but I still think the fundamentals are supportive of higher prices.
Deletehttp://media.bloomberg.com/bb/avfile/News/Surveillance/vXcF1erZzejI.mp3
ReplyDeleteTOF- What was Z's IPO priced at?
ReplyDeletenot sure man.
DeleteI just don't think what we're seeing right now is 'business as usual?' Market dynamics (eg, the 'usual' relationships between price, sentiment, VIX) are 'off.'
ReplyDeleteTo me, that spells 'risk off.'
DeleteDMND...That left a mark.
ReplyDeleteBTW, I was shocked when it rallied yesterday on restatement 'news'.
DeleteWFR - Looks like the August gap up is very near to closing.
ReplyDeleteMET - Check this one out, nearly back to trend line support and trading at ~1/2 of book.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteIE8 is a pos.
ReplyDeletehttp://www.youtube.com/watch?feature=player_embedded&v=t7ruuydWOY4
There...drivin' south....
IE...I didn't realize people still use that.
DeleteHad a power outage that completely F'ed up my operating system, so I'm using ie until I can get everything straightened out. Might just buy a new black box....
DeletePRU - "S&P rates Prudential Financial jr. sub. notes 'BBB+'"
ReplyDeleteAdded remaining amount in cash to Z at $23.65
ReplyDeleteNLY - Every morning a fire sale.
ReplyDeleteGoing outside (where it's cold)...
ReplyDeleteGMO - The General gonna roll over now too?
ReplyDeleteRBY - Her slipper break a heel?
ReplyDeleteGE - Interesting how the 200SMA converges at $20
ReplyDeleteTVIX - Finally moving up a little, time to get long(er) once this thing completes a series of spikes?
ReplyDeleteYHOO - Hey what a shock, I might even make some coin on this one!
ReplyDeleteOkay, I'm not joking...the only thing on my screen that's GREEN is either short or dope stocks.
ReplyDeleteYou guys need to look into these things. (not the shorts).
yeah i've noticed their outperformance...greens on my screen are DECK, YOKU, NOK, YELP, MITK, BAC, UPS, Z, BIDU, DANG, LNKD. Social stocks and China.
DeleteBought some MGIC at $3.93.
ReplyDeleteYou've got a stock growing at 10% a year, 5% yield, maintenance profits ($16.5 million revenues) of over $14 million per year from existing customers, a solid consulting business. No debt, $143 million market cap, but EV of $110. Plus, solid management.
It's Israeli, so you're getting some weakness due to the Hamas fighting, but I think it is a buying opportunity. The stock is more than 50% owned by a Polish company, so they could move the business up there if they really needed to.
Interesting:
ReplyDeletehttp://allstarcharts.com/last-6-days-are-rare-for-spys/
Yep, it will rally up a few points or so then continue on the trend reversal.
DeleteSooner or later the fear of the stupid cliff will subside and it will be time.
I have to admit, they do a great job of fear mongering, but it has nothing to do with prices.
Apparently the cliff is great for marihoochie stocks. Up another 11.84%.....
BTW, YRCW should announce they are delivering the devil weed. Their stock would go ape shit.
DeleteI think we rally to the 50 DMA over the next 5 to 10 trading days. Then we drop hard to 1,320 and the selloff is over. so best guess: 1,350 > 1,420 > 1,320 > new highs.
DeleteWhat stocks are considered marijuana stocks?
ReplyDeleteTRTC, MDBX, CBIS, MJNA
ReplyDeleteBTW, you're probably going to want to let MDBX pullback from that 389% gain today.
DeleteWow - who knew you could legally invest in pot?
DeleteMDBX at $0.03 (52 week low) would have been quite a buy for a stock at $215.
Now you've completely run out of excuses for not paying your electric bill and you might even have enough left over to spring for a real browser! ;)
Delete"The question is at what level in the indexes will the reduction in GDP be fully 'priced in?' -8%? -10%? -20%? More?"
ReplyDeleteI would like to point out that indexes should not be put into the same category as individual sectors. Both gold and silver stand to gain from the fiscal cliff, since an increase in taxes will increase the rate of growth of Debt/GDP, as I have already explained before. Thus, the recent sell-off in GDXJ in the light of a flat SLV has only greatly increased the value of GDXJ.
I thought the entire point of the fiscal cliff was to slash growth of debt/GDP, not only is the cliff inflationary in the sense taxes will increase but it's also deflationary in the sense of spending cuts.
DeleteIt won't happen anyway, something worse will become the substitute. ;)
I'm in agreement with CP. If the fiscal cliff kicks in, the deficit goes down which would put pressure on PM's.
DeleteThe spending cuts are 4X more than the taxes, so I suspect that is what is scaring some. They should turn off CNBC/FOX/Bloomberg and smoke pot. If a person is going to choose to be paranoid they may as well have a reason. Then we could make some $$$.
DeleteSomeone's been smoking the stuff, perhaps more than we know. The phenomenon has become predominant enough to begin appearing on the bottom line.
DeleteWhich stock are considered opiate stocks, I wanna' try getting out in front of the next trade...
ReplyDeleteMy favorite verse in the song:
ReplyDeleteAnd the only sound that’s left
After the ambulances go
Is Cinderella sweeping up
On Desolation Row
I can’t say for sure whether the ambulances have all gone, but I’m picking up QQQ (Nasdaq 100)/ GDXJ (junior miners)/ BAC here @ 61.8x/ 21.1x/ 9.0x, and adding RYSPX (Rydex S&P 500) + RYPMX (Rydex Precious Metals) at the close.
"I'm in agreement with CP. If the fiscal cliff kicks in, the deficit goes down which would put pressure on PM's."
ReplyDeleteNope. If you have missed the post I made about this in early November, I suggest you read the section titled "The Problem with Austerity" in the following article:
http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2012/10/23/the-perils-of-the-fiscal-cliff.aspx
Another good article about the US fiscal situation:
Deletehttp://www.zerohedge.com/news/2012-11-15/guess-what-they-are-not-cutting-fiscal-cliff
Don't see how people can argue that printing more money (QE Infinity) will cause gold prices to rise and printing less money (Fiscal Cliff) will also cause gold prices to rise.
DeleteI know the gold bugs say it is so (my one friend is a hard-core gold bug and tells me this all the time), but logically it just doesn't make sense.
It's not the cliff!
ReplyDeleteJohn Travolta, Olivia Newton-John Christmas Album Plunges Nation Into Double-Dip Recession
http://www.theonion.com/articles/john-travolta-olivia-newtonjohn-christmas-album-pl,30364/
How could the US possibly be in or in danger of recession if Europe after all they've been through only now officially make the list?
ReplyDelete