Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
rpt-MTA-2012-12-fc-Peek

rpt-MTA-2012-12-fc-Peek

Ratings: (0)|Views: 414|Likes:
Published by lcmgroupe

More info:

Published by: lcmgroupe on Dec 12, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

09/15/2013

pdf

text

original

 
 
1
 December 2012 EditionRestricted & Confidential
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
Monthly Market Analytics & Technical Analysis
 
December 2012 Edition
It is an explosive 'cocktail' when the present levels of uncertainty and complacencycoexist. The drama and political intrigue of the Fiscal Cliff is temporarily distractinginvestors from the magnitude of the global economic slowdown underway. Europe isentering a serious recession, the US is at stall speed, corporate revenues andmargins are under attack, and analysts are steadily reducing earnings. Peak earningshave likely been achieved for this economic cycle and the ammunition of QE
at thedisposal of the Central Bankers, no longer yields the same response. The market issetting itself up for an "Oh Sh#7T Moment", likely before the Q1 quadruple witch.
Gordon T Long12/12/2012
 
 
2
 December 2012 EditionRestricted & Confidential
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
Monthly Market Analytics & Technical Analysis
 
DECEMBER 2012
SUBSCRIPTION SERVICE: PLAN IV
 
BIG
 
PICTURE
 
-
 
EEPING 
OUR 
ERSPECTIVES 
..................................................................................................................................... 7
 
HIGHLIGHTS
 
-
 
HAT 
OU 
EED TO 
NOW 
..........................................................................................................................................10
 
SUMMARY ANALYSIS ......................................................................................................................................................... 10 
 
"QE 
Unlimited": Fed Panics - "OMT" Unlimited: ECB Panics ......................................................................................... 15 
 
Defining Chart #1 - "Delusional Distortion" Expectations .................................................................................................. 15
 
Defining Chart #2 - Long Term ......................................................................................................................................... 16
 
Defining Chart #3 - Short Term ........................................................................................................................................ 17
 
Defining Chart #4 - Short Term ........................................................................................................................................ 19
 
OUR
 
APPROACH
 
-
 
ACRO 
A
NALYTICS 
...............................................................................................................................................22
 
............................................................................................................................................................... 23 
 
DECEMBER 2012: Global Macro Drivers ........................................................................................................................... 24 
 
DRIVER: Real Wealth, Commodities & Dr Cooper ........................................................................................................... 25
 
DRIVER: Carry Trade & the € : ¥ Cross
.......................................................................................................................... 28
 
DRIVER: Currency & Forex Markets ................................................................................................................................ 33
 
DRIVER: Yield, Spread & Credit ...................................................................................................................................... 37
 
RECIPIENT: Global Equities ............................................................................................................................................ 39
 
RISK: Risk-On versus Risk-Off........................................................................................................................................... 40 
 
RISK: An Artificial "Paper" Asset Market .......................................................................................................................... 41
 
RISK: Forthcoming Deflation Shock ................................................................................................................................. 42
 
RISK: Cash Going to the Sidelines................................................................................................................................... 44
 
RISK: Cash Deposits See Largest Weekly Surge ............................................................................................................ 45
 
RISK: Micro Weakness Indicating Major Macro Problems ................................................................................................ 50
 
RISK: 2012 v 1987 ........................................................................................................................................................... 53
 
RISK: 2008 Parallels Keep Showing Up ........................................................................................................................... 55
 
RISK: No Cash Available for Margin Calls ........................................................................................................................ 56
 
TECHNO-FUNDAMENTALS ................................................................................................................................................ 57 
 
PATTERNS: Consumption Slowdown Ahead ................................................................................................................... 59
 
PATTERNS: Credit Demand Falling Off Dramatically ....................................................................................................... 60
 
PATTERNS: Bearish US Economic Indicators ................................................................................................................. 61
 
PATTERNS: Citi US Economic Surprise Index Appears to Have Peaked ......................................................................... 65
 
PATTERNS: Pre-QEIII, Pre-Election Economic Surprise Index Divergences Will Be Reconciled ..................................... 66
 
PATTERNS: Bear Market Short Squeeze ........................................................................................................................ 67
 
PATTERNS: Un-Nerving Divergences ............................................................................................................................. 68
 
PATTERNS: Volumes Continue to Warn.......................................................................................................................... 68
 
PATTERNS: Arithmetic versus Geometric Progressions .................................................................................................. 69
 
PATTERNS: Climatic Readings Signaling Exhaustion ..................................................................................................... 70
 
PATTERNS: Total Sector Performance Returns of Obama's First Term .......................................................................... 71
 
OUTLOOK
 
-
 
A
NALYTICAL
A
NALYSIS 
.....................................................................................................................................................72
 
STUDY: BOND BUBBLE - Potential Demand / Supply Mismatch ..................................................................................... 75 
 
BOND BUBBLE: Musical Chairs, Yield Chasing & other RISKY Children's Games .......................................................... 75
 
BOND BUBBLE: A Treasury Rally on Fiscal Cliff ............................................................................................................. 82
 
BOND BUBBLE: Potential Panic Buying Due to An Orchestrated Demand/Supply Mismatch ......................................... 83
 
STUDY: EARNINGS - Outlooks Being Brought Down ....................................................................................................... 84 
 
EARNINGS: Analysts Apparently Surprised? ................................................................................................................... 84
 
EARNINGS: Wage & Profit Disparity - Peak Profits, Trough Wages ................................................................................. 86
 
EARNINGS: Resting In a Few Tired Hands ..................................................................................................................... 87
 
EARNINGS: Overstated Due to the Magnitude of One Time Write-Offs ........................................................................... 91
 
EARNINGS: 10 Tired Generals Carrying the Market ........................................................................................................ 93
 
EARNINGS: Interest Rates Determined by Future Inflation & Growth .............................................................................. 94
 
EARNINGS: Only 30% of firms Beat Revenue Estimates. 65% Beat Earnings ................................................................. 96
 
EARNINGS: Global Market Comparisons ........................................................................................................................ 97
 
 
 
3
 December 2012 EditionRestricted & Confidential
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
STUDY: UNCERTAINTY & COMPLACENCY ...................................................................................................................... 98 
 
SENTIMENT: EU Consumer Sentiment Telltales ............................................................................................................. 98
 
SENTIMENT: Mispricing Uncertainty ............................................................................................................................. 100
 
SENTIMENT: High Level of Complacency ..................................................................................................................... 101
 
SENTIMENT: Uncertainty Always Stops Business Investment ....................................................................................... 102
 
SENTIMENT: Consumer Confidence Plunges After Election as Fiscal Cliff Realization Faced. ...................................... 104
 
SENTIMENT: Abruptly Plummets: Post Election, Sandy and pending Fiscal Cliff ........................................................... 105
 
SENTIMENT: Uncertainty .............................................................................................................................................. 106
 
SENTIMENT: Market Not Prepared for Fiscal Cliff Disappointment! ............................................................................... 107
 
SENTIMENT: Fiscal Cliff Uncertainty Parallels With Debt Ceiling Negotiations (The "Holy Shit" Moment) ...................... 109
 
STUDY: VALUATIONS - Extremes .................................................................................................................................... 113 
 
VALUATIONS: S&P 500 Between 40-70% above pre-bubble valuation norms .............................................................. 113
 
VALUATIONS: Hope Priced In ....................................................................................................................................... 117
 
VALUATIONS: Median NTM PE .................................................................................................................................... 118
 
VALUATIONS: Inflation Adjusted Earnings .................................................................................................................... 119
 
VALUATIONS: PE Expansion Possible, though Likely Temporary ................................................................................. 120
 
VALUATIONS: PE Compression In Process .................................................................................................................. 122
 
VALUATIONS: PE Ratio Election Year Trends .............................................................................................................. 123
 
VALUATIONS: The Shiller P/E ....................................................................................................................................... 124
 
STUDY: QE ISN'T WORKING - An Equity Perspective .................................................................................................... 127 
 
QE ISN'T WORKING - An Equity Perspective ................................................................................................................ 127
 
November Index - Reference Only ................................................................................................................................. 130
 
STUDY: Election Risk ....................................................................................................................................................... 134 
 
Post Election: Now for the Main Event - The FISCAL CLIFF .......................................................................................... 134
 
Post Election: Expect "Electile Dysfunction" ................................................................................................................... 136
 
Post Election: Following Historic Election Year Trends .................................................................................................. 138
 
Post Election: BUY Presidential Election; SELL Dividend Tax Credit ............................................................................. 139
 
Post Election: "Real" Realities - Equity Markets 83% Lower Since 2000 in Real Terms ................................................. 141
 
STUDY: Spending Deficit Correlation & the Fiscal Cliff.................................................................................................. 142 
 
Deficit Spending: Small Business Concern: "Government Requirements" ...................................................................... 142
 
Deficit Spending: Government Driver$ of Corporate Margin Levels - GMO's James Montier ......................................... 143
 
Deficit Spending: Every Investor And CEO Needs To See This Chart Before The Fiscal Cliff Is Hit ............................... 146
 
STUDY: PE Expansion / Contraction DRIVER$ ............................................................................................................... 148 
 
PE Ratio: Expansion, Then Contraction ......................................................................................................................... 148
 
PE Ratio: The Four Regimes of Equity Valuation ........................................................................................................... 149
 
PE Ratio: Since 2010, valuations have moved with Non-Investment grade (B) yields .................................................... 152
 
STUDY: Economic Cycles ................................................................................................................................................ 153 
 
Pay Close Attention to the 8 Economic Cycle Theories .................................................................................................. 153
 
SHORT
 
TERM
 
 –
 
ECHNICAL
A
NALYSIS 
.............................................................................................................................................. 159
 
SUPPORT & RESISTANCE ............................................................................................................................................... 159 
 
Gann Analysis................................................................................................................................................................ 159
 
Boundary Conditions ...................................................................................................................................................... 160
 
Channels & Regressions................................................................................................................................................ 162
 
Fibonacci - Controlling Time Extensions ........................................................................................................................ 164
 
Elliott Wave .................................................................................................................................................................... 169
 
SENTIMENT - Consumer, Investor & Trader .................................................................................................................... 175 
 
Consumer Confidence - Conference Board .................................................................................................................... 175
 
Consumer Sentiment - Michigan .................................................................................................................................... 179
 
Consumer Comfort......................................................................................................................................................... 180
 
Investors Intelligence ..................................................................................................................................................... 181
 
 American Association of Independent Investors ............................................................................................................. 181
 
National Association of Active Investment Managers (NAAIM) ....................................................................................... 182
 
Small Business Optimism .............................................................................................................................................. 183
 
Smart Money / Dumb Money Confidence ....................................................................................................................... 184
 
Percentage Stocks Above 50 & 200 DMA ...................................................................................................................... 185
 
Margin Levels ................................................................................................................................................................ 186
 
Mutual Fund Cash Levels v S&P 500 ............................................................................................................................. 189
 
OSCILLATORS & BREADTH: Indicators of Importance ................................................................................................. 191
 
NYSE Overbought / Oversold ........................................................................................................................................ 191
 

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->