THE CAPER TAPER

A Disguised G20 Summit

Gordon T Long
10/18/2013

October 2013 Edition

1

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THE CAPER TAPER

A Disguised G20 Summit

OCTOBER MONTHLY MARKET COMMENTARY

MARKET OVERVIEW ................................................................................................................................ 3
GORD'S VIEWS & OPINIONS .................................................................................................................................................................. 3
EXPECT: Another Scare before the Year End Rally & the Multi Decade Top.............................................................................. 3
WITHIN: 5-6 months of a Multi Decade Top and Market Reversal ................................................................................................ 4
PATTERNS in the Near Term Are Eerily Familiar ............................................................................................................................ 4
PATTERNS Are Also Just Unsustainable.......................................................................................................................................... 5
HINDENBERG OMEN: We Still Are Operating Within Historic Cluster Expires November 15th............................................ 5
DISCONNECTED Markets from All Basic Fundamental Valuation Measures ............................................................................. 6
MARGIN Debt is at a Peak (Again) .................................................................................................................................................... 7
Earnings are Falling With a Q4 "Hockey Stick" To Come ............................................................................................................... 7
Most Sentiment Indicators Are Rolling Over Again (History Tells Us to be aware of this) .......................................................... 8
CRACK-UP BOOM After the Near Term Consolidation We Still Expect new Highs.................................................................... 9
I- TARGETS............................................................................................................................................................................................... 10
II- MONTHLY METRICS & ASSESSMENT .......................................................................................................................................... 11
A - LONG TERM: Fundamentals ...................................................................................................................................................... 11
B - INTERMEDIATE TERM: Risk ..................................................................................................................................................... 13
C - SHORT TERM: Sentiment........................................................................................................................................................... 14
III - BIG PICTURE ..................................................................................................................................................................................... 16
IV - DEFINING CHARTS ......................................................................................................................................................................... 17
Fed Panics> "QE Unlimited" - ECB Panics> "OMT" Unlimited - Japan /UK Panic> ...................................................................... 17
Defining Chart #1 - "Delusional Distortion" Expectations .............................................................................................................. 17
Defining Chart #2 - Finding the Long Term Pivot ........................................................................................................................... 19
Defining Chart #3 - Intermediate Term Top ..................................................................................................................................... 23
Defining Chart #4 - Short Term Volatility ......................................................................................................................................... 25
V- KEY ANALYTICS ................................................................................................................................................................................ 29
RISK ..................................................................................................................................................................................................... 29
PATTERNS.......................................................................................................................................................................................... 32
VI - STUDIES ............................................................................................................................................................................................ 33
STUDY: Q3 EARNINGS .................................................................................................................................................................... 33
STUDY: VALUATIONS ...................................................................................................................................................................... 33
STUDY: Margin & Leverage .............................................................................................................................................................. 34
STUDY: DIVIDENDS & BUYBACKS................................................................................................................................................ 35
TRIGGER$ ZONES ............................................................................................................................................................................ 36
DRIVER$.............................................................................................................................................................................................. 37
COMMENTARY THE TAPER CAPER ........................................................................................................ 38
THE BACKROOM G20 SUMMIT ...................................................................................................................................................... 38
GLOBAL GROWTH ............................................................................................................................................................................ 39
THE FRAGILE FIVE ........................................................................................................................................................................... 39
THE ECHO BOOM ............................................................................................................................................................................. 40
G20 TIMELINE .................................................................................................................................................................................... 41
CRACKUP BOOM .............................................................................................................................................................................. 45

October 2013 Edition

2

Copyright 2013 GordonTLong.com

Restricted
All Rights Reserved

general@GordonTLong.com