Monday, October 17, 2011

COBRA is looking for my PREFERRED scenario, an A-B-C correction to the current rally, Cobra's Market View, HOWEVER, I disagree with the time frame. He's calling for the corrective wave THIS WEEK, my thought is that as we are currently in the middle of earnings season, we won't get the corrective wave, that would be the "B" wave, until after next week. GENERALLY, Da Boyz wait until the third week of earnings season before they determine if they are a "Santa", that being whether they've been good or bad little kids, this week is week number two, so we "probably" won't get the pull back until next week, or after. It would be just typical of Da Boyz to wait until the HIGHLY publicized "BEST SIX MONTHS OF THE YEAR" starts in November, let the retails pile in the first couple of days of November, and then just shellack the shit out of them.
He wants to wait to see the depth of the pull back before he can determine a "target", but I'll tell you what, I would NOT want to see the pull back go deeper than a 50% retracement of the current rally, that's the "B" point up there at $115. If we pull back to that level, that gives an "Equal Move" target of "about" $129. 


Of course, the, "markets", NEVER do what I want, in fact, they usually do the WORST thing I can imagine, in this case that would be that we don't hesitate here, and blast off into Never fricking Never Land. Wad ever, it is wad it is, we shall see what we shall see.
Here's an interesting note from one of my all time FAVORITE ANAL-LIST, Stan Stovall of S & P:
analyst tidbit (copyright schwab)
“…Sam Stovall is chief equity strategist at Standard & Poor's. He notes that expectations for corporate earnings have come down significantly in recent months… the consensus Q3 earnings estimate for S&P 500 companies has been pared from 16.9% in July to 13.1% as earnings season began. Energy names are likely to show the strongest improvement with a double digit increase. Towards the low end are the financials which have seen their quarterly earnings growth rate slashed from 14.9% in the summer to 0.9% now. Looking ahead, the analyst community anticipates Q4 earnings to grow by 13.8% as tracked by Thomson Reuters…”
“… Mr. Stovall provides … technical tidbit ... the quarter just ended marked the tenth time since World War II that the major averages experienced a drop of more than 10% in the third quarter. Stovall's research found that stocks rose in eight of the nine subsequent fourth quarters by an average of 7.2%.... While Stovall is optimistic about the present quarter, he remains cautious overall. He warns that a Q4 stock market rally could be followed in the first part of 2012 by a slide back to the recent bear market levels under S&P 1100….”


The reason I bring it up is because I have already seen Bubblevision and other bull shitish sites like never Bespoke, yelling and screaming about the "fact" that of the 40 S & P 500 companies reporting, 70% have BEATEN "expectations". What they DON'T mention, as shown in Stan's comments, is that the ANAL-LIST have very quietly, and subtly, brought earnings expectations DOWN 22%, so all they are doing is beating REDUCED "expectations". Wad ever, I, DO, find the stat about the average 7.2% rally in the fourth quarter, after a 10% drop in the third quarter, pretty interesting. Also, VERY interesting, is Stan's warning about the first part of next year, keep in mind that Stan is VERY good, PLUS, he also works for an outfit whose sole purpose is to suck you into "investing" in the "markets", and for him to be "negative", is, VERY, unusual.    

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