Saturday 29 September 2012

Weekend update'1 - upcoming news/events

With September now almost over, its time to reflect on what is ahead in the remaining 3 months of 2012.


sp'daily3


Summary

The Oct'2011/June 2012 up trend is still holding together very well.

Only with a break below sp'1400 - as at end October, would an initial sign of trouble be apparent.
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With both GDP and the Chicago PMI both warning of a serious risk of a US recession for the now elapsing Q3, and most definitely for Q4, I am going to keep highlighting these two data points in the months to come.

The good thing, and it IS a good thing - even for the doomer bears out there, with QE3 announced, that great unknown is no longer part of the puzzle. We can focus much more on underlying fundamentals and market price action.


Its almost earnings time again

Earnings season is just over a week away, and once again Mr Market is going to have to cope with many companies probably reducing their outlooks for 2013, and highlight their 'serious concerns' about what happens to consumer demand if the US congress does not delay the tax rises/spending cuts.

Right now, I'm assuming his highness, Obama wins a second term. In which case, the republicans - (understandably) sore losers, will refuse to compromise. We only have a post-election 4 week window in which to agree something, and I'm guessing they won't be able to.

The one wild card is if the capital markets get upset at this 'fiscal cliff' terror, and we see a brief - but sharp 15/20% drop late November/early December, and then the US congress quickly rush through an agreement to delay the changes until 2014/15 - much in the style of TARP, September 2008

The market is never one for embracing uncertainty, and we are fast approaching a cliff, which was designed by congress itself. So, its rather ironic that both democrats and republicans are seemingly terrified of what they themselves crafted.
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Later today, the monthly index cycle update!