Join The Trading Room

Will Whiff of Recession Overwhelm Even Apple?

By Rick Ackerman Posted on October 25, 2012, 12:01 am EDT Last Updated October 25, 2012, 10:30 pm EDT

Although Apple shares have gyrated wildly this week, soaring $27 on Monday and then plummeting $18 the day after, the stock is probably just warming up for the big event later this week. Our guess is that the company will announce stellar earnings after the bell on Thursday, but that attempts to rally the stock will be overwhelmed by the bearish tide of Q3 earnings reported to date.  Earlier in the week, we had raised the prospect of a resurgent Apple pulling the broad averages higher.  However, given the relentless drumbeat of misses, warnings and dismal numbers from the likes of Google, IBM, Microsoft, GE, Caterpillar and a few other corporate biggies, it is evidently not just an earnings hiccup that investors have been discounting via two big selloffs in three days, but the onslaught of a potentially deep recession that has been in gestation since late summer.  Under the circumstances, it is probably asking too much of Apple to single-handedly buoy investors’ hopes for the remainder of the year.

So what, then, of our prediction that AAPL’s performance this week will set the tone for the stock market in the months ahead?  As things stand, and notwithstanding the prospect that monster earnings will be announced, we’d be surprised if Apple shares end the week significantly higher than where they are now. The stock settled near $613 yesterday after topping at $634 intraday, but unless more such gyrations vault peaks #1 and #2 in the chart above by Friday, it’ll be a rapidly deteriorating technical picture that Apple shareholders face next week.

2500-Point Dow Plunge

In an earlier commentary, we said the Dow could drop 2500 points quickly when the delusions that have long sustained the blue chip average finally gave way.  Short of the appearance of some horrific black swan, nothing we can imagine would quash investors’ hopes more swiftly or unforgivingly than the lurking epiphany of a Fed with no more cards to play. At that point, all of the statistical lies and hubris that have sustained the bull market will be seen for what they were: mass folly.  Our prediction of a 2500-point plunge in the Dow saw it occurring over several months. However, we should be prepared for the avalanche to play out in mere weeks or even days, since a whole constellation of markets equally steeped in folly – most significantly, bonds and currencies – will at that point be without the absolutely crucial psychological crutch that the bull market in stocks has provided.

Obviously, institutional investors have built a trap from which they cannot possibly escape. As for the individual investor, only insanity would explain a bet by him right now that upside potential outweighs downside risk.

***

[Click here for a free trial subscription to Rick’s Picks that includes access to a 24/7 chat room and the recently launched ‘Harry’s Place’.]

  • Marc Authier October 27, 2012, 9:27 pm

    10 years ago Apple was at 3$. It is not a monopoly and eventually someone else will invent a cooler piece of electronic crap. Nokia was 40$ a couple of years ago and it was only blue sky ahead. So was Research in Motion. Today both are bust. Its a religion. Keep God out of investing.

  • Marc Authier October 26, 2012, 11:44 am

    Will Steve Jobs, the FoxCom slave owner, rise up from the dead to save his Apple ? Its not a company. Its a freakin crazy religious sect. I hope personnally that Apple dies like its founder. Irrationnal exhuberance fueled by religious cretins of mostly hyped up elctronic crap maker.

    .

    • mario cavolo October 26, 2012, 3:31 pm

      I don’t know about that Marc, they do make really cool, smooth products. Last year I gave my Iphone to my wife because I couldn’t tolerate the small screen, bought myself the latest HTC 4.3″ screen. Sure I like it alot and Android gets the job done similarly, its not that much different than the iphone but after a year I can EASILY conclude the iphone OS is superior, smoother, faster, slicker, cooler, easier, glitch free in comparison…

  • KS October 26, 2012, 6:17 am

    I appreciate the answer, Gary.

    RA “…And that includes even you. How are your savings allocated right now?”
    That was a question directed at you.

    I would certainly like the answer as well. Perhaps your real life position would speak of your economic views more clearly, than the mostly academic/theoretical writings you present.

    It is true, that most here are looking to make money one way or another from the market, knowing well that the music may stop playing at any time, and someone else will already be sitting in the chair. It is the allocation of their core assets, that shows their true alignment.

    Per your view of the market/economy/politics, I would assume your core financial position would differ from mine. And I would like to know what it is. Perhaps I am missing something.

    I think most people here are open-minded. They choose to carefully play at the casino for profit, knowing full well it’s a scam. Perhaps not so with you?

    And to others…my apologies, as I look like I am trolling myself now. I do follow the posts and articles daily, but never write. I am sincerely interested in getting into the head of an opposing view to see it as you do, Gary. Perhaps there is not much to disagree on after all.

  • 1987dejavu October 25, 2012, 11:41 pm

    damn, ra, you are killing me here, dude.
    my prior post today, mid-day, 6+ hours ago,
    way before aapl just released their crap earnings
    (along with amazon’s and ‘outlook’ additional crap earnings),
    were a warning, that 37 out of 38 ‘expert analysts’ were bullish on aapl,
    and the only abstaining was neutral. yet not a bear among them!!
    and I said, IF I had money, which I don’t, I’d short aapl asap, on that fact.
    I also wrote, few days ago, that aapl would chart-match, google’s crash, soon.

    guess what. aapl is currently being dumped wholesale, in after-market,
    over 1%, under $600 dollars, so bad, it has BEEN after-hours HALTED!!!

    (amazon and ‘outlook’ are also getting it hard up their after-hours — too).

    damn. tomorrow, should be mightyyyy……. interesting.
    a 1987—dejavu.

    and if you post my prior aapl post today, 6+hrs ago, I’ll provide my gold study.
    (had 2 weblinks in it, as reference, so maybe that’s why your system killed it).

  • Chris T. October 25, 2012, 7:17 pm

    “BigTom October 25, 2012 at 4:12 am
    Buster – yep the whole 9/11 explanation give to the public is questionable. I have se”

    A very simple proof that there is something not right with that whole thing, is the fact, that they do everything they can, with ad-hominem attacks, off-point criticisms, etc, to deflect the question as inappropriate, inadmissible, and so on.

    The obvious answer, if there were not something to hide, is to answer the question straight-up, to provide the evidence sought, and so on.
    “national security”?
    Just another screen to hide behind.

    9/11 is just one instance of that. Here are others:

    Romney’s refusal to show his pre 2009 tax returns (where David Stockman posits we would find many instances of politically incorrect 1% system-gaming, legal, but damaging)

    Obama’s refusal to come clean with his transcripts (viz his transfer from po-dunk to Columbia), or his birth certificate (meaning the actual original issued in 1961, as opposed to the later-generated short form that they have released)
    [kudos to the toupee buffoon for his current $10 million challenge]

    The refusal to permit a real audit of the Fed or our stored gault

    Keeping many important documents from WWII under wraps under extensions of secrecy protection– as if there could be ANYTHING there that endangers our current national security, as opposed to besmirching our moral righteousness

    and on and on

  • 1987dejavu October 25, 2012, 6:20 pm

    more 1987dejavu stock-action and deflationary news:

    all 3 primary stockmarkets, dji, spx, and ndx,
    just performed right now a 1-day island reversal,
    plus, reversal on all 3 (confirming new down trend),
    hit a new 5-month low.

    IMO, this means the market’s fall should continue soon, (and possibly gain speed),
    since when there’s a break in re-tests of prior lows, usually means fall continues.

    and in additional (big-time, IMO) deflationary news:
    80 CEO’s from major american corporations (“from aetna’ to weyerhaeuser”, says the article)
    have now formed ‘a band of brothers’, in order to:
    “…pressure Congress to reduce the federal deficit with tax-revenue increases as well as spending cuts.”

    http://finance.yahoo.com/news/ceos-call-deficit-action-041900721.html;_ylt=ArBoBdIrmngk6QpWDAIzWEeiuYdG;_ylu=X3oDMTRwdWwwZTcyBG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yaWVzIG1peGVkIGxpc3QEcGtnA2EyOWVkNWU0LWM5OTctM2JkZC05YmMxLTJjMGNjZTAyODEyNARwb3MDMQRzZWMDTWVkaWFCTGlzdE1peGVkTFBDQVRlbXAEdmVyA2Y1YjJjN2UwLTFlOGUtMTFlMi1hYjk3LTEwY2QxZDkwNGVhYg–;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

    times are starting to get interesting now.
    in the chinese curse sense.

    have a feeling that romney is going to win in 2 weeks, and by a landslide.

    • 1987dejavu October 25, 2012, 11:08 pm

      technical correction to my post above:

      I wrote:
      “…hit a new 5-month low.”

      yet it should read:
      “hit a new breakage of 5-month uptrend parallel-lines low.”

      ra, you should post my prior post today, since IMO, it’s even better,
      that the one you allowed to post above.

      if you do, I’ll provide tomorrow, a visual 11 year fractal chart view,
      of gold price,
      comparing the near-identical fractal charts, of 1971-1982, vs. 2001-2012.

      bottomline, if you care. I see gold price, in approx. 21 fib months time,
      at roughly fib 61.8% lower, which should take recent top of $1790,
      down to $750 gold (give or take $50), since there’s big support there.

      and just imagine deflationary world, that $750 gold then, will be in.

    • BigTom October 26, 2012, 12:06 am

      1987dejavu -$750 gold in 21 fib months time?…. quite a prediction indeed! That is a lop of $1000 off todays prices. Are these charts apolitical and irrespective of eras? Anything is possible of course and charts say what they say, but do you consider comparing the 1971-1982 period to the years 2001-2012 would be comparing apples to apples when overlaying one chart on top the other?

    • 1987dejavu October 26, 2012, 12:26 am

      tom, it has to do with manias.

      IMO, gold price is currently still in a mania, according to several factors.

      however, the most important, which I’ve posted here before,

      is the comparison of your so-called, ‘apples to apples.’

      and I mean that–literally. for measure of gold’s ‘true’ human life value,

      is vs. other human life commodities. a.k.a.: the crb index.

      and gold is so (hysterically, IMO) overpriced currently,
      vs. the crb index,

      in terms of last 40 yrs range (this includes ’70’s extreme inflation),

      that it would have to return to approx $700, to be back at TOP of range.

    • gary leibowitz October 26, 2012, 12:58 am

      I take this as being very close to a bottom. AAPL news was a non-event. Sales higher than expected, revenue lower. Not by much though. Future expectations?

      If you think the market is falling apart than it will not be from AAPL.

      Mr. 1987 has been betting like crazy on a crash. I believe he was sure, so many times, that it would take a calculator to count that high.

  • Divergent Observer October 25, 2012, 5:30 pm

    GaryL: “we are moving on 4 years of an explosive up move, one that challenges the record books. Clearly the crash at any moment doctrine has not worked.”

    This 4 year explosion that you fondly talk of, I suppose it is this outlook that is upsetting the most and maybe why you receive so much headwind. In my eyes this fantastic bull run is not entirely legitimate due to it’s severe manipulation. Does that mean it hasn’t happened or that you can’t play it? No, but I personally wouldn’t emphasize it as this amazing recovery and allow it to guide my future expectations. A blind man with a guide dog is still blind. As has been said repeatedly here, all it takes is for that one black swan event to change the outcome of this charade, possibly overnight, and it all gets reversed. I’m no trader, but I wouldn’t invest a dime in an environment like that. Entertaining as always though.

    JJ, “Renting a lifestyle, at least temporarily” Well said. So sad but true.

    • gary leibowitz October 26, 2012, 12:30 am

      Placing one buck in the market and getting out two is the ONLY thing people are interested in. I thought that was what this blog was all about, making money.

      Does it really matter that policy changes? The market changed from mark-to-market to a less transparent way of viewing earnings and valuation, yet analysts have also adjusted by giving a lower expectation. It’s a game that is played and usually the street values that company accordingly. I haven’t seen bank stocks for years take off simply becuase this rule was discarded. They understand the underlying value and also know that Uncle Sam is helping them recover thier losses. This provides less volatility for the industry while it heals.

      If you know the real value of things than I assure you people that invest for a living also know. It’s when the
      “unexpected” happens, an event or dramatic drop in trend that gets the street into a frenzy. Will the next few events or trend line change very much? Maybe. I will be looking for such change, but for now it’s pure speculation.

  • John Jay October 25, 2012, 4:24 pm

    Gary,
    The “Waterfall” is actually the “Fiscal Cliff”.
    And to show how far gone our economy is, the “Fiscal Cliff” is just a very modest return to sanity.
    And see how the DC crowd is twisting, turning, and trying to avoid that sanity.
    In spite of the happy talk from Ben and Barack, they know they had to conjure up tens of trillions just to slow the descent just a little.
    ZIRP enabled debt is all that is sustaining us.
    Even the big phone carrier VZ has a debt to equity ratio of about 100%, GE is about 250% Ford is about 2000%.
    Just google D/E ratios for big US companies.
    And they can roll their debt over cheap, thanks to ZIRP.
    One trillion in student loans to keep the kids out of the labor pool.
    Ignoring people not paying a mortgage for three years.
    Forty percent of the population has $500 or less saved for emergencies, most people living paycheck to paycheck. Renting a lifestyle, at least temporarily.

    No one is saying you can’t make money in the market.
    But it is all digital, and they can confiscate it all with one keystroke.
    And you have no recourse if they do that.
    And if the chaos we are sowing around the world does not bail us out, they will confiscate it, I am sure of it.
    That is what we all afraid of, in spite of the market rebound since 2009.

    • gary leibowitz October 25, 2012, 5:00 pm

      The fiscal cliff is a political game. We shall see if anyone flinches. By no means is it written in stone that it will happen. In fact a bookmaker would give the odds of that happening at under 50 percent.

      Ove the last 3 plus years there have been announcements of an imminent crash over every concievable event.

      I don’t understand everyones argument against me. I agree we have debt that is unsustainable and will cause pain. I understand it can’t be fixed sufficiently to avoid that pain. I don’t subscribe to the notion that it is useless to play the market since you will never see a dime of those profits. I don’t believe in a fatalist outcome. The Great Depression was as bad as it got. People made money before, during, and after the crisis. And so it goes…..

  • gary leibowitz October 25, 2012, 3:33 pm

    I originally came on board because I was as fanatically oriented as the rest. In fact I loved getting confirmation that a crash was just around the corner.

    What changed my attitude? Hmm. Hard to pinpoint. Perhaps it was introspection, perhaps some articles ideas that changed my view point. I do know that at the time I was researching everything I could about Warren Buffetts life and that seems to have influenced me the most. My livelihood required me to be very analytical, so I decided to discard my preconcieved notions and view everything using math, historic data, and trend.

    Why am I here? Good question. Perhaps to open people up to the notion that fanatical dogma is what you are using. Once acknowledging this fact it might be possible to broaden the discussion and expand on knowledge to help everyone understand the market and profit from it. I myself would love to hear new ideas. Unfortunately everything stated one year ago is still being touted. No change even though we are moving on 4 years of an explosive up move, one that challenges the record books. Clearly the crash at and moment doctrine has not worked.

    I believe people here might be right about this economies disastrous conclusion, the so called end game, but not focusing on the process that might get us there. It’s as if a person knows that the raft in the river is on the path of going over the waterfall, yet doesn’t bother to determine just how long it would take to get there. The real in the moment signs are there to review but instead it’s the end game people keep warning about. This raft has so far navigated this water for almost 4 years on very calm waters. The current data point, trends, charts, hsitoric comparisons, etc.. are diagnosing the rafts conditions on the water today. To ignore them is to just sit back and wait for the eventual plunge over the waterfall. Without using any analysis it could happen today or 5 years from now.

    Just as Rick has a strict technical rule to follow, you should also consider using an analytical method in determining the current state of affairs. To dismiss the last 4 years as continual manipulation as if it is dangling on someones string, allows you the comfort to stick to the same dogma, but it doesn’t help in explaining when the end game will be reached. You must evaluate the market within the mechinism it is playing on, even if you are right about the waterfall.

    &&&&&&&

    For all we know, Gary, the endgame could be reached this afternoon. In any event, no analytical method can hope to predict when the egregiously misplaced confidence that yet sustains the stock market will vanish. It is foolish, in the meantime, to think that even the wisest and nimblest among us will have time to take evasive action.

    And that includes even you. How are your savings allocated right now? RA

  • KS October 25, 2012, 5:51 am

    This is a question for Gary:
    Since you are so set on proving your point of view, and clearly display your views of the economy/politics, as to contrast most of the participants here, why do you do it?
    Usually people with similar opinions look for a place to hang out with a like minded crowd. Most here are no exception, except for you.
    This is not a personal attack at all. I am just trying to understand what is it you are trying to prove by disagreeing and making an everyday appearance on any subject. Is it a calling of yours to persuade everyone to think like you, or to at least agree with your views? And once we do, will you still be here?

    I just don’t quite understand the mental requirement to educate other against their will, agitating them while in process, making sure they see the world in a certain way(yours). Self-assertion or plain old trolling?

    • Cam Fitzgerald October 25, 2012, 2:03 pm

      Don’t scare him away KS. All good drama has villains, underdogs and contrary points of view. If we never get challenged we risk becoming complacent, even lazy thinkers. Gary’s daily challenges are a part of what makes this site work so well. I give him credit for keeping all of us on our toes…..he may just be the perfect contrary indicator (and we have him!)

  • BigTom October 25, 2012, 4:12 am

    Buster – yep the whole 9/11 explanation give to the public is questionable. I have seen released video of the pentagon and haven’t yet seen any plane parts, luggage, or engine holes in the bld. The security video just shows and explosion. The parts I’ve seen show no actual plane hitting the bld. And of course blding #7 not being hit with anything, just collapsed in the same fashion as the twin towers out of sympathy, I suppose. I have read on several occasons there were large short positions taken out on the airlines just prior to 9/11. Was wondering if anyone knows this to be factual?

    • Buster October 25, 2012, 7:23 am

      Yes, it’s certainly factual, though the 9/11 Commission ruled there was nothing suspicious in a 1000% increase, so I’m sure everything’s fine!
      There are lots of details available such as here:
      http://whatreallyhappened.com/WRHARTICLES/illegaltades.html

      …but the actual truth of the matter is most probably a matter for discernment. Based on the collective facts, I think it safe to say that the whole bloody lot stinks!
      The 9/11 event must be the most conclusive ‘conspiracy theory’ in all of history by a very wide margin. It should be a wake up call for any who still believe that the powers that be are anything other than brutal criminals. Unfortunately, though, humans are not well known for their discernment or honesty.

  • Chris T. October 25, 2012, 3:25 am

    @Anthony F

    because your post is so far back, put here.
    Looked at that Gary Null article line you posted.

    Thanks! I’ve been reading so much depressing but true commentary, such as Mr. PCRoberst Cassandra missives, so I needed a good laugh.
    Mr Null certainly suffices, what a hoot!

    I sure hope he is a better nutritionist than economist, because if he’s on par in both areas, his followers would drop like flies.

    But seriously, I haven’t seen such a collection of econo-crap in a long time.
    In case others here missed it, see:
    http://www.garynull.com/home/8-facts-that-prove-our-govt-is-not-going-broke.html

    It’s worth your time just for the chuckle factor.
    No wonder comments are set to off: I guess he know people wouldn’t laugh with him, but at him, and no one wants that….

    • Dave October 25, 2012, 9:57 pm

      Gary Null also promotes AIDS denialism as conceived by Univ Berkeley CA scientist, Peter Duesberg, that HIV does not cause AIDS. This attracts many conspiracy theorists, quacks and resulted in many deaths by those who did not begin antiretroviral drug therapy because of this. Duesberg has been disproved but Gary still promotes these ideas on his website.

      http://www.garynull.com/home/hiv-equals-aids-and-other-myths-of-the-aids-war.html

  • Chris T. October 25, 2012, 2:18 am

    ever one to love any conspiracy that appears plausible (is there any other kind?):

    It is obvious that Wall Street has shifted its financial allegiance from Obama to Romney, as compared to ’08 between O/Mc (plenty of data to demonstrate this is out there).

    So, maybe they are working on a sudden pull-down of noticeable big numbers, DJIA etc, to convert the undecideds into getting that things ain’t working?

    It’s never beyond this crowd to play with fire in a gas-filled room if there is a cent to be had by striking the match.

    Rick’s point about an “onslaught” of recession is better put as “continuation of” a recession after an interim plateau. Just this morning the drastically slowing car sales across Europe, and including Germany, made the rounds, and PSA is getting its version of GM-bailout from French government, even including the same: give control to the gov. and the unions bullsh**.

    If all of that doesn’t demonstrate that we now have neg. marginal utility of debt, and that should give even Ben and co. pause, what else can they do?
    They will grasp at straws of course, and listen to Paul K.:
    not big enough, not soon enough, more, more!

    Finally, because Gary mentions demonstrable successes:
    so what? Great for an individual or two, but all it takes is one quick look at a decades+ chart of the Dow or the S&P with their humoungous double-tops to see that NO ONE has made any money, and that is without adjustment for inflation with the B(L)S numbers, let alone John Williams’ numbers.

    Sure a bunch has been redistributed, only proving yet again Howard Katz: this is a zero-sum redistribution game, the true nature of speculation.
    Or does anyone really think that people are buying AAPL for its stellar dividend YIELD?

    &&&&&&

    It is an ‘onslaught’ of recession I am expecting, Chris, not merely the continuation of a slowdown that has allowed the government to claim, with dubious statistical support, that the recession ‘ended’ in 2009. Most Americans recognize this for the brazen lie it is, and that’s a big reason why Romney is going to crush Obama in November.

    Thereafter, when the recession of 2013-15 hits like a tsunami, the spinmeisters will be powerless to persuade anyone that the economy is still limping along. Unfortunately, there is zero chance that Romney will succeed, any more than Obama or Bush, in reversing a depressionary tide that has been building for nearly two generations. RA

  • L fry October 25, 2012, 1:34 am

    Buster,

    You are correct on all counts !++++++++!

  • gary leibowitz October 24, 2012, 11:06 pm

    Onto the races:

    We have twio senatorial races that should have been shoe-ins for the Republicans. Both blunders on woman’s rights. One thinks children from rape can’t happen since the wonwan is not “receptive” to it. The other thinks if children are born in rape god intended it.

    Yes we do have a progressive party, so progressive we have to go back 100 years to be considered a normal remark. The funny part is that both candidates are neck in neck to win this thing. On second thought it aint funny.

  • bc October 24, 2012, 10:15 pm

    For the first time in a long while both equities and the long treasury are both down on the day. This breaks the pattern of money sloshing between long bonds (front running the Fed or the dollar or both) and equities short term. If bonds and equities both continue sliding together Katie Bar the Door cause AAPL sure ain’t gonna save us.

    • Cam Fitzgerald October 24, 2012, 11:59 pm

      Agree BC. There is a movement to cash accounts and that is not really a sign of confidence. There is some heavy shorting of precious metals taking place as well while profit taking and insider selling grows suggesting some market participants expect more than the usual trouble on the horizon. These are simple evasive steps when the market appears unstable and the preparations ensure some guys will be in a good position to buy back in from the lows if we correct.

  • watcher7 October 24, 2012, 8:54 pm

    * Lu Wang, DeMark Sees S&P 500 Index Peaking Around 1,480 Before 12% Tumble, bloomberg.com, October 25, 2012:

    The gain would push the benchmark index above the 2012 intraday high of 1,474.51 reached on Sept. 14 before buyers are exhausted, said DeMark, whose prediction last year that the S&P 500’s decline would stop at 1,076 proved prescient when the index bottomed at 1,074.77 on Oct. 4, 2011. The advance will fizzle, with the S&P 500 heading for a potential decline of 12 percent to 17 percent, he said in an e-mailed statement.

    “There is still some unfinished business upside that will totally surprise and shock most market followers,” DeMark, the founder of Market Studies LLC, wrote. The S&P 500 “rally is a solo move in a sense that the overall market trend has been down since Sept. 14,” he wrote.

  • Robert October 24, 2012, 8:08 pm

    wait…. what?

    AAPL’s price swinging more wildly than the PM’s…?

    What is going on here?

  • gary leibowitz October 24, 2012, 5:46 pm

    FB your top listed dog went up 20 percent in one day. An abberation? Real earning surge. So much for the assumed demise of a company that has a billion viewers.

    Home sales, while dismal in comparison to the heyday, is climbing to new 4 year highs, along with price increases, and lean inventory. That translates to domesic spending on all things needed fo a new home.

    Your so called disaster quater is still only a 2 percent drop in profits. Earnings are runing at 70 percent above lowered expectations, while sales are over 50 percent below expectations. That translates to more productivity gains, and a lean mean corporate world.

    If earnings was so out of kilter and more importantly their announced future growth expectations, than it is a forgone conclusion that THIS TIME we would see a steep drop in the market. If everyone is committed to this than we can dispense with all the other notions of yet another crash in the immediate future. I just want to narrow down the discussion on why and when we will have this crash.

    If however, this is no more than a correction, speed bump, how can you continually dismiss such bad calls without putting into question your assumptions. Looking back this board has viewed every concievable bad news as the reason for a crash immediately ahead.

    I am not oblivious to the possibility and have stated that on a technical basis 1396 on the SPX is a major support. If it breaks it can indeed fall hard. I just like to keep this discussion on a rational level, without making conspiracy excuses when it doesn’t happen.

    You do realize that to play the conspiracy/manipulated card you set yourself up for the possibility that the market should never again crash. That would mean no data point is worth using, and no betting style will suffice.

    • gary leibowitz October 24, 2012, 6:04 pm

      correction: new home sales at 2 year highs.

    • Buster October 24, 2012, 7:12 pm

      Not that I’d necessarily question anyone’s prognosis of stock price movements, but the conspiracy jibe is just plain out of sync with reality. OK, there really is no conspiracy to the transfer of $37 trillion from the general population into the pockets of the super wealthy 1%ers during the last few years of financial ‘chaos’, it’s just cold hard predatory greed laid out on the table for all to see. Take a good look at it everyone, please. The show’s for our education before we move onto the next lesson, which is going to be a real screem, no doubt.
      Getting that cleared out of the way, I can accept the possibility of QE directed into the accounts of the few leading to rampant inflation, including stock prices, so long as the majority including the retiring baby boomers are already scared or starved out of the market enough to not benefit from it.
      I don’t know what the actual figures are, but if too many stand to partially protect themselves from such an inflationary further heist, then some more ZIRP will probably have to bleed them out of the market before it’s really ramped up.
      I’m sure you actually understand that this is all just a fight for every possible gain by the few who have the power, with total disregard for any consequences. It’s sheer predatory instict given free reign to reach it’s ultimate conclusion, & playing in this pool of sharks is a very dangerous game indeed.
      They can see you!

    • gary leibowitz October 24, 2012, 7:50 pm

      Buster,

      Let me explain. I know what Ben is doing, and now the world in regards to changing the game on financial institutions, controlling inflation and fear thru bond purchases, and running this huge government deficit to try and jump start the economy.

      I don’t consider that a conspiracy since it is done in the open. It is a manipulation, but once again done so everyone can decide what its affects will be and how to play the market accordingly.

      I expected this, as you should have to. Govenments don’t just fold up and concede defeat. Will it eventually work? I give it a low chance. Will it provide years of corporate profits and stabilze, for now, the black hole in housing? yes. When will it end? When the corporate earnings parade ends. Afterall the only reason people bet the market is to see tangible evidence of profit growth which translates to stock price growth.

      You have to focus on corporate growth, not the economy, nor any other data point. If it relates to profits than us it, if not than discard it. While it is true that all economic decisions one way or other relates to corporate profits, some do at a faster pace than others, and is therfore more timeable and prevalent. You have to decide which has the best correlation and us it.

    • Rick Ackerman October 24, 2012, 8:28 pm

      Facebook, fated until very recently to become a passing fad, has come up with a new and interesting way to make money that was detailed in a WSJ column earlier this week. The market’s belated response — to the ‘wrong’ good news, actually — suggests Wall Street is dumb as ever in sniffing out opportunities. This morning’s 25% price gap is hardly indicative of prescience, to put it charitably. For my part, I am canceling the 13.80 price target and looking for better opportunities to get long the stock than are available this morning.

      Concerning everything else you’ve said, it is just pure Gary, and I’ll let it pass.

    • gary leibowitz October 24, 2012, 8:44 pm

      No not new and interesting. In fact I mentioned their stategic decision early on to go mobile. I also stated I hate the man but will not bet against a 1 billion viewership.

      The companies that can get in early on the mobile phase will be the winners in thier segement. I believe google is already there.

      As for my rants, which have gone on a year now, I wonder when i will be proved wrong? My suppositions have panned out so far, much better than most, yet since I propose higher earnings still I am shunned without any rational. In fact since a year has gone by I have already won on that score. But who’s counting.

      &&&&&&


      No one here objects to the market going higher for whatever stupid reason, Gary. What divides you from nearly everyone else in this forum is that you don’t seem to understand that a global economy that has been running on fumes, fraud and delusions for years is doomed to collapse, taking everyone with it.

      And so what if the shares of a meager handful of multinational biggies have traded higher on the relative trickle of cash leaked into the real economy from a global financial shell game based on hundreds of trillions of fraudulent, ephemeral, ultimately worthless dollars? How long can that game go on if the companies are not investing, hiring or raising salaries? The answer to that question is just starting to become visible in lousy Q3 earnings that tell us — although not you, evidently — that the potential Mother of All Recessions has already begun. RA

    • Buster October 24, 2012, 9:44 pm

      The stock price theory is not of much interest to me really, but no, the government is not really trying to get the economy moving, at least not the real one. Government is trying to perpetuate a debt money system for the benefit of the relative few who gain from it long term. Since when has evicting millions of families after handing their creditors billions had a ‘real’ positive economic effect? I mean, what ‘real’ productive benefit have these people added to the economy other than the possible turnover of their homes to yet more sharks? Yes, this economic activity may add some numbers to GDP but so would nuking NYC & rebuilding it again. Allowing millions of people to die from cancer needlessly is great for the drug business, too, for that matter, & their stock price, no doubt. Not so good for human beings & the real prosperity of society in reality, though.
      If the aim was really to get the economy moving I can come up with a better solution in around 5 seconds:
      The infrastructure’s falling to bits everywhere. Why didn’t government just spend the trillions on rebuilding it, thus providing millions of jobs & wages to spend & preventing millions of bankrupsies, too, with the oportunity for ordinary people to keep their debt payments up? America is rich in natural resources so nearly all the spending would have been internal, so no real problem there. Better still, why doesn’t government print it’s own debt free money like it used to instead of having to pay interest to a non federal central bank owned by foreign Bankster parasites, just like JFK tried to do just before some lone gunman shot him for no reason? It may not seem right nowadays but it’s actually how it used to be before the Banksters got to run the show. Government created currency for real things that benefit the country & people didn’t go bankrupt through perpetual debt & having the money tap deliberately turned off all of a sudden. Look it up! And before anyone tells me that’s not very ‘Free Market’, neither is pouring money into the unproductive bank accounts of useless parasites. Yet still it’s being done with gay abandon, now to the tune of 40+billion a month. Next to none of that money ever sees the ‘real’ economy, which is instead being stifled with every new government rule & regulation.
      BTW. Gary, why did the 9/11 towers collapse in a controlled explosion including one which wasn’t even freaking hit. I mean, am I just missing something here or could there really be a conspiracy??
      I’ll continue just in case….Why was Iraq invaded soon after Sadam declared a non US$ oil exchange after having his countries oil stolen by Kuwait using horizontal drilling technology supplied by western corporations? Why is Iran suddenly targeted as the worlds pariah after declaring its own non US$ oil exchange?
      Why was Gaddafi wiped out soon after asking for Libyas gold reserves to be repatriated? Why was western manufacturing exported to cheap labour countries under agreements signed by government for the sole benefit of corporations when the eventual result would undoubtadly be econmomic ruin for the masses? Why is cheap immigrant labour allowed in when millions are unemployed & loosing everything to their creditors?
      If I wasn’t so sure of your correct prognosis I’d almost believe that it’s all about the money instead of the real economy. Maybe even a conspiracy, if i dared to use the word.
      You need to get your head out the numbers ‘cos a train wreck is surely coming your way.

    • gary leibowitz October 24, 2012, 10:07 pm

      Buster,
      On most of your points I have no issue with. I do not think any of this debacle was intentional. The events and attacks you mentions could be as you say. We have played with south america for decades, so why not in the middle east. As for how to fix this mess, once again the argument is moot. All capital flows thru the financial system. If broke, fix it at all costs first. Not humane or fair but it is what it is.

      The problem I have with eveyone here is that you want to link “cause and affect”. The proof that this linkage is hard to distinguish is simply the fact that companies have made real tangible money, and lots of it, during this hardship.

      Even if you believe in a fixed playing field, it can’t remain fixed for everyone all the time. Any fix in the end will translate into the corporate balance sheet. A phantom manipulation using smoke and mirrors will always be shown eventually in corporate profits. That’s the nuts and bolts of it. All manipulations, whether transparent or not, will always be reflected in corproate weath and trends. In the end you can’t hid this fact.

    • gary leibowitz October 25, 2012, 4:49 pm

      Rick,
      I understand very well what is going on yet you expected the market would die immediately, and clearly it hasn’t. I look for real tangible signs it isn’t working. If real companies earnings isn’t an indicator than nothing is. Afterall whatever happens, good or bad, gets reflected in profits and loss. To excuse or deny these huge profit gains is to ignore why stock prices rise or fall. People invest in the market for one reason, to make money. They focus on earnings, and if those earnings are sustainable. Thats it!

      Latest data: sp500 – 186 companies announced. 59.1 beat earnings, only 38.2 beat on sales. Have not found data that reassesses future earnings expectations. I am anxiously waiting on those numbers.

      Economic indicators: unemploment filings continue to fall, latest -23K for total of 369K. US Business spending is flat, new orders for long-lasting manufactured goods increased. Housing continues to improve on new homes and resales, with inventory levels exteremely lean at 5 months.

      I don’t dismiss these data points simply because they conflict with my expectation. I use them as a guide for when things are about to fall apart.

      &&&&&&

      For a guy who claims to be a stickler for hard evidence, Gary, you’ve fabricated a whopper of your own with the claim that I “expected the market to die immediately.” In fact, I have an outstanding projection of 14969 for the Dow and continue to give this purely technical forecast nearly equal weight with every fiber of instinct in me that says a crash is coming.

      As a practical matter, I have been closely monitoring the intraday charts of key stocks, since the big picture cannot possibly change without the small picture changing first. In fact, “small” changes — corrective moves on 5-minute bar charts that have been overshooting their Hidden Pivot targets, for one — are already indicating that something is wrong. Another is that bigger-picture rally targets in IBM and GE that I’d hoped to sell short were narrowly missed. It is in the devious nature of The Bear to deny all of us ‘smart guys’ the opportunity to get short at the exact peak. Whether I will be able to convince myself to accept something less is a question that goes to the core of my ability to trade disinterestedly, without passion or opinion. And there’s still that niggling concern that the Dow, against all logic and in the face of a pronounced downturn in corporate earnings, still has a 2000-point rally in it. RA

    • gary leibowitz October 26, 2012, 1:52 am

      Rick,
      I suggest you read your own press. Every article is peppered with flash crash possibilities. Is this one any different? Even when you tout the technical rally from your proprietary system you hedge by saying it could also result very quickly into a huge drop.

      Your damning praise of AAPL is a perfect example. You seem to bet with your system but don’t trust it? I am confused. A huge surge in these darling stocks or a breakdown to oblivion? Pick one, just one.

      You were sure Spain was the straw that broke the stock markets back. Now its what? Failed QE3? Fiscal Cliff? Earnings? I can’t keep up. At one point the off shore drilling fiasco was going to create a huge chasm in the earth and do what?

      If you are going to pick a crash scenario back it up with facts. Earnings by the way is not out of analysts expectations. It is running on average over 60 percent, the norm. Sales however is a concern, but given that analysts months ago “expected” a slowdown there is no “surprises”. Not yet anyway. three months ago the street saw 5 percent gain in earnings, now down to flat or -2 percent. A 7 point swing with the market falling ever harder than that.

      Excuse me, but did you see Big Foot, a Martian Invasion, Government confiscation of your guns, wife, and home?

      I guess I will have to sit this period out and come back 3 months later. I am sure by that time everyone would be patting themselves on the back after the “Big One” has already hit. If it doesn’t by that time, relax it will at any moment in the very near future.

      “Who knows what evil lurks in the hearts of man…”.

      &&&&&&&

      I am confident in my technical methods, Gary, although boredom and the need to say “something” occasionally cause me to mistake or exaggerate the meaning of some diabolically ambiguous price patterns. You should sign up for my daily forecasts or shut up, since, as a lurker who thrives on my work while taking factually ignorant pot-shots at me, you’re missing all of the nuances that subscribers pay for.       RA

  • ter October 24, 2012, 4:24 pm

    AAPL: from Golden to poisoned in two days.

  • Dave October 24, 2012, 10:18 am

    A 3-4 times/year astrological event, Mercury Retrograde has begun, currently in the early shadow phase. So possible correlation with Rick’s info.

    Yesterday’s and past week action, since it began 10/18, is a good example of what we can expect, increased volatility in both directions. The actual retrograde begins on Election Day night 11/6 around 6pm. As in the past, the strongest action could happen a week after, around 11/13/12. Could get interesting for election results ala Bush/Gore ballot counting.

    Please keep in mind, during past MRs, we had gold and silver hit all time highs, AAPL hit all time high, the big flash crash and more recently a mini flash crash.

    MR is in Scorpio this time, those who are Scorpio or have Scorpio as an ascendant/rising sign, could feel it effects more pronounced.

    Mercury is known as QuickSilver, and speeds things up, as you will notice, faster changes.

    Generally good idea to backup computers, have alternate computer access available as Mercury affects communications of all kinds. You may notice cable, DSL, internet going down more often, modems not working, mobile phones/service on the blink, etc.

    Basic traditional advice is “Don’t travel”, “Don’t sign contracts”, “Don’t marry” or “Don’t look at your computer or it will blow up!”

    BE FOREWARNED AND PREPARED!!!

    October 18 – Mercury enters retrograde at 18° Scorpio 10′ (shadow phase)
    November 6 – Mercury stationary retrograde at 4° Sagittarius 18′
    November 26- Mercury stationary direct at 18° Scorpio 10′
    December 14 – Mercury leaves retrograde zone at 4° Sagittarius 18

    • Robert October 24, 2012, 7:57 pm

      Great… Mercury is in retrograde until a week before the Mayan calendar ends…

      we’re screwed.

    • Dave October 24, 2012, 9:31 pm

      FYI, Bush/Gore election ballot debacle was also during an MR, which began 10/18/2000 and went direct on 11/8/2000, the controversy continued through the shadow period afterwards. Will we have a repeat given the current Obama/Romney stats?

  • watcher7 October 24, 2012, 8:08 am

    * Antonia van de Velde, West in a ‘Colossal Mess’ in Five to 10 Years: Marc Faber, cnbc.com, October 22, 2012:

    Faber believes the Chinese and Japanese stock markets could see a rebound, while in the U.S. the S&P 500 is likely to see a 20 percent downward move.
    “I think here we’re going to go down 20 percent from the recent top at 1,470. The technical position of the market is poor and the corporate earnings are worsening. And I believe that if the statistics were precise – which they aren’t – (…) I think there’s hardly any growth,” Faber said.


Exit From This Page Back to Trades