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Charting Next Week's Bearish Action: Goldman Warns Of A "Meaningful Decline" In Stocks
Goldman's John Noyce (part of the firm's trading desk) has released his most recent barrage of technical analysis and charts, confirming our running expectation that a drop in stocks is now widely anticipated by the charts. In addition to extended commentary on FX, Bonds, Curves, and the VIX, Noyce notes the following on the S&P: "as discussed in recent client meetings, while the timing is difficult, we remain concerned that a larger topping structure is still being formed on the S&P – which will eventually lead to another meaningful decline." Has everyone, Goldman included, now gone from bullish to bearish in the span of two weeks?
In the S&P:
Arguably the market could still be forming a larger H&S top; This would fit well with some further downside correction in risk correlated FX currency pairs.
If Friday’s close is below 1,101 the market will post a bearish weekly reversal from the high of the recent recovery
In conclusion, as discussed in recent client meetings, while the timing is difficult, we remain concerned that a larger topping structure is still being formed on the S&P – which will eventually lead to another meaningful decline.
In FX:
There are certainly a number of warning signs that the last stage of the USD-weakness trend we have been looking for (EURUSD to 1.35-1.37) is unlikely on a tradeable horizon; Overall, as an overview chart this warns of a material turn in the broader trend of the G10 currencies versus that USD.
Once the market eventually broke lower in late-July (a similar time of year to now) the market [in AUDUSD] began the sharp drop into the October ‘08 lows
In VIX:
If Friday’s close is above 23.89 the market will post a bullish weekly reversal from the base of the recent down move
Beyond the significance of VIX patterns for the S&P they’re also important for broader markets as in the vast majority of cases a broader swing in risk appetite will take place across asset classes. (not today's implied correlation)
In Treasurys:
Following last Friday’s poor data yields broke from their July range
The multi-week chart still looks like a big double top targeting 2.2%
On the Curve Shape:
The 10-year/2-year curve is continuing to flatten: The ultimate target of the 200-week moving average now stands approximately 66bps below current levels
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Must be time for the Squid to pulverize some shorts....yum. Only 18 days to September.
The moral of the story here is to invest heavily in Iocane stocks.
Looking at the Junk funds, the Libor and Ted it seems there is plenty of liquidity. Option Expiration next Friday also, one day up, next day down.
Fack GS where's Nick
Are you people serious?? The majority of this presentation referenced currency movements yet not one single reader had an fx-related comment(s). If the main take away from this was "the stock market will sell-off/gs is going long", there's something quite not right with the majority of you folks...
Putting GS's reputation aside, the analysis (specifically EUR/USD & DXY) is spot on. As long as the uptrend in the DXY resumes, all risk assets (especially ES) will run their selling course - and judging by last week's action, there couldn't have been a stronger signal. Contrary to popular belief that treasuries offer a strong anti-correlative signal for equities, I would suggest paying attention a handful of fx pairs.
GoinFawr - Any new thoughts on your dollar weakness thesis? How is your h&s pattern panning out (looking at the 3 tops dating back to 2007 - can you point out the head vs the shoulders)?
The dollar is looking quite fungible <sarcasm>...
ahem. On a long enough timeline, eh 'biggs?
My 'thesis' worked out just fine, thanks for asking.
My friend, it has been a while since I last checked in on ZH so before you take a wise crack at my absence, keep in mind that I have a full-time job. The increased volume in my posts during summer time was a product of a "in-between jobs" limbo. As much as you contribute to this site, I am pleasantly surprised that you could find and comment on my post from 1/2 year ago. I am assuming that it did not overburden you to search for it - since you have so much free time on your hands...
I have no issue humbling myself by giving props where props are due - you made a nice return on your gold coins in 2010 (had you sold them).
It will be interesting to touch base and see where we stand in a year. 2010 was certainly challenging for me, My S&P dollar hedges paid off but I gave up some of my 09 gains in my main position; looking back, I should have oppositely structured the trade... I will not make any predictions for the future but the technical pattern forming in pm's is not historically a positive one (not that you need me to point it out to you, since phys is quite fungible as you say) nor is it in energy where also the fundamentals look equally bad. My career revolves somewhat around the second point but what does it matter in the overall scheme of things?
Sincerely though, it was nice to catch up - take care and best wishes in 2011!
And you!
Is this an undouble disnegative outlook for the unusually uncertian unpast?
It's like unknown unknowns, man...
http://www.youtube.com/watch?v=30x8VTCaOws
Undoubtedly a uniquely ubiquitous opinion!
My algo's are quite chipper.
Sounds like they might be deserving of a swallow tonight instead of the old swish and spit.
You mean like: "Wood chipper?"
does that mean it is time to go long? <newbie>
Welcome! Let me offer you 1) the red pill or 2)the blue pill.
:)
Excellent. A better short entry awaits.
100% time to go long...the negativity this week is beyond belief.
armchair analysts and bloggers telling us to sell NOW after the big declines when in reality this is a perfect entry to add new long exposure
today's trading say very few sellers are left to sell on the same negative news we all know. just look at how they bid up pcln and nflx..not a care in the world if you're in the annoited stocks
Let us know how things look when you lose your job...
Next time, take half a tab.
Tripps be trippin'
actually (sarcasm off) I do think there will be a small bounce next week engineered by the PTB. We are getting close to the fall off but not quite there yet.
Bounces are NORMAL, not engineered events. Of course it's going to bounce, but because it's due to do it based on technicals, not because of some conspiracy.
God, it's like everything the market does something you shouldn't, "they" manipulated it.
Does anybody here know anything about math or technical analysis?
It's fucking annoying.
Like there's people out there JUST making the market go the opposite of what YOU think it should.
People are stupid...
Bravo Johnny! Bravo!
I think Goldman is being treated unfairly by the Feds. And I don't like Goldman. So doesn't that mean we are screwed? I mean the Slaves are attacking their Master. Batten down the hatches!
Will go up on Monday morning like every Monday (thanks to algos), then at around 1h00pm will go down a bit. Seeing the downtrend, JPM/Bernake/Whatever will turn the algos to warp speed and we'll close arround -20 points.
(no we're not in Groundhog Day)
Cocka-doodle-doo said the rooster to the pre-morning sunshine.
The algo's aren't the problem here son, the slow, irrational, underfunded human counter parties are.
The Problem Is...
Don't need to be a weatherman to see which way the wind blows.
Like all political operations, rhetoric has to change with the times (and the times, they are a changing). All these Goldman announcements are telling me that the Great Unraveling is about to displayed in its full glory, as the final wraps of the recovery facade are removed.
Think of it as creating the groundswell of support for QE2, aka "but we had to do something!"
Also, it serves to take the air out of arguments against GS being out of touch. One day the spin is green shoots, the next, the arriving storm clouds.
I was thinking this might be true seeing GS and Cramer pumping gold. Then somebody else said, "now that they're invested in Treasurys they'll pull the plug". Who knows, this crap is fascinating.
Anybody else care to speculate?
Yeah, "We hadda do someptin'." Reminiscent of the $700+ Billion, "It had to be a big number."
Fucktards.
FROM:
http://www.bizzyblog.com/2008/09/29/psst-that-700-billion-is-a-contrived...
Sep 29, 2008:
As I write this on Monday afternoon, the People’s House has rejected "the
$700 billion bailout."
You won't believe, unless you're a very experienced cynic, where that
$700 billion figure came from.
The answer appears to be "out of nowhere."
With no basis.
I'm not kidding.
Here's the evidence, carried six whole days ago at Forbes (HT LAT's Top
of the Ticket Blog via BizzyBlog commenter Dan Scott):
...The committee's top Republican, Alabama Sen. Richard Shelby, says
he's concerned about its cost and whether it will even work.
In fact, some of the most basic details, including the $700 billion
figure Treasury would use to buy up bad debt, are fuzzy.
"It's not based on any particular data point," a Treasury spokeswoman
told Forbes.com Tuesday. "We just wanted to choose a really large number."
My guess is that the person just quoted, if discovered, might be better
known today as a "former Treasury spokesman."
It doesn't seem like a wild stretch to suggest that there is a whiff of
blackmail in the figure Treasury decided to use (i.e. "How big does it
have to be to get them to do what we want?").
"We have to pass the bill to see what is in it." - SanFranNan.
As a matter of fact, it was that very comment which gave me the nudge I needed...
To sell my company, put my house for sale..
.. and start construction of my retirement home.
Overseas.
Sadly I have come to the same conclusion. Best of luck.
QE2 will be the biggest dud since New Coke.
That sorta depends on what it's supposed to accomplish, does it not?
Reese Bobby,
Have you had a coke lately? Do you remember that "AAAAhhhh" that you used to get? It is gone. They have changed the formula recently, but failed to mention it to the media. They must have learned their lesson from last time.
So, now it's: "The pause that distresses?"
While I understand the usual theme is to do the opposite of GS, this call seems to be backed more by the fundamentals. The eco data has turned hard. GS doesn't want to be wrong all of the time. And this way they have some bearish and bullish SPY calls out there.
While Main Street is bearish, plenty on Wall Street deny the double dip. Sept Oct coming up. They got their summer rally. PTB/PPT might want to put Republicans in seats to create facade of choice.
1010/1040 are my immediate targets in next 2 weeks.
you guys are picking up nickles...we've been down here at the 1060-1080 level a few times now and its been resolved to the upside
today CLF CEO said CHINA is growing again. the BDI data confirms that recently
BAC bottomed today. financials will rally and but in a floor in that sector
APPLE will likely start getting bought again as soon as netflix and pcln crash....apple has big weighting
most of the people who want out...are OUT
So, is Bender Bending Rodriguez ready to cash in his chips?
"most of the people who want out...are OUT"
i totally disagree with you here tripps and assure you this is not the case.
big hitting investors have been willing to let this go on, they are not comfortable with the outlook but they are patient. thats how they became big hitters. That patience is starting to wear thin and these guys are only 1 or 2 more data points away from liquidating some huge portfolios that will bury you and your long positions in a world of pain.
Agree. I don't think everyone turned bearish yet, there is a lot o talk about buying dips. We need to wait for September for the real action. With low volume you cam see that PPT is still able to move stocks up on terrible news.
Where was the PPT in 2008? Destroying Stocks and the Market. WHY?
Wildly pushing buttons, flipping switches, desperately fighting a dead stick, trying to restart all the flamed-out engines (get the idea?)
how many times people blame rises in the market for the PPT and yet ignore the PPT allowed trillions of equity to disapear in 2008?
bears are psychotic to me at time...it really becomes a mental disease
I'm holding on to my OEX Aug 505 Puts. Action today indicates to me that we've got some more downside possible for next week before expiration.
Also surprised that a low-volume rampjob didn't commence in the final hour.
Fasten your seatbelts, going to be an interesting ride next week...
pure garbage. i get better chart analysis at stockcharts.com from jackie chan.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID530404&cmd=s...[s77560190]&disp=O
Could Goldman be right this time?
The Sucks is always right. Do you mean are they telling you anything meaningful? Doubtful...
Goldman is always right. They just don't always share the truth with their clients. Now that they are safely invested in 10 year Treasuries, it's time to pull the plug so they can say, "We told you so."
"as discussed in recent client meetings"
With whom? ZimBenbabwe? Larry the Hut? Lorraine Newman? How about His Majesty Hisself. George Soros. Robert Rubin. Mo Greenspan. No, he's the sporting goods guy, his brother, Alan. Yeah, him. David Rockefeller. Yeah. The rest of the same bones as prez met with at the Bilderberg meeting before they said it was OK to get elected when he wuz supposed to be at Hillary's. Or maybe the folks at Council on Foreign Relations. Or, how about uh, lemme see, uh, yeah, Timmy Two Hands, cause he's the guy funding the margin account so it don't show on the books. Or, Barney, Nancy, Chris and Harry. Nah, they vote like their paid to vote, waste of time. The Silver Surfer, Iron Man, the Green Hornet, Flash, Batman and butt boy Robin and the rest of the League of Justice. Or the UN's WHO and IPCC to coordinate the next news worthy scare to raise our taxes and relieve us of another drop of freedoms again. For the life of me, I can't imagine Who The Fuck they Met With before Telling The Rest of Us, while I'm out in the back yard scooping up runny dog shit because even my pooches are stressed out over the cheap shit Chinese unfit for human consumption dog food that we're all forced to eat because all our money's been systematically looted by the Powers that Be. For the life of me, I can't figure out who it was got the news first.
(sigh)
Someone is sure loving the 10 year. With fund outflows and no volume 11:30am ramp jobs this market is to be abandoned, not traded and certainly not invested in.
Nice avatar. Bernanke and a taxpayer ?. Nice job if you are on the bottom.
Risk managers have a responsibility to their clients....
Wait. Wait a minute.
The israeli risk managers have a responsibility to Benjamin Net-in-yahoo and the homeland.
Can you answer one question for me?
What does homeland security really refer to? The US or israel?
I'm so confused right now that I think homeland security means the US has to protect israel. Am I wrong?
I'm certainly not wrong if you spend travel time in US airports. Hour long lines so you can get strip searched by the TSA jew co-conspirators. "Why are you searching every last orifice of mine? We want you to be secure. Oh yea."
Do you want ultimate security in the US? Kick the jews out and do NOT support them financially. The ARABs will have NO reason to retaliate against the USofA.
Was the US Department of Homoland Security actually set up to provide suppression of US supremacy vis-a-vis israel?
Oh no you say. "We are just a homogeneous group of people who want nothing else than nicey-nice that leads to Hasidism, Chasidut(piety, loving kindness).
http://www.nydailynews.com/entertainment/movies/2008/03/15/2008-03-15_ha...
(Long story short: A real jew wanted to show the plastic jews a thing or jew and the Rabbi said no we cannot portray the cloth as if... Get it?)
As Cosner might say: Build the mosque and hopefully they will come. Come to save jewyork city and Miami.
Some day, another Rosetta Stone will be uncovered, giving everyone some insight into what you're ranting about here -- until then, you want to talk to the Conspiracy Dept., two doors down the hall, on the left.
What? I think I missed something in linking your comment to the topic.
Probably just me.
I don't think it was just you.
Oh dear.I can see trouble ahead,moonlight,music,romance,etc,etc,etc, .....................
Chart: SPX
Today's boring market was nonetheless a win for the bears: prices remain below a long-term price level and are below the 10-, 20- and 50-day moving averages. Next week should prove most interesting to bulls looking for a big bounce up. Be short, be happy.
http://www.screencast.com/t/ODY2NmZkO
I wish Marla would spin tonight...
Would you settle for a belly-dance or sword-dance?
There is a point where the recursive snake-wiggle of contrarianism cancels itself out. Sometimes people are right on their calls. I would say that a lower scenario is correct in this instance.
Doesn't mean that this particular report from this institution is always right, but they could be on the right side for this one.
Disclosure - long puts which are deep in the money today. -0.80 delta, hells yeah!
Right on time for options expiration week...let the fun begin!
Beware of the Goldman warnings...
Options Expiration Racketeering Week coming up.
5-day ARMS closed at 11.6 today
Get all the people who were yahooing the rally last Monday on the air again in one big Brady bunch style split screen. Ask each one if he or she is insane and they get 20 seconds to respond....
Oh and Goldman will be selling their puts next week for a tidy profito. Chahhh-ching...
like the picture robo.
put it on my desktop to remind me who I'm dealing with.
Keep the stuff from gs coming. good to know what the kings men are thinking.
In a world of noise and many commentators playing the "professional" it is always a good idea to step back and take a neutral look at investment opportunities:
US 6 month yield : 0.19 %
US 1 yr bill yield : 0.26 %
US 2 yr note yield : 0.54 %
US 10 yr note yield : 2.68 %
30 30 yr bond yield : 3.87 %
Dividend yields: GS : 0.95 %, C: 0.26 %, GE : 3.12 %, MCD : 3.06 %, JPM : 0.53 %, KO : 3.16 %, MMM : 2.50 %, CAT : 2.59 %, BA : 2.59 %
Cash : 0 %
And here is the relative YTD performance of commodities and futures :
http://www.finviz.com/futures_performance.ashx?v=15
-400Pts - 4days...............
Definition of Meaningful?.
20%?,30%?,50%?.................
We've had five days up on the dollar due for a dollar index, that means we shopuld be due for a dollr drop we are also at the bottom/top of two channels.
so the likley story is a go up for a few days to the top of the channel. I don't think they big boys let it break until later in the month.
Hindenburg Omens? Oh, the Humanity!
Looks like they are planning for a nice short squeeze here...too earl to bail here...Labor Day the games begin!
Updated DOW and SP500 charts:
http://stockmarket618.wordpress.com
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