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Weekly Chartology - Even David Kostin Says To Watch Out After Best September In 70 Years

Tyler Durden's picture




 

David Kostin, traditionally the most optimistic person in the world after A.Joseph Cohen warns clients that the best market performance September in 70 years may be a one-time event, and that in advance of another turn in economic indicators, it may be prudent to lock in profits. "Looking ahead we see the potential for US-MAP readings to again turn negative. Our US Economists expect the two MAP inputs with the highest relevance scores (US ISM and non-farm payrolls) to weaken into year-end. If realized that outlook would be negative for US equities and consistent with our more defensive sector weights." Nonetheless, it is pretty obvious that the apocalypse is now firmly priced in. And as we all know now, the only entity that everyone is frontrunning is the Fed, becase as Tepper so well put it, stock can only go up. That said, Zero Hedge Structured Finance, in collaboration with some very secret and anonymous hedge funds, has some Arizona-desert bridge backed CDOs to sell to Mr Tepper and everyone else buying that gobbledygook.

All this week's charts that's fit to print.

 

 

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Sat, 09/25/2010 - 18:48 | 604725 shinola
shinola's picture

I've got a pretty solid prediction for 70 years hence.

 

IBGYBG.

Sat, 09/25/2010 - 18:57 | 604736 Dagny Taggart
Dagny Taggart's picture

IBGYBG.

I don't work for Wall Street so I had to look that one up.

Quotation: On Wall Street, a new phrase was invented only a few years ago: IBGYBG. I’ll be gone, you’ll be gone, so let’s do the deal and let the suckers pay for it. Now consumers are suckered into no-income second mortgages (:hey they wouldn’t lend me the money if they didn’t think I could pay it back, right?”).

So, like... you did mean that third person, right?

Sun, 09/26/2010 - 17:14 | 605930 Djirk
Djirk's picture

The IBGYBG mentality is driven by the fact that bankers/traders make way too much for their skill level and contribution to the economy. Their goal is to make as much money as possible in a short time before people figure out how worthless they really are.

The musical chairs game is accelerating and the gig may be ending soon. (I can dream)

Hopefully out of this crisis someone will disrupt the big fat pig market makers.

 

 

 

 

Sat, 09/25/2010 - 18:56 | 604734 bugs_
bugs_'s picture

What can top the best september?

Sat, 09/25/2010 - 19:07 | 604745 WAYBACK .....WA...
WAYBACK .....WAAAYYBAAAACKKK..O..MY..ITS OUTAHERE's picture

With these mutual fund outflows, with these macro-correlations, and with consumer discretionary noted as among the least favorable sectors on fundamentals, the PCLN and AMZN meteoric rise may abate, to put it mildly.

Sat, 09/25/2010 - 19:14 | 604750 Careless Whisper
Careless Whisper's picture

Sergey case set for trial; meanwhile a judge declared J P Morgan knowingly committed fraud (by clear and convincing evidence) in a Florida foreclosure case. No criminal charges...

http://www.fiercefinanceit.com/story/update-goldman-sachs-case-set-trial...

 

 

Sat, 09/25/2010 - 19:14 | 604751 RockyRacoon
RockyRacoon's picture

This will last -- until there is just no more to take, the Treasury has been looted completely, and the culprits are well out of the reach of the law.  Until then just hang on and enjoy the scenery as it rushes by.

Sat, 09/25/2010 - 19:27 | 604755 Pillage
Pillage's picture

His year end target for the S&P 500 is 1200. Is that bearish?

Sat, 09/25/2010 - 21:08 | 604848 frankTHE COIN
frankTHE COIN's picture

That part is'nt bearish, but his fear that Ism and other indicators turning down are not good for the market is where the slide can begin and go farther than he anticipates.

Sun, 09/26/2010 - 00:44 | 605127 gerd
gerd's picture

in typical oracle at delphi fashion, kostin

has both scenarios covered.  if by year end

1200 is met, he trumpets his prediction.

if it isn't met he has his recent addendum.

well played, Squidward.

Sat, 09/25/2010 - 21:04 | 604840 frankTHE COIN
frankTHE COIN's picture

And Tepper did admit that when he is wrong he is disastrously wrong.

Sat, 09/25/2010 - 22:32 | 604930 CL1
CL1's picture

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Sat, 09/25/2010 - 23:03 | 605017 prophet
prophet's picture

Exhibit 3 and the accompanying description on page 2 is interesting.

""Investors’ search for yield has been expressed in the flow of funds into equity-income instruments. Equity income funds inflow has totaled $3.8 billion YTD despite investors having withdrawn $14.4 billion from US equity mutual funds during the same period. If ETFs are included, more than $6 billion has moved into equity income funds in 2010. Yield is a scarce commodity with 10-year Treasuries at 2.6%. High profile dividend raises this month from LMT, MCD, MSFT, PM, and YUM as well as CSCO’s initiation announcement show firms responding to investor demand.""

Perhaps some of the mystery is explained here as large cap dividend companys are in favor and the indicies are cap weighted. More of the mystery is likely in managed/seperate accounts, individual brokerage accounts, private pools(including sovereigns), closed end funds, hedge funds, and perhaps buy back effects as well.

-profd

Sat, 09/25/2010 - 23:45 | 605080 doolittlegeorge
doolittlegeorge's picture

1940.  An interesting year.  The year of "the phony war." France would be defeated in 6 weeks.  It was the year "Britain stood alone." 

Sun, 09/26/2010 - 05:07 | 605246 Sudden Debt
Sudden Debt's picture

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Sun, 09/26/2010 - 06:43 | 605276 Kreditanstalt
Kreditanstalt's picture

It may not be gobbledygoop.

When the Fed plans to create up to $3Trillion, yields on nearly every asset class approach zero, cash is being progressively devalued in terms of purchasing power and everyone is $$$ behind and has been since Sept. 2008...

You have no choice but to accept RISK.  And Tepper may be right in saying that stocks can only rise.  Even Marc Faber says stocks "will not do badly"...yet we keep hearing the technicians, chartists, wave magicians and assorted analysts predictin a crash.

They must be TRULY PUZZLED right now.  Their charts and magic technical indicators mean nothing anymore.  We've been hearing 'a crash is round the corner' since about April 2009...

But this is a)not a functioning market but a manipulated game and b)it's a CASINO, not a market anyway.

VALUE and EPS, cash flow, etc., have never meant so little.  Discount them, the bias must be UP if you want even a smidgen of a chance at making a decent return for capital.  I'm not saying stocks are "fairly valued" - whatever that now means - and I can see few OBJECTIVE bargains outside of precious metals and energy.  But stocks are only now bought and sold for dividend yield or as momentume trading plays.

We have to do that too because the music is still playing - and will be playing for some time to come. 

Sun, 09/26/2010 - 10:48 | 605426 MarkCaplan
MarkCaplan's picture

Normally when an extremely reclusive hedge fund manager like Tepper suddenly appears on CNBC, it's to fire up demand for the multi-billion dollar portfolio he's about to dump on the market. 

Sun, 09/26/2010 - 15:52 | 605821 huggy_in_london
huggy_in_london's picture

exactly right.  And usually it corresponds to the HWM of their fund also!

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