The 5 Most Ridiculous Charts In US Equity Markets

Tyler Durden's picture

The ratio of negative-to-positive pre-announcements for the third quarter earnings season is running at 4.3-to-1. As Citi's Tobias Levkovivh notes, this is the highest since 4.7-to-1 in Q1 2009 and shows management's clear lack of confidence about even short-term economic performance (elections, fiscal cliff, China slowdown, Europe depression). He, like us, expected management to 'trim back' earnings expectations on their conference calls - especially as Q4 EPS growth estimates at 8% are simply 'too optimistic'. Of course, that doesn't stop the thundering herd of extrapolating analysts from imagining what the world could be like - as the following charts of Q2 2012, Q3 2012, and Q4 2012 earnings growth estimates so clearly indicate. It would seem that with the Fed less able to 'surprise' given its QEternity bazooka has been fired, and China's PBOC stymied, it falls back to Draghi to magically 'enable' the divergence between fundamentals and the market - and after today's more disappointing call, that appears less forthcoming.


S&P 500 Negative-to-Positive Pre-announcement ratio...


S&P 500 versus Upward Revisions as a % of Total...


Financials saved us in Q2 - the rest were mixed and mediocre...


Expectations for the current reporting period are mixed but with some very weak results for Energy, Materials, and Telecoms...


But of course, all that fear will be gone by Q4...


It seems the analysts are much more confident of what will occur in Q4 than any and every central banker, politician, CEO, and strategist.


Via Citi:

When investors consider the earnings expectations for the next several quarters, it must be noted that a few sectors seem to have an abundance of optimism that may or may not be warranted. For example, the Materials sector is showing a big bounce in 1H13 earnings projections that may require much more clarity on global economic reacceleration, while Financials are expected to rise sharply as well. Hence, these two areas might require some ratcheting down of forecasts and management teams may begin to do so in the next few weeks.


We have highlighted some of current measures of complacency, which may not be entirely appropriate in the very near term (next couple of months) given the US elections and the related fiscal cliff, recent European social unrest and the need to curtail some of the profit growth enthusiasm. In the medium term (2013), many of the analytical models we use still argue for overall market gains, and thus we believe weakness should be seen as a buying opportunity.


Charts: Citi and Reuters

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LawsofPhysics's picture

Remind me, what is the real value of all those financial "products" again? - FAIL.

Lots of paper promises, fewer and fewer real fucking assets.

hedge accordingly.

Sheeple Shepard's picture

I'm impressed you narrowed it down to just five.

Jason T's picture

profits as a percent of GDP are way out of wack.  Decade of shitty profit growth coming.

orangegeek's picture

The SP500 weekly shows we are at or near a top.


And Bernake applying stimulus at a four year high - it doesn't get any better than that.  SNAFU.

caimen garou's picture

If the dow was at 30,000 they would still scream "buying oppertunity"

Cognitive Dissonance's picture

"The best time to purchase real estate the stock market is (always) now."

Cognitive Dissonance's picture

I can't wait until "they" declare that the next recession actually started 9 months ago. Then in 10 years they declare that the whole shooting match was actually a depression.

Who could have foreseen?

mayhem_korner's picture



The next recession started in '13...

...1913, that is.

drivenZ's picture

It's not only the S&P, spec gold net longs are through the roof. But god forbid anyone on ZH mention that.....

LawsofPhysics's picture

Good information.  I guess the real question is whether or not people and institutions start demanding delivery of the physical metal.  Pre-scanned for tungstun content of course.

Boilermaker's picture

Pssst:  They don't give a fuck.

OH yea, they just ram rodded the SPX 12 handles.


Meesohaawnee's picture

careful with that word "market" knew this would happen before the debate was over. no soon the last handshake you had a 5 handle ramp on sp.. please. this just gets more and more comical by the day. Wish there would just be all traders boycott. none allowed till they restore price discovery if ever. global sit out of all human trading if there is any. period

Boilermaker's picture

What are talking about?




CrashisOptimistic's picture

What makes you think there are any significant traders left?

If 80% of volume is computers, the traders already left.

Wonder why Obama was so bad last night?  It's because he's decided to leave and take his lifetime presidential pension.  He won't be blamed for 2013's apocalypse.

Meesohaawnee's picture

i didnt. i think i pointed that out. were all refering to the last 20%

hedgehog9999's picture

Meanwhile he'll be enjoying his Hawaiian mansion, provided the Pacific Ocean doesn't swallow the Hawaiian Islands.

Meesohaawnee's picture

oh and ps. hate to say it but if you want to play fundamentals. i just go outside the rigged us equity market. there are actually markets that trade more to fundamentals than the pac man game.

LawsofPhysics's picture

yes, like your local farmer's market and black market.

hedgehog9999's picture

Also, the commercials have the highest short position ever (by a mile) on stock futures as of Today.

BrigstockBoy's picture

The upwards revisions chart looks like someone headed into cardiac arrest.

Tombstone's picture

In a free economy, fundamentals and earnings matter most; however, in the current socialist planning stage, all that matters is how much Benny can goose the economy.

Grand Supercycle's picture


Stocks are being dragged up by yet more USD selling.

Price action today looks like the previously mentioned SPX Election Rally, but without the pullback I wanted beforehand.

Therefore the postponed correction when it happens, will be WORSE.