Stop Talking Please!

Tyler Durden's picture

Via Michael Naso of FBN securities,

The economic calendar remains light until Wednesday’s Retail Sales data while most S&P 500 companies already have reported QE3 earnings.  This keeps the spotlight shining on the fiscal cliff despite an expiration sitting over six weeks into the future.  Unfortunately, this will supply a stiff headwind to stocks as it only reminds investors of the peril which looms directly in front of them.

One suggestion I could offer both sides of this debate to avoid any further damage is just to be quiet.  Stop making stump speeches.  We all know your views.  We all know how stridently you will defend them, but your incessant reminders that you have dug in your heels does no good regardless of the negotiating tactic.  Instead, hold a joint press conference and admit there are ideological differences, but announce that both parties will do their best to hammer out a deal palatable enough for everyone.


Alas, this is wishful thinking.  As a result, anytime they open of their mouths, most notably Mr. Obama’s, the words they spew will cause damage to share prices.  After George W. Bush’s popularity soared after 9/11, traders bought ahead of every one of his speeches, especially pertaining to the economy, to catch an easy, yet significant, move higher.  Unfortunately, the President’s drawing a line in the sand on Friday has guaranteed that a countless number of E-Mini bandits will short the futures in front of his speaking which will erode the conviction among managers trying to put money to work who otherwise would buy these dips.  Ironically, it may take an equity market in free fall that ultimately forces compromise, for if stocks finish the year on their highs, then, the bullish environment would give both Speaker Boehner and Mr. Obama ample cover to go beyond the stated deadline.  The eroding of Main Street’s 401K assets would therefore force everyone to sit down and bargain in good faith.

I wrote on Friday that the current pullback has come close to entering the Exhaustion Stage.  Primarily, the average monthly NYSE Closing TICK must drop below +60 before I feel comfortable that an intermediate term bottom has arrived.  The outperformance by the S&P 500 over the Russell 2000 for most of the session along with open interest figures that declined massively hinted at a modest short covering bounce.  To flip my most reliable technical indicator to a buy will entail further long selling similar to the magnitude we witnessed on Wednesday and Thursday.  Consequently, I maintain my 1355-1360 target for the index despite the futures’ already plummeting to an overnight fair value basis low of 1367 late last week.



The University of Michigan Confidence figures printed its highest level in over five years; however, I would throw out the print as part of one’s macro analysis, for it comes too close to the Election.  A better guide to consumer sentiment in response to the more rancorous bickering over the fiscal cliff should arrive later in the month.  Thursday’s Empire and Philly Fed surveys should gauge the temperature of manufacturers with consideration to Hurricane Sandy and the current political climate.  I anticipate an unraveling of these subjective releases in the coming weeks along with the weakening of the objective data next month.  Although I expect a modest relief bounce in equities to commence in the next several days, the subsequent reversal will be small in magnitude and short in duration, for as much attention the fiscal cliff has garnered in the past several days, its shadow will lengthen dramatically as we make that final turn for home for 2012.

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GetZeeGold's picture



Just STFU!

CPL's picture

No, let's run our mouths and the markets and see how high it goes and extend the size of the collateral damage of the fiat market collapse.  


Why take out ten or twenty currencies?  Take them all out.  Everyone should be pleased as punch then.

I am more equal than others's picture





Oh contraire mon faire.... let them speak their fool heads off.  Barry, please speak plainly and into Mr. Microphone

francis_sawyer's picture

Impeach the algos...

Michelle's picture

Sadly impeachment doesn't lead to being thrown out as we learned from the Clinton debacle!

francis_sawyer's picture

It served it's purpose I suppose (although the downside is that it unnecessarily cost a shitload of money, but what else is new?)... In any case, 'Bubba' can go on for the rest of his life being the butt of jokes (which, I suppose, is about as much justice as ever can be served these days)...

old naughty's picture

Hopefully there are still a few good men, from a few 'good' states, after the General that will 'shut down' the 'machines'.

vinayjha's picture

Election is over and now nobody will care where market is going.

insanelysane's picture

Someone might want to let Obama know as he is still campaigning.

Zero Debt's picture

The campaigning will continue until morale improves.

insanelysane's picture

"NO WE DON'T!" - Spain  (unless we can get free money with no strings attached just like the FED does for the banksters)

jmcadg's picture

Bearing in mind they can put the market wherever they want to ...

I dare you fuckers, go on, put it there, GO ON.

PUD's picture

And just what is this magical compromise? Thousands chant the mantra but I've yet to hear one shill describe how the laws of mathematics will be repealed 

Mad Mohel's picture

" a stiff headwind to stocks" 

Oh something stiff will get supplied to stocks but it won't be a headwind.

Dr. Engali's picture

 A politician stop talking? That's like asking the Bernak to stop will never happen. Just like an agreement for the scary scary fiscal cliff will never happen. It's in Obama's best interest to drive off.

hawk nation's picture

I still believe that is his plan from the beginning

orangegeek's picture

Euro, Franc, Yen, Dollar are up this morning.  And so we watch the US Dollar slide and the markets climb based on sweet fuck all - oh wait, lower revenue on hiring earnings (fire all employees).

jplotinus's picture

Yes, stop talking. No one knows which way markets will go. Generally, they are up one day, down the next.

SheepDog-One's picture

Will the bankers 'freefall' the markets again to get their a bully on a playground twisting up a kids arm for his lunch money? Sure as hell will...till someone kicks the shit out of the bully.

richard007's picture

Obama will do what he knows:

He will try to campaign the issue because he does not know how to manage.

This situation has Biblical implications.

Habakkuk 2:6-7

Our creditors will suddenly awake and make us tremble.

They will ALL taunt Obama with ridicule and scorn.

buzzsaw99's picture

Naso is the retard who should just stfu. Nobody gives a fuck about the stock market anymore asshole.

Catullus's picture

If Boner falls for the "compromise or the stock market will collapse" gambit again, he's a political retard. He got behind TARP and republicans deservingly took the political hit for bailing out Wall Street, causing the collapse, blah blah blah. Then the Fed comes in start seriously monetizing everything and accounting rules are suspended for mark-to-market and Obama looks like hero.

This is a bet they set up years ago when the Bush tax cuts were made temporary. They made an agreement in 2011 to prevent the Treasury from defaulting. The republicans can just say "these are Clinton era tax rates, the democrats didn't come to the table, we're sticking to the agreement made in 2011". Watch the democrats squirm. Let a recession hit. Let the stock market fall. It's all "Obama's Fault" now.

AynRandFan's picture

From a partisan standpoint only, what do Republicans have to lose now standing up like tin soldiers to the tidal wave of leftism?  They stand guard over their own House districts who are comprised of core constituencies of the Republican party.  Martydom may be the calculation.

nodhannum's picture

" the words they spew will cause damage to share prices"...and I should give a shit exactly why?  I don't have a dog in this fight anymore Let the fucker go to zero for all I care.  Then I will do what so many here suggest...BTFD.

a growing concern's picture

Agree. I will be an enthusiastic bull when SPY is trading at $.02.

plainpilot11's picture

This is the group that is playing the game.  Laugh, cry, scream.  Whatever.

booboo's picture

There is NO political solution to this problem, NONE, NADA, ZILCH, ZERO. Get it out of your head, the sooner you do the sooner you can free your mind to prepare spiritually and physically to rebuild.

hawk nation's picture

I up arrowed you and could not agree more

Its a sad time for america and i believe we may have lost gods grace

AynRandFan's picture

The correction to the 200-day SMA of the S&P500 was easily predictable.  From here, I expect consumer confidence to plunge, as it was boosted entirely according to Gallup by Democrats' enthusiasm.  Combine that with post-election layoff announcements due to the now inevitable Obamacare burden on businesses and families and you have a prescription for a bad holiday shopping season.  The fiscal cliff will happen anyway, at least regarding payroll tax hikes, because both parties agree on it.  The only debate is over whether small business owners, including farmers, get socked with a tax increase.  The answer is irrelevant because small business has already planned for a tax hike in terms of not hiring.  I still like commodities, but most everything else is off my wish list.

helping_friendly_book's picture

Keep talking, please, 3x short the snp using SPXU. Keep talking.

If the carnage continues I should have a very nice holiday.

philosophers bone's picture

New Rule:  No one on either side is allowed to state publicly who proposed what.  They are all such egomaniacs that they don't want to be seen as "giving in" to the other side.  Also, neither side wants the other to be the one who "saves" America from the fiscal cliff.  Too bad Obama played politics by saying he has his pen in hand waiting to sign the bill to cut middle class tax cuts.  It's playing politics and the Republicans now won't sign it because the President looks like he is dictating.  As a rule, when the other side has a demand that the other side agrees to, they should let the other side come out and make it look like they made the "offer" in the name of bipartanship.  Unfortunately, these egomaniacs simply can't do it.  Speaking of egomaniacs, maybe Chris Christie can hold a press conference and solve the crisis for us all.

SillySalesmanQuestion's picture

Yes, keep talking and do nothing! We might actually be able to get a good, old-fashioned shorting opportunity for longer than five minutes.