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BofAML: "Equities Are Set To Top And Roll"

Tyler Durden's picture




 

"Equities are set to top and roll over," and BofAML's Macneil Curry remains bullish US Treasuries despite today's stability (so far) from recent stock gains. He remains negative on risk assets and believes US equities are posied for another leg lower (with perhaps tomorrow's Yellen testimony the un-taper punchbowl removal catalyst) and warns  bond bears that a break below 2.657% on the 10Y would indicate the downtrend in yields has resumed. Elsewhere Curry adds "gold is coming to life."

Via BofAML's Macneil Curry,

Equities are set to top and roll, risk to follow

We look for the cash S&P500 to top between 1800/1823 (approximately 1795/1818 in ESH), with downside targets seen to 1712/1686 (or approximately 1700/1680 in ESH3). Looking specifically at ESH4, a break of 3d trendline support (now 1774.00) would be the 1st sign of topping, with a close below 1760.25 confirming a resumption lower for the S&P500

US Treasuries: Stay bullish. Below 2.657% to 2.544% / 2.399%

With risk assets poised to roll lower, we remain bullish US Treasuries. Looking specifically at 10yr yields, a close below 2.657% says the downtrend has resumed for the larger range lows between 2.544% / 2.399%. Bears need a break of 2.788% to invalidate our bullish outlook and say that a base has transpired

The US $ Index is choppy but still bullish

While the US $ Index is far more choppy than we have anticipated, it is still bullish for 82.15/82.55. This view would be given a significant blow below 80.15, and would be invalidated below 79.68.

Gold is coming to life, but it’s the close that matters

A daily close above 1273 confirms a Triangle breakout and further near term strength towards 1321, potentially beyond to the confluence of long term support between 1358/1381.

 

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Mon, 02/10/2014 - 18:30 | 4421451 Dr. Engali
Dr. Engali's picture

Bank of America is really doing everything they can try and get some short sellers into this market so they can squeeze it higher.

Mon, 02/10/2014 - 18:59 | 4421582 johngaltfla
johngaltfla's picture

Funny thing is I observed something similar last night. Notice how GS has failed to even sniff its original all time highs and how the Aussie is screaming "deflation" in a crowded theater while nobody evacuates as it burns.

 

Why Last Week’s Stock Market Action Should Cause Great Concern
Mon, 02/10/2014 - 19:23 | 4421711 css1971
css1971's picture

Base metals don't lie.

People bitch about gold and silver. Really, they're just following copper, aluminium, steel down.

That's reality. The real world is flat to down. Not the end of the world, not a reset. Just down, possibly for a very long time. The banks have been saved, they don't need to be saved by the fed or BOE, or ECB.

Stocks, going to follow commodities with a 12 month delay or so.

We are Japan.

Mon, 02/10/2014 - 19:30 | 4421746 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Base metals don't lie.

Zinc is a trickster and is rumoured to be a tax cheat.

Mon, 02/10/2014 - 18:35 | 4421467 max2205
max2205's picture

Fed mouthpieces

Jpm
Boa
Ms
GS
Citi

Why do I want to hear them pump or dump their book?

Mon, 02/10/2014 - 18:45 | 4421516 Johnny Cocknballs
Johnny Cocknballs's picture

Sometimes -  a lot of the time - it is precisely not the close that matters but the volatility.

 

Gold is still in suppression mode - just wait until Yellen says  {says...} that tapering will continue...

Mon, 02/10/2014 - 19:20 | 4421518 Ham-bone
Ham-bone's picture

2014 is 1000 tons (20%+) short of covering current global gold demand...hard to imagine anything that wouldn't be "coming to life" with that kind of discrepancy between demand / supply

gold closed on the knife edge of $1275 (break out or break down point)...gold poised for some fireworks.  Only way to meet that demand is to crash the price by another 30%-50% to disgorge another 1000+ tons from the ETF's, as was done in '13 (or said otherwise, another 500 tons from the remaining 790 tons of GLD inventory (60%+ of remaining inventory), among others) although this will cause futher declines in scrap / mining...So, to get 1000 more tons from ETF's will likely cause a further 200-300 ton scrap/mining output decline.  Law of diminishing returns hitting hard. 

Another option for central planners to beat down demand via further global gold buying bans / heightened taxations (a la India?)

The more logical manner to meet / manage the demand would be a signifcantly higher price...however unlikely it is.

Seems tomorrow is either the blast off or the shut down point of the gold markets..manipulation has run out of room to maneuver.

Mon, 02/10/2014 - 21:23 | 4422121 FMR Bankster
FMR Bankster's picture

Trading at $1281 right now.

Mon, 02/10/2014 - 18:48 | 4421529 ATM
ATM's picture

I'll bet they aren't.

Mon, 02/10/2014 - 18:52 | 4421548 ZH Snob
ZH Snob's picture

they will continue to act like it's business-as-usual until one day...

 

..when it isn't

Mon, 02/10/2014 - 18:55 | 4421567 MarcusAurelius
MarcusAurelius's picture

Well as a trader my technical analysis shapes up similar to BoAML. With one exception that I do not think that stocks are topping out yet although they might have a point. 1823 would be the sucker level for more bulls so I could see it falling there as it approaches the top if it is going to fall. Kind of spooks me when they see the same things as me with the exception of stocks.....that would mean I am on the sucker side or the herd. However not so sure with the emerging market trade unwinding first and Dollars flowing back home to the US.  

Mon, 02/10/2014 - 19:00 | 4421597 css1971
css1971's picture

You can only afford to buy on margin if things are actually going up at a reasonable clip. Rolling along sideways is no good. So if you have a fair bit of margin debt around and the market isn't actually going up at a fair old clip, then it's going to be going down in pretty short order. T'aint rocket science.

Mon, 02/10/2014 - 19:12 | 4421621 Emergency Ward
Emergency Ward's picture

Top and roll hootchie coo; Top around the clock; Toppin' in the free world; Top and roll high school; Top and roll never forgets; I love top and roll; Top and roll suicide; Top and roll ain't noise pollution; The heart of top and roll; Top and roll fantasy; So you want to be a top and roll star

It's only top and roll

Mon, 02/10/2014 - 19:21 | 4421692 Missiondweller
Missiondweller's picture

and gold confirms the gold break out at $1274 close. Very bullish.

Mon, 02/10/2014 - 19:32 | 4421747 Iam Yue2
Iam Yue2's picture

What is the actual point of Macneil Curry?

Mon, 02/10/2014 - 20:12 | 4421881 FieldingMellish
FieldingMellish's picture

To have a first name that's a last name and a last name that's a spicy dish.

Mon, 02/10/2014 - 19:46 | 4421800 HaroldWang
HaroldWang's picture

Dow down 300 last Monday, Dennis Gartman turns bearish seeing 15% downside. Today, after late week rally, he says he was wrong and correction is over. These guys are beyond idiotic.

Mon, 02/10/2014 - 21:24 | 4422125 FMR Bankster
FMR Bankster's picture

Must be going down in the morning. Let me guess he's now long the S&P 500 in Mexican Pesos.

Mon, 02/10/2014 - 20:09 | 4421877 FieldingMellish
FieldingMellish's picture

Gold inverse H&S, $1360 target.

Mon, 02/10/2014 - 20:40 | 4421979 NOZZLE
NOZZLE's picture

Gold supply? thanks to shows like "Toilet Flush" & "Pukon Gold", every moron with a pick, shovel and pan is busy meeting demand. 

Mon, 02/10/2014 - 21:08 | 4422085 wisehiney
wisehiney's picture

One of my old girlfriends used to top and roll just before she took another leg higher.

Tue, 02/11/2014 - 01:32 | 4422914 StychoKiller
StychoKiller's picture

Sounds like loads of fun...

Mon, 02/10/2014 - 22:15 | 4422336 TheRideNeverEnds
TheRideNeverEnds's picture

Yea sure, see you @ 1900 in a month.

 

Mon, 02/10/2014 - 22:55 | 4422516 royal
royal's picture

Gold is looking good, but even better are the Gold Miners.

I went long GDX today on the break of the cup and handle.

Lotsa upside potential with this trade.

Tue, 02/11/2014 - 01:46 | 4422937 OC Sure
OC Sure's picture

The gold triangle breakout to 1321 is not clearly explained. I see the triangle traced, but if you draw a parallel line from the bottom of the triangle across the top then you get around 1285, not 1321. ...Not sure of the allure to that level from this article. The 1285 level is still just a throwback to the inclined line of previous lows and not a big deal. ...But I agree if those "purple" long term downtrend lines are taken out then we have a trend changer. Until then, I expect that level to be greeted with EXTREME optimism and thus a retreat to the 1180 lows; and, well, you know  what happens to triple bottoms...

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