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Bank Of America: "Our Bearish View On The S&P500 Was Wrong"

Tyler Durden's picture





 

"Our bearish view on the S&P 500 is wrong," remarks BofAML's Macneil Curry, as yesterday's close above 1,823 points to the larger uptrend resuming. However, despite the equity strength, Curry says "stay bullish Treasuries" as price action points to further gains. The USD's bullish trend is at risk and pressured by silver strength.

 

Via BofAML's Macneil Curry,

Our bearish S&P500 view is wrong. Further gains in store. 

Up until yesterday we had been bearish risk assets and the S&P500.Yesterday's close above 1823 (top of the daily cloud) says that view is WRONG and that the larger uptrend has resumed. Indeed the daily Bullish Engulfing Candle against the pivotal 50d avg (1811) provides further bullish evidence for a test of the mid-Jan highs at 1851, through which opens 28m channel resistance at 1872. Back below the 50d on a closing basis points to a more choppy environment than currently thought. 

Stay bullish Treasuries

Despite the turn higher in equities, the price action in Treasuries says STAY BULLISH. Looking specifically at 5yr yields and TYH4, the impulsive moves from Feb-03 extremes at 1.582% & 125-03 say that the month to date correction is finished and that the larger bull trend is resuming. Further supportive of this view is the fact that the overnight pullback in TYH4 from 125-31 (and 1.482% in 5yr yields) has unfolded in a counter trend manner. NOW, watch key resistance in 5yr and 10yr yields at 1.470% & 2.692%, respectively. Below these levels provides further evidence that the bull trend is resuming. In TYH4 we would like to see a daily close above the overnight high at 125-31. Through these levels target a test and break of the 200d in 5s (1.380%), 126-25 (Oct-30 high in TYH4) and 2.544% in 10s. our bullish view is wrong thru 1.582% (5s), 125-03 (TYH4) and 2.788% (10s).

The US $ is at risk, especially against £

We have been bullish the US $ Index, looking for topping in both £/$ and €/$. That bullish US $ view is NOW on the ropes as the repeated failure of the US $ to stage a rally warns off significant underlying weakness. Indeed a DXY break of 79.68 (Dec-27 low) and a €/$ break of 1.3737 (Dec-27 high) would invalidate our bullish US $ view. However, probably the most important level to watch is the £/$ Apr'11 high at 1.6748. With daily RSI breaking out a closing break of 1.6748 would clear the way for the Aug'09 highs at 1.7044 

The Silver breakout adds to the US $ woes

Adding to the US $ woes is the recent strength in precious metals. 1st it was gold, now it is silver. Today's spot silver break of 3m range highs and 7m pivot between 20.62/20.51 points to a medium term base and further gains to 22.40/23.09

 


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Fri, 02/14/2014 - 13:14 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

Looks like he got a suicide thread.

Fri, 02/14/2014 - 13:26 | Link to Comment El Oregonian
El Oregonian's picture

Well, Janet is going to have to change her hair color then.

Fri, 02/14/2014 - 13:34 | Link to Comment Clueless Economist
Clueless Economist's picture

Veterans Admin Regional Office and Insurance Center is closed for the 8th snow day of the year today.  They had King Day, Snow Day, Snow Day in a row last month.  Snow Day, Snow Day, Weekend, President's Day in a row this month.  They are 2 1/2 years behind processing Vet's disability claims because they never work due to 26 Vacation/13 Sick/14 Holidays/Snow days off.

The scroll on the TV screen last night on WPVI Philadelphia was classic: "VAROIC will be closed tomorrow - all USELESS EMPLOYEES are not to report"

Fri, 02/14/2014 - 13:40 | Link to Comment BaBaBouy
BaBaBouy's picture

"" The USD's bullish trend is at risk and pressured by silver strength.""

WHat The He-ll Does SILVER Have To Do With ""USD Strength""...Unless...
GOLD (And SILVER) Are MONEY, And Competing Currencies!

Ahhhh... The Barbarism Of It All...

Fri, 02/14/2014 - 13:46 | Link to Comment Spastica Rex
Spastica Rex's picture

Maybe confidence in silver is inversely correlated with confidence in the con.

Fri, 02/14/2014 - 13:48 | Link to Comment zaphod
zaphod's picture

Bankers are saying "all aboard" (hint that means to run for th hills)

Fri, 02/14/2014 - 14:03 | Link to Comment Obchelli
Obchelli's picture

So what makes current view right? or 2 wrongs make it right? I'm confused...

Fri, 02/14/2014 - 16:19 | Link to Comment Groundhog Day
Groundhog Day's picture

BoML was calling for a pullback and the exact opposite happened.  Doind the opposite of their recommendations in the long run is the best trading strategy..this goes for all of them WFC, MS, GS, JPM st al

Fri, 02/14/2014 - 13:15 | Link to Comment FieldingMellish
FieldingMellish's picture

Its all silver's fault. Ahh... I see. Nothing to do with unbridled money printing then... nope.

Fri, 02/14/2014 - 13:18 | Link to Comment Divided States ...
Divided States of America's picture

Yup the S&P went from 1 correlation to the Yen carry to 1 correlation 2 days ago to 1 correlation to Gold yesterday and now 1 correlation to Silver today....its basically correlated to the charts screaming the highest percentage wise....I would say one day it should be 1 correlation to the # of people on food stamps.

Fri, 02/14/2014 - 13:14 | Link to Comment The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Wrong? You fucks have never been right.

Fri, 02/14/2014 - 13:29 | Link to Comment Pseudo Anonym
Pseudo Anonym's picture

they've been right for their insider trading.  i dont see them having too many, if any, negative trading days overall

Fri, 02/14/2014 - 14:11 | Link to Comment eclectic syncretist
eclectic syncretist's picture

This BAML guy draws a couple of trendlines, completely ignores corporate earnings, and comes out representing BAML as if this is how they do it?  What a joke this assclown must be.  I see absolutely pisspoor volume on this run-up which has yet to reach the former highs, coupled with lowered economic output and earnings across the board (other than miners!) and want to fade anything this overpaid shill says.

Fri, 02/14/2014 - 13:15 | Link to Comment lasvegaspersona
lasvegaspersona's picture

So who is providing the fuel for the fire? The Fed denies it. The Yen is getting stronger. Must be a miracle. Money from nowhere....how wonderful for the bulls.

Fri, 02/14/2014 - 13:19 | Link to Comment skwid vacuous
skwid vacuous's picture

Now that Gartman has blown up his fund and is living off a few newsletter subs and $500 CNBS gigs... maybe he should apply to B of A analyst training program? seems like he would fit perfectly, may have to shave the beard though

Fri, 02/14/2014 - 13:17 | Link to Comment jmcadg
jmcadg's picture

Oh so now silver drives the market. Bullshit.

Has he got bored with wanking his little cock to death?

Fri, 02/14/2014 - 13:17 | Link to Comment q99x2
q99x2's picture

Did you BTFD?

Dudes, the money changers got hold of the printing press. What else is there to know.

Fri, 02/14/2014 - 13:20 | Link to Comment fonzannoon
fonzannoon's picture

Something is off for the money changers. This run in commodities should not be happening. 

Fri, 02/14/2014 - 13:44 | Link to Comment BandGap
BandGap's picture

We'll find out this weekend. That's when they release most of the really painful news.

All this HSA buying of ammunition has to be part of what they see down the road.

And I think the biggest reason they pushed ObamaCare is to get the OK to hire additional IRS agents (16,000) who are also be trained to use, and are being issued, firearms. They have been hired BTW.

Fri, 02/14/2014 - 15:14 | Link to Comment Emergency Ward
Emergency Ward's picture

Them pistol-packin' revenooooers are gonna make house calls.....

Fri, 02/14/2014 - 13:25 | Link to Comment LawsofPhysics
LawsofPhysics's picture

ignore what these TBTF banks say and watch the reverse repos...

tick tock motherfuckers...

Fri, 02/14/2014 - 14:02 | Link to Comment Clowns on Acid
Clowns on Acid's picture

LoP - the Fed has learned their lesson. Just buy the bonds when necessary to keep yields silghtly real return negative or zero, with printed money... and oh yeh... don't bother telling anybody. The "taper" is a great misdirection story. 

Fri, 02/14/2014 - 15:04 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Perhaps, but the real costs of all the unfunded liabilites are growing exponentially.  They will need to begin confiscation soon.

Especially since there is no way to "tax" people with no real income.

Fri, 02/14/2014 - 14:21 | Link to Comment tip e. canoe
tip e. canoe's picture

LoP, is there a link one can use to keep track?

btw, check this out, not sure if it's been reported here or not:

http://finance.yahoo.com/news/u-money-funds-put-72-billion-fed-39-173102...

 U.S. prime money market funds parked $72 billion with the Federal Reserve in December as the central bank ramped up its testing of a program aimed to help the central bank achieve its targeted interest rate when it eventually begins raising rates, a report by J.P. Morgan Securities released on Monday showed.

The amount of reverse repos that prime money funds held at the end of December was equivalent to 5 percent of their $1.5 trillion in total assets, J.P. Morgan said.

5% is a very small % of total assets.   lot of capital floating around to bring home if needed, yes?

Fri, 02/14/2014 - 15:02 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Could be, and if it never comes home?  The unfunded liabilities remain regardless (unless they are "suicided").

Fri, 02/14/2014 - 16:09 | Link to Comment tip e. canoe
tip e. canoe's picture

probably why Timmy was so in a tizzy before he left about overhauling the MMF's.

agreed on the unfunded liabilities, maybe an eventual global debt-for-equity swap?

Fri, 02/14/2014 - 13:25 | Link to Comment Frank N. Beans
Frank N. Beans's picture

Gee, I thought banks loaned money, not prognosticate markets.

 

 

Fri, 02/14/2014 - 13:31 | Link to Comment machineh
machineh's picture

They ARE the markets.

Fri, 02/14/2014 - 13:36 | Link to Comment El Hosel
El Hosel's picture

Tail wagging the dog, weak Dollar giving strength to the "stuffs"... Weak data, weak dollar, weak case for taper = Metal Palooza

Bofa Nails the Top for stocks.

Fri, 02/14/2014 - 13:32 | Link to Comment StackAttack
StackAttack's picture

Translation:  We raped all the sheeple shorts with the previously provided disinformation, so now the sheeple should go long SLV.  Then, our buddies at JPM and GS will stomp on the silver price, so we can rape the sheeple again.

Fri, 02/14/2014 - 13:38 | Link to Comment BandGap
BandGap's picture

From Wikipedia

The Roaring Twenties, the decade that followed World War I and led to the Crash,[4] was a time of wealth and excess. Building on post-war optimism, many rural Americans migrated to the cities in vast numbers throughout the decade with the hopes of finding a more prosperous life in the ever growing expansion of America's industrial sector.[5] While the American cities prospered, the vast migration from rural areas and continued neglect of the US agriculture industry would create widespread financial despair among American farmers throughout the decade[5] and would later be blamed as one of the key factors that led to the 1929 stock market crash.[6]

Despite the dangers of speculation, many believed that the stock market would continue to rise indefinitely. On March 25, 1929, however, a mini crash occurred after investors started to sell stocks at a rapid pace, exposing the market's shaky foundation.[7] Two days later, banker Charles E. Mitchell announced his company the National City Bank would provide $25 million in credit to stop the market’s slide.[7] Mitchell's move brought a temporary halt to the financial crisis and call money declined from 20 to eight percent.[7] However, the American economy was now showing ominous signs of trouble.[7] Steel production was declining, construction was sluggish, car sales were down, and consumers were building up high debts because of easy credit.[7]

Fri, 02/14/2014 - 14:12 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Yeh... we already covered that in 2007/08. We are experiencng the new Star Trek. The one where money can be printed and the inferiors have taken over the controls. Yes, historically this has happened before, but only since the fall of the Roman Empire, and the subsequent Dark Ages.

This time it'll be different.... or not. 

Fri, 02/14/2014 - 13:43 | Link to Comment Iam Yue2
Iam Yue2's picture

Living up to his reputation as the New Stolper.

Fri, 02/14/2014 - 13:53 | Link to Comment Fuh Querada
Fuh Querada's picture

Anyone who believes the technical analysis bullshite deserves all they get.

Sat, 02/15/2014 - 00:57 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Absolutely. Scatterplots, equations mapping price &time or prices to each other are technical analysis for real, but technical bullshit POSING as analysis is garbage

  • moving averages
  • cup and handle
  • head and shoulders
  • double bottom
  • triple top
  • elliot waves
  • always using MACD with the default settings as if they could never be inappropriate
  • using moving averages & MACD's on SHARPLY curving charts that otherwise would be a very steep slope LOG scale

are all failures POSING as technical analysis

Fri, 02/14/2014 - 13:57 | Link to Comment Blazed
Blazed's picture

As I keep saying, Wi Tu Looooooo!

Fri, 02/14/2014 - 13:57 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Of course they were wrong !! So have I been for the last year. The immoral Fed is going great guns with the printing press, with the level of corruption in the Kenyan White House, the Fed doesn't even have to tell anyone what / how much they are printing.

Janert Yellen is the Chair? Yeh in name only... Dr Stanley Fisher I presume? Do you think that there will be any significant correctio in the US equity markets while Iran is threatening Isreal in mid east? Cannot have that for obvious reasos.

It's smooth sailing from here for US GDP. Up up and away... in nominal terms only however. Inflation now is going to take off .... globally. Stagflation in the EM's however means moer violence and need for US weaponry... good time for defense contractors ahead. Brilliaqnt times for debtors ahead... inflation hits 10% by end of 2014. MNow that JOM and GS are long gold.... gold to 2000 by end oif 2014.

Austerity is for posterity. We will never see it until the collapse... in 2015/16.   

Fri, 02/14/2014 - 14:15 | Link to Comment PlausibleDenial
PlausibleDenial's picture

Wrong... I can tell you about wrong... Every time I know I am right I am wrong.  Regardless of how much studying, reading, or praying every time  I have an idea on how to trade this bitch I am wrong.  There is no right in this manipulative casino.  Every time I read someone touting their great trades I find that they forget to indicate how fucking lucky they are.

The way I have made money is buying .223 low and then selling it to some lazy ass for more.....  Oh, btw, Fuck Fisher.... No matter how much censoring the world can demand there will be a day.....

 

Fri, 02/14/2014 - 14:02 | Link to Comment Cult of Criminality
Cult of Criminality's picture

Up yours Bank of assholes.....Jump

Fri, 02/14/2014 - 14:09 | Link to Comment slightlyskeptical
slightlyskeptical's picture

A divesified equity portfolio (60% Spy; 20% IJH, 20% IJR) had a 5 year average return of 16.7% going into the Nov of 2007.

Curently the same portfolio is sporting just over a 20% average return over the last 5 years.

Hard to come to any other conclusion then we are almost fully tapped out. Proceed with caution.

 

 

Fri, 02/14/2014 - 14:13 | Link to Comment Yen Cross
Yen Cross's picture

   Does Macneil Curry's 94.00 call on usd/jpy still stand? I'm guessing he's reversed that as well. It looks awfully heavy on the daily chart. The 100 and 200 day avgs. are not far off.  101.20 & 100.15 respectively. If the 100.00 handle goes it's not going to be pretty for equity markets.

  I was just beginning to think the guy had sprouted a set of nuts...

Fri, 02/14/2014 - 14:17 | Link to Comment Spungo
Spungo's picture

"Anyone who believes the technical analysis bullshite deserves all they get"

Some of it works. Fundamental analysis tells you what to buy. Technical analysis tells you when to buy it. 

Fri, 02/14/2014 - 14:19 | Link to Comment NDXTrader
NDXTrader's picture

Do these peeps know how to look at a chart? This pattern is incredibly bearish - a massive head and shoulders with an almost perfect Fib retracement on the right on less volume. We've seen the Fed f up these patterns before but there is much more risk of substantial downside here than the opposite

Sat, 02/15/2014 - 00:49 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

head-and-shoulders has no more meaning than cup-and-panhandle on the corner - it will not pass any backtesting.

Fri, 02/14/2014 - 14:30 | Link to Comment The worst trader
The worst trader's picture

Print me up Scotty!

Fri, 02/14/2014 - 15:32 | Link to Comment Amagnonx
Amagnonx's picture

Reverse psycholgy - works on people who read opinions instead of doing research + math.

Fri, 02/14/2014 - 16:14 | Link to Comment Rising Sun
Rising Sun's picture

Of course BOAML was wrong, but they made billions.

 

Listen to what the banks say and do the opposite. 

 

Banks are sitting on a mountain of inventory - and the herd isn't buying - so the fucking cocksuckers have to short squeeze their way out of dilema.

 

Low volume melt up every time - Fed is leading the orchestra and the banks are playing the instruments - it all ends eventually, because even these fucking cocksuckers have to report profits - when their profits fall, the scam is over and the markets tank.

The way to fuck the banks is to keep positions small and short - don't cover your shorts and wait for the next roll over.

 

 

Fri, 02/14/2014 - 16:41 | Link to Comment TheSkipper1967
TheSkipper1967's picture

I have been waiting (I thought it has started last couple weekx) for this all to go down but nothing seems to be able to bring this house of cards down.  I cant get a job even at $65k level with an MBA and Finance degree with over 15 yrs experience.  I am in a mid level city 400k+ and am 46 years old.  I have semi long term supplies, good amount of ammo, and low level of silver.  Wife is now making more than I am which helps and sucks at the same time.  Not sure how long I can hold out until I become one of the FSA.   I had to cancel my individual healthcare and go bareback.  I keep sending out my resume for simple Financial Analsyt positions but nothing comes around.  I can barely pay for heat, gas and food but the market keeps going up even after all the shit around the world.  I spend my days working out, cutting back on spending and waiting for the 1% to take it in the portfolio.  When the fuck is this day of reconing going to happen?  I know it has already begun for me.   

Sat, 02/15/2014 - 00:13 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Start a fund.

Make sure it's crap.

Call it high yield.

Sell it to EVERYONE.

You'll get far more than 65k.

Also, you'll need to sign : here

Sat, 02/15/2014 - 00:09 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

LOL
these jokers...
expect us all to still believe them.
http://flic.kr/p/enJ7Cs

Do NOT follow this link or you will be banned from the site!