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About That "S&P 500 Will Be 2,150 By Christmas" Call...

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

So this megaphone playing out again is just plain crazy.

Back on October 13, when the stock market was in free-fall, I prepared this chart showing a potential megaphone pattern. With major indicators (such as the MACD and stochastics) looking decidedly bearish, the idea that a rally would soon return the S&P 500 to the 2,030 area seemed crazy:
 
Three weeks later--ding-ding, we have a winner! The SPX has touched the top line of the megaphone drawn back in mid-October.
 
Now here's another crazy idea: the megaphone pattern continues to play out, and the SPX reverses here and crashes 200 points down to the 1,800 level. I marked up this chart last weekend (chart is dated 10-31-14).
 
 
At this moment, this megaphone projection looks as crazy as the projection for a massive rally back to 2,030 did in mid-October. Right now, many pundits are projecting SPX 2,150 by Christmas as a done deal. Heck, why not say 2,300? Just extend the rally line a few more weeks.
The euphoria is palpable: sentiment is pegged to the top of the charts, expectations of central bank easing are pegged to the top of the charts, profit expectations are pegged to the top of the charts, complacency is pegged to the top of the charts, the expectations of further declines in the yen are pegged to the top of the charts, and so on.
 
There is literally nothing standing in the Bulls' path at this point--everything is going the Bulls' way.
Just like it was going all the Bears' way in mid-October.
 
That spot of bother is now being written off as Ebola-inspired nonsense, never to be repeated. Perhaps.
 
But there is still a substantial list of things that could disrupt profits, capital flows, volatility, sentiment and central bank omnipotence.
 
Back on October 13, I discussed the notion that the Fed (and its central bank cronies) would not let the stock market crash before an election: Will the Fed Let the Stock Market Crash Before an Election?
 
Voila. That script played out rather well.
 
Yes, the Bank of Japan had to step in and do the heavy lifting, and Mario Draghi had to repeat his now-tiresome stand-up routine of the ECB will do whatever it takes to blah, blah, blah, save central banking from itself, restore the imploding remnants of European Imperial glory, or whatever. But the idea that central banks coordinate their stick-saves and we're gonna-save-the-world-yet-again media spew is not exactly new.
 
So this megaphone playing out again is just plain crazy. No way can the market retrace its well-deserved rocket-launch to 2,030 and change. That is impossible.
 
Glad we got that settled: the pundits all agree: don't just buy the dip, buy the new all-time high and everything in between.
 
Note: this stew of conjecture and sarcasm is not a recommendation to do anything but laugh heartily at the insanity of "rational" markets.

 

 

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Fri, 11/07/2014 - 09:25 | 5423151 ekm1
ekm1's picture

S&P can be 2150 on today if central command wishes to.

Just override the system and type up 2150.

 

That is why world is quitting the system.

Fri, 11/07/2014 - 09:32 | 5423176 eclectic syncretist
eclectic syncretist's picture

Well payrolls sucked the big one but unemployment dropped anyway.  Same as it ever was.

Fri, 11/07/2014 - 09:45 | 5423217 Headbanger
Headbanger's picture

'Ol Chuck is WRONG!

The peak will be 2035!!

 

Fri, 11/07/2014 - 09:57 | 5423270 max2205
max2205's picture

Traders trade and tops are a bitch

Fri, 11/07/2014 - 10:34 | 5423390 Headbanger
Headbanger's picture

Looks like I'll have to split the difference with 'Ol Chuck

Cause the S&P just hit 2032 before heading south.

Fri, 11/07/2014 - 09:53 | 5423251 venturen
venturen's picture

ya and inflation is down too.... There are no problems....everyone is a millionaire....in Zimbabwe dollars!

Fri, 11/07/2014 - 09:34 | 5423178 cnmcdee
cnmcdee's picture

The only thing standing in the bulls way is a little bit of ebola snot it doesn't notice dripping off it's nose - brought to you by ISIS in time for Black Friday.

Fri, 11/07/2014 - 09:41 | 5423193 gatorengineer
gatorengineer's picture

ebola has been banned from the media....  full state control, and its not a tinfoil hat....number of US cases, who knows....

Fri, 11/07/2014 - 09:53 | 5423244 LULZBank
LULZBank's picture

WE'RE ALL GONNA DIE!

Fri, 11/07/2014 - 10:09 | 5423299 Esso
Esso's picture

When?

Fri, 11/07/2014 - 10:36 | 5423395 Headbanger
Headbanger's picture

And from being shot by a jealous husband!?

Fri, 11/07/2014 - 09:58 | 5423269 orangegeek
orangegeek's picture

Exactly.

 

But central command is such a rotten gang of detached fucks, they are just starting to wake up to the mess that they've created.

 

Elite intelligence is this generation's oxymoron.

 

 

Fri, 11/07/2014 - 09:29 | 5423163 NoDebt
NoDebt's picture

Yeah, but the Fear & Greed index says we're only about half way there (55):

http://money.cnn.com/data/fear-and-greed/

Just a couple weeks ago we made such a big deal about it being at literal zero.  And here we are today.

Fri, 11/07/2014 - 09:32 | 5423165 Ban KKiller
Ban KKiller's picture

Laugh of the hour, thanks!

Deutsche bank? You are being exposed.  Time to short! And...Fuck off and die, Deutsche!

Fri, 11/07/2014 - 09:27 | 5423167 thismarketisrigged
thismarketisrigged's picture

well after todays bullshit number that they will release, so they can pretend that the ''good'' numbers had nothing to do with an election, the s&p may reach 2150 by today.

 

cant wait to see like 250,000 jobs with 75 percent being part time and that jackass liesman pretending the economy is better than ever

Fri, 11/07/2014 - 09:29 | 5423169 buzzsaw99
buzzsaw99's picture

3000 IS IN THE BAG

Fri, 11/07/2014 - 09:28 | 5423170 jubber
jubber's picture

Gold hit 1131 and Silver 1505 in the middle of the night, is thats todays target???

Fri, 11/07/2014 - 09:30 | 5423173 LULZBank
LULZBank's picture

Repost from earlier:

--------------------------------

Tylers, dude you have missed the biggest bombshell from yesterday morning!

http://www.theguardian.com/business/2014/nov/05/-sp-luxembourg-tax-files-tax-avoidance-industrial-scale

There are people running around like crazy around various offices.

Ghordius, the floor is yours :)

Fri, 11/07/2014 - 10:06 | 5423293 max2205
max2205's picture

And this from the biggest tool paper of the UK and US govt.

 

Wonder why and how this plays out

Corps need to pay a flat rate for sure as the current scheme is onerous to taxpayers. 

 

But whoever cared about us?

Fri, 11/07/2014 - 11:35 | 5423644 The Most Intere...
The Most Interesting Frog in the World's picture

Hasn't anyone figured out, yet, that taxing corporations is kind of like trying to corner a skunk?  Corporations already pay directly or indirectly real estate taxes, personal property taxes, unemployment taxes, medicare taxes, social security taxes, license fees, collect sales taxes and pay enormous costs annually to simply comply with business requirements.  Enough is enough.  Eliminate the corporate income tax!

Fri, 11/07/2014 - 09:31 | 5423175 SheepDog-One
SheepDog-One's picture

They'll do the real takedown at peak euphoria of course.

Fri, 11/07/2014 - 12:53 | 5424007 TheReplacement
TheReplacement's picture

Agreed.  Every stick save is meant to inspire confidence in the power of TPTB.  They will save us from every disaster and make sure everyone has an iPhone and EBT then SNAP it's all over.

Isn't that how a confidence game works?

Fri, 11/07/2014 - 09:35 | 5423182 AdvancingTime
AdvancingTime's picture

 In addition to manipulation by the government-financial complex other forces are converging to further distort and disconnect Wall Street from the American economy. Why American equities continue to rise is very important, more is at force here than the usual causes which might include a pre-election and post-election rally. This is more than the continuation of a double down and let it ride mentality that has been ratcheting the market higher while reenforced by media hype.

Most analysts agree that money from countries with weakening currencies is flowing out of the troubled areas and the U.S. is receiving most of the benefit. The Japanese as well as many Chinese and Europeans know with so much money floating around and few safe harbors America is becoming the most comfortable option for temporary investing their money. More on why this should be viewed as a sign of instability rather than a reason to celebrate in the article below.

http://brucewilds.blogspot.com/2014/11/why-american-equities-are-rising.html

Fri, 11/07/2014 - 09:43 | 5423204 yogibear
yogibear's picture

The banks are doing the QE now instead. It's rates at 0 and printing to the mad-max. 

A round-robin print-a-thon orgy by the central banks. Japan blows first, then the US.

They resolve it with IMF SDR exchanges and  a vastly devalued dollar. As  Jim Rickards stated.

 

Fri, 11/07/2014 - 09:42 | 5423207 assistedliving
assistedliving's picture

best market analysis i've seen in years

Fri, 11/07/2014 - 09:44 | 5423216 dirtyfiles
dirtyfiles's picture

Charles is right the megaphone will brake down

and as always investors are unprepared for that

I love the ZH deer look

Fri, 11/07/2014 - 09:56 | 5423228 john_connor
john_connor's picture

The Fed wouldn't let the stock market crash before *this* election becuase that doesn't suit TPTB.  Back in 2008, McCain started started to pull even with Obozo however the banks knew they were going to need spending orgy / bailout by the gov to keep the scam going.  It was the 2nd or 3rd debate in late August/ early Spetember that McCain said that govt spending was out of control and he would institute a spending freeze.  From there it was decided, no McCain.  The Fed then pulled liquidity from the shadow banking system for 2 weeks and boom, Lehman was exposed.  We all know what happended next.  stocks crashed, Obama surged into the lead.  

 

Fri, 11/07/2014 - 09:56 | 5423266 LULZBank
LULZBank's picture

Which election now?

There are some sort of elections every 2 years in US.

Around the world, probably every year.

Fri, 11/07/2014 - 09:52 | 5423242 venturen
venturen's picture

I call 3000! Do I hear 4000...and average Wall Street Bonus of $10000000

Fri, 11/07/2014 - 09:53 | 5423245 orangegeek
orangegeek's picture

Here's when we top and roll over.

 

When central banks around the world (and their aligned institutions) - including Japan, the UK and Yellen, stop buying up everything that moves from their pool of "punchbowl cash".

 

ECB is out.  Yellen has bond interest that she can blow.  Japan is just a rotting POS.  And the UK is right behind Japan.

 

We are close folks.

Fri, 11/07/2014 - 09:53 | 5423253 Badself
Badself's picture

I really believe the participants of zerohedge are very intelligent and want the USA to change direction, pay the due penalty for living beyond our means, and bring back some kind of normalcy even if a full fledged depression is needed to accomplish this.   But that will not happen and the 1% wealthy herd knows this and are taking measures to protect at least part of their wealth by thinking and doing the following:  Acquire physical assets such as gold, art, and equity shares. Yes equitity shares!!  These assets are going up in value and after the US bankruptcy will retain at least some of their value as in Germany after their fiasco and bankruptcy in the 1920's.  I keep hearing from the wealthy that they would rather own 10% of something(equity, gold, art) rather than 100% of nothing(Fiat).  I believe that we will see S&P at 4K before it all implodes.  I think buying any physical assets in addition to above that can not be taxed like property such as cars, trucks, rolex watches, portable generators, etc. would be a better use of your fiat before it continues to diminish in value.  

Just my thoughts of late while trying to figure this out

Fri, 11/07/2014 - 11:34 | 5423637 RabbitOne
RabbitOne's picture

In a desperation attempt to find work after I got out of the service as the Vietnam War ended I took a brokerage job. They told me it would increase my abilities in dealing with people directly blah, blah, blah. Instead I became a paid tout.

But one thing I did learn was the colorful street (wall) jargon my bosses used with the big customers (who were not touted to). I can still hear my old boss shouting on the phone his timeless metaphors of “…and what’s going to keep that tire inflated (market up)…” So with QE ending, for the moment, it is time for reflection…  

Fri, 11/07/2014 - 11:47 | 5423695 Goldbugger
Goldbugger's picture

There is a huge Megphone pattern that has been devloping since 2000 and should complete around 2020-2023.

The DOW should kiss 5000 by then is this thing plays out. The Trillions in money printing and bond buying from central banks and the Quadrillion in Dirivatives will all explode in their faces and they know it.

 

http://elliottwavepredictions.com/wp-content/uploads/2014/07/DJIA-quarte...

 

Fri, 11/07/2014 - 12:11 | 5423781 Consuelo
Consuelo's picture

'2020'...?  McCain just became head of the Senate Armed Services Committee, bugger, and the Republicans ran on a platform of MOAR global power-projection.   I don't think any more need be said.   

Fri, 11/07/2014 - 12:20 | 5423821 Jim Shoesesta
Jim Shoesesta's picture

Bears no longer shit in the woods. They shit in thier pants. 

 

And this stupid megaphone is is just an expanding triangle within a bull channel that has been running for literally years.

Price bounced off the bottom of that channel and now is headed back to the top. Hugh is a broken clock, right twice a decade. 

Fri, 11/07/2014 - 13:36 | 5424171 ted41776
ted41776's picture

greatest comment ever

Fri, 11/07/2014 - 14:17 | 5424350 El Hosel
El Hosel's picture

Bulls now wipe with little bear fur balls.

Fri, 11/07/2014 - 13:49 | 5424222 medium giraffe
medium giraffe's picture

How the fuck do you see anything on that chart?

 

Fri, 11/07/2014 - 14:14 | 5424315 El Hosel
El Hosel's picture

Its a megaphone sir, clearly.  Its screaming something... But all I can here is moar moar moar

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