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  • v1kes_won v1kes_won May 30, 2013 8:23 AM Flag

    Don't Blame FED Speak, its MCV Time Again!

    Ben Bernanke is taking a lot of heat about his confusing comments last week to Congress. This has caused the market to take some recent hits.

    However, this reaction is nothing more than the chart monkies using Uncle Ben's comments as an excuse to exercise their SOP of using maximum contrived volatility (MCV) to generate some trading profits. Two other factors contributing to the volatility is money inflow into mutual funds has slowed and despite most of them just performing with the market, the buyside is currently happy to sit on their gains. Must be nice making the big bucks for just average performance, eh?

    Aside from interest sensitive stocks like REITs, Bernanke's comments should have had little impact on the market. Let's get real people, the FED is not going to do anything to threaten the economy especially with inflation being under control, which BTW Bernanke also addressed in his FED speak last week.

    While the SP500 is up 16% this year, it is still trading at a P/E of 15 which is on a historical basis just average. Applying that same P/E to the current consensus SP500 estimate of $123.4 and you get a target of 1850, or 13% above yesterday's close. A recent survey of the buyside found that a significant portion of them saw DOW at 18,000 next year.

    Actually one positive for the market as the FED winds down QE3 is that the large amount of money held in bond funds may start to find its way into equities.

    So it appears to me we are in for some choppiness in the short term as the buyside rotates in and out of some sectors hoping to get some bargains. Longer term, the secular bull market will rage on. So, like the buyside, I would use any weakness over the next few months as a buying opportunity.

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    • "While the SP500 is up 16% this year, it is still trading at a P/E of 15 which is on a historical basis just average. Applying that same P/E to the current consensus SP500 estimate of $123.4 and you get a target of 1850, or 13% above yesterday's close"

      Another GREAT CALL!

    • 5/30/13

      "Aside from interest sensitive stocks like REITs, Bernanke's comments should have had little impact on the market. Let's get real people, the FED is not going to do anything to threaten the economy especially with inflation being under control, which BTW Bernanke also addressed in his FED speak last week."

      "So it appears to me we are in for some choppiness in the short term as the buyside rotates in and out of some sectors hoping to get some bargains. Longer term, the secular bull market will rage on. So, like the buyside, I would use any weakness over the next few months as a buying opportunity"

    • Well the heggies and short parasites are jumping for joy at the return of MCV.

      The game is called good news is bad news. If the economy is gaining steam that's bad news cause Uncle Ben is going to end QE3.

      As noted in my first post in this thread, get real people the FED is not going to do anything to threaten the economy.

      However, with the buyside fat and happy with their returns for the year, BTW most of which are just keeping pace with the market movements, the parasites and heggies have found something to run stocks up and down with.

      So we got the classic short #$%$ in the last two hours of trading today. Now two other things contributed to the min-crash this afternoon: end of month portfolio adjustments and there are some pot holes coming next week that the shorts will try to exploit.

      1. Both China and the EU will release some ecomonic data that is likely to be beraish or flat
      2. Two FED hawks are speaking next week and one of them has been whining about the threat of inflation for years while the other has been pushing to wind down QE3.
      2. U.S unemployment figures come out on Friday and good news will be treated as bad news and vice versa.

      So, just like the buyside is doing, keep your eyes out for bargains in the weeks ahead and ignore the chicken littles who come running on these boards screaming about the sky is falling. They are simply morons, heggie shills, or short parasites.

      Uncle BEN is our friend and he ain't going to do anything stupid anytime soon.

      • 1 Reply to v1kes_won
      • Vikes on Friday:

        "there are some pot holes coming next week that the shorts will try to exploit.

        1. Both China and the EU will release some economic data that is likely to be beraish or flat
        2. Two FED hawks are speaking next week and one of them has been whining about the threat of inflation for years while the other has been pushing to wind down QE3.
        2. U.S unemployment figures come out on Friday and good news will be treated as bad news and vice versa.

        So, just like the buyside is doing, keep your eyes out for bargains in the weeks ahead and ignore the chicken littles who come running on these boards screaming about the sky is falling"

        Spot on once again!

    • Yep, we are now back in the one day up, one day down mode, but it won't last.

 
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