Joseph Granville the chart/market timing guy was on TV yesterday. He's calling for a 4,000 pt drop in the DOW this year. He says last Friday was the 2012 peak. (about 12,700)
In addressing the timing of his call he referenced the notable low trading volume of the current Bull phase.
I would interpret him to mean all the smart money hit the exits on the last dip. More recently, the rubes have been celebrating the good earnings news, taking no note of the looming disaster in Europe.
It's sort of like we are sailing on the Titantic when the crew & rich passengers (the smart money) spot an iceberg about to plaster the ship (Europe troubles). They hit the lifeboats while the rest of the passengers (the rubes)are celebrating the sudden availability of deck chairs.
Granville is calling for about a 30% drop in the DOW. A 30% drop in NNA would put it around $2.10 But, maybe not that low since the shipping sector has already been hammered pretty low. Any thoughts?
If Greece defaults and the CDS trip then you could have a pretty bad market fall. Lagarde is out with the IMF's World Economic Outlook and she makes the most sense. Her demand is not to cause too much austerity such the economy in question tanks, such as Greece. She appears to believe that the EU's job now is build a wall around Greece and find liquidity sources for Spain, Italy and others.
Oops, I missed that accent. Now that I think about , he sounds exactly like Za-Za Gabore.
"Frankly, I do not understand why Greece has not been in the market over the past year buying back its debt at 50 cents on the euro"...........Dave
Probably, because they want to give the bond holders a much worse haircut. Frankly, I don't understand the point of the negotiations between the Greeks and the bondholders. Its not like their credit worthiness is going to be notably better if they somehow get the bondholders to agree to the degree of haircut. Greece will be a better credit risk in the future if they simply renege on the entire debt. But either way, their interest rate is going to be much higher in the future...it goes to character. And the Greeks would appear to have none. They are shameless.
Joe had a big call back in the late 70's or early 80's that brought him to fame. He's been mostly dead wrong since then. After his first big call he screwed up badly on the next couple and ended up doing dog and pony shows with a pet monkey by his side.
What occurs to me is that charts might tell you when the market was about to turn. But, I don't know how a chart pattern could tell you about the depth of a sell-off. So, he is making a call outside of his area of expertise.