Although it was a pretty good rally yesterday, investors remained cautious ahead of the FOMC decision. VIX (16.03) rose even as stock prices were higher, and settled above 16 for the first time since mid October. Technically, it was just an oversold bounce yesterday, as the major indexes are still in the downtrend started on November 29. With that said, it all depends on what the Fed says on Wednesday. Should there be no tapering, we are most likely to get a final push higher toward the year end.
Today's bounce didn't change the short term downtrend. Technically, the major indexes are now in short term oversold territory, suggesting that we could see a little more bounce early next week. However, with the FOMC decision coming on Wednesday, expect traders to remain cautious and stocks to go sideways ahead of the decision. There is not much to do but to stay nimble or stay out.
never brother never, they have too much on their plate to digest. if apple wanted to do any of what you are saying they would have done that long time ago. they will not get into a business they donot understand.
with intel producing new processor chips for servers every 3 months. Intel will eat google up alive. If u believe what you read in bloomberg, you better believe in Santa and the Gay Dentist (Tooth fairy).
if only these friggin rumor spreading mongers understand what it takes to design a chip and then to manufacture it maybe they would take a dump over google's BS. Google only wants to knock down the price of the server chips and hence have started this rumor mill. Good buying opportunity if it goes down to 21 area.
It was a good thing that the small caps kept the overall market from totally falling apart yesterday, as the Russell 2000 index held 1100. However, the small cap index still looked vulnerable, as it failed to reclaim its 50 day moving average. Elsewhere, there was still no sign that this down leg is over. The new 52 week lows on the NYSE, which reached its highest level since late August on wednesday, expanded again. The chart of the DJIA appears to be forming a head-and- shoulder pattern after the blue chip index fell below its early December low (neckline) yesterday. The DJIA could fall to the 15400 area should the pattern play out.
Be cautious ya numbnuts....LOL
There was no sign that this leg of the pullback has run its course, as market internals continued to deteriorate. The new 52-week lows expanded to the most since late August. The Russell 2000 broke below its 50-day moving average, and is now looking at the 1100 level for support. For the S&P 500, watch for support near 1775, followed by 1760, an area near its 50-day moving average. A 3% pullback from the broader market index's record closing high 1808 would take the index back to 1754. A 5% pullback would take it back to 1717. With still four sessions to go till the FOMC meeting, expect more profit taking in the near term.
A professor at the University of West Virginia was giving a lecture on the supernatural. To get a feel for his audience, he asks
"How many people here believe in ghosts?"
About 90 students raise their hands.
'Well, that's a good start. Out of those of you who believe in ghosts, do any of you think you've seen a ghost?"
About 40 students raise their hands.
"That's really good. I'm really glad you take this seriously. Has anyone here ever talked to a ghost?"
15 students raise their hands.
"Has anyone here ever touched a ghost?"
3 students raise their hands.
"That's fantastic. Now let me ask you one question further...Have any of you ever made love to a ghost?"
Billy Ray, way in the back raises his hand.
The professor takes off his glasses, and says, "Son, all the years I've been giving this lecture, no one has claimed to have made love to a ghost. You've got to come up here and tell us about your experience."
The #$%$ student replied with a nod and a grin, and began to make his way up to the podium. As he reached the front of the room, the professor says, "Well, so tell us what it's like to have sex with a ghost?"
Billy Ray replied, "Daaaang!!! From way back thar I thought you said "Goats"!!
Pfizer Corp is making the anouncment today that VIAGRA will soon be availible in liquid form and will be marketed by the Pepsi Cola Comp as a power beverage suitable for use as a mixer. It will now be possible for a man to literally pour himself a "stiff" one. Obviously we can no longer call this a "soft" drink, and it gives new meaning to the names "cocktails", "highballs", and just a good old fashioned "stiff drink". Pepsi will be marketing the new concoction be the name of "mount and do"
This old man in his eighties got up and was putting on his coat. His wife said, "Where are you going?"
He said, "I'm going to the doctor."
And she said, "Why? Are you sick?"
"No," he said. "I'm going to get me some of those new Viagra pills."
So his wife got up out of her rocker and was putting on her sweater and he said, "Where are you going?"
She said, "I'm going to the doctor too."
He said, "Why?"
She said, "If you're going to start using that rusty old thing again, I'm going to get a tetanus shot."
Did you here about the man who died on overdosage of viagra, they couldn't close the coffin.
*A man fell asleep on the beach under the midday sun and suffered a severe sunburn to his legs. He was taken to the hospital. His skin had turned a bright red and was very painful and had started to blister. Anything that touched his legs caused agony. The doctor prescribed continued intravenous feedings of water and electrolytes, a mild sedative and Viagra. Rather astounded, the nurse inquired, "What good will Viagra do him in that condition?"
The doctor replied, "It will keep the sheet off of his legs."
*There was this guy from Louisiana. He had a tooth ache so he went to his dentist. When the dentist asked what was wrong he said he had a tooth ache. The dentist went to give him a shot of novicaine and he said, "Oh no you dont Doctor, I dont like needles so you better get that needle away from me." The dentist said, "Ok, then how about some gas?" the guy said, "Oh no you dont, doctor. Im allergic to gas." The dentist went into the backroom and came back out with a perscription and handed it to him. The guy said, "Doctor, I may be from Louisiana, but I know what this is, this is viagra." The dentist said, "Yeah, i know, but it will give you something to hold onto while I yank your tooth out."
Market complacency over the timing and impact of Federal Reserve tapering could leave some investors unprepared for rising volatility in rates. Long vol positions in U.S. rates and dollar and long swap spread positions are favored as insurance against higher interest rate volatility.
Challenging year for fixed income. Tightening spreads and rising rates could make total returns challenging for fixed income investors. Corporates are favored over government bonds. High-yield bonds are expected to produce positive returns, though about half the gains seen in 2013. U.S. high-yield bonds may offer the best potential, with a total return of 4 percent to 5 percent. Among investment-grade bonds, Europe should lead the way with a return of up to 2 percent, followed by the U.S. at 1.5 percent, while Asia and emerging markets may suffer negative returns.
Global inflation rate to remain stable at close to 3 percent. After surging in 2011, inflation has fallen in almost every country, with the exception of those facing foreign exchange fueled price increases, namely Japan, Brazil, India and Turkey. Inflation in emerging markets is expected to increase from 4.7 percent in 2013 to 5.3 percent in 2014.
The U.S. housing recovery continues. The ongoing strengthening of the U.S. economy is expected to boost real estate values by another 5 percent in 2014.
Oversupply to contain commodities pricing. Global commodities prices will be contained in 2014 by oversupply in key sectors, especially global oil and grain, a strong U.S. dollar and modest global economic growth. The Merrill Lynch Commodity Index (MLCX) is expected to decline by 1.6 percent, less than the steep 5 percent decline in 2013. Gold values are expected to drop to $1,250 an ounce in the first quarter, before rebounding to normal levels later in the year. Other metals not in surplus, including zinc, platinum and industrial metals could outperform.
“ThreeBs” corroborate evidence of great rotation. Higher bond yields, a h
10 macro calls for the year ahead:
The Standard and Poor’s 500 Index is expected to rise to 2000 and the MSCI All-Country World Index to reach 444 by year-end. Gains in the year ahead imply a price return of approximately 11 percent, with modest earnings growth of 7 percent, driven by higher sales and additional buybacks.
U.S. and global economic GDP growth is expected to accelerate in 2014, to 2.6 percent and 3.5 percent, respectively. The U.S. economy is expected to expand in the second half of the year at a 3 percent rate, driven by the end of fiscal austerity and pent-up demand for capital goods. Slow growth of 0.8 percent is expected in Europe as credit and fiscal policy remains tight. China’s GDP growth will marginally decline from 7.7 percent in 2013 to 7.6 percent in 2014, but remains highest among the leading emerging market economies, while Japan is in transition, with another year of 2 percent growth.
Modest rebound for emerging markets. Following flat lined growth since 2007, the emerging markets should prove resilient in 2014, with modest growth recovery and rising productivity. Emerging market GDP is expected to rise 4.9 percent in 2014 with modest returns of 2.9 percent, 0.7 percent and 0.3 percent for local debt, emerging market foreign exchange and external sovereign debt.
U.S. rates to head higher, with 10-year Treasury yields expected to reach 3.75 percent. A rise in the Treasury yields by 85 basis points will have consequences for markets around the world, likely resulting in an increased interest rate differential in favor of the U.S. dollar, especially against the euro, which is expected to decline to 1.25 by year end. In addition, rising rate volatility may surprise. Interest rate volatility is expected going into 2014, with a target of 100 for the Merrill Option Volatility Expectations (MOVE) Index. Market complacency over the timing and impact of Federal Reserve tapering could leave some investors unprepared for rising volatility in rat
2014 Market Outlook: BofA Merrill Lynch Global Research Calls for U.S.-Led Red, White and Bull Market in Year AheadHigher U.S. Dollar, Interest Rates and Rate Volatility Create Upside Risk
BUSINESS WIRE 9:30 AM ET 12/10/2013
Symbol Last Price Change
BAC 15.55down -0.03 (-0.19%)
QUOTES AS OF 11:51:02 AM ET 12/10/2013
NEW YORK--(BUSINESS WIRE)-- BofA Merrill Lynch Global Research today released its outlook for the markets in 2014, calling for strong U.S.-led economic growth, higher yields and solid U.S. stock gains that are lower than in 2013 but higher than consensus. Meanwhile, a rising U.S. dollar and rising rates, as well as rising rate volatility, will have consequences for markets around the world as credit cycles diverge.
At the annual BofA Merrill Lynch Year Ahead outlook news conference held today in New York, analysts summarized the macro story of the year as inherent upside risk in a vigorous bull market for the U.S. dollar and a low, but rising interest rate environment.
“In 2013, we saw the 30-year bull market in bonds wind down and stocks soar, with a stronger recovery since 2009 than in the last five market cycles,” said Candace Browning, head of BofA Merrill Lynch Global Research. “As we move into 2014, we expect this trend to moderate but continue forward even with Federal Reserve tapering mid-year.”
Bearish on rates and commodities, long on volatility and bullish on real estate and equities, the BofA Merrill Lynch team expects a shift to lower liquidity/higher growth in 2014 and overall positive asset returns. Rejecting the outright bear market case for equities, analysts remain optimistic about stock market gains in the near term as high-quality, U.S. based companies with global exposure unleash value. However, they advise to move to middle ground, shedding the extremes of high yield or high growth stocks as long-term trends in the great global rotation continue to play out.
The BofA Merrill Lynch Global Research team made the following
I post going by the technical NOT of Intel but of the general markets. The markets have been going up for all the wrong reasons. A couple days ago GDP was reported at 3.6 percent and the market rallied BUT the true fact is that the GDP went up on built up inventory and unsold inventory. Companies had built up inventory on hopes of holiday sales as well as improving economy but that didn't seem to be the case. Watch out this month GDP will show up at 2 percent. Mark this post. The amount of margin money that people have borrowed and shoved it into the markets is the highest its been in the stock market history, you have the dip buyers that step in on any dips and until they dry up the market will continue to melt higher. Besides the history about the month of December giving you the highest return. But technically the market is way overbought and for all the wrong reasons and is way due past for a correction. I sometimes wonder if the markets will even correct - but always the retail investors get in at the top and get butchered. Maybe I am preaching to the choir but I would be careful cause once the tapering starts and the free money printing stops and the margin rates begin to climb up and people start to sell as they see its not worth their while to hold onto the stock any longer and pay the high interest rates everything will come apart. But when the tapering will start is also anyones guess could be dec, jan'14 or march. goodluck and have a nice day.
Almost everyone seems to expect stocks to continue higher into the year end, and the uptrend is unquestionable. But how strong is the stock market technically? The charts of the major indexes continue to suggest that a correction is overdue. The negative divergences between the technical indicators and the price moves still exist among the major indexes. In addition, in spite of last Friday's rally, both the short term and long term MACDs of both the Russell 2000 small cap index and the DJ Transportation index continue to head lower, suggesting the two indexes have been losing upside momentum. It is not a time to go wildly bullish.
Although there were big moves in the major indexes today, the lack of volume indicated that the upside momentum wasn't particularly strong. This will probably have longer term implications. In the near term, stocks are in a seasonally strong period for the weeks before Christmas, and we are likely to see a new leg of an up move. However, the tapering concern could be back on the table in about ten days before the December 17-18 FOMC meeting and most likely again in January should the Fed take no action in December. Keep your eyes on the market internals to see whether the rally can last. For now, watch for resistance near their record highs among the major indexes. For the S&P 500, that stands in the 1807-1813 area. And for the DJIA, the resistance is in the 16100-16200 area.
Citi as well as Drexel upgraded Intel and bumped its Target to 28 and 30 respectively. With the stock trading at 25.01 the Resistance level is at 25.98 and support is at 24.60.