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  • Friday Roundup: Commodities, Emerging Markets [View article]
    The markets are devilishly incomprehensible most times.

    That is just the way it is; otherwise Dow Jones could be at 100,000+++ by now or be close to zero if it was so predictable or too easy to understand.

    Another analysis could be this:

    The SnP500 has a high side of 1300 at the start of July-Sept 2008 quarter. Before the earnings season started in Oct 2009, it was able to reach 1100. A 15% difference YOY high on a QxQ comparison.

    Viola! SnP500 is on tract for a 15% YOY drop in earnings.

    Big investors had been pricing in the 15% difference before the start of the earnings season or was it co-incidence? And on the high side of July-August 2008 quarter?

    This bodes well for the next quarter stock market run from an investor's point of view.

    Going forward:

    If they believe that the Oct-Dec 2009 quarter will get better; then move the parameters back YOY going back into April-June 2008 QxQ SnP levels which has a high side of 1400. Then SnP could be at the 1300 area just assuming the 15% profit differential will narrow down to half or be at 1400 if their estimates show full recovery within this year.

    Then SnP could be at the 1300 to 1400 area before the start of the earnings season in Jan 2010.

    On the downside; if something realy bad happens like that of 9/11 episode. Then backtract YOY going forward to Oct-Dec 2008 QxQ then SnP could drop hard to the 800 area before the next earnings season starts in Jan 2010.

    Does this analysis makes sense or what?
    Nov 08 13:55 pm |Rating: +1 0
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