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ON THE MARKET - Greek Debt Again -- And A Free 2-Year Pass

Pre-market - Tuesday --11-13-2012

Dr. John L. Faessel


Commentary and Insights

Quotes of the Day

"A democracy is always temporary in nature: it simple cannot exist as a permanent form of government. A democracy will continue to exist up until the voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority will always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, (which is) always followed by a dictatorship."

~ Lord Woodhouselee ~

~~ i.e. Alexander Fraser Tytler ~~


"We Won't Have True Social Justice until Everything Is 'Equal in Everybody's House"

~ Al Sharpton ~

"Make the lie big, make it simple, keep saying it, and eventually they will believe it"

~ Adolph Hitler ~

Market: Patterns remain in major down channels since the top tick in late Sept. The S&P 500 (SPX) is off 95 points and the NDX has given up 294 points. McClellan Oscillator is in NEUTRAL at Minus 129

I remain bearish - and don't think we will get a decent bounce till the McClellan gets well oversold - likely in the' high' MINUS 200's of past MINUS 300

Re Greece; In the latest compromise in three years of crisis fighting, creditors led by Germany opted late yesterday to keep money flowing to Greece instead of risking a default that could lead to the nation's exit from the euro and stir more turmoil for the countries that remain in the single-currency bloc.

Notable: Over $ 1 trillion in value has been lost from global equities since Obama was reelected.

The S&P 500 (SPX) closed Monday at 1380 (Was 1414 last week)

The 50-day moving average resistance is at (SPX) 1432

Short term price resistance is also at (SPX) 1403 and then 1434

The 200-day moving average resistance is at (SPX) 1381

Then price resistance at the top tick in September @ 1474 / 1470


Price support is at 1373

Longer out term price support is at 1354, 1325 /1320/1313/ 1309

Stronger 'Price' support in the (SPX) is at the June 4th lows of 1266 and will be the battleground zone if the market tests its lows.


According to estimates from the International Monetary Fund, America's total government debt per person is 35% higher than that of Greece, and is also higher than per capita debt in Portugal, Italy, or Spain (which together with Greece make up the so-called PIGS countries)."

I remain bearish -

Greek, Spanish and Italian short- and long-term bond yields are moving higher again after their big retreat after the European Central Bank's [ECB] "plan" to buy bonds of up to 3-years in maturity...'but only if asked', and 'only if conditionality is imposed upon those asking'...

· Greek 10-year yields are up one% from last week at 17.32% but down from a high of 24.41%

· Italy 10-year (gross) bond yield - 5.04% off cycle highs of 7.29%.

· Spanish 10-year (generic) bond yield - 5.92%. Only 2 ½ months ago yields ticked cycle highs of 7.41%.


My running list of global nightmares... or if you like; "The Wall of Worry"

Hurricane Sandy damage slowing the economy in the Northeast and the Mid-Atlantic

And the following Storm slowed recovery

An Obama Care tidal wave of taxes and regulations

The USA is closing in on the Fiscal Cliff.


Obama considering a new tax on carbon emissions

German Economic slowdown

Corporate earnings growth is slowing.

A major swoon going on in technology stocks (and earnings) is underway.

Iran / Israel conflict could ignite any day / hour.

Al-Qaeda terrorists are flourishing in Africa and the Middle East.

Muslim nutcases world-wide in general are running totally amuck.

Syria & Turkey could blowup anytime.

China slowdown accelerating.

Japan debt at 220% GDP.

China / Japan still nose to nose over some Japanese islands (oil there.)

EuroLand is in a deepening recession.

A global economic slowing is underway.

The IMF cut global economic growth to 3.3% from 3.5%

The risky features of global monetary easing (out of control printing) by ECB / USA Fed / Bank of Japan yet loom.

A 2nd USA Debt Downgrade.

A payroll tax cut benefiting 160 million workers to expire at the end of the year.

Tax unknowns / and new $billions in Obama care taxes -

Unfunded pension's tsunami of $ trillions.

Election can go either way - More Socialism or Free Markets.

Regulatory situation continues to deteriorate.

Savings rates close to nothing and the middle class goes deeper in the hole daily.

Add in here that the moral / ethical / spiritual compass of the USA is now close to only being but a memory.

And throw in investors abandoning stock markets due to Flash Crashes, Naked shorting etc

Plus you name it…


This week's Bullish Investor Sentiment.

Overall Bullishness is holding up as stock markets weaken

(High BULLISH readings in the Investor Sentiment Readings usually are signs of Market tops; low ones, market bottoms.)

· The American Association of Individual Investors [AAII] Investor Sentiment Survey of BULLISHNESS rose to 38.5% from 35.7% the prior week. It posted cycle lows of 22.2% on 7/23/2012 the lowest percentile since August 2010.

· The Market Vane (Market Letter Survey) rose to 62%. It was at Cycle highs of 69% seven-weeks ago.

· Consensus Index BULLISH fell to 57% from 60%. It ticked Cycle highs @ 73% two months ago

· The AAII Investor Survey of BEARISHNESS fell to 39.9 from last weeks 41.0%.On August 4th 2011 it posted cycle highs of 49.9% in Bearishness.

The Citigroup "Panic / Euphoria" Model is running sideways at a plus 0.02. That's well off from cycle highs of plus 0.33 ten-weeks ago. At the end of June it ticked cycle lows of minus 0.31in the Panic mode. It's still registering in the Neutral zone,

The BARRON's Confidence Index posted a 66.4 - Cycle lows of 64.7 were established 14-weeks ago. One-year ago it was 68.7.

The Confidence Index is the premier measure of how the bond markets trillions (total global is around $91 trillion and USA is 39% of that) are allocated: (The bond market is twice the size of the stock market.)

The Index is the High-grade bond index divided by intermediate-grade index. A decline in latter vs. former - generally indicates rising confidence, pointing to higher stocks.