Key Dates and Times for the Week Ahead:
· Keystone’s Comments on the Upcoming Week: Autumn arrives this weekend ushering in colder winds. The U.S. Presidential election is now only 43 days away and the fiscal cliff is 100 days away. Housing and real estate sectors are important this week with LEN earnings, Case-Shiller, and other sales data on tap. Real estate matters due to the Fed’s new commitment to buying MBS (mortgage-backed securities).Consumer Confidence will create a market pivot point at 10 AM on Tuesday. The economic data on Thursday and Friday is key. The main market mover is wishy-washy Spain deciding on whether or not it will seek a bailout. The ECB’s bond-buying program cannot be unleashed unless Spain requests the bailout but Spain does not want to give up sovereignty by accepting conditionality. If Spain requests aid, the markets will bounce higher but that pop will likely not have much oomph. If Spain says the bailout request will be delayed until October, then the markets will sell off. Markets will not tolerate the wishy-washy posture of Spain such as was the case all last week, if Spain does not ask for a bailout in the coming days the markets will not wait any longer and will assume the bailout is delayed and sell the markets. The next ECB meeting is 10/4/12 where a possible rate cut may occur, if so the euro will fall in value against the dollar. Europe must move to a weaker euro to help the continent grow out of its mess. Bank runs and European riots remain a concern. The Greece talk is heating up again since they need approval of another tranche of aid but cannot agree on austerity plans. The European news flow directly dictates global market direction. Watch for further China easing measures such as lowering rates or triple R’s which will bounce equity markets. China, however, appears hesitant to act. Middle East and Northern Africa turmoil requires attention. Oil price should remain buoyant as the violence remains or escalates but WTIC dropped from 100 to 90 last week, settling at 93. This says the global economic slowdown carries more weight than oil-field worries. A possible SPR (Strategic Petroleum Reserve) release may occur which would help President Obama’s reelection campaign but it is difficult to justify if the global slowdown is actually sending prices lower. The SPX should move with oil. U.S. trading volumes are slowly increasing now that summer is over. The two highs in SPX over the last six days occur with the selling pressure slightly stronger. Pre-announcement confessional season is underway where companies are lowering Q3 estimates at an alarming rate, notables are FDX, INTC and NSC, the largest amount of confessionals thus far since 2006. Lower earnings are not consistent with higher stock prices. Weaker shipping and semiconductor industries indicate a weak global economy. Volatility, the VIX, typically bottoms in August and now sits at 5-year lows so watch this closely going forward; far higher volatility is expected although the VIX is at a low 13.98 to start the new week of trading. Larger intraday price swings will occur as the volatility moves higher. Traders are much too complacent now since they expect the markets to be supported by central banksters forever and never go down again. The low CPC put/call ratio and low VIX signal uber complacency and that the broad indexes are placing a major market top right now and should experience a significant sell off in the near future. Interestingly, the smart trade may not be by the majority of traders that jumped in long over the last two weeks but instead the handful of traders that expect a strong pull back first, in the coming days and weeks, into October, where the ideal long buying time may actually occur. Congress goes back on vacation until after the presidential election; markets are typically bullish when Congress is not in session but considering the seriousness of the impending fiscal cliff, Congress is creating market negativity on a continual basis moving forward.
· Monday, 9/24/12: Spain needs to provide clarity on the bailout, if they plan on asking for a bailout in the coming days the markets will bounce on the news, if Spain says they will delay the bailout, the markets will sell off. Spanish bank audits are due so watch for a potential ratings downgrade, especially by Moody’s rating agency. Window dressing is expected to dress-up the Q3 quarterly statements--winning stocks this quarter are bolstered higher and losing stocks are further beaten down in these final days of September. Monday’s are typically down days in recent weeks. The Monday’s after OpEx Friday typically move opposite of Friday which trended down the whole day after the pop at the opening bell, thus, market buoyancy is favored for today using this metric. A Bradley turn window is now open for a market trend change to occur anytime now thru Friday, 10/5/12. Seasonality-wise, this week after September OpEx is typically down about 80% of the time. Chicago Fed Manufacturing Activity 8:30 AM. Dallas Fed Mfg Survey 10:30 AM. Fed’s Williams speaks 3:10PM. Earnings: LEN-watch the housing sector, PAYX-great gauge for how business and employment is doing, RHT-will impact tech sector, SHIP, THO.
· Tuesday, 9/25/12: S&P Case-Shiller House Price Index 9 AM. Richmond Fed Mfg index, FHFA House Price Index and Consumer Confidence 10:00 AM-a market pivot point will occur. 2-Year Note Auction 1 PM. Earnings: CCL-a ship wreck or smooth sailing?, FFI, JBL-will effect tech sector, MTN, SINO, UEC.
· Wednesday, 9/26/12: Yom Kippur. Mortgage Purchase Applications 7 AM. New Home Sales 10 AM. Oil Inventories 10:30 AM. 5-Year Note Auction 1 PM. Earnings: FGP, PRGS, SABA, TXI, WOR.
· Thursday, 9/27/12: Corporate Profits, Durable Goods Orders, Jobless Claims and GDP 8:30 AM. Pending Home Sales 10 AM. Natty Gas Inventories 10:30 AM. Kansas City Mfg Index 11 AM. 7-Year Note Auction 1 PM. Farm Prices 3 PM. Fed Balance Sheet and Money Supply 4:30 PM. Markets tend to be buoyant into the full moon. Earnings: ACN, DFS-listen for news on the EBAY payment partnership, GPN, IDT, LBIX, MKC, MU-will impact tech sector, NKE-are folks still spending three hundo on a pair of sneakers?, RIMM, SANW, ZZ.
· Friday, 9/28//12: Personal Income and Outlays 8:30 AM. Chicago PMI 9:45 AM. Consumer Sentiment 9:55 AM- markets will pivot on the PMI and Sentiment data. EOM. EOQ3. Earnings: AM-markets may need a greeting card by the time the week ends, FINL, FUL, WAG.
· Saturday, 9/29//12: Full moon.
· Sunday, 9/30//12: Bradley turn date-a window is open for a potential market trend change between 9/24/12 and 10/5/12.
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· During October: Troika Report is due after continual delays; it is needed for leaders to make a decision with Greece. New China Premier Xi Jinping is officially selected and named Head of Party, but, where is he?
· Monday, 10/1/12: ISM Mfg Index 10 AM-markets will pivot and watch energy sector. Q4 begins, where tech and biotech typically outperform but they have already outperformed.
· Wednesday, 10/3/12: First of Three Presidential Debates; Obama v. Romney 9 PM EST. If Obama does best, gold will move higher and the coal sector will sell off. If Romney does best, gold will move lower and the coal sector will move higher.
· Thursday, 10/4/12: ECB Rate Decision 7:45 AM EST and Press Conference 8:30 AM- if the rate is lowered the euro will weaken.
· Friday, 10/5/12: Monthly Jobs Report 8:30 AM-second to last report before the election.
· Monday, 10/8/12: Euro zone Finance Ministers meeting-next tranche of aid for Greece is needed. ESM Inaugural Meeting.
· Tuesday, 10/9/12: Bradley turn date so a turn window opens for a market trend change to occur between 10/2/12 and 10/16/12. Note the overlap with the 9/30/12 window.
· Thursday, 10/11/12: First and Only Vice Presidential Debate; Biden v. Ryan 9 PM EST.
· Tuesday, 10/16/12: Second of Three Presidential Debates; Obama v. Romney 9 PM EST.
· Thursday, 10/18/12: ECB/Euro Summit-banking union outline is expected and Merkel may avoid a decision on Greece’s aid until now? Will Greece exit the euro? A Greece decision is needed now or sooner. Will the banking union discussions go smoothly?
· Friday, 10/19/12: Keystone’s Eclipse Indicator targets the time period of 10/19/12 thru 12/20/12 as potential for a large market selloff especially October into early November, 10/19/12 thru 11/9/12, then the period between Thanksgiving and Christmas, 11/26 thru 12/28.
· Monday, 10/22/12: Third and Final Presidential Debate; Obama v. Romney 9 PM EST.
· Tuesday, 10/23/12: FOMC meeting begins. FB earnings and conference call.
· Wednesday, 10/24/12: FOMC Rate Decision 2:15 PM.
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· Thursday, 11/1/12: Bradley turn date so a turn window opens for a market trend change to occur between 10/25/12 and 11/8/12. This period matches up with Keystone’s Eclipse Indicator.
· Friday, 11/2/12: Monthly Jobs Report 8:30 AM-last report before the election, do you magically see a 7.9% or lower unemployment rate (under the 8 handle) perhaps helping President Obama?
· Tuesday, 11/6/12: U.S. Presidential election decides on Obama or Romney.
· Wednesday, 11/14/12: Bradley turn date so a turn window opens for a market trend change to occur between 11/7/12 and 11/21/12. This period matches up with Keystone’s Eclipse Indicator.
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· Tuesday, 12/11/12: FOMC meeting begins. FB earnings and conference call.
· Wednesday, 12/12/12: FOMC Rate Decision, Forecasts and Press Conference at 12:30 PM, 2 PM and 2:15 PM, respectively. Expect market pivot points especially at 12:30 PM and after 2 PM.
· Saturday, 12/22/12: Major Bradley turn date so a turn window opens for a significant market trend change to occur between 12/14/12 and 12/28/12. This period matches up with Keystone’s Eclipse Indicator.
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· Tuesday, 1/1/13: ESM is officially up and operating.
· Wednesday, 1/2/13: If Congress does not act, the U.S. drives off the “massive fiscal cliff” (a phrase coined by Chairman Bernanke in early 2012) that will cut the GDP, increase unemployment and immediately launch the country into recession, but, on the positive side, the nation’s debt will decrease. Chairman Bernanke stated that the Fed does not have the tools to help should the fiscal cliff occur.
· In February or March: New China Premier Xi Jinping is named Head of Government and takes control.
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