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Wednesday, September 24, 2014

Why you should ignore both Albert Edwards and the queers at Zerohedge

How's this for doom?

Zerohedge - S&P 500 on the verge of the ULTIMATE DEATH CROSS!!!1!

Holy fuck!

That sounds bad!

Here's SocGen's Albert Edwards:
Regular readers will know that we have always followed analyst optimism closely (optimism here defined as the percentage of analysts EPS forecast changes that are upgrades). We have shown previously that it is not the level of analyst optimism that is important for the equity market, but the change in optimism (see right-hand chart below). Somewhat surprisingly we have found that the change in analyst optimism tends to be a very good leading indicator of economic activity (it mirrors almost exactly the OECD and Conference Board leading indicators), but it is published on a far more timely basis, and more importantly it is not subject to revision in the way the economic data and leading indicators are.

Hence we note that the aggregate monthly analyst optimism data has slid below the previous lows of last year and the year before, to the sub-40% mark (see chart above). This has taken the 6-month change in optimism back into negative territory, which is beginning to drive the equity market back into bear market territory (see left-hand chart below).

My colleague Andrew Lapthorne calculates analyst optimism data on an even more timely bottom-up basis and publishes it in his weekly Global Equity Market Arithmetic- link. He notes the dramatic collapse in the US analyst optimism to below 30% for three weeks in a row! These data are entirely consistent with a US already in recession and supports that recent assertion in an interview with Lakshman Achuthan of the ECRI.


Finally I want to share with you news that the S&P is on the verge of an “ultimate” death cross (see chart below). This is where a 50-month moving average (currently at 1152) falls below the 200-month average (currently 1145). The Trend blogspot (link) tries to make some sense of this very rare event. They note that the averages came close to crossing in 1978 towards the end of the 1965-82 secular bear market, but just held. By contrast Japan suffered a monthly death cross in 1998 and 14 years later we are still in the firm embrace of the bear. Watch this space.

Dear god in heaven!

Oh wait....

Turns out that the Russkie propagandist Nazi queers at Zerohedge posted this on 16 July 2012.

What happened to the market since then, I wonder?

Oh... S&P's up nearly 50% since then, NASDAQ almost 60%.

With this one little fact, you should now realize how smart it'd be to fucking ignore Zerohedge and their little faggot Putin bumboy Albert Edwards forever more.

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