Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

December Stock Market Brief, Avalanche of European Debt 2013

Stock-Markets / Stock Markets 2012 Dec 12, 2012 - 04:50 AM GMT

By: Christopher_Quigley

Stock-Markets

A market giving mixed signals:
The stock market had been basically playing a waiting game since the American presidential election with a tug of war going on between buyers and sellers but now the momentum is definitely moving with the bulls. By all accounts this rally should remain, notwithstanding any shock from Congress and the fiscal negotiators from the Whitehouse. The sooner these budget issues are put to bed the better. Either way, fiscal cliff or no fiscal cliff, the end result will be the same.  There has to be some budget cuts and some raising of taxes (the ratings of the American dollar demand it) so I really do wish they would get on with the job of work at hand and cool the dramatics.


The action demanded by American and European budgetary arithmetic is deflationary
all-round yet the market is still positive. Thus while there is no fundamental reason for bullish price action one cannot fight the market. It remains to be seen whether the rally is sustainable.

The Dow Transports held at the crucial 4900 level after the election results and if the 5350 level is broken to the upside it will be a very bullish technical signal. It will mean this important leading index has pierced up out of a 12 month trading range. This range formed a "line" in Dow parlance. The longer the duration of the "line" the more technically important any breakout.

The strength of both the Dow Transports and the Dow Industrials is surprising to me given that quite a few stocks are below their 200 daily moving averages (DMA), in addition significant DMA have become points of resistance rather than support for many equities. These technical characteristics are indicative of a bear market so it remains to be seen whether this bull really has legs. To show what I mean here are a few examples: BIDU, BBBY, MSFT, DLTR and DG.

Baidu Inc.: Daily



Bed Bath & Beyond Inc.: Daily

Microsoft Inc.: Daily

Dollar Tree Inc: Daily

Dollar General Corp.: Daily


An avalanche of European debt rolling over in 2013:
"One European issue you don't hear about a lot is the massive amount of debt, both public and private, that will roll over (i.e. need to be refinanced) in the next few years. In 2013 nearly $1.2 trillion of European government bonds will need to be refinanced. A few weeks ago, in a CNBC interview, CEO of money management giant Blackrock Larry Fink, hinted that his firm's clients, typically large institutions, had very little interest in buying those bonds — especially those issued by downtrodden  European Union members such as Spain and Italy. Worse still is the mountain of debt refinancing European companies will need. About $4.2 trillion worth of corporate bonds will mature through 2016, according to Standard and Poor's ratings services. In 2012  alone roughly a half trillion came due. But the real tidal wave rolls over the next two years, with $1.03 trillion for 2013 and $1.28 trillion in 2014. If these numbers aren't scary enough, then consider financial companies (i.e. banks) owe about 78% of this debt. These companies are the primary sources of liquidity to keep the commercial gears of the EU greased. If investors are hesitant to buy European sovereign debt, then the mere idea of buying European corporate debt — especially for financial companies — would send them running for the hills."

From the above report by the Jutia Group the new European Stability Mechanism (ESM) is going to have a very busy year in 2013. The ink is barely dry on recent plans when it is now apparent that the agreed 500 billion Euro targeted to be "raised" will not be sufficient to meet requirements particularly as it looks increasingly likely that Italy will go into "default" like Spain, Portugal, Greece and Ireland.

Any indication that the 27 Euroland countries are going to drag their feet in this regard will more than likely throw the Euro into its biggest crisis yet. The reason for this growing disillusion is that it is rumored the fund will need to "grow" to at least 2 trillion Euros to adequately deal with the Italian problem. It is thought in certain circles that this debt level may be substantial enough to now make the German political establishment finally consider throwing in the towel on the disaster that has become the Euro. I personally don't think they will walk but if France goes the way of Italy that is another issue. I do not think Germany could maintain its premier sovereign debt status in such an eventuality. I think then and only then will the writing be on the wall for the Euro.

Charts: Courtesy of StochCharts.com

By Christopher M. Quigley

B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin, Ireland. He holds a Bachelor Degree in Accounting and Management from Trinity College Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the stock market in 1989 in Belmont, California where he lived for 6 years. He has developed the Wealthbuilder investment and trading course over the last two decades as a result of research, study and experience. This system marries fundamental analysis with technical analysis and focuses on momentum, value and pension strategies.

Since 2007 Mr. Quigley has written over 80 articles which have been published on popular web   sites based in California, New York, London and Dublin.

Mr. Quigley is now lives in Dublin, Ireland and Tampa Bay, Florida.

© 2012 Copyright Christopher M. Quigley - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules