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
Semiconductor Sector – Watch the Early Bird in 2019 - 21st Jan 19
From ASEAN Economic Development to Militarization - 21st Jan 19
Will China Surprise The Us Stock Market? - 21st Jan 19
Tips to Keep Your Finances Healthy in 2019 and Beyond - 21st Jan 19
Tips for Writing Assignment in Hurry - 21st Jan 19
UK House Prices, Immigration, and Population Growth Mega Trend Forecast - 21st Jan 19
REMAIN Parliament to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 21st Jan 19
Pay Attention To The Russell Stocks Index and Financial Sectors - 20th Jan 19
Hyperinflation - Zimbabwe's Monetary Death Spiral - 20th Jan 19
Stock Market Counter-trend Extends - 20th Jan 19
The News About Fake News Is Fake - 20th Jan 19
Stock Market Bull Trap? January 22 Top Likely - 19th Jan 19
After the Crash, the Stock Market Made a V-shaped Recovery. What’s Next - 19th Jan 19
David Morgan: Expect Stagflation and Silver Outperformance in 2019 - 19th Jan 19
Why Brampton Manor Academy State School 41 Oxbridge Offers is Nothing to Celebrate! - 19th Jan 19
REMAIN Parliament Prepares to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 19th Jan 19
Gold Surges on Stock Selloff - 18th Jan 19
Crude Oil Price Will Find Strong Resistance Between $52~55 - 18th Jan 19
Stock Market’s Medium Term is No Longer Bullish. It is Now Mixed - 18th Jan 19
SPX and Gold; Pivotal Points at Hand - 18th Jan 19
Fable Media Launches New GoWin Online Casino Affiliate Site in UK - 18th Jan 19
The End of Apple! - 18th Jan 19
Debt, Division, Dysfunction, and the March to National Bankruptcy - 18th Jan 19
Creating the Best Office Space - 18th Jan 19
S&P 500 at Resistance Level, Downward Correction Ahead? - 17th Jan 19
Mauldin: My 2019 Economic Outlook - 17th Jan 19
Macro Could Weaken After US Government Shutdown. What This Means for Stocks - 17th Jan 19
US Stock Market Indexes Reaches Fibonacci Target Zone – Where to Next? - 17th Jan 19
How 2018 Was For The UK Casino Industry - 17th Jan 19
Gold Price – US$700 Or US$7000? - 16th Jan 19
Commodities Are the Right Story for 2019 - 16th Jan 19
Bitcoin Price Wavers - 15th Jan 19
History Shows That “Disruptor Stocks” Will Make You the Most Money in a Bear Market - 15th Jan 19
What Will the Stock Market Do Around Earnings Season - 15th Jan 19
2018-2019 Pop Goes The Debt Bubble - 15th Jan 19
Are Global Stock Markets About To Rally 10 Percent? - 15th Jan 19
Here's something to make you money in 2019 - 15th Jan 19
Theresa May to Lose by Over 200 Votes as Remain MP's Plot Subverting Brexit - 15th Jan 19
Europe is Burning - 14th Jan 19
S&P 500 Bounces Off 2,600, Downward Reversal? - 14th Jan 19
Gold A Rally or a Bull Market? - 14th Jan 19
Gold Stocks, Dollar and Oil Cycle Moves to Profit from in 2019 - 14th Jan 19
How To Profit From The Death Of Las Vegas - 14th Jan 19
Real Reason for Land Rover Crisis is Poor Quality of Build - 14th Jan 19
Stock Market Looking Toppy! - 13th Jan 19
Liquidity, Money Supply, and Insolvency - 13th Jan 19
Top Ten Trends Lead to Gold Price - 13th Jan 19
Silver: A Long Term Perspective - 13th Jan 19
Trump's Impeachment? Watch the Stock Market - 12th Jan 19
Big Silver Move Foreshadowed as Industrial Panic Looms - 12th Jan 19
Gold GDXJ Upside Bests GDX - 12th Jan 19
Devastating Investment Losses Are Coming: What Is Your Advisor Doing About It? - 12th Jan 19
Things to do Before Choosing the Right Credit Card - 12th Jan 19
Japanese Yen Outlook In 2019 - 11th Jan 19
Yield curve suggests that US Recession is near: Trading Setups - 11th Jan 19

Market Oracle FREE Newsletter

UK House Prices, Immigration, and Population Growth Trend Forecast

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

© 2005-2018 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