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LONGWave 10-10-12 - DELUSIONAL DIVERGENCES

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LONGWave 10-10-12 - DELUSIONAL DIVERGENCES

  1. 1. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Delusional Distortions + Dangerous Divergences = DELUSIONAL DIVERGENCES Disconnecting from Reality Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  2. 2. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE LONG TERM - FUNDAMENTALS – EARNINGS • DIVERGENCE - Stealth Warnings Season Not Going Well - Divergence Between Stocks And Earnings • ESTIMATES - Up / Down Revisions - Estimates Simply Dont Match Reality • VALUATION - Markets Seriously Overvalued by Most Metrics • INVESTOR SHIFTS - Steady Equity Exit - A “Front Running the Fed” Bond Bubble INTERMEDIATE TERM – RISK • ANALYTICS - 11 Months of QE Priced in • QE III - Doesnt Bode Well For Traders • GLOBAL GROWTH SLOWING - Dangerous Divergences • DRIVERS - Fiscal Cliff, a Eurozone Led Slowdown & Gross Margins Lance Roberts – 10-05-12 • WARNING - Caterpillar - China – Shanghai – Hong Kong Warnings Signs 10/01/12 • EARNINGS – Early Indicators • SPEAKING OUT - MISPRICING: Sam Zell - LET MARKETS CLEAR: Jim Grant SHORT TERM - SENTIMENT • PEAK COMPLACENCY • CANARIES - Equity Investors Now Fleeing Equity Markets • ALL IN - Everyone on the same side of the boat • UP THEN DOWN – Goldman’s Outlook Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  3. 3. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE LONG TERM - FUNDAMENTALS – EARNINGS  DIVERGENCE - Stealth Warnings Season Not Going Well - Divergence Between Stocks And Earnings  ESTIMATES - Up / Down Revisions - Estimates Simply Dont Match Reality  VALUATION - Markets Seriously Overvalued by Most Metrics  INVESTOR SHIFTS - Steady Equity Exit - A “Front Running the Fed” Bond Bubble Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  4. 4. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  5. 5. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  6. 6. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  7. 7. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  8. 8. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  9. 9. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  10. 10. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  11. 11. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  12. 12. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE INTERMEDIATE TERM – RISK  ANALYTICS - 11 Months of QE Priced in  QE III - Doesnt Bode Well For Traders  GLOBAL GROWTH SLOWING - Dangerous Divergences  DRIVERS - Fiscal Cliff, a Eurozone Led Slowdown & Gross Margins  WARNING - Caterpillar - China – Shanghai – Hong Kong Warnings Signs  EARNINGS – Early Indicators  SPEAKING OUT - MISPRICING: Sam Zell - LET MARKETS CLEAR: Jim Grant Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  13. 13. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 QE PRICED IN Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  14. 14. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  15. 15. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DANGEROUS DIVERGENCES Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  16. 16. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  17. 17. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  18. 18. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  19. 19. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  20. 20. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  21. 21. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  22. 22. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 CATERPILLAR WARNS Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  23. 23. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  24. 24. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  25. 25. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  26. 26. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCECummins Lowers 2012 Revenue and EBIT Guidance.Company Also Announces Necessary Actions to Respond to Global Economic Slowdown. “We continued to see weak economic data in a number of regions during the third quarter increasing the level of uncertainty regarding the direction of the global economy.Demand in China has weakened in most end markets and we have also lowered our forecast for global miningrevenues. EBIT margins will also be below our previous guidance primarily due to the sharp reduction in revenues.”CMI is down over 7% after-hours (to three-month lows) as it seems the 16% cut expectations in Aluminum demandthat Alcoa just announced can no longer be ignored. Reality is that Cummins is slashing guidance and cutting jobs in"response to the weakening global economy.“ *CUMMINS TO CUT UP TO 1500 JOBS, LOWERS YEAR REV, EBIT FORECASTS *CUMMINS SEES YEAR EBIT ABOUT 13.5%, SAW 14.25%-14.75% :CMI US *CUMMINS PRELIM 3Q REV. ABOUT $4.1B, EST. $4.425B :CMI US *CUMMINS SEES 2012 REV. $17B, SAW $18B, EST. $18.11B :CMI US Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  27. 27. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE MISPRICING -- Sam Zell "QE-whatever has created artificial numbers that the underlying wont support" is how Sam Zell sums up his view of the Feds actions, adding that the Dow should be more like 9000, not 14000. The typically optimistic bottom- feeding real-estate magnate says he is not buying here, is gravely concerned about liquidity needs, and in his assessment "everything is massively too expensive." This epic CNBC interview-fest, where the less-than-cheer- leading Zell was allowed to speak, includes his views on a pending recession (as he sees capex planned projects being delayed) and while trying not to play the political card too strongly, he asks that we "stop this class warfare crap" and that the animal spirits are unleashed - as the game is being stacked against him. "Were kicking the can down the road... and with QE, there is now too much capital chasing too few opportunities - even when nobody has confidence in the future!" Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  28. 28. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE LET MARETS CLEAR – Jim Grant where we "return to capitalism", and markets are finally "allowed to clear." As ever, Grant is worth the price of admission as he explains how the monetary mandarins have interjected themselves between us and the public price mechanism as the Feds influence has grown exponentially since its inception. Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  29. 29. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE SHORT TERM – SENTIMENT  PEAK COMPLACENCY  CANARIES - Equity Investors Now Fleeing Equity Markets  ALL IN - Everyone on the same side of the boat  UP THEN DOWN – Goldman’s Outlook Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  30. 30. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  31. 31. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  32. 32. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  33. 33. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  34. 34. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  35. 35. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE Delusional Distortions + Dangerous Divergences = DELUSIONAL DIVERGENCES Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
  36. 36. This chart is from the October 2012 Market Analytics & Technical Analysis Report October 10th, 2012 DELUSIONAL DIVERGENCE DISCLOSURE STATEMENT AND TERMS OF USE THE CONTENT OF THIS SLIDE PRESENTATION AND ITS ACCOMPANYING RECORDED AUDIO DISCUSSION ARE INTENDED FOR EDUCATIONAL PURPOSES ONLY. This slide presentation and its accompanying recorded audio discussion are not a solicitation to trade or invest, and any analysis is the opinion of the author and is not to be used or relied upon as investment advice. Trading and investing can involve substantial risk of loss. Past performance is no guarantee of future returns/results. Commentary is only the opinions of the authors and should not to be used for investment decisions. You must carefully examine the risks associated with investing of any sort and whether investment programs are suitable for you. You should never invest or consider investments without a complete set of disclosure documents, and should consider the risks prior to investing. This slide presentation and its accompanying recorded audio discussion are not in any way a substitution for disclosure. Suitability of investing decisions rests solely with the investor. Your acknowledgement of this Disclosure and Term of Use Statement is a condition of access to it. Furthermore, any investments you may make are your sole responsibility. THERE IS RISK OF LOSS IN TRADING AND INVESTING OF ANY KIND. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Listen to the original podcast for this slide at www.GordonTLong.com/LONGWaveThe content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.

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