Just one month ago, Bank of America's equity strategist Savita Subramanian told Barrons to stay the course and to expect a 2,200 year end target on the S&P based on a year end 125 EPS forecast and an implied 17.6x forward multiple. Incidentally her 2015 year end S&P500 forecast was an identical 2,200.
Another algo-induced stop-run has tried and failed to maintain its gains this morning as Morgan Stanley becomes the latest (after Goldman) to join the "oil in the $20s is possible" bandwagon. Despite hopeful bullishness from Andy Hall who sees production destruction leading (an industry that couldn’t function at $50 certainly can't function with prices below $40) inevityably leading to higher prices, Morgan Stanley warns, "in an oversupplied market, there is no intrinsic value for crude oil.
First it was JPM's Croatian quant "Gandalf", Marko Kolanovic, who promptly became the nemesis of every 17-year-old upward momentum-chasing hedge fund manager after accurately calling every market move, especially selloff, ahead of time with uncanny precision.
Submitted by John Rubino via DollarCollapse.com,
Regular contributor Michael Pollaro offers three more charts which tell a story that’s both disturbing and apparently misunderstood by a lot of mainstream analysts.
The US trade deficit (exports minus imports) has been getting smaller. Since a trade deficit subtracts from GDP growth, a shrinking deficit will, other things being equal, produce a bigger, faster-growing economy (that’s the mainstream take).
As traders will, accurately, point out based on technicals stocks are significantly oversold on short-term time horizons, and are thus due for a rebound. Case in point JPM's Misla Matejka who said overnight that "we note that some of the tactical indicators we follow, such as Bull-Bear at -16, are in oversold territory. This argues for a bounce in the short term...”