Oct
9
While it was another bad day for stocks, the International Monetary Fund can finally look forward to a bull market in the number of client states from which to collect fees and pay their employees.
Managing Director Dominique Strauss-Kahn took center stage, saying problems in the financial markets and in the global economy can be solved “if we act quickly, forcefully, and cooperatively.” I strongly suggest you watch the briefing video instead of the news.
As the IMF draws up emergency bail-out plans for countries large and small, regular folks are helping themselves by clipping coupons. It’s that 70s show.
The thing to watch is this: Joseph Stiglitz has sharply criticized the IMF’s program of austerity and increased taxes in the past, characterizing their monetarist stance as “not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community.” (More…)
The anti-Keynesian prescription was viewed as good when imposed upon banana republics, but we shall see how member countries in dire need will take a dose of their own medicine now that the shoe is on the other foot.
The good news: the IMF presumably still has a few thousand tonnes of gold reserves. If you need more good news, check out ten reasons to look on the bright side, at least in England.
52-Week Hi/Low Sentiment
We’ve come up with another take on 52-week high/low data. Our oscillator is built to fluctuate between +100 to -100 percent with zero as neutral. This way, we can compare today’s readings to that of other periods in history.
10-day Oscillator on the NYSE Daily Chart
Recall Justin Mamis wrote about using this information in The Nature of Risk. He showed a chart with a divergence on an intraday basis during the 1987 Crash and also watches the daily numbers.
Objective Buy/Sell Signal Sentiment Survey
The InVivo Objective Sentiment Survey tracks the number of buy and sell signals generated by InVivo Universal Stops amongst the constituent stocks of the S&P 100 and NASDAQ 100 indexes.
InVivo Objective Sentiment Survey
What do we expect tomorrow? Well, we have the Lehman CDS auction:
The auction to settle credit default swaps on this debt will likely be the second-largest settlement of the contracts in the $55 trillion market, following an auction to settle swaps on Fannie Mae and Freddie Mae on Monday.
Twenty-two dealers will participate in the auctions, which will determine how much protection sellers will recover after paying out the insurance. The timeline for the auctions follows, according to JPMorgan.
9:45 a.m.-10 a.m. Auction participants will submit bids and offers for the debt backing the credit default swaps, which will be used to determine the initial recovery rate of the swaps.
10:30 a.m. Auction administrators Creditex and Markit will publish the initial recovery price and the open interest for the contracts will be published. The open interest reflects the amount of bids and offers that have been made, and will show if there are more buyers than sellers, or vice versa.
12:45 p.m. -1 p.m. Participating dealers will submit limit orders for the debt on behalf of themselves and their clients to fill the open interest
2 p.m. The final price of the auction will be published.
Members, please CLICK HERE to continue reading my comments on the 65-minute chart of the S&P 500 index and the classic pattern that has formed in this time frame.
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