This Week: More Debates, More Meetings, Less Clarity!

By Lloyd Khaner  OCT 16, 2012 10:50 AM

Why the markets will remain on edge until the final US presidential debate, and the 23 worries facing investors this week.


MINYANVILLE ORIGINAL The world is grasping for answers and certainty and we will get them…but just not yet.

Patience, Grasshopper, patience. Let’s start with the second US presidential debate teed up for Tuesday night primetime. Expectations for another historic night are set and undoubtedly they will not be met. Short of one of the candidates balling their eyes out or busting into simultaneous Tourette's tirades, Debate Deux will likely feature a  workmanlike showing by both men, leaving the markets -- including the Dow (INDEXDJX:.DJI), S&P 500 (INDEXSP:.INX) and the Nasdaq (INDEXNASDAQ:.IXIC) further on edge for the final debate. And let me tell you if you haven’t noticed, this market is on edge about everything, especially Europe.
At the big summit in Euroland later this week, we will get plenty of headlines and posturing but not likely a showing by Old Man Certainty. We just want to get on with it because whatever it is, it’s gotta be better than the economic purgatory we’re in now. And yes, I know that means it can only go one of two ways and one of those ways is a long hot ride.
For now, it’s more news, more information, and more confusion coming our way. The good news is that certainty is on its way, just not this month. Like it or not, patience and plenty of it is the call for now.

Click on the image below for specific comments about each of the 23 worries facing investors this week, or scroll down for a text-only version of this column.


Lloyd's Wall of Worry (Text only)

QE: Bernanke fending off the disbelievers, the disbelievers fending off Bernanke, the rest of us fending for ourselves.
US ECONOMY: Still managing to leap the many hurdles put in its way. A gravelly face-plant awaits us if we clip one of them, though.
UNEMPLOYMENT: Eurozone rate hits 11.4%. How high is up? 
INVESTOR SENTIMENT: See no rally, hear no rally, speak no rally.

HOUSING CRISIS: Housing permits and starts keep rising. Now it’s time to start actually building those homes.

EUROPEAN ECONOMY: And now to do an interpretive skydive called “Euroland Economy in Motion”, Mr. Felix Baumgartner…
THE EUROPEAN UNION: EU summit meeting later this week. No agenda will likely be released until menu items and wines have been selected. Food allergies, anyone?
SOVEREIGN DEBT: Don’t look now, but Greece is ready to drop below a 17% yield. Prepare to sound the all-clear at the port city gateway, The Colossus of Rhodes!
SPAIN: Will call the ECB in November if they feel like it.
VOLATILITY: If Vol could speak: “Every time you try to get rid of me, I pull me back in!” 
Lloyd: How’s that new speech recognition software working?
HAL: A peach will improve my cognition where forking?
Lloyd: I told you a good product would be hard to find.
HAL: Gold production good in your backyard mine!
CHINA: Party week is over. Back to work and back to saving the world economy... we hope.
STOCK MARKET TECHNICALS: Feeling heavy. And not just regular heavy, I mean like 10-minutes-after-your-second-piece-of-pumpkin-pie-at-Thanksgiving-dinner heavy.
GLOBAL ECONOMY: “Smile though your heart is breaking…”
US PRESIDENTIAL ELECTION: October surprises busting out all over.
THE MIDDLE EAST: Why do the markets care? Because right now, no one seems to care.
THE CLIFF: Chances for a lame duck session solution being talked down as the members of Congress display the unique talent of lowering an expectation bar that's already a good three feet below sea level.
GREECE: Debt levels cause fright , companies take flight. The wave of corporations fleeing has begun….
DRAGHI: That magic hat’s not empty already, right?
ITALY: More divorce talk in Euroland as Venetians start rallying for independence from the north. I wouldn’t want to be the lawyer for either side in this fight.
EARNINGS SEASON: First week was weak. One more like it and markets will freak.
GOLD: The price shudders from a shot across the bow of the world’s oldest currency as the stronger US employment rate may threaten more QE and the golden dual jewels of high inflation and the weak currency it brings with it.
OIL PRICES: Iran threatening to wreck a tanker in the Straits of Hormuz to ruin the oil supply. Sometimes there just isn’t a pacifier big enough.

What Is Lloyd's Wall of Worry?
by Lloyd Khaner

Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.

Typically the term "wall of worry" refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.

This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."

In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.

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