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Investors Prepare to Watch the Debates: If Romney Surges, Markets May Follow

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Here we go. Debate 'em if you got 'em!

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MINYANVILLE ORIGINAL Will the Dow (INDEXDJX:DJI), Nasdaq (INDEXNASDAQ:IXIC), and S&P 500 (INDEXSP:.INX) care about the three US presidential debates -- the first of which kicks off this Wednesday night? To quote the esteemed market watcher Bugs Bunny, "Aaah, could be."

This could be the week that Mitt Romney finally gets his first poll surge and the markets may surge along with him. Not predicting, just saying. What I will predict in classic Captain Obvious fashion is that the TV ratings for the first debate will be high -- and if Romney takes it, the ratings for the second debate will be higher. And then the rubber match! But first, let's see how Wednesday goes.

So the market left September on shaky legs after taking a solid left hook to the jaw two weeks ago. And bearish sentiment is creeping back up with every lamentable economic number we get hit with from far and wide. Stimulus is good, but an improving economy is better. Right now, it's all about housing starts and auto sales. Lucky for us, the old economy dogs are barking once again in the US. Sure would be nice if the other hounds from around the world would join in.




QE: Two weeks into QE3 and already the cries and wails for QE4 can be heard from the hallowed streets of Broad, Pine, and Wall.

US ECONOMY: GDP flirting with the +1.0% level. And with a margin of error of, say, 0-2%...uh, you get the drift.

UNEMPLOYMENT: "You need a busload of faith to get by…"

INVESTOR SENTIMENT: Still more interested in cupcake cooking shows and screaming show-moms than stocks. Totally understandable.

HOUSING CRISIS: Housing permits up, housing starts up, housing prices… kinda up, if you look real close and include inflation and don't include foreclosures, short sales, and houses with less than two garage doors, and….

EUROPEAN ECONOMY: Last seen on a clipper ship headed to the New World circa 1492.

THE EUROPEAN UNION: The dance continues. And it's a slow dance. "Slow dancin', swaying to the music…."

SOVEREIGN DEBT: Looking more appetizing, but not yet edible enough for the ravenous, dividend-chasing, yield-hungry crowd.

SPAIN: My Uncle Ziggy always told me that admitting you need help is sign of strength, not weakness -- something to be rewarded not punished... Then he'd ask me for a couple hundred bucks.

VOLATILITY: It's back, but only in small doses, small, gut-wrenching, ACL-tearing, spinal-piercing doses.

HIGH FREQUENCY TRADING:
Lloyd: What's your favorite App?
HAL: It's a link to a video of people standing in a long line, waiting for their turn.
Lloyd: Sounds ridiculous.
HAL: Hey, you're finally coming around.

CHINA: The country is on holiday so its financial markets are closed for the week. Closed for a week? To which I say, "Wouldn't it be nice if everybody…"

STOCK MARKET TECHNICALS: Currently saying that the averages and stocks are "backing and filing." Feels more like "grinding and spilling" here on the front lines.

GLOBAL ECONOMY: Would be fine if we could just find a yet unknown Earth continent that's growing its GDP at 10+%.

CONSUMER CONFIDENCE: Gas prices down, confidence levels up. It's just that simple.

US PRESIDENTIAL ELECTION: First candidate to perform "Gangnam Style" on late night TV wins.

THE MIDDLE EAST: The pin is back in the grenade for the moment. But it's still a grenade.

THE CLIFF: Apocalyptic potential. "Sending out an SOS..."

GREECE: My ring fence idea here: Greece and Portugal steal away westward for a quickie Vegas wedding. Consolidate their debt, and keep it from messing up any other economy.

DURABLE GOODS: This past month's orders, not so durable.

DRAGHI: Interest-rate cut coming? Many in the eurozone say it isn't needed. Which prompts the question: What does "need" have to do with anything?

ITALY: Who's your daddy? Does the eurozone own Italy or is it really the other way around?

MONDAYS: "The markets hate Mondays! Stay away from the Mondays!!" – My re-mix homage to a classic quote from The Jerk.

EARNINGS SEASON: Low expectations? Yeah, we've got that.



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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