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Taper Talk, a Little Bit Louder Now...

By

The future of QE is top of mind for most investors, but after next week, worries should diminish as we stroll toward the end of year.

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The Fed governors seem to be in the midst of jawboning the markets in hopes of a pause to the relentless charge of the Dow (INDEXDJX:.DJI), S&P 500 (INDEXSP:.INX), and Nasdaq (INDEXNASDAQ:.IXIC). Pretty much everyone is out there taper talking except inside man, Ben Bernanke, and the next inside woman, Janet Yellen. Nothing concrete coming out of anyone but a lot of inflation, unemployment, and GDP-type commentary and, dare I say, hedging about future QE moves. Okay, I dare.

Back in the Fun-Duh-Mental stock market, things are as they have been for a while. Let's break it down. Fun – hey, up 20-plus percent year-to-date is a smile. Duh – how does a market rise without a correction for over a year? Inflows. Mental – multiple expansion-led bull markets drive the pros crazy. They can also be the most powerful bulls. Toro, toro.

For those hungry for potential Worries, the kitchen is working on a bleak Black Friday soufflé, a spicy Middle East jambalaya, an Asian surprise that the sous chefs refuse to tell us about, and an American Congressional Fed Chair confirmation banana split big enough to feed a nation. It sure is hard to diet in this world of worry.

That said, while the Wall added one Worry this week, it's going to lose "Earnings Season" next week and maybe some others as we stroll our way into the end of the year. Will we trip? We will see.

Here's a quick look at the worries facing stock market investors. Click on the image below for an interactive version of this week's Wall of Worry, or scroll down for the text-only version and an explanation of how the Wall works.




QE: Fed governor taper talk starting up again, "…a little bit softer now, a little bit softer now, a little bit louder now, a little bit louder now, hey-hey-hey-hey!"

UNEMPLOYMENT: Back to BLS Friday watch. The question is, what's good for the market? Feel free to add a comment below.

US ECONOMY: Not too hot, not too cold, but not just right, either. Sorry, Goldilocks.

INVESTOR SENTIMENT: Stock market approval rate his risen…to a slightly higher level than that of Congress.

EUROPEAN ECONOMY: 2014 GDP estimates coming down, but still plus-1%. Maybe we should take a picture?

VOLATILITY: Screams of complacency trying to shatter the market's zombie march higher.

HIGH FREQUENCY TRADING:
Lloyd: How's this low volume environment treating you?
HAL: Thinking about getting a dog.
Lloyd: That bad?
HAL: Maybe two of them.

CHINA: Structural reforms taking root while the economy is improving. Taking notes America? France? Brazil? Argentina? Venezuela? India?

GLOBAL ECONOMY:
Ready to rock in 2014!...Or roll, if the US and China step in it again.

DATA DELUGE: Still playing catch-up. Should be done by the time the next government shutdown starts.

BONDS: Buy 'em? Sell 'em? Hold 'em to maturity? Yes, the third choice is an option.

EARNINGS SEASON:
Almost done. See you in December for Pre-Announcement Season.

CONGRESS: One famous actor suggested that the whole body should be committed. Begging the question, is there an institution crazy enough to take it?

CONSUMER CONFIDENCE: Down on its knees, crawling around trying to find its mouthpiece.

RETAIL SPENDING:
"Buy Somethin' Will Ya!" music to shop by…

DEBT CEILING: New legislation proposed that gives the president the power to raise it and Congress the power to veto the raise. The deck-chair shuffling on the Titanic continues….

SEQUESTER II: Going down the "Everybody Loses" path is most likely the one we take again in January.

EMERGING MARKETS: Uh, which countries make up the "emerging" group again?

US GOVERNMENT SHUTDOWN: All in Washington, DC, promise this will not happen again. Politicians make promises -- cold comfort.

FED CHAIR ELECT: Confirmation hearings now slated to start during the week of November 14 and to end once the grandstanding by politicians is over. Your guess is as good as mine.

ECB: Rate cut. The Super Bee is back!


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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No positions in stocks mentioned.
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