Thursday, September 15, 2011

Société Générale's Albert Edwards Gets all Technical on Us (and it doesn't look good) Sept. 15, 2011

Uh oh. I don't like Albert making market calls in September. Nope not at all.
Three years ago it was ""Meltdown"-Société Générale" on September 5.
Within three weeks Fannie and Freddie were in conservatorship, Lehman was in bankruptcy, Merrill was in BAC, the U.S. Treasury was in AIG for 79.9% of the equity and the markets were in shock.

From FT Alphaville:

Not sure what to make of this.
Über bear Albert Edwards has abandoned his empirical approach for (shock horror) the mystical world of technical analysis.
Behold the killer wave.

For those of you not familiar with the Coppock indicator here’s a quick primer, via the authoritative source that is Wikipedia:
Coppock, the founder of Trendex Research in San Antonio, Texas, was an economist. He had been asked by the Episcopal Church to identify buying opportunities for long-term investors. He thought market downturns were like bereavements and required a period of mourning. He asked the church bishops how long that normally took for people, their answer was 11 to 14 months and so he used those periods in his calculation.
A buy signal is generated when the indicator is below zero and turns upwards from a trough. No sell signals are generated (that not being its design). The indicator is trend-following, and based on averages, so by its nature it doesn’t pick a market bottom, but rather shows when a rally has become established.
And Edwards says it a reason to be afraid, very afraid....MORE