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What to watch for this week

October 17, 2011

This week will be very interesting. Not much macro data coming out, but we will see if the mega algo-driven short squeeze will continue. I don’t see us going up much from here. We will likely trade sideways early in the week. Earnings will be the driving force this week. Today, we have Citi, Wells Fargo, Halliburton, and others reporting. So far, earnings have not been particularly bad…GOOG crushed it as usual. What concerns me is guidance. Most companies will be concerned about not projecting too optimistically in this volatile market.

From Zerohedge,

“When even Goldman says the rally is based on male cow feces, Houston, we have a very big problem.

From GS‘ Thomas Stolper on what endless BS to expect out of Europe, together with a few facts here and there:

To some extent it is remarkable that markets continued to rally last week and that Eurozone-related risk premia declined, because at the surface, there has been very little concrete progress regarding the Eurozone fiscal crisisThe extent of Greek haircuts, the details of bank recapitalisations, the use of leverage in the EFSF or not – all these and many other issues remain basically unresolved at the moment. Only one thing is clear, policymakers continue to work overtime while trying to find solutions. Following this weekend’s G20 finance ministers meeting, which also emphasised the increased focus on bank recapitalisations, the Eurogroup summit next Sunday will be the key event.”

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