Have we seen the top? Alcoa and Peter Schiff on the Fiscal Cliff

ALCOA from MarketWatch
"Alcoa('s)...adjusted earnings outpaced Wall Street's projections... its third-quarter earnings excluding charges were 3 cents a share...On a net basis, Alcoa swung to a net loss of...13 cents a share {due to charges associated with a lawsuit settlement}. In the year-ago period, the company earned...15 cents a share."  Full story at...
http://articles.marketwatch.com/2012-10-09/markets/34336000_1_alcoa-swings-alcoa-shares-forecast-for-global-aluminum
 

Alcoa's revenues were down about 10% and that doesn't reflect good economic conditions.  It shows the world economy is slowing, but really, that's not new news. 

FISCAL CLIFF from Yahoo Finance:
Peter Schiff,  Chief global strategist of Euro Pacific Capital Inc:

"...it's not necessarily the year-end cliff that could lead us into the next disaster.  It's not because we go over this phony fiscal cliff, it's probably because we don't go over that one because the government cancels the spending cuts, cancels the tax hikes, and instead we end up going over the real fiscal cliff further down the road," he says.
 
By kicking the can down the road, Schiff believes interest rates will spike and we won't be able to afford to pay the interest on the enormous amount of debt that we have. "In fact, the real fiscal cliff comes when our creditors want their money back, and we don't have it," he states.
 
Schiff says QE3 can only take us so far and the Federal Reserve's money printing will do so much destruction to the dollar through inflation, that we'll see a currency collapse like never before, which will force a dramatic and painful new way forward... "We can't keep avoiding the pain and in the process making the problem worse, because then we're just going to have even more pain in the future to fix an even bigger problem."  Full story at...
http://finance.yahoo.com/blogs/breakout/real-fiscal-cliff-much-bigger-think-warns-peter-131010466.html

HAS THE S&P 500 TOPPED?
(After yesterday’s blog, today’s shows that I’m feeling very schizophrenic.)

I commented on 27 September that there were indications of a calm-before-the-storm.  
http://navigatethestockmarket.blogspot.com/2012/09/gdp-down-durable-goods-orders-down.html 
I’ve noticed the top sometime occurs about a month after that “calm”.   That “calm” set up at the end of August.  The S&P recent top was 1466 on 14 September, and the S&P 500 was 1461 on 4 October, pretty close to a month after the calm.  The market internals are now trending down too.  In some respects, this does look like we’ve already seen the top. 

To counter that argument, there hasn’t been an uptick in volume that would normally confirm a downturn so the evidence is weak so far.   While there have been a couple of surveys of the investment pros calling for an end to the rally, that’s not a good indicator either.  Even though I said yesterday that the market usually does the opposite of what everyone says it will do, sometimes everyone is right.

MARKET RECAP                                                                               

Wednesday the S&P 500 was DOWN about 2/3% to 1433 (rounded) and VIX fell about 1/2% to 16.29.

The S&P 500 is now about 1% below its lower trend line.  Some traders would say the trend has been broken; Sell!  I’m still watching the NTMS analysis.

NTSM

The NTSM analysis remained HOLD Wednesday, stuck in neutral.

If we really have seen the top, VIX and Volume indicators should react quickly and signal a sell; so far, no dice.    

MY INVESTED POSITION

Based on the BUY signal, 6 July, I moved back into the market on 9 July (after the weekend) at S&P 500 1352. 

I currently have a 50% stock allocation overall.  For my age, that is what many advisors recommend as a fully invested position, however, I am normally much more aggressive.  I have less invested in stocks now because there’s a lot of risk.