We opened lower earlier this morning but ripped north right away when there was “hope.” Consumer sentiment was GREAT! AWWW YEAAAH!
I on the other hand, I thought it was bullshit and ignored the Rally of Hope! Do you know why i ignored this crap? Bc it is a survey of 500 people! Those 500 people doesnt represent the entire country, so fuck these fake numbers. And Fuck the bulls that tried to shake me out of my position, i’m done and i’m tired them trying to rally this market. The market will die like a dog with the fiscal cliff around the corner like a ticking time bomb and Greece going bankrupt.
MCD marketed in @ 85.29 11/8/12 when i saw a refreshing seller at 85.40 offer; 86.00 was the support level that was supposed to be the short entry, but I was doing something else and missed it but I found another area of entry. McDonalds is a macro company that a lot of people around the world use as an index to gauge how the global economy is doing, foreign exchange differences and inflation. An example would be the Big Mac Index.
Now let’s go through some of the earnings conference call a few weeks ago:
Now, let’s turn to Europe. Third quarter comparable sales were up 1.8% and operating income grew 3% in constant currencies. We’ve been able to grow our market share despite the fact that Europe’s economic environment remains challenging and that the IEO category continues to contract as our steady measures impact consumer confidence and purchasing power. Across the board in Europe, value has become even more important as the economic crisis lingers.
Our markets have implemented a two-pronged approach, increasing their media weight and focusing on value offerings to drive traffic, while also promoting new food news in list average check. The U.K. and Russia specifically continue to deliver strong results posting solid sales for the quarter on top of strong prior year results. In the U.K., they successfully combined various sales initiatives to drive traffic and increased average check.
France’s third quarter comparable sales were positive despite continued pressures, including slowing European tourism and a declining IEO market. And even though guest counts are soft, our initiatives are resonating and we continue to gain share. We strengthen our emphasis on value by featuring Petit Plaisir nationwide. These are smaller sandwiches at the €2 price point, and we also increased advertising levels.
In addition, 600 restaurants now offer Petit free, which like the Eurosaver Menu offers great tasting products at the one to two year old price range. To promote value across the menu, French recently launched the Royale Barbecue, a quarter pound of cheese and a barbecue sauce to sales for €3.90 and delivers higher profit margins.
And while Germany hasn’t been impacted a significantly as the rest of Southern Europe economically, German consumers are some of the most sensitive to global economic news. Their high saving rates, controlled spending habits and focus on price deals all reflect continued weak consumer confidence. In response to the environment and softening sales, we’ve been focused on driving business with great offers that round out their everyday value platform, which we call the SMS menu.
In June, we introduced the McDeal extra value meal for €3.79 to augment our premium product extra value meals. Since then, we’ve experienced all time high sales of all extra value meals. The team is currently evaluating additional ways to expand the McDeal brand and to build on this momentum with more options for our customers.
In addition to combining Europe’s successful premium entries with the greater emphasis on entry price value platforms, we continue to increase the number of restaurants opened for extended hours. And we continue to modernize the brand with an ongoing focus on reimaging. Together, these actions give us confidence; the McDonald’s Europe is well positioned to succeed in a long-term.
**I delete some boring parts but you can read it all at SuckingAlpha.com
**bolded some important stuff
So here’ s my conclusion, they saw this economic slow down, did some preventative measure to protect themselves from losing money, and created more discounted meals, but they couldn’t stop the Euro-problem? So poor people aren’t buying food for €4 ? NOT GOOD.
These aren’t good #s and it shows how the Euro problem is really affecting them, but this is just the first month; we shall have to keep an eye on McDonalds and see if they’ve relieved this problem next month, but I seriously doubt it.
This is the fundamental problem, but let’s take a look at the psychological:
Broke the macro ascending support trendline in October after they released earnings on the monthly chart; not good.
broke another important support at 86 in the weekly; not good.
the daily was testing 84s today…
We could use something else as a view of the macro economy. Let’s take a look at the SPY
2 days below the 200ma.. not good.
I am still holding my BIDU short even though GOOG was told that they’re blocked in China again.
GOOG was basically lost the battle to BIDU since 2010 b/c citizens in china could not view specific data; so it was basically the same as BIDU or crappier. Fundamentally, I still think that GOOG doesn’t have much influence in China anymore and that BIDU should just worry about QIHU taking 20% of their market share and potential shitty mobile products..which will suck b/c the mobile market share is being controlled by Samsung and AAPL. The barrier to entry too high.
BIDU is hovering below the 106 and 105 area of resistance and now it’s building a descending resistance trendline. I am looking at 103 as micro support b/c it hovers around it — this isn’t very significant for swing, but day trading, it is somewhat. Then the macro area that a lot of people are thinking about going long is the 100; this is a good area to watch to see if it would bounce or crack down and go lower.
Also, take notice of what happened after Obama opened his mouth around 1:15pm when he talked about increasing taxes. Drrrrrroooop!
Fib lvls…if we don’t get a bounce, watch these areas as support…135.16 is a crappy micro lvl; we might slice through it.