Bank Of America: "Santa Is Not Coming", Sees 50% Chance Of Drop To 950

Submitted by Tyler Durden on 12/19/2011 - 14:29 BAC Bank of America Bank of America

Forget the Santa rally, and pack up on parachutes. That is the advice of Bank of America's chief technician Mary Ann Bartels who in a note today writes: "Test of the October lows is underway – Santa is not coming - Last week the S&P 500 fell below its 50-day moving average which is the new level to watch – 1228. A failure to move above and hold the 50-day moving average confirms to us that we have already begun to enter the phase of testing the October lows near 1100-1074. This pattern is becoming eerily similar to 2008 into 2009. A base building process has been underway since August but we have maintained the belief that the lows still need to be tested and undercuts to 985- 935 are possible (50% probability) as part of this process. We expect a new cyclical bull market to emerge near 2Q12. Time and patience are needed." Which is to be expected: after all Bank of America, which is about to have a $4 handle once the Maginot Fortress of a near infinite number of bids at $5.00 is soaked up, will be the first to go the way of the dodo unless the market cracks and the Fed has political cover for QE3. Which is precisely what we have been saying for a year - namely that the market has to stop discounting (events such as QE3, 4 and so on) and allow itself to plunge in order to unleash all these favorable outcomes. And yet it refuses to as someone always start lifting the offer on every big dip in following with the now suicidal (for many banks) practices of BTFD. Oh well, when you have 24 year olds like this kid, who somehow made top billing in Forbes 30 under 30, defining market structure, we are long past overdue for the mother of all market crashes