Belgian justice

Adult theaters with “private
cubicles” can’t benefit from a lower sales tax rate usually
reserved for cinemas, the European Union’s highest court said in
a dispute triggered by a Belgian sex shop.
While cinemas give people “the right collectively to enjoy
the cultural and entertainment services,” the EU list of such
places exempt from higher taxes “does not cover the payment
made by a customer so as to be able to watch on his own one or
more films, or extracts from films, in private cubicles,” the
European Court of Justice in Luxembourg ruled today.
Erotic Center BVBA, a Bruges sex shop, argued its coin-
operated cabins qualified for the reduced 6 percent rate of
value added tax instead of the standard rate of 21 percent. A
Belgian court sought guidance on whether establishments fell
into the list of services, such as theaters, concerts, and
cinemas that can claim lower VAT under EU law.
VAT is a consumption levy charged on goods and services,
similar to a U.S. sales tax. Today’s ruling contradicts the
decision by the Netherland’s Supreme Court in 2008 to allow
adult theaters to apply for lower VAT rates, because the
definition for music and theater performances should “be
interpreted broadly.”
The case is C-3/09 Erotic Center BVBA v Belgian State.

Belgian justice

Adult theaters with “private
cubicles” can’t benefit from a lower sales tax rate usually
reserved for cinemas, the European Union’s highest court said in
a dispute triggered by a Belgian sex shop.
While cinemas give people “the right collectively to enjoy
the cultural and entertainment services,” the EU list of such
places exempt from higher taxes “does not cover the payment
made by a customer so as to be able to watch on his own one or
more films, or extracts from films, in private cubicles,” the
European Court of Justice in Luxembourg ruled today.
Erotic Center BVBA, a Bruges sex shop, argued its coin-
operated cabins qualified for the reduced 6 percent rate of
value added tax instead of the standard rate of 21 percent. A
Belgian court sought guidance on whether establishments fell
into the list of services, such as theaters, concerts, and
cinemas that can claim lower VAT under EU law.
VAT is a consumption levy charged on goods and services,
similar to a U.S. sales tax. Today’s ruling contradicts the
decision by the Netherland’s Supreme Court in 2008 to allow
adult theaters to apply for lower VAT rates, because the
definition for music and theater performances should “be
interpreted broadly.”
The case is C-3/09 Erotic Center BVBA v Belgian State.

Short-term top?

Some assets like Gold and EURUSD showing DeMark sell signals. Major trendfollowers will still be long these things but maybe a sign of some short-term weakness. S&P looks a bit stretched on the DeMark count as well. I think $ will be the key for next few days.

How much further can we go?

The uptrend in most risky assets continues with unabated speed this morning. If we look at the S&P 500 we are still very much in an uptrend but things looks a bit stretched if you like at historical patterns.

The average autumn correction in the S&P from the highs from August and September to the Q4 low is almost 9% since 1964 with -36.1% the worst year and +0.4% the best year. The low for Aug/Sept this year was 979, and the low for this quarter is so far 1025, so if we dont have another correction below the 1000 level it will be the weakest Q4 correction in 45 years.

Sugar

Sugar is one of very commodities actually in a downtrend. Which is quite unusual at this time of the year. Normally the month, September, October and November are the best for sugar.

One direction macro market

We have now buysignals and uptrends on most contracts out there. Eurostoxx, S&P, Hang Seng, Copper, Orange Juice and even Soybeans!

Columbus day

As we talked about on Friday, Columbus day is normally a very bullish day for equities. Europe is off to the races this morning up 1.5% after 3h of trading.

Cocoa

Cocoa has been in an uptrend since last week of August. Its up 5% already this month, which is against the historical pattern. Cocoa's worst month is October, Ivory Coast main-crop cocoa harvest is in full swing, pressuring prices normally. Nothing of that so far this month.

Weekend interview

Very interesting interview with a hedge fund legend. Have a good weekend!

October

Equity markets in Europe opening a tad lower after Bernankes comments yesterday. October is still seen as a bogey month for investors as two major stock market crashes have occured in that month. But since 1998, October is the best month for US equities.

We have Columbus day on Monday, with the bond market closed. However, DOW is up 24 out of the 28 last observations that day and the last 8 years the market is up on that day. Generally speaking, US equity market tends to be bullish for the first three days next week leading into October expiry.