Tuesday:
INTC, YUM
Thursday:
GOOG, JPM,
Friday: (opex day)
BAC, C, GE, LVMH
---re-print of Andy T (7.11.10)---
Good Evening Capitalists,
Last week saw some fairly dramatic moves on the S&P 500 in the form of a "bear trap" brought on by the well-advertised Head and Shoulders top. We could almost "smell that one" coming....
The rebound from the 1000 area has been very impressive and seems like only the first leg of larger rebound. Because of the way the waves have developed from the highs, it's impossible to know the "count" with any sort of certainty. If one were to put a gun to my head, I would suggest Slide 3 as my leading candidate--a move to the 1150-1180 zone. Even with that though, I will still remain 20-30% short this market because the longer term trend does seem lower now and I have little confidence in the short term wave models. For instance, slides 4 and 5 demonstrate other viable alternatives that reach very different conclusions.
Bottom line on the S&P: Use 1054 and 1080 on the September futures as near term support and resistance. Breaks of those levels should trigger bigger moves in the direction of the break.
The Dollar Index seems headed lower over the next few weeks. We may get a little rebound back to 85 to retest the broken neckline, but a move down to the 81.50-82.80 zone seems "in the cards." I still remain 20% long the DXY index, even though it seems likely we'll see lower levels in the near term. The bigger picture is simply too bullish not to be marginally involved on the long side.
~~~~~~~~~~~~~~~~~~~~
Brief World Cup thoughts:
Wow. Whoever doesn't think "football" is a physical support needs to watch that Finals again. That was a brutally intense game. I was rooting for the Dutch because I'm just not a big fan of the controlled Spanish game. That said, the Spanish deserved to win that one. The Dutch blew their chances and then got caught a man short at the end as a result of their thuggish play. So it goes.
Would love to be in Madrid or Barcelona tonight. Though, I'd happily take a night in Amsterdam even as the losing side....
184 comments:
@ Amen
"The Corner" (for this week)...
http://www.chaseart.ca/famous/the_road_hole_lrg.jpg
Another week, and soon off to the salt mine. A couple of thoughts:
Hussman's Monday Morning is very very good this morning. Don't miss it.
It appears governments are finally coming to the realization that they must eat what they grow at home. I don't think our jawboning about continued stimulus is going to have ANY effect on what other countries do here. In fact I think Germany, China, maybe others like Australia look at us as misguided here. I think our overwhelming public and private debt will have to be worked off, and it appears that low interest rates will not lead to inflation after all.
Anecdotally, I have seen an amazing number of motorcycles and boats for sale along the roadside here in east Tennessee the last several weeks. It appears that boy toys are losing their luster.
Hey Manny,
Welcome back. What did you miss last week?
Lebron may have put in "the top" for the NBA. Maybe the start of a big S&P rally as well.
Starting a discussion on sentiment this week, whether we be setting up for a large C wave decline later this year or Prechter's Primary Wave 3, doesn't matter. I just want to point out that both of those declines are going to be something fierce, and the stage could in fact be set for that, sentiment looked like this right before our waterfall declines in 08, so if this is in fact what we are setting up for sentiment is basically right where it should be, not too bearish, here is one link for starters:
http://www.schaeffersresearch.com/streetools/market_tools/investors_intelligence.aspx
Good fictional read here...
http://mensnewsdaily.com/2010/07/10/across-the-rubicon-when-germany-left-the-euro/
It appears governments are finally coming to the realization that they must eat what they grow at home.
@DL
Olive oil bitchez! :-)
A second thing that can be mentioned and viewed on the youtube are all the recent trades in the VIX, they are all huge bets are much lower volatility....not overly bearish there either.
To counter, EWI showed DSI below 20% late last week on the market....it was above 90% bulls at the top in April, so a giant drop there. Believe they are running on a 10 day moving average on that one.
and this week, certainly so far this morning, we can gain a lot of insight into sentiment by watching bloom and cnbc, already this morning I've heard two analysts setting up for expectations changes with analysts this week by saying:
"analysts often revise earnings estimates too low"
"we are finding terrific value all over"
@McF
AmenRa's going to have to verify this, but the VIX reversed UP in May & was confirmed in June...
For that to change back the other way, you'd need a monthly CLOSE (I believe), in the teens...
Whatever...
In order for that to happen, we'd probably have to get a period like FEB-APR...
I'm not saying it couldn't happen (maybe they'll just turn on the machines and let them bid prices up all summer)...
If they do... It should be a hell of a FALL (pun intended)...
1.2550 is the level to watch again on the EUR if you are in equities. Funny how that keeps coming back.
On vix expiring next week (after index and equity options)-
April did the same and the daily top was very close to the vix opex.
@Ben
re: sentiment leading up to 2008 compared to now
I am talking straight out of my ass here but:
It would seem to me the waterfall declines would happen when sentiment is like this. Most expect a drop, get it, and get ready for the next bounce higher. Unfortunately for them, that bounce does not come. This thinking is much like myself from June 21-July 1st - and I'm a pretty big bear. I kept thinking there is no way this drop can continue - but it did - and when I gave up my hopes of going up shorter term - it did.
Again, ass talk here.
No talking out of ur ass around here!
"No talking out of ur ass around here!"
So PhD's aren't allowed here?
C,
re: VIX
In March the market went up every single day but maybe 3 or 4 if I remember correctly, and those down days were a handful of points.
I'm highly skeptical we get to have another month like that before the year is out.
McFearless said...
"So PhD's aren't allowed here?
Just the facts man, just the facts
You gotta love Bloomberg...
Technology Stocks Cheapest to S&P 500, UBS Sees Gain
Computer and software shares have slumped to the lowest valuations in two decades, a sign to Barclays Wealth and UBS AG they will rebound as Standard & Poor’s 500 Index companies start spending their record cash.
Let's see, we're laying off workers to downsize, so let's SPEND the cash we save...
“It just comes down to this macro viewpoint that we’re going into a double-dip recession, and the world’s going to go to hell, and people are going to stop buying iPads and smartphones and computers,” said Paul Wick, the Menlo Park, California-based manager of the $3.3 billion Seligman Communications & Information Fund, which beat 90 percent of rivals in the past five years. “That’s kind of a farfetched conclusion.”
Sad thing is, he's probably right - We'll all meet our doom in the checkout line at the Apple store
Technology profit may get a boost if U.S. businesses start using cash for new projects, said Bruce Bittles of Robert W. Baird & Co. S&P 500 companies have piled up cash for the past six quarters, the longest stretch in seven years, as they eliminated jobs and cut dividends during the recession. They held $836.8 billion on March 31, a 29 percent rise from September 2008, data from New York-based S&P show.
“Tech stocks have some of the strongest balance sheets in the S&P 500,” said Bittles, chief investment strategist at Milwaukee-based Baird, which oversees more than $85 billion. “The valuations are inexpensive -- that’s another plus. It’s a good time to invest in tech.”
Yeah - I want to go right out and BUY a company that's about to embark on weakening it's cash holdings
“Among the large-cap names, they’re really in an absolute sense all cheap,” said Howard Ward, a fund manager at Gamco Investors Inc., which oversees about $26 billion in Rye, New York. “I’m loaded with these large-cap tech names because they’re too compelling to ignore.”
Actually - to me it just sounds like you're LOADED period
@McHappy,
EWI is fond of saying the largest sell-offs often occur when we are already oversold, in 2008 sentiment got negative and it stayed that way. So no, you aren't talking out of your ass.
In trying to guage where we are right now with sentiment consider:
after the 87 crash it took years for sentiment to get back to levels prior to the crash, this time after a major crash it only took 13 months not just to reach the prior sentiment extreme, but on some levels the optimism was actually eclipsed!
All that I'm saying is that things like this should be considered before stating sentiment is too bearish right now.
Things are in fast forward it would seem.
All that said, if we get a decent drop today I'm going to look at some short term calls to be long of.
@ben: I think Lebronkenstein put in a "top" )(or "low", if you will) for quite a few things culture-wise in this country.
What a sad, sorry spectacle. What's next?
@McF (9:30)
But that's what I'm saying...
It would likely take that kind of March action to get the VIX down into the teens (which is what would be needed to NEGATE the monthly 3lb "up" on the VIX)...
Bottom line?
- we'd need a slow grind up (on low volatility)
- It would have to sustain at least 3-4 more weeks...
I'm not sure if if that type of scenario will play out...
Basically - I'm acknowledging that PRICE action can go higher, but I'd put my money on the VIX having a couple of VERY bearish candles in the process...
For the life of me I can't see the VIX getting into the teens here...
Don't forget it only took sentiment 15-20 minutes to recover following 2:40pm on May 6. Fat finger anyone?
good morning.. if uup candles mean anything, the $usd is headed for an oversold bounce at the least.
mcHAPPY is betting on fireworks by Wednesday - to the downside.
Also, I'm glad to see we are not down 20 in the futures. NO MORE GAPS.
re: tech stocks
oh little mind that I have, let me see if I have this straight:
Valuations on tech companies are cheap because the world isn't going to end, that's far fetched, and if the world doesn't end, the valuations must go higher.
in 1999:
Using arguments based on real options pricing theory, these valuations (on tech stocks in 1999) were reasonable and the high prices were nothing more than recognition of the large growth potential of these firms.
So in other words, valuations on tech stocks always look good! It's the goldilocks of sectors.
Q's to the moon baby!
Intel reports tomorrow...
It's up 2% today and running into resistance...
Tech can probably keep the broader market from selling off for most of the day (unless we get some news story)...
GOOG is probably the same story, it's up 2% today (and reports on Thursday)...
an excellent summary of the pas week and the week to come:
http://www.fundmymutualfund.com/2010/07/bookkeeping-weekly-changes-to-fund_12.html
its also fun to note the usd and euro charts in juxtaposed to display mirror image..
Looking like a trend up day so far...
Early attempts to sell the rip were chewed up and spit out by Mr Market.
Waiting for a pullback, and getting long.
FWIW -
About 1083 (spx) would be right on the leading diagonal of CLOSING daily candles since the April highs...
Could see a pause there for reflection...
Could be setting up a run up to 10225 on the YM...
Spanje stinkt! En ze bedrogen! Mijn oma Nederlandse voetbalt beter!
sorry, I-man.. i disagree.. look at spy on daily.. rolling over left shoulder.. rsi (3) rolling over.. key points to remember:
(1) the trend is down
(2) big money in distribution mode
My gut says that we'll see a pullback coming on at least one occasion this week...
Most likely, you'd have to sell the CLOSE and reap the benefits as some SHOCKING trumped up news story (overseas) hits the airwaves...
You'd get a 20 point gap down at the open (which you'd probably have to end up going LONG on, or covering shorts)...
i'm having a serious problem this morning! market not even open an hour and i can't keep my eyes open!
Karen,
You don't think we could trade up to near 1,100 before opex?
that'd be a pretty nice move to catch if you are doing mini's.
big picture though, totally agree with you.
More coffee, karen? Try something stronger, maybe an espresso? ;-)
Jeff! welcome back : )
OK, off to the Apple store. I have the worst luck with electronics. My I-Phone charger won't work. Keeps telling me "this accessory not compatible with with the I-Phone." WTF? I have the worst luck with electronics, which is why I'm generally skeptical of new (or any) technology hype.
@McF
50Ma is 1197, 200MA is 1111 as we speak...
1097... sorry
"Question. Why do workers in developing nations earn a fraction of the wages American workers earn? While protective and regulatory factors such as trade barriers, unionization, and differences in labor laws have some effect, the main reason is fairly simple. U.S. workers are, on average, more productive than their counterparts in developing countries. While the gap between U.S. and foreign wages can make open trade seem very risky, it is simply not true that opening trade with developing nations must result in a convergence of wages. The large difference in relative wages is in fact a competitive outcome when there are large differences in worker productivity across countries.
The main source of this difference in productivity is that U.S. workers have a substantially larger stock of productive capital per worker, as well as generally higher levels of educational attainment, which is a form of human capital. This relative abundance of physical and educational capital has been a driver of U.S. prosperity for generations. Neither advantage in capital, however, is intrinsic to American workers, and it will be impossible to prevent a long-term convergence of U.S. wages toward those of developing countries unless the U.S. efficiently allocates its resources to productive investment and educational quality. This is where our policy makers are failing us."
...from Hussman this morning...of course socialism does not allocate anything efficently, whether it claims to want to do something positive for its citizens or not. Only capitalism does this efficently, warts and all.
@BinT
Or... when you try to layer one on top of the other, the end result is a CLUSTERF***
surrounded by a circle jerk...
JNK.. worth keeping an eye on.
I've got my eye on it JNK
ok, I just put some long call limit orders in....we'll see what happens, more than anything I'm trying to hedge some of those recent shorts I put on....feeling some cold steel team!
time to listen to some PanterA
I-Man smells a bear trap... going to make some breakfast and brew a fresh pot.
"U.S. workers are, on average, more productive than their counterparts in developing countries."
I think I might take issue with this:
1. Are people in the rest of the world more or less capable of a full days productive work vs. the US worker? Eliminate Europe out of that questions and I'm skeptical that all the hardest workers live here "on average"....I'm very skeptical in fact...averages are dangerous.
2. Why can't the answer be simpler...where did credit expand the most...oh yeah, the same place wages did.
"as well as generally higher levels of educational attainment, which is a form of human capital."
Well, I consider Hussman to be a very smart PhD. but how is this quantified?
I know some very wealthy people that don't have much formal education.
>> "U.S. workers are, on average, more productive than their counterparts in developing countries."
Are US workers more productive to the degree they're paid? If we accept that, then there should be no hesitation for more "free market" (eco/labor arbitrage) agreements. Right?
Well, what if that relationship doesn't hold. Then, uh oh, after we make more of those agreements, somehow US workers' real income starts to go down. And we have to figure out how to create work in industries like home-building where the work can't be offshored. Whoa! I just predicted the present! ;-)
Your limits hit, McF?
Canary?
SHAW reported and beat by 3 cents... Yet the stock is getting hit (down 2%)...
Look at the SHAW chart (since the March '09 lows)...
Pretty classic... The May lows re-traced almost 50% of the whole move...
If a "pennant" is forming, it probably has room to go higher and do a breakout from the triangle, but a "3" may be coming after that...
McF?
I used to love trading SGR... love me some sugar.
@I-Man
SPX hit right on .009 from (1080)...
1064 or 1054 might be in play (imo)
Thank Kid Dynamite for clearing this up! I was reading about the earlier and thinking, what the heck??
http://fridayinvegas.blogspot.com/2010/07/tax-loophole-of-day-weyerhauser-edition.html
CV.. if 1070 can go.. i was thinking 1066
Ben,
I think you have to agree with Hussman. Since the beginning of the 20th century the US has been slightly more productive, year after year, than Europe. If you don't agree with him, I'd like to hear your ideas on why this occured. Frankly the lower cost of capital, with generally lower government and tax costs have helped immensely, and the Asian challenge that we see now did not exist because of many reasons, including communism. Lack of productive capital formation in any kind of private industry also helped. Very few people are really productive in a dead-end job type of relationship....or government system.
When you stop to consider that some of the best "paying" jobs nowadays are either GOVERNMENT or UNION... I'd take exception to the notion that the workers are more "educated"...
@karen
If it gets much past 1074, I might have to re-consider...
For now (very short term)... I'm looking (hoping) lower...
Any country that completely eliminates capital controls by, for instance, giving away control over its own currency, loses a part of its sovereignty. E.g., Greece/Spain can't devalue. Germany can't continue acting relatively responsibly.
Any country that completely eliminates import/export controls by, for instance, eliminating tariffs, loses a part of its sovereignty. E.g., if it's "cheaper" to pollute in China, all the industry and jobs move there. That undermines whatever OSHA standards and pollution controls were enacted in this country. Say "hello" to the Great Pacific Garbage Patch and no jobs in this country.
>> Since the beginning of the 20th century the US has been slightly more productive, year after year, than Europe. If you don't agree with him, I'd like to hear your ideas on why this occured.
20+ different languages. Not nearly the same resources. Factories weren't bombed during the wars.
Secret gold swap has spooked the market
http://www.telegraph.co.uk/finance/markets/7884272/Secret-gold-swap-has-spooked-the-market.html
"When you stop to consider that some of the best "paying" jobs nowadays are either GOVERNMENT or UNION... I'd take exception to the notion that the workers are more "educated"...
But CV, this "government worker bubble" is similar to the housing bubble....it is an abberation in the normal functioning of our capitalistic government, and will need correction for us to proceed...
...it is a socialistic tendency, that will either be corrected with good result..or remain with a result we can all envision...
CV,
Alphaville has been all over that one, the first link is one of the best. There are other links to stories of hers at the end. One thesis is that it is not the CB lending, but the BIS requesting to borrow.
http://ftalphaville.ft.com/blog/2010/07/08/281601/the-bis/
http://ftalphaville.ft.com/blog/2010/07/12/283141/a-gld-contango-strategy/
it's mostly busy work
paper pushing & lacking mostly in creativity or vision...
I can hardly see GREAT LEAPS ahead as more and more get onto government payrolls...
@bob
...seems to be a currency swap arrangement...
A LEASE
I think that is the question, is it a gold swap or a dollar swap. It makes my head hurt.
wunsacon said...
20+ different languages. Not nearly the same resources. Factories weren't bombed during the wars.
...Well, All Germans have always spoken German. That doesn't explain why Europe as a whole has been such as disappointment. Now that we have one currency, that too doesn't seem to be the answer. If bombing factories in WWII was the answer, the rebuilt factories in the 40's should have given the rebuilding country a leg up, with new and improved machinery.
No, physical capital was headquartered here because productive Americans made the best use of it, return-wise, than the rest of the world. Whether that changes significantly now in the recession, and with Obama's responses to the recession, that remains to be seen.
Just got back in on the long side. Looking for that move up to 10200 on YM now that we had our little flush out.
@BinT
What recession?
People right now are pooh-pooh-ing the idea of going into a DOUBLE DIP...
To DOUBLE DIP, that would assume that there is no recession...
DId anyone sign up for that ElliottFractals.com? I've been following it for a couple of weeks. It is certainly interesting. Provides great stops and quick trading opportunities.
$COMP probably does its DARK CROSS either tomorrow or Wednesday...
Arrgghh. The new setup works in one part of the building but not where I am. Need 2 find a way to boost the signal. I'll be lurking until then...
AmenRa
AR
Try the lid to a pan, like a satellite dish. Try different lids, some work better than others. There is an equation that you can use, but trial and error is the best.
AR
Since I know you will see this here-
Your previous provider was probably using At&T's towers. AT&T just kicked everyone out.
Wireless is great when it works, but there really is no substitute for wires.
"...right now we have a stock market, not a market of stocks. According to a study by Birinyi Associates, the correlation of S&P 500 component stocks is at historic highs:
According to Birinyi, the average correlation since 1980 has been 44% - in comparison, it is 81% right now. The previous high was 79% in late 2008 and the all time high is 83% claimed by the infamous 1987 market. There is also another spike in correlation above 60% in 1998 and again in late 2002."
http://www.tradersnarrative.com/sp-500-herding-wreaks-havoc-on-breadth-indicators-4421.html
do click on the link because that chart should give you pause..
@karen
That's what happens when you have HFT "quants" bidding prices up on little or no volume...
It's going to be a hell of a a base jump when the bots turn against themselves...
bumped up against 1080 (minor)
bounced off 1071 (mid between 1098-1044 majors)
will 1080 hold again?
the real story:
"Don't be fooled by the latest news on credit-card debt. The true picture is worse than many people realize. And unless Congress renews extended unemployment benefits, you can expect it to get even worse."
"The biggest reason credit-card balances are declining isn't that people are paying them off with their spare cash and extra earnings. It's because the banks have been writing them off as the borrowers default. Sure, that reduces the balances. But it tells a somewhat different story."
http://online.wsj.com/article/SB10001424052748703609004575355362430020090.html?KEYWORDS=credit-card
The master at work...
Bernanke says spurring credit key to rebound
http://news.yahoo.com/s/nm/us_usa_fed_bernanke
BORROW TILL IT HURTS BITCHEZ!
Doug Noland..worth a skim; remember you need to scroll all the way down to read his opinion piece:
http://www.safehaven.com/article/17439/a-scenario
bob
It works great in another part of the building. The signal has problems with brick walls so I need to boost it enough to get through them.
AmenRa
Karen,
A tech analyst explains why he thinks that the Android OS could potentially overtake the Apple OS:
http://online.barrons.com/article/SB50001424052970203296004575351032162702178.html?mod=BOL_hpp_popview
Limbaugh Gets Mega Millions on Condo Sale
AR
Can you put the modem in the other part of the building and run a really long cable to your computer? USB's max out at 16 feet, but you can run an ethernet cable 300 feet.
In general, higher is also better.
DL, thanks.. let the competition begin! (apparently that author, MARK VEVERKA, is a noted apple basher : )
this seems to be gaining more traction:
Bank of America trades hid billions in debt: WSJ
In letter to regulators, bank says 6 trades led to 'unintentional' accounting
http://www.marketwatch.com/story/b-of-a-says-it-made-deals-that-hid-debt-wsj-2010-07-10/comments
BAC, they came clean, but not really, and they haven't fired anyone.
http://brontecapital.blogspot.com/2010/07/bank-of-america-comes-clean-well-sort.html
http://online.wsj.com/article/SB10001424052748704545004575353102793970916.html?mod=WSJ_WSJ_US_News_5
MARKETS JULY 12, 2010
Small Investors Flee Stocks, Changing Market Dynamics
"I feel like the tail of the dog that is being wagged by institutional investors who are taking a lot of risk, playing a lot of games and just have these computerized orders that affect me a lot," says Simeon Thibeaux, a semi-retired businessman from Alexandria, La.
History suggests that individuals eventually will return to stocks, as they did in the 1980s and, even more strongly, in the 1990s. But rebuilding their confidence could take time, says Brian Reid, chief economist of the Investment Company Institute. Historically, it has taken an extended period of stock success to lure individuals back after long periods of disaffection."
@karen @bob
It was UNINTENTIONAL...
They "didn't intend" to get caught - lol
bob
No, but they did recommend getting a home wireless modem to place upstairs in the building to rebroadcast the 4G signal. Should eliminate the "wall" problem.
AmenRa
Hey teacher... Leave them kids alone!
What are happened to Macro Man...no new post since Wednesday? Has the posse decided to disband?
bruce.. i don't know the answer to that..
Bruce, I'll see if I can get an answer from the old chap...
AR
That could work, assuming no concrete floors/ceilings. Don't go crazy with the wireless router $50 should do it.
I propose that we pile on another three trillion dollars in debt.
That should be enough to create one million new jobs over the next 18 months.
@Bruce
I'm not so much questioning this idea of our higher productivity vs. Europe, but this was a questiona about productivity compared to that of developing nations I thought. Europe is not a developing nation to me, I'm thinking about places like China, India, or Africa and wages there versus wages here in the states "on average".
Hussman concludes as to why those in developing nations earn less:
"U.S. workers are, on average, more productive than their counterparts in developing countries"
My argument is more along the lines of wunsacon's, which is to first question whether our productivity compared to developing nations is relatively that much higher in order to justify the massive discrepency in pay. Did Hussman attempt to quantify this?
he then states:
"The main source of this difference in productivity is that U.S. workers have a substantially larger stock of productive capital per worker"
So here is my second argument which is that productivity itself is not the "source" of the higher wages. The statement above ultimately comes down to a net worth ledger right? And can we conclude that most all of the assets on said ledger have been inflated, regardless of business, due to credit expansion.
It's credit and monetary expansion that causes inflation, and we see the price effects of inflation in money supply + credit in stocks, in real estate, in commodities and in the amount of our wages, I don't believe it is productivity that drives those wage figures.
I think even you ultimately have to lean my way, using credit as the cause, because when you or anyone else tries to explain to me why Hussman is correct, or why things played out here in the states the way they did you have to use language like this:
"Frankly the lower cost of capital"
I think in a round about way you and I are on the same page here regarding why physical capital was in the US, etc. but imo, the best explanation I can find for our massive wages compared to those of developing nations is more a credit story than one of our superior productive ability.
I would especially have to question how productive we've really been when I review long term data on things like capacity utilization for starters.
http://quantumsupport.blogspot.com/2010_07_01_archive.html
"Wall Street Shills. Further complicating the outlook is a more traditional issue: pronouncements by some economists on Wall Street and financial reporters in the popular media, who act as shills for the needs of Wall Street and political Washington. While there are a number of fine and honest economists and financial reporters in their respective fields, there also are those — often very heavily publicized — who spew Pollyannaish nonsense aimed at affecting public sentiment and/or the financial markets during troubled economic times.
Let me recount two personal experiences. Back in late-1989, I contended that the U.S. economy was in or headed into a deep recession. CNBC had me in to discuss my views along with a senior economist for a large New York bank, who was looking for continued economic growth. Before the show, the bank economist and I shared our views in the Green Room. I outlined my case for a major recession, and, to my shock, his response was, "I think that pretty much is the consensus."
We got on the air, I gave my recession pitch, and he proclaimed a booming economy for the year ahead. He was a good economist and knew what was happening, but he had to put out the story mandated by his employer, or he would not have had a job.
More recently, following an interview on a major cable news network (not CNBC), I was advised off-air by the producer that they were operating under a corporate mandate to give the economic news a positive spin, irrespective of how bad it was."
1080 is providing a bit of resistance.. andy's charts above are great.. tho, which one plays out is the question..
im somewhat fascinated with the $indu for the moment.. seeing the same candles and run up this month as we saw in June.. so either we roll over as we did the first week of June or bust up as we did in the second and third week.
@I,
yeah, the limit's triggered not long after i wrote that post, looking good so far, but i cant' say I'm making money, I have shorts on as well so it's really just to cut off some of the near term bleeding.
Well, Bruce @ 1:32, I think that proves what we already knew.. quite disheartening, really. I am just so fed up with liars and non-truths..
http://www.youtube.com/watch?v=7q9GKf6cCts
top step!!
Ben,
Are you saying that if we increase credit enough productivity must follow? How did we pass Britain in the very early 20th century?
Karen,
re: Birinyi link above
that was a really interesting link. Another blow to the EMH crowd:
"Apparently, when there is fear, traders and investors treat the stock market as a homogeneous entity rather than a composition of varying individual stocks."
The author concludes in the very next para that it's likely in some part due to ETF's, but if you read articles during another time with similar correlation, 87, well, they had a different theory then. Of course.
It's hard using all the old tools though, I agree with that, it's still "all the same markets"
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a3Eg4vzAbneA
July 12 (Bloomberg) -- Bank of America Corp. and Wall Street firms that notched perfect trading records in the first quarter are now depending on an accounting benefit last used in the depths of the credit crisis to prop up their results.
Ben,
I agree with much of your and Wunsacon's thinking...all these things make up a homogenous pie...economics is not fluid dynamics...and I am not a trained economist, and would find the idea that I had to make my living as an economist abhorrent.
But once upon a time we were that developing nation, and I think an argument, if it is true should hold with developed nations against developed nations as well as against developing nations...otherwise it seems like we are just having to mold the facts to fit the outcomes...much as Einstein did with his cosmological constant.
...in the end, we are in a very bad place.
Ben, glad you followed that link (Birinyi). WSJ had a similar story but not as well stated.
http://blogs.wsj.com/marketbeat/2010/07/12/stock-pickers-overwhelmed-by-indexers-etfers/
And, I really like your point, that in 87.. they had different theory.. just as they did in 2007/08! (then it was too much money chasing too few stocks!) Of course, it turned out to be leverage..
http://blog.afraidtotrade.com/july-12-market-internals-reveal-dangerous-divergences/
The Swiss government has refused to extradite Roman Polanski.
I wonder how much of that is because of Obama’s attempts to coerce the Swiss government into revealing names of U.S. citizens that have accounts with Swiss banks
Americans' credit scores sink to new lows ??
http://www.msnbc.msn.com/id/38205674/ns/business-personal_finance
If this does not push through 1080, it could be bearish.
*There, I jinxed it*
oh, brother! GFL! WASHINGTON — A federal regulator is taking steps that could lead to the recovery of some losses sustained by mortgage giants Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency said Monday it may try to get back money that the two government-controlled companies have lost on mortgage securities packaged and sold by Wall Street firms.
http://www.msnbc.msn.com/id/38205964/ns/business-real_estate/
well, we are close enuf to the close now to rally with wild abandon (and no volume : )
B of A another example of Repo 105 operations.
Regarding the recent discussions here about QE2:
No Easing Says Lacker
SCrap the 1080 comment above. DOW made new high today. We go higher.
Hmmm...
Got some crosscurrents going on here in the tape...
We might get a nice reversal into the close... would make some of you very happy I'd imagine.
:)
Looking for one little higher push, maybe to 10167 on YM, and then a big one lower.
DL, has zero to do with it, for heaven's sake.
Just got short, feels like I'm home.
I've never wanted to yell "FYAH" in a crowded theater so bad in my life...
@I
My belief that we are going higher didn't make you flip short did it? LOL
Or was it just confirmation? LOL
Is it possible that the tone-deaf New York Times is getting a clue?
Class War We Need?
LOL McHappy...
We've been doing that alot lately... but no, no deliberate mind games... I'll leave those to Lloyd.
Dammit... they got me.
CV, how is your hand healing?
@karen
It's healing slowly (but surely)...
The best part is I'm getting less and less concerned with it getting infected...
welcome to america.. live in your home for years w/o paying your mtg:
http://www.bubbleinfo.com/2010/07/10/free-rent-bonanza/
this is funny.. vote and/or look at the poll results.
http://lansner.ocregister.com/2010/07/12/housing-risk-as-low-as-youll-ever-see/72241/
Answer to question #3:
- Probably a COHIBA
@I
I am short and leaving it on but I expect us to go higher. I'm just not going to try and time it anymore.
IMO, essentially the decline off April 26-May 25 is going to be ruled out if we do not go down hard early this week. I think that was too much too fast to be corrective. From a time perspective we went down 21 days, up 18, down 8, up 5 and today we are treading water.
Although my rationale is reminding me of:
http://www.youtube.com/watch?v=m-n-jZJhpT4
especially in light of this:
http://mortgage.ocregister.com/2010/07/12/o-c-s-distressed-home-market-grows-by-29/34203/
Bruce,
just one more follow-up as I drag myself from the tape for a bit:
"Are you saying that if we increase credit enough productivity must follow?"
Not exactly because we'd have to discuss the type of credit, not all credit is equal, some self liquidates, some doesn't, but credit must be considered in the backdrop of productive measures and the ultimate effect on wages or quality of life. I find it shortsighted to simply say wages are higher here vs. developing nations because we are simply more productive...Productivity was up some 16% from 2000-2005 but real wages grew nowhere near that.
http://mises.org/daily/2847
We can't even conclude wages are determined within the country based on productivity, let alone compare them to developing nations. Consider:
If productivity was the ultimate determinant of one's wage, the driver, how is it that a woman in the states can perform the same job as me, and be just as productive as me using the same equipment and having the same exact educational background, yet "on average", I'll make more money?
If it were all simply about productivity we should make the same amount right?
How did we pass Britian in the very early 20th century?
Now that's really a loaded question.
You don't believe it was a simple function of us becoming more productive do you? Don't we need to go much further back into their history to understand what led them to where they were in the early 1900's? Britain was extremely powerful in the 1700's but already at that time they were heavily in debt and trying to find ways out of the debt, first through trying to tax the colonies. In the 1800's they tried a few times as well to come to the states in order to expand credit, but magically, they were not successfull until the stage was set for the Fed to come into existence in the states after the panic of 1907. Just about the same time you are asking how it was we passed them.
I don't think it was by chance that we truly started to out-earn and out-produce the rest of the world in a great way at that time.
Now you might ask me, ok fine, but we still expanded credit in the 80's and 90's, more than ever before, but you just said above, real wages didn't move along with it, and this is where the discussion about non-self liquidating debt comes in.
financing plant equipment isn't the same thing as making sure everyone in the country can secure a home loan and get a credit card when it comes to what debt means to productivity.
iow, different types of credit expansion have different outcomes, and they occur along a different timeline in social mood. The US isn't the only place where the focus morphed into a entire nation bent on expanding non-self liquidating debts.
good talk, this had me thinking a lot of things through today.
that new bloom site really is awful, and takes forever to load, freezes my whole comp up.
In any event, next time I say QE2 won't happen until after the fact just ignore me and listen to what the source tells you:
“It would take a very substantial, unanticipated adverse shock” for further steps at stimulus to be appropriate, Lacker said to reporters today at the opening of an exhibit at the Richmond Fed on the history of the central bank. “Consideration of further easing steps is very far away.”
I mentioned earlier that the markets touched the leading diagonal today of the highest CLOSING candle (day before 1220 @1217), and the highest CLOSING candle (day before 1131 @1117)...
So if we hang around here, tomorrow may be an attempt to open ABOVE that trend line...
OR
It may prove to be resistance...
In any case it seems important (with not much else on the table) at the moment...
Intel earnings tomorrow... Google Thursday... JPM, C, BAC Friday...
@Ben
What Lacker is saying, "No QE2 until after November, BITCHEZ."
LOL
good for a laugh: "For your weekend viewing pleasure, we have a bank owned property where the borrowers invested $200 and pulled out $145,500. No wonder houses are so popular in California"
http://www.irvinehousingblog.com/blog/comments/ihb-news-7-10-2010/
@karen
"Distressed home marker grows"
See? there's "growth" in the economy!
Lacker to US people:
We are not going to let the bankers rob you again until strictly necessary.
Shit just dont want to breakdown... bet its getting tired though...
I'm not a political strategist, but wouldn't it likely work in the dem's favor to have the Republican's take the house back this fall?
we all know things are going to suck in 2011, even if that means the "new normal"....think that through, I could write an easy speech for a Dem next January if the GOP wins the house and the economy sucks
and after all, those government jobs pay pretty well and offer some pretty good benefits....
j/k about that last part....;-)
The more we keep changing players the more money it's costing us...
Don't these Congress people receive full benefits after leaving office?
That 5min chart looks like it got thrown into a blender.
Not FULL...
But a pretty hefty package...
McF @ 3:22
If the R's take the House in November, I would think that would increase the odds of Mr. "O" winning re-election in 2012.
The R's would try to pull "O" to the political center, and he might actually acquiesce and go there.
a decent move down here in 3 waves over a few days/week and we look an awful lot like Andy's slide 3.
@I,
what's the high tick on the futures today, AT said in that update he'd eliminate the one bearish count on a futures break above 1080, and he didn't clarify a "close" above that level.
High tick on ES 107725
High tick on YM 10163
DL,
Yeah, I think I would agree with you then on the 2012, there's a good story to be had for Dem's if repub's take the house and the economy looks worse and worse as 2011 rolls along....blame bush will be more popular than ever.
Thinking people realize however that "better than bush" is not an appropriate form of leadership, of course, that damn limbic system gets hi-jacked when people pick leaders.
well, there's that, no 1080....least not yet anyway.
thanks I.
volume is more in-line today with the bearish case, I can't understand why so many wavers are sticking to ii of 3 count when the last few volume bars were bigger than the one's in Wave 2, the wave at lesser degree shoulnd't have more volume, especially right on the cusp of the iii of 3....not logical.
@McF
It might not be that simple... (vis-a-vis: Economy stays bad OR WORSENS, new incumbents get blamed)...
It might be a time where "corruption" (and things of that nature) are exposed...
I highly doubt there will be ANY winners at all...
http://finance.yahoo.com/news/Hugh-Hefner-offers-to-take-apf-1484593333.html?x=0
You guys are forgetting that O is a REPUBLICRAT.
He talks to Jamie, Warren and Jeff pretty often.
Trojan Horse.
C,
Yeah, that makes just as much sense given my thoughts on where "social mood" is.
The Leftback pig.
The real McCoy.
In any case... We can probably be sure of one thing...
With regards to AGENDA... Obama is sure to go after programs that are very costly (yet have a high POPULIST value)...
Even if they are canards (with NO HOPE of ever passing) that way, when the GOP "shoots them down", they'll be labeled the BAD GUYS...
Politics as usual...
In 2008, anybody who really believed it was DIFFERENT was out of their minds...
It's the pig or the rooster, take your pick.
Anyone got guesses on Alcoa?
My guess is many traders will be "foiled" by the aluminum giant.
Just watching here, expecting the BTE of course.
Anyone got guesses on Alcoa?
Um... How about BTE?
Bingo leftback. I believe if the O-man moved any further to the "center", he'd actually be a Republican.
Interesting story for those crazy enough to want to be a prop trader... :)
http://notablecalls.blogspot.com/2010/07/schonfeld-letter-to-traders-it-is.html
CV,
that's my point, economy in the shitter:
Obama: I believe.....that what we need....to tackle this economic crisis.....is a 7 fafillion dollar stimulus bill. One that stops the gaps where the first stimulus failed. I don't work for fat cats on Wall St and I'm going to kick ass.
Republicans: No, that idea sucks, it wasn't ours. No. Lower taxes, less government, Ronald Reagan....uh...(leaning away from mic: what are our other talking points)
Obama: You see people...economy sucks, I try to fix it....they say no. Joe the Plumber said cash...but I say credit (with finger wagging) They want to follow the old policies of Bush. Bush got us here, now who you gonna blame?
Tea Party: Oh crap, folks we need about 15 minutes before we reveal our policy initiative. Unfortunately climate change made us sweat and caused the market notes we put on our hands to fade off. Be right back.
People at Home: What time is (insert any tv show) on?
Joe Biden: Huh?
The main benefit of having more GOP around will be that the 2nd Amendment ought to be safe, for now...
Not much else, really...
Krugman: Print you f***ers, I have a big mortgage now.
in case you weren't aware : )
Dow, Nasdaq and S&P 500 extend win streak to fifth session
07/12/2010 04:03:29 PM
calling AA BTE might be a stretch.. .13
AA top-line was BTE, revenues were strong.
Bottom-line was in line, more or less.
some AA fundamentals:
Shares Outstanding 1.0 B
Institutional Ownership 67.66%
Number of Floating Shares 1.0 B
Short Interest as % of Float 7.60%
I'll drink to that.
Dividend yield for AA is 1.1%.
Not very enticing, unless you buy the V-shaped recovery.
OH, JOHNNY already bought the V-shape, it's priced in.
This one will be whacked by the China slowdown.
I cannot recommend enough people sign up for Elliott Fractals. I won't say what he is looking for tomorrow but after the fact I'll say. In the meantime, sign up. It is free for 1 month and all you need is a PayPal account.
KAREN is BTE.
Beautifuler Than Ever....
on this blog today
SHORT was mentioned 14 times today
SELL was mentioned 4 times
BUY was mentioned 3 times
just saying
That settles it.
The market's going higher.
Well... what are you saying?
Our future discerned (as through a telescope) as the demographic inevitability proceeds in the Land of the Rising Sun:
Japanese Regions Lag as Stimulus Fails to Reach Provincial Towns
Not with a bang, my friends, but with a whimper.
"Anonymous #2 said...
That settles it.
The market's going higher."
Just saying markets going down after it goes up, then it'll probably go up again untill it goes down
just saying
Market usually doesn't do much during earnings season.
Sorry wasn't around today, not feeling great.
Today was the lowest NYSE volume day of 2010
NEW THREAD UP
Lo siento por llegar tarde.
I'd also like to point out the US's lower cost of capital stems in part from our military and physical security. And it's important to think of this not only in absolute terms but in relative terms. Every time there's a coup or some instability in another region, it adds risk and legitimately increases the cost of capital for doing business there. That made it cheaper to do business in the US.
During the Cold War -- which was "hot" in other countries -- where were you going to invest long-term? Europe? Russian tanks might've rolled over it. China? USSR? Nope. Latin America? I forget.: was the coup scheduled for 2pm or 3pm? (Horrible stereotype *now*...I know that.) Forget it. The only safe place to invest was North America.
That edge still remains a bit. But, it's diminishing.
>> Krugman: Print you f***ers, I have a big mortgage now.
Leftback, I would *love* to hear that on tape! LOL.
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