Sunday, July 31, 2005
Last week, the Dow fell 0.1 percent, while the S&P edged 0.04 percent higher and the Nasdaq gained 0.23 percent.
The Labor Department's job creation report, due Friday, is a proven market-mover, and has the potential to single-handedly keep the summer rally afloat -- or halt it for good. Economists predict the economy will have created 183,000 jobs in July, up from 146,000 in June.
This number has been difficult to predict in recent months, however, so investors will likely be somewhat lenient should the number be modestly higher or lower. In fact, a slightly lower number could be beneficial, reinforcing the notion that the economy continues to grow, but not at a pace that would trigger inflation. (woof what idiots)
**Of course the damn number is difficult UNLESS you look at Net Birth Data as WE DO! It is set to take away maybe 80K jobs!!!!! if pattern holds.
Is why a BIG MISS is very very possible IMHO but you NEVER know for sure.
Last month it ADDED 180K!!!!!! and we STILL only ended up with....146,000 you with me? Take away the miracle jobs and it would have shown a loss of 40K !!
WHAT will happen if you DON'T add but SUBTRACT JOBS? with a DOA Help Wanted index of 38? We will see won't we?
CHART HERE ROC has slowed to sideways, RSI UP into overbought on the weekly as we PRESS against the longer term moving avg. This week should clear a lot of things up for us.
MACD is ever weakening RSI nears overbought weekly as descending LONG TERM moving averages should repel the rally, that is STILL below 2004 high.
WHAT if DEFLATION hits the US? It might as almost NO ONE talks about it.
Unlike when Phase I began in 2000, we now have what the Bear MArket behind us had accomplished, in our memory banks, it wasn't that long ago! But it seems like that experience has been obliterated by the STRONG cyclical Bull that followed, but that my friends is exactly what it was supposed to do. "....it's OK to come back into the water, don't worry."
STUDY this chart of the Dow from 1995. SEE how the MACD was rising from 1990's into 1999/2000 high (NAZ TOPPED IN MArch of 2000). But also see that ROC indicator after rising with it, broke ranks and diverged with a decline RIGHT BEFORE the all time highs!
THAT is exactly what is happening now, except ROC PEAKED back in 2002!!! MACD in 2004 !!! YES, the momentum has GROWN WEAKER as the DOW has struggled HIGHER!!!! AS PLAIN AS DAY, NOT BULL MARKET ACTION!! IMHO (also, if you draw a trend line from the highs and another one from the 1994 low and first 2002 low they form a triangle and MEET right where the DOW is now! and it is UNDERNEATHE these trendlines FORMIDABLE RESISTANCE IMHO)
Now here's where it gets interesting!
From July EWT Financial Forcast http://www.elliottwave.com/ (homepage) I would like to share some important and interesting data.
Leading up to the Dow's all time high IIAA (Investors Intelligence polls) ran NET BULLISH for 65 CONSECUTIVE WEEKS, we all know what happened next.
We are currently at historic measures of 145 STRAIGHT WEEKS of Bulls plurality 145 weeks !!!! MORE than DOUBLE previous stats!
Is this NOT a set up for something?
HELP WANTED IDNEX http://www.bls.gov/opub/ted/2004/dec/wk4/art02.htm
Current reading is 38, since the lows of 37 the high was only 41, the high in 2000 was 80 EIGHTY! This has been the weakest recovery (began in 2001) from a Recession in HISTORY!
Yes we are right near the LOWS in Help Wanted Index, when the Recssion hit, this reading cannot be manipulated like most of the others, what is wrong?
Can you imagine ALL the jobs related to the HOUSING INDUSTRY/ BOOM that HAVE been created? Amazing isn't it, you see how important this sector normaly is, but NOW? it is EVERYTHING!
But when you trade one asset inflation (TECH) for another (Housing) all you get is a maladjusted economy......and one that is not real, one that has caused all kinds of misallocations.....one that has helped build CHina into world power and destroy US manufacturing.....one that raised the level of debt to HISTORIC HIGHS, and brought SAVINGS to historic lows.
NO, from these extremes we DO NOT BEGIN NEW BULL MARKET AND SUSTAINED ECONOMY.....on the DAMN CONTRARY.....
.....WE have USED FORWARD the demand we will wish we had when the next slowdown begins (if not aleady), auto's and housing the FUEL which runs the economy (spurs consumer spending) has been near used up, we have sucked almost dry future demand.
$300 BILLION came from HOME EQUITY LOANS (HELOC), most in history and was used to maintain consumer spending through 2004 and present.
Also I left out before, in the DOW chart linked above, we see important 50 WEEK moving average FLATTENING OUT, NOT RISING STRONG like in previous bull market, it looks VERY SIMILAR as it did leading into 2000 top and so I believe we are witnessing a complex but definately topping process near completion, based on my comments here.
ALso though dollar volume lags (cheaper prices) SHARE volume of the most speculative issues (Bulletin Board) has DOUBLED from its BUBBLE TOP HIGH!!! WTF??
Not only have stocks run up to underside of trendline resistance (mentioned above) but we have reached the 62% FIB RETRACEMENT (EWFF) from the lows created from PHASE I of Bear market......yes it could go higher, but the evidence says that is not MOST likely end game......the market will of course tell us.
Value, and small caps even Transports have hit all time highs AFTER Phase I of the Bear ended, amazing isn't it? But maybe that synchronizes all for the next Phase?
C, JPM, WMT have been WEAK, Walmart NOT able so far to get and stay above $50 break......why would a Citi Bank not come along for this wonderful rally?
ALL this undercurrent, while the FED is looking at something else, concerned with INFLATION??? LOL intent on raising rates and no word of when they are done?
When they are done will not be a happy day, and when they have to CUT again, will not either as even they will need to come clean as to real economic environment.
With 70% already owning homes, lowering rates will not work this time IMHO. YES, WATCH FINANCIALS AND HOUSING, perhaps the key to it all.
Saturday, July 30, 2005
There are your parameters, it looks like a break above 4.6% would be needed to return this chart to bullish yields, only recently did the 7.0% projection get overturned.
SO it is a guidline not a given. OIL is listed as $80 price objective!
"When the U.S. SuperBoom Adrian and Jonathan Van Eck foresee gets rolling, an American Super Bull Market will not be far behind."
How do I go against one of the oldest soothsayers in the business?
His premise is that the Bush and FED machine will NOT ALLOW anything to happen to the housing boom and understand its importance to the economy, so don't worry.
Housing seeps into almost every orifice in our economy, indeed I understand the importance.
But I am not going to ignore the fact we have reached 70% home ownership, and have had 10 maybe 15 years or more of price appreciation.
So to suggest we are at the beginning of a SUPER BULL, I feel Van Eck has his blinders on! living on wishful thinking.
Certainly there are a huge contingent of housing bears, and the strength has slapped them down, but now housing appears invincible and we have the MACHINE behind us, not to worry.
Did THE MACHINE help us during the Internet Craze and subsequent CRASH? NO they leading up to it made it WORSE, these invincible hands of prosperity.
No Mr ECK, the housing BOOM isn't ahead of us, it began 5 years ago! We should assume record numbers to infinity?
70% home ownership, that's a record, and nearer to an end than a beginning.
RECORD mortgage debt has led to HISTORIC HIGHS in Total Credit MArket Debt......so I am to assume this is a beginning as well?
Friday, July 29, 2005
67% downside volumea pretty good down day. ALL dat WHite House saff mouth piece was humping and hyping the AM's GDP figures, saying it "came in where economist's predicted" bt that's a LIE according to Briefing.Com where the survey SAID! 3.5^ was expected coming down from 3.8% we landed in shit at 3.4%, but hey that's not half bad?
The press lackies been whipped with wet noodle better not ask too many questions, better to parse freakin' words on what Frist said about STEM CELLS! wooof
SAd.......really sad! boo boo
COMPQ didn't like 2,000? ALL those "good " earnings..hmmmm shouldn;t have any problem paying into pensions and that leaves plenty left for buying stock for stock options and insider wise guy payouts as the lemmings lap it up.....SAD, really sad
LEI didn't say hat they wanted it to, so they changed the damn formula! yeah, just like that. OUT goes the data from a FLATTENIG yield curve.
The wise asses rather commit their worthless opinion isntaed of leaving the caluclation formula alone, surely THEY know better.
3.4 GDP not half bad, what's the beef POPS? Because I KNOW that's BEEFED UP TOO!!!
GDP MISSIVE from TOM PAINE
DR RICHEBACHER on HEDONIC PRICING manipulation.
Now add that housing prices go thru the roof yet they aren't included in CPI figures!! nor is rising property tax, but RENTS ARE!!??? gee, Iwonder why THEY don't want it to look like inflation is here?
Yeah, the noodnicks at Press meeting don't know how to ask a question, or maybe they are worried if they get too pissy, they'll NEVER get called on again?
Yeah, that's the service I provide, I'm covering your ass, along with a few others, we keep digging for the truth, as much as it hurts me to find it.
Things aren't always what they seem? BINGO
The avg Joe's and Josie's know the score, and some maybe wonder why the life they see an dlive isn't reflected in any of this data?
ALL the BILLIONS giveaways in the Preposterous energy bill, UH DUH let's give MORE money to EXXON.....surely they must need it....
FIrst chart don't fight the 20 EMA, so it is rising saying rates will rise further. nearing overbought (RSI near 70) however good chance 20 EMA can offer support.
MACD was falling but faked out at last and has turned up again. (MACD EXPL)
Weekly chart The MACD histograms have moved up from BELOW ZERO to above this is bullish for now. and the RSI here is neutral....if the 10 WK (50 DAY) crossed up the 40 WK (200 day) that would also be bullish for yields.
The rising 10 WK could also provide support for any correction. NOW we have 2 series of higher highs and lows, so until proven otherwise, my guess is trend is UP!
Yield is now above both 50 and 200 SMA, and if 50 gets above 200, even better.
QUite the whipsaw action from yesterday to today, sentiment is ABOVE previous lows.
BUT, I really think the next jobs report is going to STINK! maybe even show close to 100K LOST jobs. WOuldn't there be a flight to safety then? Is this a "wise guy" set up to shake off weak hands before that?
Daily chart shows non confirm of move, but I'll show you WEEKLY to further enhance my view, we are seeing a rising wedge a "finishing " move post parabolic spike, IMHO
NEW HIGH not confirmed by weaker MACD, weaker RSIhttp://tinyurl.com/83d28 and same for ROC and STRANGE ADX pattern both forming rare H and S.
NEXT MOVE of consequence will be down IMHO
BONDS have tipped their hand? yields scorching LOWER yesterday, today LOTS of data comes out, check back and let's see what's up.
Thursday, July 28, 2005
Beautiful BULL MKT lines with 200 above 400 WK rising in paralell, but now?
IMHO we are making a TOP, certainly not rising from any bottom.
The CALM before the STORM.
WHY oh WHY did yields CRASH today? does anyone know? so we're buying stocks like no tomorrow and BONDS like no tomorrow?YET.....with all the bullish signs, and hoopla........we aren't even ABOVE 2005 high formed in JAN!!!!HOW far along in a BULL market would you think we are with so many extreme readings?
The bubble bursts in EARNEST at next job data in a week, they experts will all be wrong, Challenger and all the data, net birth etc point to me towards a HUGE miss, it might even be as bad as NEG 100K IF its positive at all, it will be PUNY...do bonds know that?
ASSET INFLATION is like feeding a junky to get well....we are very sick....and when the shoot hits the fan next time......there will be NO medicine to take
Wednesday, July 27, 2005
YOU make your mind up, does it mean anything? NO other way to compare then and now unless you use old formula. And YOU can plainly see the relationship in 2000, and NOW!
When it ends I am not sure, but there is NO way we are beginning a new bull market, but tops are hard to come by.
But the FEd beige Book came in yummy, with STRONG Consumer spending and of course........"little inflation" and that my friends, is an utter crock of.....yup
Because the DATA is CHEATED, manipulated, falsified, not worth the time they spend on it, in the REAL world, you SEE what is happening....and they think they are fooling you! are they?!
Is it any coincidence that SS benefits etc are based on CPI readings? SO, there is GOOD reason to KEEP THEM LOW! and LOW they will stay, so they will CHANGE how it is computed to cheat even better.
YOU chase a rising market only in hopes of selling higher to the greater fool, knowing the little guy is full tilt extreme bullish long, while the pro's are opposite, your investments will probably come to a sad end.
I may sound like an idiot now, but that's my view.
MArket stalled, momentum drying up, a trading range we got. BUT, what's going on? LMT, INTC TXN AMZN GLW, IBM GOOG EBAY etc etc ripped earnings to the moon baby. Record earnings one after another.
Record housing sales and price increases. Yuan begins to trade more freely? LOW inflation (so THEY say) retailers doing the jig, industrial production screaming (actually that was utility output due to HOT SUMMER) what's not to like?
Record amounts being drawn out of home equity, sustaining consumer spending considering flagging wages.
Disjointed markets, not moving in unison, sharply declining Baltic Dry Index, no one else is talking about.
So what's it all about Alfie?
Economy humming because of housing. We have 70% home ownership.
We have UNSOLD homes on market growing and staying unsold longer.
We have reached critical mass IMHO, and have sold our souls to the devil of future demand and will be left with NOTHING to drive economy cept Federal spending.
Indebtedness reaches every nook and cranny, is at historic levels while there is NO savings, now is that a cocktail for a new bull market?
Tuesday, July 26, 2005
SNAP this rallies back in HALF! IMHO this I do believe is coming, a HORRID miss. If so, my educated guess, bonds could catch a doozy of a bid!
AS consumer confidence "unexpectedly" fell in todays report..over "worry about jobs"??? now how can that be?
Follow my link in previous post on same and see for yourself.
Sometimes they DO ring a bell!
If only we could look at life in the rearview window?As bearish as I can be, even I find it hard to think of stocks getting down to levels we have already seen. But I am sure as hell not buying and holding in here....a break of 10K is almost assured.
If a bell rang in 2002, nobody I know heard it, at least I heard the bell of 2000 ! I damn sure wish I could have gone 2 for 2!There is SO much to LOOK at, some VERY easy things to help guide you.
One was the 50 SMA moved up thru the 200 SMA in 2002....something it hadn't done in 3 years, THAT alone IMHO was enough to signal some kind of change was in the air, a PAUSE of some kind in the BEar.3 FORAYS into 40 PLUS VIX. 90% fall in an index....if that ain't a damn bell a GONG what is?
VIX of 10
REcord string of IIAA bullishness
plumetting small investor short interest
smart money short all 3
spx/vix at alltime highsCPCE at historic lows 20 EMA .54
8 wk VICKERS insider sell buy near 5.0
Dow Theory Bear Mkt bottom not satisfied.
RR keeps saying investors are "turned off to stocks" and he is wrong, they JUST added housing to the mix.
Shares of BB stocks volume at all time highs....with no capitualtion there is no loathing of stocks, they just RIDE IT OUT, the lemming silence should not be confused with distaste!Maybe I don't hear a bell, but maybe a foghorn...
IMHO, when the dust settles, the METALS will SCREAM higher with FRENZIED buying....after they find a LOW. what else is left to run?
http://www.naftemporiki.gr/markets/quotegraph.asp?id=.BADI&ctime=5Y&cperiodicity=W Broken support at 2003 level!
http://www.vtoreport.com/sentiment/vixvxn.htm sentiment at extremes
http://www.vtoreport.com/sentiment/putcall.htm at extremes
http://www.bls.gov/web/cesbd.htm From the HORSES mouth or other orifice...JULY likely to SUBTRACT JOBS, 80K last year, holding to form this year.
Consumer confidence falls on "job worries"?? WTF? that's "frack" aka Battle star Galactica...What job worries? isn't this the best recovery in history creating jobs left and right?Or is it the WEAKEST on record (yes) creating mostly low paying service jobs, (with allowance for learning Chinese) where only thing created was out of thin paper?
You have your answer in front of you. IF the job data is UGLY as I think it will be....bonds should soar.
With FED meeting also scheduled for AUG, in the face of weak jobs, they will still raise, and we will have out first serious market showdown.
Monday, July 25, 2005
This TRIPE from CNN would have us believe investors are worried? SHOW me ONE damn indicator of that?
DO they mean the fact that small investors have been reducing their shorts dramatically last 4 weeks? Or perhaps a decade low in the VIX? or 20 day CPCE at .54? (stocks only out call)
Or maybe RECORD string of bulls in IIAA polls in plurality? Or record readings in SPX/VIX ratio? Or bidding GOOG to over $300?
Also I see on RR board, some are bringing up the BDI, an index I have been discussing here for several months! My last post goes into much detail on why the BDI should be followed.
It had FLAT SALES Y/Y??!! Sells for 4X book and sales. (no bargain)
It had 6 cent one time gain.
How much is cureency factor? Are stock options expensed?
How much did stock buyback help earnings, considering busienss is SO good that sales are flat?
Total Credit Market Debt (first chart offered)
Kondratieff Wave as seen with Elliot Wave applied (When the Elliott wave has completed a large degree five-wave pattern at the same time the Kondratieff wave is entering Winter the following decline will be much more severe. That occurred in 1835, 1929 and to a much larger degree in 2000. A key principle of Dow Theory is the stock market moves from undervalue to overvalue and back to undervalue. That principle is fundamental to Elliott and Kondratieff. )
Life is a cycle, everything has cycles, 17 year locuts, the economy goes from credit expansion, to credit contraction and back again, stocks go from undervaluation to over valuation and back again.
Credit is still expanding, but this cannot go on forever,we are nearing the end of that cycle, the contraction period will be painful.
Sunday, July 24, 2005
Saturday, July 23, 2005
BKX Banking Index flat performance for a year and a half in the face of weakening technicals like lower highs in MACD
Financials Select offers similar picture, 4 strikes you're out?banging at the door of previous highs while momo flags.
While relationship of SPX and VIX reach levels never seen before, 30% above 2000 BUBBLE
Weekly sell in CITI? how could this be? given the stimulus liquidity picture?
JPM sporting similar look as 1998-2000?
What's wrong with WalMArt? Can't stay above $50
The bell TOLLS for RYL, look at 2000 price! 5 years straight up,more to follow?
ODD 5 yr gone nowhere behaviour from large credit card co?
Some fortunes reverse KKD Some fortunes wiped out along the way.
MER, financials make up HUGE part of weighting in SPX, but WHERE is the performance?
TRANS consolidating for another new high? even so, the MACD would be wellbelow previous peak.
With the BDI back to 2003 levels falling HARD from 2005 highs, this is in direct conflict with MANY other bullish signals.
Like in late 90's, then the NET drove job growth. Now so does Housing, only Housing. Into Banks, lenders mortgage depts, real estate brokers, lawyers,contractors, home depot, demand for plywood etc, furnishings, wall street.......
WHEN THIS BUBBLE POPS, can you see WHY it will drop us to our knees?
Same site, maybe why we rallied or are in range, but VERY LOW now http://www.investmenttools.com/thefed/specialist_short_sales.htm
SOB what bubble? http://www.investmenttools.com/thefed/_real_estate_loans_at_all_commercial_banks.htm What a great site!
SOme conflict as to what was said?
We are headed for one of the severist economic collapses in the history of the world, unseen since the Great depression, unless priniting fiat currency can cure all evils.
NO.......asset inflation only brings pain to most invloved. The government does not present ACCURATE data, offers only manipulated adjusted data and changes formula when unhappy with results. (industrial production).
Greenspan commented on how an inverted yield curve "doesn't mean what it used to" !!!! I must have wax in my ears again....
A SOBER look at our DEBT
Chart #8 shows mind blowing cash outs, what has FUELED spending
Friday, July 22, 2005
JULY CONTRARIAN INVESTOR
Does the stock market like rate cuts? or rate increases? all during RECORD bullishness.
Ownership hits record
February 6, 2004
The United States set a record for home ownership in 2003 with more than 72.6 million families
owning homes, according to a recent federal study.
The Census Bureau said the new home-ownership rate of 68.3 percent surpasses the previous record of 67.9 set in 2002.
Minorities also set a home-ownership record with a rate of 49.5 percent. This marked the first time the majority of minority households in America have owned homes.
The Midwest continues to lead the country with an overall home-ownership rate of 73.5 percent in the fourth quarter of 2003, according to Joseph Galvan, HUD regional director for Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin. The South region ranked second with 70.5 percent, followed by the Northeast with 64.7 percent and the West with 63.8 percent
HOME SWEET HOME ARTICLE now 70% own homes. THIS WAS DRIVING ECONOMY (Last year, Americans took out about $225 billion of their home equity, and even more in 2002 and 2003. Half of that was saved, and half was spent.)
ANd SPECULATION FEVER: Speculation. The purchase of second homes made up a record 36 percent of all home purchases last year, according to the National Association of Realtors--13 percent for vacation use and 23 percent for investment. That's three times the percentages just five years ago. Reflecting increased speculation, existing homes are turning over 50 percent faster than the average of the previous decade.
THAT'S a bubble!!
Ford white-collar job cuts planned?6:36aReport: Automaker may cut 10,000-plus salaried staff, about 30% of North American total. (more)
Kimberly-Clark to shed 6,000 jobs
HP's 15000 job cuts look imminent The Register15000 HP workers get nervous as analyst predicts massive job cuts. [Mail] [Print] [Mobile] [NewsAlerts]. Promote your Events and Training courses for free ... http://www.theregister.co.uk/2005/07/15/hp_job_cuts/
Employers announce 110996 job cuts in June: Challenger - Jul. 6, 2005Job cuts jumped 35 percent in June, with the number of layoff announcements pushing the monthly total to its highest level since January of last year, ... money.cnn.com/2005/07/06/news/economy/job_cuts/ - 36k - Jul 20, 2005 -
Employers announce 82283 job cuts in May: Challenger survey - Jun ...Planned job cuts soared in May after hitting a five-year low in April, but it's too early to worry about weakness in the economy, an employment firm said ...
money.cnn.com/2005/06/02/news/economy/job_cuts/ - 36k - Jul 20, 2005 -
Brighthand â€” PalmSource Reports Profitable Quarter, Job Cuts
News Results for 2005 job cuts
(AFX UK Focus) 2005-07-19 16:38 GMT: IBM now sees 14,500 job cuts, 70 pct of them in Europe UPDATE - Interactive Investor - Jul 19 8:58 AM
Thursday, July 21, 2005
Greenspan argued that an inverted yield curve was not as good an indicator of a recession as it had been in the past. But he said if there was an inverted yield curve, it would be a consideration for the Fed when weighing interest rates.
"Even though its efficacy as predictor is greatly diminished, it's not zero," he said.
Bond prices fell and yields on the 10-year treasury, which moves in the opposite direction, rose, on those comments by Greenspan.
**why don't we just call him the Riddler? He also said he hadn't understood FNM and FRE only until recently.....wooof
SO he didn't recognize the tech bubble, doesn't see housing bubble, didn't recognize trouble at FNM, and now feels an inverted yield curve doesn't mean what it used to??!!
Now you KNOW why Wall Street LOVES Alan Greenspan.
It will trickle in, then it will come on a mother freight train. GOLD and US dollar action now even more important.....oh and BONDS! GOT SPANKED TODAY. TNX WENT WEEKLY BULLISH as MACD crosses up from below to above ZERO. YOU can see what lies directly ahead as resistance.
"I do not manage money for others anymore, so I do not have to be in the market. When short rates are rising and monetary liquidity is decelerating as presently, I keep long exposure down to a minimum. The market may be reasonably priced, but in this kind of monetary environment, risk is on the rise and return potential diminishes. So, I may play the occasional interesting idea with some mad money, but I leave the field to the more adventurous."
On U.S. Economy
I believe that a period of lengthy economic expansion, perhaps reaching out to the end of the decade, is a crucial objective of U.S. economic policy. The main idea here is to generate a stream of rising budget revenues through higher earnings and incomes that will outpace expenditures and lead to a sharp contraction of the budget deficit. Only limited progress can be expected with expense reform, so revenues will have to carry the day. I would point out that the GWB Administration can expect ever stronger pressure to reduce the military commitment to Iraq, which I think it will do. This would generate substantial savings."
The U.S. remains in a cyclical bull market. The popular S&P 500 (1227 as of this writing), has been trending under “the average bull market” since this spring. This reflects the liquidity squeeze discussed earlier, plus continued investor preference for small and mid-cap stocks. To qualify as a more typical bull market, the “500” would need to rise to about the 1360 area by late 2005 or early 2006. This benchmark is do-able if the Fed was to begin to add liquidity into the system soon. But, such remains to be seen.
Stock Market Long Term
Recent bubble-burst notwithstanding, I see the U.S. as remaining in a long term bull market that began in earnest back in 1982, and which swung back into gear again after the 1987 meltdown. There are now too many indices, sectors and individual stocks at or near all time highs to suggest otherwise, in my view. This market has been fed by decelerating inflation, a progressive downtrend of interest rate structure and extraordinarily aggressive balance sheet management by corporate America that has kicked up the long term growth rate of earnings to 8%. This extraordinary confluence of fundamentals coupled with the most favorable demographics in modern U.S. history has produced this grand market.
I am looking forward to a modest new all time high in the S&P 500 in the 2008-2010 timeframe. After that, I see trouble ahead. I believe the U.S. will be in for a period of slower growth in output and earnings, more inflation pressure to contend with, and a reversal of fortune in demographics as aging baby boomers increase financial liquidity. These developments will have major global repercussions, especially for sizable exporters to the U.S. This stark turn will throw into sharp relief just why the U.S has been interested in globalization, as new locomotives of growth will be needed.
This new, oncoming epoch will usher in great changes and will keep the investment scene interesting to say the least."
Economic and Stock Market Observations (Guest Commentary)
BFD pardon my french
Dollar not plummeting but due for retrace from 80.00 rise.
WE get everything from China, is it IN THE BAG that the fuel is thrown on inflations fire? It seems IN THE BAG gold screams higher....or is it?
$430 key level $7.30 in Silver IMHO. How does 2.8% revalue side with Politico calls for 27%? lip service? GOV says they still CONTROL VALUE, how is that free float?
I am watching NEM, for the new uptrend, of false breakout, I think DEFLATION (as NO ONE mentions it) is the demon.
Wednesday, July 20, 2005
What THEY said when SUN was $20 !!!
"Goldman Sachs, which has the stock on its recommended list, Credit Suisse First Boston, which rates it a buy, and Lehman Brothers, which rates it strong buy, have done the usual, cutting estimates to reflect company guidance. They all maintained their existing ratings."
APRIL 2000 "Greenspan compares stock market to casino" And the Free Republic made this statement, maybe BEFORE any other gold bug did!!!! "Since gold is countercyclical to stocks, now is an ideal time to consider cashing in some of your chips for the security of the world's only real form of money: gold."
MAY 16th 2000 ABBEY COHEN STILL BULLISH
CHARTING THE COURSE OF THE SECULAR BEAR (great read)
Tomorrow maybe different, the onus on Bears to show up, when few BEars left standing remember no one left to buy he selloffs (cover shorts) either.
Today smacked of a Greenspan rally and short covering. Market is overbought, been DUE for correction......we'll see if it SHALLOW to consolidate gains. Sellers in hiding.
Note above, how MACD and RSI keeping topping LOWER with each new high, see how they are lower in 2005 JAN high than in 2004?
How we have record string of bullish IIAA polls?
My ONLY conclusion can be, we are witnessing an ever weakening economy and stock market rallying as a bear market rally, with so many EXTREME readings, and what we know we find at BEar market bottoms (new bulls) this cannot be anything else. IMHO
With a BDI at new lows as transport roar 3.6% (but below 2005 highs)
W haveone freaking disjointed disconnnected mess that the populace views as ROSEY!
But I think it will.
No I don't think 11K will be seen this year, but if so, it wouldn't change my mind.
Are ALL Boats NOW being lifted, reasonable or not? JURY is still out, but my own business is getting better....
Tuesday, July 19, 2005
A corection is coming, we just don't know what form it will take. 10K is more likely than 11K IMHO
Why they spend $2 B a qtr buying back stock to make earnings look better? Is buying back stock, does that have anything to do with company profitability?
Here is the latest on INTC *("We continue to think it would be good policy and simple common sense to delay" the June 15 deadline, Intel Corp. spokesman Bill Calder said.") I bet they do!
Futures lit up RED
I have never witnessed anything like this. A GROSS non confirmation to the world stock markets.
WHY WE SHOULD BE AWARE OF THE BDI:
Because it provides "an assessment of the price of moving the major raw materials by sea," as the Baltic puts it, it provides both a rare window into the highly opaque and diffuse shipping market and an accurate barometer of the volume of global trade.
The BDI is a good leading indicator for economic growth and production. After all, it doesn't deal with container ships carrying finished goods. It deals with the precursors to production: bulk carriers carrying building materials, cement, grain, coal, and iron. Unlike stock and bond markets, the BDI "is totally devoid of speculative content," says Howard Simons, an economist and columnist at The Street.com. People don't book freighters unless they have cargo to move. http://slate.msn.com/id/2090303
*Something is amiss, that's for sure. WE get EXAGERATED manipulated CPI and PPI data, don't even ask how they come up with NO INFLATION, the BLS deal in smoke and mirrors and general BS.
www.chinaview.cn 2005-07-19 07:59:26
BEIJING, July 19 -- Landmark gold trading available to individual investors as of yesterday was getting the cold shoulder from local residents on the first trading day in China's financial hub, perhaps due to high costs and low profitability prospects.
"There were only two to three telephone calls asking for information, but no customers came to register," said Lu Feng, a wealth consultant at the brokerage bank's Yandang Outlet in downtown Shanghai.
The Shanghai branch of China's largest lender, the Industrial and Commercial Bank (ICBC), teamed up with the Shanghai Gold Exchange on Sunday to announce the opening of the new trading platform through its "Jinhangjia" (Gold Expert) product, marking the milestone opening of physical gold trading yesterday to individual investors.
Previously, gold trading was reserved for more than 100 corporate investor members since the launch of the Shanghai Gold Exchange at the end of 2002. The debut of paper gold trading at two other banks the Bank of China and the China Construction Bank in Shanghai followed earlier this year.
Different from paper trading trading not for delivery the gold trading allows buyers to demand the physical delivery of the gold, with expenses of only 2 yuan (24 US cents) for each kilogram.
But the situation is sluggish in branches where the service is available. "We only had three to four calls, and nobody came to us today for application," said a banking clerk surnamed Wang at ICBC's Nanjing Road in the centre of the city.
Detailed information from ICBC Shanghai branch was unavailable regarding trading in the whole city.
"We are not in the right position to say much on the product as it is only one product launched by ICBC, it is not the whole pictureand maybe it will get better when customers get to know the product," said Tong Gang, an official with the Shanghai Gold Exchange's Information Department.
According to rules set up by the ICBC's Shanghai Branch, individual investors can apply to register for gold trading at any of its nearly 60 outlets in the city, with an identification card and a registration fee of only 60 yuan (US$7.24).
But investors must have a lot of money before investing in this new business as they are required to buy at least 10 units, with each unit weighing 100 grams, in each transaction. That required more than 113,000 yuan (US$13,647) yesterday, when gold prices ended at 112.76 yuan (US$13.61) per gram at the exchange.
"The threshold is high for individual investors," said Wang Lixin, chief representative of the World Gold Council's Beijing Office, "but (by setting up a higher threshold) the regulators hope to make the market more stable rather than heatedly speculative," he said.
Investors will also need to pay fees to the brokerage bank before any deal is completed, including 0.21 per cent of the total transaction volume brokerage fee, 60 yuan (US$7.24) in registration fees and some other exchange fees, all meaning profit margins go down.
"I will not buy this as it cannot generate much return for me" said a client surnamed Li at ICBC's Luwan branch. "I prefer to invest in long-term treasury bonds that are more profitable and safer."
(Source: China Daily)
WEEKLY WEAKLY CHART ALL that bullish energy for this?
When support gives way (what am I crazy?) look out! ALL kinds of non confirmations going on, let's see even if IBM euphoria can last the day!
Factory ute rates and industrial production, a NOSE BLEED housing sector, a FED whwo MUST continue to raise rates, humptey dumptey.... do YOU BUY an easing FED or a TIGHTENING FED?
*(if I'm short and sweet, it is because my tendanitus is acting up again)
IBM will scoot futures, will we have another FLAG POLE day, up up and away? Forget horrible financial giant CITI GROUP'S results? They trump IBM I can tell you that!
INTC due to goose market too with their same old song and dance routine.
WILL rates REACT to continued HOT housing market? That is where my attention will be.
Monday, July 18, 2005
Citigroup Inc., the nation's largest financial institution, reported second-quarter profits below Wall Street's expectations Monday as a result of what CEO Charles Prince called "challenging conditions," including a tough bond market and an interest rate squeeze.
**Enquiring minds think, if this can happen to behemoth Citi, and we heard about VEGA Hedge Fund blowup, what else lurks out there?
Now C missed estimates, but did NOT warn.
Duratek unravel it will I say.
Saturday, July 16, 2005
VOLATILITY INDEX is going WRONG direction for the "start" of any kind of important rally leg. (VXO)
MODERN VIX formula shows a close well below 10 and 20 SMA'S!!! And a decade low reading!
You MUST be able to appreciate this next chart. FRIDAY reading is a full 30% ABOVE this relationship, at the 1999-2000 ALL TIME BUBBLE MANIA TOP! So what is this? and consider we are 50% below highs in NAZ around 10% in Dow and 20% in SPX? As some other indexes have hit highs in 2004-2005 (small cap and Trannies).
Great rallies are born of too much pessimism, like after 3 years of Bear Market. Consider market has virtually no net gain in 2005, yet the Bears fall away to insignificant levels. (IIAA survey shows 2 week avg of bears at only 17% with this past week at only 14%.!!!!!)
Also consider we have had record plus 140 WEEKS consecutive plus 50% BULLS readings as well, this includes part of the wicked past Bear Market!!!!! EVEN though, no new high in the Dow! Granted 2003 was VERY kind to mutual fund holders.
ADD to the unusual behaviour is the fact that since the FED began raising the funds rate from 1% to 3.25% the 10 year yield has FALLEN from 4.9% to around 4% (currently 4.17%)
Bonds normally get SOLD during final stages of bull market. See move of 1998 and 2003. WE just closed above 20 EMA, so yields could trend higher up until next jobs report.
Friday Industrial production and Factory ute rates were sceeaming to recovery highs (80% capacity) and normally considered very inflationary. Yet, yields were slightly down yesterday.
McClellan OSC has fallen for 3 straight days during 3 straight days (now 7 up days in row) of PLUS Dow action !!!!! as new highs fall away! New lows have not picked up yet.
EQUITY ONLY Put/Call ratio exudes bullishness.
New highs for SPX(2005) but not for Dow and Trannies! We continue to have a dysfunctional market, one that moves this way is seen as weak.
Gold and Silver have shown COOL action towards the inflation readings of manufacturing data etc, and the CPI and PPI data are so manipulated by the BLS to be worthless. I trust the metal action, yet we KNOW where the asset inflation has come from.
EWT points out in FRI update that the FED FOLLOWS open market conditions, not the other way around! SO keep an eye on 3 Month Treasury Bills, which are STILL rising near SAME rate as Fed Funds, there can be some LAG TIME between (as much as one year) when the FED follows the freely traded fund rates. (as was the case in 2001 and 2004)
10 YEARS are now above a rising 10 and 20 EMA while MACD tries to cross above 0 (a BUY signal using triple screen method) SHOULD rates continue in an uptrend, this also MIGHT put pressure on equities. BOND BEARS would mulitply until the setup for the next JOBS REPORT is due. WHich I am "guessing" will be a DISASTER and cause the uptrend in rates to HALT!
I base this on the NET/BIRTH DATA CHART I have posted on numerous occasions provided by the BLS. I think this is a good guess. AND also coresponds with what is normally a tricky period for market bullishness. going into AUGUST.
Doesn't this make sense considering ALL the EXTREMES I lay out here in bullishness?
ALL that data is MORE indicative of a topping pattern, NOT where we BEGIN a new era of BUll Market, NO.....it is signalling, IMHO the death of the cyclical bull which began some 3 years ago!
That is MY conclusion, it is up to you to come to yours.
Duratek@YHOO.COM Do you find my opinions worth reading? WHO else lays it out like I do? Again, I am not trying to pinpoint an exact date, but lay out my argument for what may lie ahead, VS going with the flow.
STocks COULD trudge higher, for longer than we think possible, but IMHO the ONLY argument for that is the willingness of investors to buy with intent to sell higher.....it certainly isn't VALUATIONS and DIVIDEND YIELDS.
Friday, July 15, 2005
SO IMHO, GE may lead on the way down as this source of revenue tops and begins to dry up.
We have had 2 days of negative BREADTH in a row while DOW rose, McClellan OSC also sunk during this time, showing weakness of rally.
I have pointed out the non confirmation which exists while the SPX made NEW 2005 highs. A market that doesn't move together is usually a market in trouble, though it may not l00k like it.
More data today, but does it really matter?
GOV BLS stats show little or no inflation? Now how is that when we have RECORD OIL PRICES (PREM hit $2.59 here yesterday REG $2.39) and HOUSING has tripled or more in some areas, SHARPLY rising property taxes tuition, food costs, and health care premiums, and we are told we have BENIGN inflation? INQUIRING MINDS DON'T want to know.
WE have an economy and administration built on LIES.
I have shown the world indicator for economic strength the BDI INDEX continues to sharply decline! WILL the TRansport Index confirm and follow? DOW and TRansports NOT at new highs for 2005 as SPX is.
DOW rising while breadth declines smells of MORE INSIDER DISTRIBUTION. PUTS being given away. 10 day stock CBOE put call ratio near .50
WE NEED energy conservation, we GET a HUMMER! When I look in to parking lots, I see a sea of SUV'S trucks and VANS! AVG 15 MPG or less. Does this FLY in EUROPE?
WHY do US car companies continuously sell cars at large discounts VS on quality? I answered my question.
INSTEAD of INVESTMENT we get M and A activity, which doesn;t create jobs it DESTROYS THEM.
New PUSH POP at BoB Evan's, is also a Batman Light. $1.59, throws off a Batman signal, Made in CHINA.
Having things made in China should not necessarily been a bad thing, but it didn't follow all good things in moderation.
Economy held up by rising ASSET inflation (housing), we have traded ONE Boogeyman for another, problem, it's still a boogeyman. BUT one that is a might more less LIQUID!
Thursday, July 14, 2005
Than as you can see in JAN, they TOOK BACK 280,000 jobs to "even up" the books.
SAD, very SAD
Duratek, searching for the truth will set you free.....and maybe lead to drink!
New low had a rather neutral showing in ROC and MACD. Lower BB and upper BB have been playing YOYO with moving price. Coincidence the 50 week SMA is 4.197 and today's high was 4.196 ??!! Do you love that?
Weekly MACD is about to give BUY signal on HIGHER YIELDS with crossover and histograms going positive. ROC has turned up.
My guess is with 50 SMA now declining, if we do get above 50 wk SMA, the rally will last until we get near upper BB and end somewhere near previous high.
This should occur right before the next monthly JOBS DATA which I think wil NOT have the manipulated NET BIRH DATA so positive (looking at trend) to give the appearence of healthy job growth.
Bonds will quickly rally, stocks will sharply decline, somewhere between now and then will be LAST great buying opps for bonds IMHO.
Inverted or flat, the yield curve points to a weaker Federal Reserve, not a downturn.
July 14, 2005: 2:41 PM EDT By Katie Benner, CNN/Money staff writer
NEW YORK (CNN/Money) - When bond yields compete with Martha Stewart and Bernie Ebbers for headlines, they usually lose. But recently they've gotten attention by behaving in a way that has sparked fears of a big economic slowdown.
That's because the yield curve has been flattening. The graph of bond yields in the Treasury market usually slopes upward, with yields on longer-term bonds higher than shorter maturities.
Some experts even say there's a decent chance the curve may soon invert -- an event that has preceded the nation's last two recessions. (Confused about yield curves? Click here for help.)
Federal Reserve Chairman Alan Greenspan is worried, too, calling the persistence of low long-term rates a conundrum.
He and other Fed policy-makers have raised a key, short-term interest rate, the fed funds overnight bank lending rate, to 3.25 percent from 1 percent just over a year ago, as the central bank tries to ward off inflation, and cool off the housing market, while it keeps economic growth on track. (Full story.)
But while short-term rates have risen, long-term rates, which are set by the markets, haven't followed suit. In fact, the yield on the 10-year Treasury is about half a point lower than it was last June.
That, in turn, has helped keep mortgage rates low, since home loan rates track the long-bond rate. And some, including Greenspan, have begun to worry that the red-hot housing market may overheat. (Full story.)
Analysts said the Fed's power to influence long-term Treasury and mortgage rates has been clearly diminished by a number of factors -- most notably low inflation worldwide and the growing clout of foreign central banks on U.S. rates through their purchases of Treasury bonds.
Investors usually sell Treasuries on signs of economic strength, or when short-term rates start rising, as they bet that long-term rates will eventually rise along with inflation. (Bond prices and yields move in opposite directions).
But most bond investors and economists say the 10-year yield probably won't rise much further this year -- even though the Fed probably isn't through raising short-term rates.
And while that will leave the yield curve flat, or perhaps inverted, some experts are saying the curve is not as good a recession predictor as it once was.
"It's not inaccurate to say that Fed concerns about bond yields have been overdone," said Steve Rodosky, vice president at Pacific Investment Management Co. (PIMCO), one of the world's biggest bond investors.
Low inflation: bonds party on
One big reason long bond yields have stayed low is that inflation has remained remarkably quiet, even with strong economic growth and record high oil prices.
Measured by the Consumer Price Index, the government's main inflation gauge, inflation was running at about 3.6 percent a decade ago, but that's been closer to 2 percent over the past five years, said Anthony Crescenzi, chief bond market strategist at Miller, Tabak & Co., an institutional brokerage. (The latest reading on June CPI shows inflation is tame. Click here for the full story.)
"We've had growth without inflation, said Crescenzi. "And every time the Fed raises rates it enhances its reputation as an inflation fighter," he said, noting that the central bank has convinced many bond investors that it's out in front on the fight against inflation.
As a result, he thinks the average yield on the 10-year Treasury will end the year at about 4.25 percent, just below the average for 2004.
"At the end of the day, if Greenspan wants to solve the conundrum of low long-term yields, then raising the fed funds rate is not the answer," said John Derrick, who handles $570 million in fixed income investments for U.S. Global Investors. "[Raising short-term rates] gives the long bond more staying power," he added.
Outsourcing the Fed
Then there's another school of thought that says the march of globalization has eroded the Fed's influence over long-term rates.
"Globally, the U.S. and some emerging markets are the leading growth engines," said John Herrmann, director of economic commentary at Cantor Fitzgerald, one of the world's top Treasury bond brokers.
And with growth slow in Europe and Asia, and rates relatively low worldwide, Treasuries have become unusually attractive for overseas investors -- for yield as well as perceived safety.
So the stronger the U.S. economy becomes relative to Europe and Japan, the lower long-term bond yields could fall as foreign banks keep snapping up Treasuries, analysts said.
Underscoring this point: foreign banks now own far more Treasury securities than the Fed, at about $1.1 trillion versus $738 billion for the central bank, according to Grant's Interest Rate Observer.
As the current state of affairs persists, the link between low long-term yields, a yield curve inversion and a possible recession becomes less clear.
"We buy foreign-made goods that are inexpensive and those countries plug our deficit by buying U.S. securities," PIMCO's Rodosky said. "Everyone playing that game wants to perpetuate that cycle because it is benefiting them."
To find out why Cantor Fitzgerald predicted an inverted curve, click here.
To read why Cantor said the curve may not happen, click here.
For more on the yield curve, click here.
To see what bonds are doing today, click here.
And for bond market charts, click here.
A ZUTZ off of IPOD sales, wonderful. The REAL business world away from strictly consuming I KEEP hearing, is a flat world to down....and SOONER or lATER the markets will reflect this.
The late comer lemming bear must be dealt with first. Correcting skew in CPC IMHO is needed, we are headed lately in right direction.
1% APPLE zutz, while not super impressive has moved the NDX above previous high, but 1600 looms as good resistance IMHO
Strong retail sales, cool inflation (as depicted by CPI) and reaction in futures pits = extension to rally....and it looks like today will be one of those days with a flag pole, up straight from the get go, lots of buying sellers covering, never looking back....hard up into close.
This may lead into a rally that lasts well into AUG, making believers of the ones who are not, and maybe bringing down one of the last bearish holdouts I talked about last night, the put call ratio which better reflects the extreme optimism normally found at THE TOPS.Bringing this up JUST to the 2005 JAN highs we saw out of the gate, would not be good enough.
Remember, the DATA we now see is a month old, the MARKET is suppose to see into the future....6 months or so.SO we have some extreme readings of bullishness, decades lows in the VIX (VXO)new highs for SPX/VIX ratio surpassing old bull, yet we are far below that previous top....go figure.
Now, I'm all for having fun, and those long may choose to stay there and ride this up, but I feel too late in this cycle for me to do so, unless a special opp comes along.....like a dying quail DWA or something worth a play.
It seems like what is goos is known, we shall see how far the IPOD (mkt saturation?) and AMD (not a profit story) can take us, time for NAZ (laggard yesterday) to lead the way perhaps.Though I don't see what could put a pause in this today, market will always surprise.
CPC this AM a heady .50 (what Is ggested may now come to pass)
NDX busting out of upper Bollinger Band, and now overbought, some kind of reversal should not be far off. NO change iN VIX so far but SPX/VIX making another high.
Shorting DANGEROUS business, if pessimistic, most better off on sidelines. Being right and early is just as bad as being wrong.
Will the up move exhaust itself today....up up and away! LOL
Wednesday, July 13, 2005
Approaching 2001/2002 highs RSI WEEKLY oversold, but strong uptrend intact. 2 long term avg's rising on top of each other.
TRAN MACD and RSI looking weak on the weekly chart, if 52 week closes below 90 week, I think we would have some trouble, the 52 week has provided the support so far. AN exponential 52 week, taking into account the go nowhere 2005 has begun to flatten.
DOW is sickly and offers a different view. from 2003 we see decending tops of RSI and MACD, not a healthy picture. INSTEAD of looking like the rise from 1995, it looks more like 1999 !!!! AM I wrong?
A NEW HIGH surpassing its rise into 2000 !!
NDX MACD has near flat lined since 2002 lows and first crest. ARE WE putting in WEAK right should of MASSIVE head and shoulders formation?
We are there! the downward trendline formed from 2000 high to 2005 high. Unlike FTSE, the merge of the 52 week into 90 week not a welcome sight! BOTH are flattening, unlike RISING FTSE averagess.
It helps to STEP AWAY from daily grind and see what is really happening.......IMHO
A low in VXO (VIX old formula) not seen since 2005?!!
HOWEVER, this is NOT BEARISH, we MUST keep open mind. I am talking about "trend
of put call ratio, it was trending DOWN into 1999/2000 tops, WHO thought it would EVER end? It is now trending up! This is at odds with VXO/VIX and SPX/VIX ratio's which ALSO are used to depict complacency or pessimism and are at extremes.
Only thing I can say is possibly after CRASH of markets from the bubble highs, to the lows, there IS pesimism about current rally. BUT, PUTS are DIRT CHEAP as shown by VIX readings...a CONUNDRUM?
And rallies on lower volume than declines.
OK last look, have you REALLY looked at every chart? CPC has moved lower since 2005 top, what me worry? We are looking at shorter moving averages. STILL, LOOK where 10 week avg was at 2000 top BELOW .50 !!! YIKES!!! This keeps bulls warm at night I think.
I don't know if this ONE THING, the rising put call ratio will be an issue or not....but it is there to consider along with HIGH VALUATIONS and LOW DIVIDEND YIELDS> how will it all get rectified?
Apple Delivers Record Revenue & Earnings
CUPERTINO, Calif., July 13 /PRNewswire-FirstCall/ Apple® today announced financial results for its fiscal 2005 third quarter ended June 25, 2005, reporting the highest revenue and earnings in the Company's history. Apple posted a net quarterly profit of $320 million, or $.37 per diluted share, and revenue of $3.52 billion. These results compare to a net profit of $61 million, or $.08 per diluted share, and revenue of $2.01 billion in the year- ago quarter, and represent revenue growth of 75 percent and net profit growth of 425 percent. Gross margin was 29.7 percent, up from 27.8 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter's revenue.
Apple shipped 1,182,000 Macintosh® units and 6,155,000 iPods during the quarter, representing 35 percent growth in Macs and 616 percent growth in iPods over the year-ago quarter.
"We are delighted to report Apple's best quarter ever in both revenue and earnings," said Steve Jobs, Apple's CEO. "The launch of Mac OS X Tiger has been a tremendous success, and we have more amazing new products in the pipeline."
"We're very pleased to report 75 percent revenue growth and a 425 percent increase in net income," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the fourth quarter of fiscal 2005, we expect revenue of about $3.5 billion and earnings per diluted share of about $.32."
**WOW!! IPODS have been FLYING off the shelf, stock right has been ALL OVER THE PLACE AH, now near unchanged. Growth FLAT for next qtr may be reason.
It isn't the NOW anymore in the what can you do for me tomorrow world....as the markets always look ahead.
NAZ was obvious laggard today, market needs the HIGH BETA stuff to fly.
Now I also see GOV is "touting" falling budget deficits, LOL. Surely THESE DO NOT nor have they EVER included cost of IRAQ INVASION!!
And it wouldn't surprise me if the figures are "ESTIMATES" based on the 2002- 2005 recovery like that of the tax receipts leading into 2000 caused EXTROADINARY miscalculations and errant assumptions going forward the next 10 years.
And I am sure the deficits we will actually end up with will pale with what we are told they will be.
All this happening under the umbrella of the BUSH 10 yr tax cuts, what is one to think?
Does this look like inflation to you? There is NO foundation for a further rise in gold and silver based on this data IMHO.
Now certainly we have had asset inflation, but it is SEGREGATED, on a narrow defined area.
HAS higher OIL worked its way into the equation? What was different in the 70's when gold got near $900? No tech stocks to siphon off volume, BONDS offered screaming yields, we had a FED that reacted promptly to the inflation threat, we had TOO MUCH MONEY CHASING TOO FEW GOODS.....that is the essence of inflation gold is not going to see anytime soon.....NOT with CHINESE production seemingly limitless.
Not with 6 new dollars printed for each one that existed prior to the last 40 months, with historical easy money, with housing going thru the roof, higher oil prices etc, we don't even have a NEW HIGH for gold in 2005!
Now I'm not dissing gold, I am pointing out we have a BLACK HOLE that is sucking up all this liquidity without a marked pick up in inflation, in at least the way it is beiing presented, perhaps a whole other discussion on manipulated data! Hedonic BS seasonally adjusted hooga booga.
Surely in my business I keep getting 4% increase here, and there, but "back then" I would get 10% increases which is like 15% increases now or more.
A 50% retrace of the dollar loss from high bring us back to above 100 on the index,our rates are higher than Europeso even low FED funds draws money here.
WILD CARD, the TRILLION $$$$ Treasuries held by Asian countries......is
there a limit to how much they will buy?
What would make them sell?
MORE Likely yields fall, then selling causing yields to rise, IMHO.
I again bring attention to the MANY EXTREME readings and data we have right now, and my conclusion based on this is we will enter a VERY DIFFICULT period of ADJUSTMENTS........I am not a Shaman....WHEN it begins is not as important as understanding it WILL BEGIN.
Tue Jul 12, 2005 09:59 AM ET NEW YORK, July 12 (Reuters) - U.S. consumers' were less optimistic about the economy in July as gasoline prices edged higher, according to a survey released on Tuesday.
Investor's Business Daily and TechnoMetrica Market Intelligence said their economic optimism index slipped 1.9 points to 48.6 from June's 50.5. A reading above 50 indicates optimism while a reading below 50 indicates pessimism.
"The across-the-board decline is not surprising given that gasoline prices kept rising throughout the month of June," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner.
Tuesday, July 12, 2005
Knowing the FED has added record amounts of liquidity, and Bush's STIMULUS package, and we have witnessed a record easing with 45 lows in interest rates, and HERE we sit with gold NOT EVEN above its 2005 highs let alone its all time high??!! What gives?
NOT outright DEFLATION, but a deflationary trend is at work, SUCKING UP the liquidity, giving us a FLAT Y/Y money supply growth. And we are needing ever more increasing amounts to get the same bang for our tattered buck.
IMHO, we will see the yield on Bonds and Treasuries trade in a range to up until next job report where I believe will turn down hard with lessening effects of NET BIRTH MODEL, and the BEAR MKT will again begin to exert itself.
The rally now afoot means nothing to me, I am more concerned with larger trend and when it might resume.
Monday, July 11, 2005
"Doh, wha is it? da concundrim" says Greenspam. "You couldn't see a bubble until you actually had one....." I wouldn't know a bubble if I Had both hands on it" Be afraid be very afraid.
No, of course there couldn't be a bad reason for flattening curve, first off most investors don;t care or pay attention.
IF the FED STOPS raising rates, then the bond market will SCREAM towards the funds rate, it doesn't matter WHAT the FED does at this point. IMHO
There is a Bradley turn date coming in 2 days, wanna bet it is going to a high?
By Matt Krantz, USA TODAY (dec 2004)
Count one for the bean counters.
After years of heated debate between high-tech companies and accountants, the head accounting rule-setting body Thursday declared all companies must subtract the cost of stock options from their earnings starting in mid-2005.
It's a massive blow for companies, mainly in Silicon Valley, which had been doling out lucrative stock options to employees and executives for decades but not counting them as a cost. It also requires investors to rethink how they value companies: The new rule will affect everything from price-earnings ratios to earnings estimates.
Accountants, thinking companies had been enjoying a loophole that understated their costs, applauded the decision. The new rule will have "a big impact, but it's the right move," says Ed Nusbaum, CEO of accounting firm Grant Thornton.
The rule change, approved by the Financial Accounting Standards Board, represents a massive shift because it:
•Affects so many companies. Only 117 companies in the Standard & Poor's 500 index currently expense options, says David Zion, accounting analyst at Credit Suisse First Boston. That means a majority will need to start.
•Puts a big dent into reported earnings. Had all companies in the S&P 500 expensed the cost of options, reported earnings would have been 20% lower in 2001, 19% lower in 2002 and 8% lower last year, Zion says. He says the rule could dent 2005 earnings 3%.
•Has massive effects on individual companies. Not surprisingly, tech companies that have relied on stock options to retain employees stand to suffer a big hit to earnings.
Consider Internet site Yahoo. Had the company been required to expense stock options last year, it would have reported earnings of 5 cents a share, 86% less than the 37 cents a share profit it reported. That makes a giant change in Yahoo's P-E on 2003 earnings: 742 under the new rule, vs. 100 before.
•Affects earnings estimates. It's still unclear if Wall Street analysts will ignore the new charge, or include it in the earnings estimates that investors watch, says David Dropsey, analyst with First Call.
High-tech firms are not pleased. "We remain opposed to expensing and will continue to work with the Congress, the administration and the SEC to come to an accurate, auditable, transparent solution," says Cisco Systems' spokesman John Earnhardt.
Sen. Peter Fitzgerald, R.-Ill., one of the rule's champions, says he fears companies will wait for his retirement this year and try to derail the rule before it kicks in June 15.
Silicon Valley companies "will stop at nothing to stop this (rule) from going into effect," he says.
Into month 7 in 2005 and and we have a very mixed market performance with flat as good to down for tech.
The rally on "bad news" is something to watch out for (London terrorist act) but I feel the SPX manipulations prior to open take some OOMPH out of it.
We are in nothing more than a trading range environment.
The rallies come on weakish volume, but new highs are perking up, but are these bond funds and energy stocks mostly? REG $2.31/gal in B'more
Aren't ENERGY STOCKS skewing SPX 500 earnings data? I fell the earnings coming from the SPX sectors are not balanced, do not present a fair and correct economic picture.
Haven't we seen the TOP in earnings momentum? WHAT will drive it in the near future?
Housing prices have rose in a PARABOLIC fashion, now making it tough even on the middle class to afford a home, granted with low rates. If a rise in tax property asessments puts a hurting on home owners, that is a source of worry given punkerish wage growth.....and a rise in cost of the things we need, deflatoin in much else.
LOW LOW Treasury yields are a function IMHO of a weak economic environment, LAST time yields flattened like this we had an economic crash ( just prior to OCT 1987) SOMETHING is wrong, others delight in such a setup, and find it bullish.
SO, markets seem pretty bullish and fun to be long, and even terorist action is nothing to worry about, as a CONTRARIAN, this lack of fear and total complacency I find BEARISH (surprised? LOL)
In IRAQ, support is growing for US TROOPS to leave, and fight the war on terror somwhere else. WILL we abide by the will of the new Gov. like it or not?
Isn't the reason so many are dying and terrorists are being drawn to Iraq ONLY because we are there?
10 YR DOW SEE how MACD AND RSI have been falling since 2004? showing weak momentum? DOW gone nowhere since 1998. I see 2 things, potential multi year reverse Head and SHoulders a break of 2005 highs could lead to charge at all time highs. OR 10,940 is the HEAD and we are putting in right shoulder here! NOT much support BELOW 10K (is why the PPT protect it so!)
SPX/VIX RATIO hits new highs ands hows NO sign of weakening yet. But also take note of awesome triple top here. SHOULD PUT CAP ON RALLY.
VXO (old VIX formula) Hitting LOWS NOT seen since 1995 or before? That was during 20 year bull mkt, yet we make these kinds of moves, and we are WAY below the highs made??!!!
As it the many EXTREMES we are hitting in this "echo bull" which we have now MULTIPLE BUBBLES instead of just one (NAZ) we have CREDIT, HOUSING, BONDS, and DEBT bubbles.
Opinion or fact. I am as cautious as ever, standing my ground, it's a traders market, that's all.
Tune into CNBC for the blather or that ass's show loudmouth obnoxious Cramer, how weak is that?
SHould WE be allowed to HYPE the stocks we own? on TV? woof