SPX 500 earnings are OVERSTATED by quite a bit, as financials do not carry market valuations for their book, it's all mark to fantasy.
So when you hear the hair people telling you on the boob tube how chaep the market is? remember that. Remember that they only want to tell you the HOT STOCK PICK of the day, not any warning on the stock market.
As discussed earlier, this is chart of 30 years treasuries suggested as warning signal (link was provided). The way the VIX has remained elevated is worrisome and more evidence trend may have changed, market MAY have topped in april.
Stocks rallied since March of 2009 and price rose to the 50% FIB retrace level of near 1186. After awhile you start to believe in all in mumbo jumbo technical stuff as it seems to happen enough not to be coincidence.
$ peeped over its 8 year downtrend line, not sure if overhoot and trend hs changed from down to up.
Chinese market continues to make new lows after peaking in AUGUST of 2009. ST support is 1140 on the SPX. Tuesday down volume near 98%, 3rd 90% plus downer in ONE WEEK!
Stocks for the long term? SURE!!!! after Secular Bear market ends......
GOV (DEM'S) want to continue forcing forward demand for housing by entenxding home tax credits....sad bastards....applying bandaides to a severed artery
Reminder from July 4th- 15th I will be traveling through Europe....I should much to share when I return!
Last time USB prices spiked above their trading channel was late 2008 into 2009 at worst of financial crisis.
ONLY EXTREME INTERVENTION and "MARK TO MARKET" accounting suspension IMHO stalled the crisis end game and market crash.....piper not paid enough?
I've been warning since the market topped something was still very wrong, I am keeping chin up, but it is what it is.....if THEY Haven't fixed shit, the shit will hit the fan again and again...
**why has my blog gained in popularity? here is what I said in one post back in APRIL
>>>HAS SOMETHING CHANGED? Selling intensity hasn't been this high since OCT 2008, during the previous bear market, and coming so close to the high water mark on the indexes, I am wondering if a shift is commencing.
It's too early to tell, but Alice is not in Wonderland, and the man behind the curtain is a fat pasty white man.
And damn I was having such a fine day til I got back to office and saw this mess. Well, there is always hope isn't there? GS comes out and warns on 1040 (bear trap? they cannot be trusted for anything!) so we swoon to 1035 but close at 1041.....
15 90% days 10 down 5 up since APRIL!!! and my guess is today was ANOTHER 90% downer......do you usually get 11 90% volume downers and only 5 uppers in a BULL MKT?(and Im not even talking ENTIRE BULL or BEAR DAMN...this is just since APRIL!!!) I don't think so, VIX staying elevated. NYA already signalled 50/200 cross.
Evidence is piling up we are in sinister times here, all is not lost, but this is NOT the back drop we wanted after all GOV and FED have done, no sir. NO SIR!
>>>On the day the Obama administration took office in February 2009, the budget deficit for 2009 stood at $1.3 trillion, or 9.2 percent of GDP. Over the following ten years, projected deficits totaled $8 trillion. But in reality, the fiscal year 2009 ended in September saw a deficit of record $1.42 trillion. President Barack Obama projected in his report to the Congress earlier this year that fiscal year 2010 will see a $1.56 trillion federal budget deficit. And it will not fall significantly in the coming years.
"Without changes in policy, deficits would total 10.6 trillion dollars over the next ten years," Geithner said. <<<
I can remember when the DEM'S were screaming about Bush and his $400B deficit, well Obama has seen him and raised him twice!
We are headed for near $2T deficits, the world as per G20 comments are headed towards austerity, does the US go it alone in spending?
Japan has spent itself into a stupor and is one of the most indebted nations, mostly from 20 years of stimulus and gov spending battling deflation.
Real world data is more and more pointing to WAVE 2 of the Great Recession is hear or looming within months. Companies have NO pricing power to speak of, deflation is gaining a foothold.
The internet makes it easy to shop around, most companies working on scant margins. MORE competition for less business breeds cost cutting, no loyalty...sinking profits.
ECRI world index is leading indicator and is pointing to trouble. BDI has been crashing.
SHOULD THE GOV continue to stimulate with money they don't have? If no one else spends would that be worse?
Home sales had worst month in history in May, am I a pessimist or clue me in on what I am missing....
Bond Bubble? Does it make sense, that with RECORD debt issuance and deficits, interest paid continues to fall near decades lows? Japanese 10 year notes yield about 1%.
LAST GREAT bear bottom in 1980 was amazing time to be bullish, the yield was close to 6% ! now 2% is a bottom for stocks???
from capt cap "
"1. What if all the increase in stock prices for the past 30 years was due to cash flowing into the stock market from retirement plans, not necessarily because those stocks were good investments making them fundamentally overvalued".
Interesting thought, since 401k's etc, this FED GS and friends, FED the stock market.....a GUARANTEED source of buyers.....every month. Has that changed?
Drawing money from homes, has that changed? Bank lending down, good for economy?
GOLD is most bullish chart I can find, many think correction is coming....hasnt come yet.
T could be forming a huge head and shoulders, it has not regained much from the top in 2007/2008, but the stock now yields near 6.7%, so we could argue there IS compensation for risk. When the SPX 500 yields 6-7% and not 3% or less we could argue for agressive buying as price will have collapsed to near bear mkt lows.
Just a thought. Recent bear took T down to $20 area, a new round of selling could do same. Dividend should be sound unlike BP's.
Bear markets are supposed to unvail stocks at great prices, is the BP Bear going to unmask bargains in the sector? XOM now yields 2.9% I am monitoring the situation, have the other related stocks been unfairly beaten down?
...."More recently, the marketplace is coming to appreciate that runaway fiscal deficits are destabilizing and problematic. How this appreciation manifests in the markets over the coming weeks and months will be something to watch and analyze."
CCI topped out, waiting on MACD confirm. Door is open for a different alternative, but quickly closing. ECRI world growth index it's economic index has fallen back to levels last seen in 2007.Glass half full or spilt all over the floor?
If world economies were heating up, this is not what you would expect to see.
Yesterday trading brought us an 89% down volume day, just 2 days after a 90% down volume day, if this IS a NEW BULL MKT??? I don't ever recall this amount of volatility, (something like 14 90% days in last 60 or so...unprecedented)
FINAL US GDP comes in at a sinking 2.7% (if you can believe that). Further extension of unemployment bennies does not pass. ECRI sinking like a stone. Worst month of home sales on record. FINREG passes (BD!!)
Weakness in home prices remains, banks not carrying values at market value, we continue to have been supported by government stimulation and not much at that. Where to now?
As I see it, companies have little to NO pricing power, some raw materials pricing remain high, carrying costs of employees remain high, a SQUEEZE on profits may be on its way.
BUt even as the DATA comes in WEAKER AND WEAKER, we get WASHINGTON telling us the economy is gaining strength "MINUTE BY MINUTE".......that IMHO makes our precarious situation even scarier.
Well, maybe some of the smart people out there STILL calling this a "PRIMARY UPLEG" which translates into BULL MKT......have also redefined the economic realities that usually go along with that
*FNREG which passed Obama "we will create new independent agency to enforce..." at END OF DAY...IT'S ALL ABOUT GOV GETTING BIGGER......when what we really want is smaller gov, private enterprise is getting squeezed out. IF ONLY The existing agencies would do their damn jobs.....dont need ANOTHER entity!
HISTORIC NEW LOW IN HOME SALES! SO THE V SHAPED RECOVERY IS BASED ON WHAT? March 09 RALLY BASED ON WHAT? FED 0 rates? No other choices? HEDGE manipulation? HFT ? PPT ? Does this not make you SICK to your stomach's when that JOKER BIDEN parades around town trying to tell you how many jobs the O adm has saved or created? WTF?! "Economy is strengthening MINUTE BY MINUTE....." IS IT FOLKS? IS IT?
Karl Denninger Site "WHAT RECOVERY?" In fact not anyone's recovery. 3 years after the housing bubble burst, today we get the WORST EVER home sales number in history.. and a 33% PLUMMET from recent data......shows even the putrid interest recently was 100% GOV induced....we need FREE MKTS. GOV nor FED interventionis helping it may be hindering recovery.
99 WEEKS of unemployment insurance not enough for most.....this along with people just NOT PAYING their mortgages has helped fund consumer spending.
MOST ACTION BACK under the 200 EMA, and when we get a bear cross (50 thru 200) I suspect that will be new hard evidence, say what they want, the BEAR MKT has returned.....even though choppy action can continue leaving some doubt.....past history IMPLIES a bear cross is not healthy to your avg portfolio
*Now all that said, the powers that be have given investors little else to go for potential returns. ThE FED is holding the rates where they are. SO its hard to like the DATA, but that doesn't mean that stocks have to go into an immediate death spiral.
IMHO, if fundamentals do not improve there will be little to lure the many into purchasing shares...
"New Home Sales Plunge to Record Low as Tax Credits Expire- AP
Sales of new homes collapsed last month, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer get government incentives."
You still counting on mythical V SHAPED RECOVERY FOLKS? Now I know market can and will do anything, AND can and will confound as many bears and bulls as it can.....SHIT I'm just looking for the thinnest of proof we even have any kind of recovery!
And GOV and FED policy has failed, maybe any policy would fail in the face of this historic burst? BUT the savers are getting SCREWED and the BANKS WONT LEND.....why not raise rates? savers spend too!
Duratek.....your never ceasing servant in search of direction and truth
"Shares of the companies rose after Sen. Richard Durbin, D-Ill., said that members of the House financial reform conference committee agreed to changes on his plan to reform the markets for credit and debit card transactions.
One shift limits the Federal Reserve's authority to regulate the fees Visa (V) and MasterCard (MA) charge on their networks, a change one analyst dubbed "a tremendous victory for Visa and MasterCard."
The companies, which operate card networks and collect billions of dollars in fees on transactions, saw their shares rise as much as 8% in afternoon trading.
Even so, Durbin said the compromises strengthen the bill." (HAAAAAAA sure it does ChamP!)
Don't you love how COngress continues to sell us out?
NPR….guy makes fishing nets (used to) for living…..was crying. BP will skate BIG TIME as MANY of these dudes….work for CASH….no records…no claims…
State and local governments budget gaps and woes escalating. Lots of "stimulus" money went right to bridge these gaps....I've seen a few bumpy roads gets some asphalt little else, BFD!
MANY MOE AND JACK running our government (no offense to pep boys). Transparency must mean the documents past from one to the other. Patience....what Americans are running out of.
You SEE how little goosing the futures means? not very liquid, the gamers were there on YUAN revaluation news....gotta watch my vocab.....never know who might be reading...
Bonds crowded deflation trade, so far right trade, many WARN of looming disaster there when THAT bubble blows.
LOTS OF MONEY already lured out of MM's into stocks....fuel depleted.
BIG BOYS running most of volume playing between themselves. FED policy ineffective, yet it continues unabated, savers get NADA. RISK TAKERS AT RISK...NO WIN SCENARIO
OH CHINESE YUAN...yeah BFD...I can abbrev....read my mind when am I teasing, when am I facetious...blows futures up...markets rise and then peter out!!!! YOU CANNOT TRADE NEWS AND CNBC BARELY HAS A REAL LIFE HONEST PULSE....that's why people blog hopefully to snare a tidbit of truth here and there.
We're back under a close the 50 EMA, 1099 is 200 EMA...so IMHO that's where we go to test.....was the break real?
I think earnings season could dissapoint, I think the ECRI has been falling rapidly...warning....a technical traded market, better be aware then what THEY are watching.
WHY? Chinese going to let their currency float value more freely.....WOW that's a new one! SMart money will be selling this event, IMHO
Housing brought us down......it's still down folks
SHANGHAI (AP) -- China followed through Monday on its pledge to allow greater flexibility in exchange rates, but said an appreciation in its currency alone could not rebalance world growth as it urged world leaders to carry out more fundamental reforms.
Boy isnt that the best news in awhile? surely a rising yuan is good for CHinese exports????? (not)
The broad NYA index covers thousands of stocks, so I like to use it to get a broader feel for direction. After strong move off recent lows, you can see price has paused under the two big boys 50 and 200 EMA's
A breakout here would probably mean ST to IT has turned positive, not too many I think see a plunge is around corner....summer rally time most say, see strength in technical data.
A BIG MOVE IN CHINESE STOCKS might cinch it, but so far they remain depressed. The data for now doesn't have to support these bullish claims, the action is mostly manipulated...I'm not sure what to trust anymore.....when the fog lifts....I don't think anyone is gonna like what they see.
The ECRI was held in broad esteem when it was rising, now it is plunging negative and warning of potential double dip.....same bulls ignore it.
"Initial claims for the week ending June 12 jumped by 12,000 to 472,000 and neared the recent May 14 peak of 474,000 claimants. The Briefing.com consensus expected claims to fall to 450,000.
These numbers do not reveal a strengthening labor market. Instead they suggest that businesses remain cautious about future consumer demand. Furthermore, the claims data fit the view that the recovery in the labor market will be a protracted one."
You mean not a V SHAPED ONE? How are we to sell the unsold homes, slow foreclosures, heal the economy, increase end demand..... without a significant recovery in the labor market...my SIMPLE ASS PREMISE>
I'm about to bust apart at the seams.......is the US GOV failing the people? slow to react, guaranteed to keep making itself bigger feeding on the private sector.......making funds available......is there a problem with the damn banks not having enough money???!!!!!!!!!!!!!!!!! for damn sakes!!!
Hey I got it....why don't we stimuluate and spend out way to prosperity? DEBT WAS THE PROBLEM...are the damn homes that got inflated and sucked the life out of those who leveraged their values to SPEND and now are STUCK...will they all of sudden go back to their higher value?
NO these suckers will STAY underwater for a LONG LONG TIME.....we got secular damn issues....will take a long time to heal....and the REST of US and those at or near retirement who WOULD SPEND cannot get a PLUG NICKLE for their savings....
"The last thing someone who is unemployed needs to be told is that they shouldn't even apply for the limited number of job openings that are available. But some companies and recruiters are doing just that.
Employment experts say they believe companies are increasingly interested only in applicants who already have a job.
"I think it is more prevalent than it used to be," said Rich Thompson, vice president of learning and performance for Adecco Group North America, the world's largest staffing firm. "I don't have hard numbers, but three out of the last four conversations I've had about openings, this requirement was brought up."
Some job postings include restrictions such as "unemployed candidates will not be considered" or "must be currently employed." Those explicit limitations have occasionally been removed from listings when an employer or recruiter is questioned by the media though. "
Folks if this is a recovery I sure hate to see one that isn';t. SOme of my ewaver friends are looking for the next leg DOWN, maybe even tomorrow.
Remember FRI is OPEX (3rd FRI in month) and the action can be muted leading up to it.
Briefing.com A JUMP from revised upward 460,000 to 472,000...sorry folks if you are asking me to find something good here like the ahole now talking on CNBC sorry I don't see it. Where do they find these aimless brainless jackasses? I'm getting sick to my stomach.....
REecent rally may be nothing MORE than "flow of funds" as $ fell and EURO found some support.
THE economy is not the stock market? Sometimes we just go from oversold to overbought and back again.
If we WERE in a sustainable recovery that meant anything like the next great bull phase.....we would see 2 things for sure.....A REAL IMPROVING JOB MARKET....that shows companies demand is great enough to take on extra workers and absorb their costs.
The moving 4 week average on claims in 463,000 a drop BELOW 400,000 would be equal to some job growth.....this figure is not acting like it did during ANY of the previous recoveries from Recession.
And the most recent chart of the housing mkt I posted, and article on housing show we have barely nudged off the HISTORIC CRASH LOWS.....even more frustrating when you consider the amount of government intervention and stimulus thrown at it AND the HISTROIC LOWS IN MORTGAGE RATES......add in EXTRA stress as we enter the deacde of potential DOWN SIZING from the aging baby boomers......go ahead.....let her ride if you see blue skies
Folks, just off phone with customer and I was their customer in the go go days of home renovation. This remodeler, home contruction company, stellar quality and reputation is down from 30 employees to ? 5
I FUME AT THE EARS when I continue to hear the LIES from those in charge.....the "minute by minute " economic recovery guys......the NO double dip dudes.
PPI...companies have NO PRICING POWER, inflation which THEY have tried to induce is dangerously close to going negative....may already be in real life terms.
Housing got us here, housing after record gov breaks and stimulus...BARELY has heartbeat...my remodler bareley has heartbeat going after fire insurance claims to survive....customers cannot get bank credit for home improvment....MAIN SOURCE OF EQUITY IS ALL BUT DEMOLISHED GONE KAPUT!!!
YOU DAMN RIGHT I question the strength of recovery! MT PRES I would appreciate no more outright lies about minute by minute strength and yes we are not brain dead the some of us to your comments......we know 411,000 of the minute by minute job growth of the whole 431,000 were your temp, part time census hires!!!! FOR G-DS SAKE STOP LYING!!
Rubber chicken has met the road, is any price action a coincidence anymore?
This is going to get VERY Interesting from here. Usuallu plunging 50 MEA's will draw prices back, even with a throw over the 50 EMA.....Friday is opex Fri and the shorts were caught too complacent.....hence short squeeze.
Or inform me of what has changed in the world that will finally bring us robust economic growth?
AGAIN I am asking why the Shanghai CHinese market is not getting jjggy....surely tonight it will? A market in a 10 months decline of more than 20% I refer to as a bear market, NO something is horribly wrong.
WHat is and what should never be, appearences decieving, can't judge a book by its cover....keep on your toes......we're all just trying to survive.....please point out the data if I missed it that shows recovery?
LOng term Secular BULL moves are followed by SECULAR BEAR themes that can last 10-16 years. Last time the BULL extended beyond the channel in an exagerated bubble move was 1929 and what followed was a trip to the bottom of that channel....chances are that is what the future holds.....it certainly is worth considering.
If the job of the bear market is to restore order, remove the excesses, and show values well below known values.....has this bear finished its job?
When the leaders like Obama and Bernanke do not speak the truth, most tools taken out of the shed...why not use deception?
FUTURES pointing to BIG OPEN.......charade continues..
"Prices in the stock market, for instance, flap around as computers decide whether the institution should be a buyer or seller at a certain level. This has led us into the unknown, as explained by the Financial Times: “An explosion in trading propelled by computers is raising fears that trading platforms could be knocked out by rogue trades triggered by systems running out of control.”
12 90% volume days in 2 months, this is outright craziness and a symptom of our corrupt and controlled markets, there is nothing free about them.
I am worried old tried and true analysis may prove futile in helping to predict future price action as human emotion is not the only thing we are guaging with computer program high frequency trading dominating the overall volumes.
Let them put in all kinds of circuit breakers, computers have no emotions.
In my mind, employment is the key indicator. A BROAD Pickup in hiring would signal strengthening economy. BUT with 4 week moving average of claims recently RISING to 463,000 a week, it is hard to find ANY proof the trend is improving to any certain degree.
4 week average smooths out any anomalies, we need to see it below 400,000 consistantly. Trend is to pay down debt, save vs take on expanding debt. A tightening of credit and contraction not on par with sustainable recovery.
We're BACK!!! Stocks have momo? Rally again comes with volume receding. Rumors of big players coming in buying SPX futures just when it looked like the market would fall apart...fact or fiction?
Next week will be telling. The 200 EMA is right there.
The 50 is crashing down towards it, that also usually offers resistance. MOST trading not done by humans....what will the boxes do?
As Noland quantified:
"A semblance of stabilization returned to European debt markets this week, supporting a bounce in global equities. "
Cheer the hire of temp census workers, cheer the loss of benefits(drop in continuing claims) as proof the economy is expanding....what a crazy world we live in!
JUST since April we have had 12 90% VOLUME DAYS!!! 8 downers, 4 uppers. This is unprecedented action.
There is some indication, a bottom of some kind is in place, at least we have our parameters set. IT doesn't matter whether I like the economic backdrop or not. BUT there are also techical warning signs that the decline will resume shortly. I mean if a bottom is in, if this is BULLMKT WHY constsantly do we have MORE and expanding volume on the declines and LES decreasing volume on the rallies?
Hallmark of the market is to keep the majority guesssing.
Paper? FIAT? OK what backs it up? "In gd we trust? Federal Reserve note...I bet you and try it, ask 100 people and see if they know what a federal reserve note is.
It is our currency and add "this note is legal tender for ALL debts, public and private" WHY? because we say so. GOLD? well we know the Inca Indians, Romans....and before all cherrished it....all that glittered......we know we had that STAMPEDE out West, and strip mined the rain forests of Brazil....the Congo......is that REAL MONEY?
GOLD, SILVER have NO DEBTS against them, they flucuate in value, but they NEVER have any debt against them....paper and electronic money is what passes for money....light a match to it, or get hacked and what ya got?
KNow what happens when you lose control? one can spend more than they actually have, CREDIT and BANK LOANS were to help our econmy grow.... how banks made money.....on the interest.
To be able to lend, banks lured in deposits by offering a fair rate of interest.....NOT ANYMORE?
BIG BANKS go to the "Federal Reserve" to get money to loan at a reduced price...a guarantee profit margin UNLESS one defaults.
You can make "funny money" too easy to get, loan it to anyone and set a cycle of defaults that crash down on the speculative cycle of excess......
We have 2 cycles, EXPANSION and CONTRACTION......it is the latter right now, not condusive to growing economies. IT WONT CANT change overnight.
Attempts to stimulate economy have BACKFIRED! AS it has in Japan for 20 years after their debt bubble popped.
DID bailing out the banks help? Are we creating jobs? Housing revived? OUCH
Now not just banks, or companies need bailing out but entire countries!!! Back to MONEY, what do the others use to finance these bailouts?
It is an illusion that we accpet paper instead of rocks or donuts for trade, when real money is glittering. REAL money is not very liquid, hard to transport, not practical for commerce, but many agree and use it to STORE WEALTH.
I am not TOO optimistic about what is going on, problems not addressed, changes not in the works, same guard...at the door...
Its an INSIDERS GAME.....and if it is PAPER we trade and value the more of anything around the less valuable it is.
And when something can just be printed w/o any restrictions, that is worrisome. The difference between Greece and the US is we print our own money.
Little guy isn't sniffing much! OLD joke.....we are the MOLES in the HOLE....and when the papa mole and momma mole go to the opening and look out, what do the baby moles smell?
STocks made NEW ALL TIME HIGHS In 2007......1980-2007 is 27 years.....how long will this SECULAR BEAR RUN? 10-16 years IMHO....gd help us
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I have been writing about stocks and the market since the late 90's. My record of calling the last 2 , now maybe 3 bear markets stands. There is more to investing than just avoiding bear markets, but it sure doesn't hurt. I offer NO recommendation to buy or sell equities or trade any vehicle...I just offer my opinion for what it's worth. Consult with your financial advisor before taking any actions. this financial blog is for amusement only.