Friday, August 31, 2012

"Is Half a Trillion Dollars of New Fed Easing Worth It?" or NO FREE LUNCH

"So, for the sake of discussion, I asked CNBC's top Fed-watcher if QE3 is presumed to be on, what might we expect the benefits to be of a half a trillion dollar package of additional quantitative easing?
According to guests and conference attendees that Liesman has spoken to, 0.2-0.3% of additional GDP growth and maybe a 0.1-0.2% reduction in the unemployment rate."

Wednesday, August 29, 2012

Consumer Sentiment

There is a direct correlation between the Consumer Sentiment readings and the direction of the stock market, with the recent drop, most in last 10 months, one would have to wonder if the stock market is going to have one of those bad Septembers.

We had lowest volume trading day of the year today, prices in narrow range and the VIX slowly creeping ON GUARD


THEY are trying to revive economy after debt bubble burst, by creating more debt???


Sunday, August 26, 2012


Anything against Obama on personal level of attack might be taken as Racist, its just a fact when discussing our first black President, what people forget is the majority of Americans didn't care he was black, big deal.

It's about the policies, how effective has he been? Not how many shopping trips has his wife taken....

Sure it seems extreme to have a large entourage, but then her every move and word is disected.

I'm a Republican, and Bush dissapointed me, I didn't get the Conservative I thought he represented.

Both parties IMHO have screwed up, changes financial landscape and laws to allow climate that the current crisis was formed...enough blame to go around, its black and white to me.

Stop blaming any President and focus on the core issues, mostly the soundness of money, the ensuing greed, the duplicity of the FED, and arrogance to continue and even expand current destructive policies.....and the ignorance of the avg elected official to comprehend the problems

Saturday, August 25, 2012



We know all that is wrong with the world. We also know that many feel the central bankers have it all handled.

We have a stock market disjointed with the dow and SPX rallying to near rally highs but see the Transports lagging behind, long since in 2011 making its high, and the NAZ and small caps also failing to confirm the move by the large caps.

We have a LOW LOW VIX (fear index), for lack of short term fear or worry about a major decline. But farther out we see positioning for a drop. We see NYSE short interest at a 5 year high, bears are in position in individual shares betting on an AUTUMN swoon.

If the markets job then was to fool the most people, most of the time, then its done its job handily.

A macro focused rally on low volume. Most shares traded by pros and computer programs. NO return on money left sitting around.....economic activity ebbing. SHort term NO fear but NYSE short int at 5 year WILL play out, shortly....


Friday, August 24, 2012

Lee Adler’s Fed Cash to Primary Dealers Indicator




What good is Central Bank easing if it doesn't lead to more economic activity?



"Annual incomes in the United States have dropped sharply in recent years, and near-retirees are getting hit the worst.
That's the conclusion of a new study by Sentier Research, which looked at the trend in median U.S. household incomes since 2000.
Twelve years ago, after adjusting for inflation, the median household in the United States earned about $55,000 per year, reports Catherine Rampell of the New York Times, citing Sentier's data.
Now, the median income has fallen to about $51,000.
The two age-groups that have been hit the worst in this period are households led by those in the 55-64 age group and those in the 25-34 age group. The incomes of the near-retirees have fallen by nearly 10% in the past three years.
This data explains why our economic recovery is so sluggish."


Above chart highlighted are diminishing stocks above 200 day moving avg over the last 3 plus years of rally highs....this IMHO is signs of an AGING BUKLL MKT.



"The stock market hasn't priced in the end of the world this December, and it's not pricing in the "fiscal cliff."
That's because most investors don't believe either will happen.
While economists say the fiscal cliff (Learn More) has already created a drag on the economy, the impact on the stock market is less certain, and the outcome is about as predictable as the behavior of Congress.
"Most people have a relatively benign view of the risks involving the fiscal cliff, and the idea that it's going to be addressed in the lame duck session of Congress," says Goldman Sachs U.S. equity strategist David Kostin. "Some people have that view, and that's a pretty optimistic view. Experience might suggest that politicians are not in the mood to coming to resolutions necessarily."

Wednesday, August 22, 2012



"The government report, released today by the Congressional Budget Office, estimated a $1.1 trillion deficit for 2012, and said that if the tax and spending cuts go through as planned in January that “such fiscal tightening will lead to economic conditions in 2013 that will probably be considered a recession.”
The report also predicted that the country’s unemployment rate would remain above 8 percent for the rest of the year."

Tuesday, August 21, 2012

WARNING FROM GS ANALYST "beware the fiscal cliff"

"You can sense almost an air of desperation from David Kostin, Goldman Sachs chief U.S. equity strategist, in his latest note to clients as he pleads with them to take money out of stocks before they fall off the fiscal cliff.

In the note, Kostin vehemently defends his year-end S&P 500 (^GSPC) target of 1250 despite the benchmark's recent rise to above 1400. The strategist still sees a 12 percent drop ahead, believing that Congress will fail to address the fiscal cliff before the election, and maybe even before the end of the year."


Weakening momentum should lead to a break LOWER.


Monday, August 20, 2012

"U.S. corporate earnings point to further gloom"

NEW YORK (Reuters) - Earnings season is drawing to a close and the results raise a number of worrying questions about the economy's direction.
For the second quarter, the percentage of companies beating revenue forecasts was the lowest since 2009. For every company that gave a positive outlook, nearly five companies gave negative outlooks, Thomson Reuters data showed.

Sunday, August 19, 2012


"Risk on” has seen 10-year Treasury yields jump 40 bps off July 24 lows to 1.81%. The way things are unfolding, the placid Treasury market might turn into rather treacherous waters. I expect Draghi’s Plan to be yet another European disappointment. “Risk off” waits patiently. But it’s also apparent that over-liquefied U.S. securities markets have turned highly speculative. An enduring “risk on” backdrop could easily see things get out of hand. Amazingly, as the signs of excess become increasingly apparent, the Fed apparently remains ready with additional monetary stimulus. It’s going to be an interesting fall."

Each time in the last decade when the US economy gets into trouble at the end of speculative bubbles, first tech, then real estate/mortgage finance.....the FED comes to rescue and Gov't with an even larger scoop of stimulus, but what it has done each time is create even larger, unwieldy bubbles that have to be dealt with.

Each time we get into trouble with debt, we get an even larger dose of credit growth. 0% FED rate for 4 years has worked some magic on the housing market, but it hasn't produced strong job growth and it's not likely to all of a sudden.

Money is flowing into bans and mortgage lenders in so far as majority is refi's. This should help economy and with lower mortgages put some pop into consumer what's to worry about?

ALL BUBBLES POP. Yields are historically LOW at 1.8% on the 10 year, but they did vault higher from lows this week.

Higher interest rates, should that be what we are headed to would be a huge nail in our speculative coffin. A bursting of a historic debt/gov't and FED induced junk bubble...F ME!

Read Doug's piece, junk is now being treated like its safe, as the yields are so low elsewhere, people are being forced into stocks and risky investments to get will that end?

Friday, August 17, 2012


It may seem strange to some investors who keep seeing stocks go higher, the VIX is back to 13 area, so short term there is NO fear, but further down road the VIX is being bought as many fear DOWN THE ROAD prices of stocks will fall.

I can't be certain, as the rally gets ever so more narrow, and less inclusive, but could this FEAR longer term, not so shorter term work to keep this thing together until the bear finally give up? LIke SPX 1450-1550?

I've seen stranger....maybe a Sat post, please come back, and have a great weekend.


"When the Weakest Critical Part Fails, the Machine Breaks Down "

"Once credit ceases to expand, asset bubbles pop and consumerism grinds to a halt. And since ever-expanding consumption is the bedrock of the global economy, the global economy will also grind to a halt." by Charles Hugh Smith

Wednesday, August 15, 2012


Good chance this will resolve with a spike HIGHER. I think this is good example of a bullish pennant pattern. LOWER HIGHS with higher lows.....the higher lows so far may be key as it shows even as stock does NOT make new highs, people are betting on higher prices with the higher lows.


Tuesday, August 14, 2012


It is true, the stock market always (eventually) moves higher throughout history.

BUT, after the fall of 1929 to 1930 it took 26 YEARS to better the old highs. For almost 20 years during 1960-1980 stocks basically went nowhere.

The CRASH of 1929, stocks ended up losing 90% of their values from the highs when that bear mkt ended.....and then it took another 26 years to recover new highs.

SPRING forward to today, the new world of financial engineering (thank you FED) THE DOW FELL better than 50% from 2007 to 2009 LOWS, but it has recouped MOST of those losses in jsut 3 years???

Most of stocks gains has come since we enterred the Greenspan FED ERA. LOW LOW INTEREST RATES are DIRECTLY behind todays stock surge....the FED has laid down the gauntlet and left you with little else to find yield.

I have seen balanced, well diversified portfolios that have managed a 7% return over the last 10 years...outpacing the SPX.....with the help of an expert financial planner, you can somewhat rest easier at night....because HOW many of you can TIME the market?

For most people it is they are in.....until the market losses pile up and stress wins out, they eventually sell near the lows....some never come back settling for meager 1.5% returns on SAFE US TREASURIES....who can live off that?

Will baby boomers begin to sell stocks soon to fuel their retirement?

Stocks made new highs in 2007, so we could argue the BULL LONG TERM BULL that began in 1980 ended in 2007...longest running in history 27 years! or will wenow hit ANOTHER NEW HIGH?

The last BEAR MARKET lasted 16 years from 1966-1982.......there is NO WAY a 27 year BULL MKT or even an 18 yr bull mkt (if you use 2000 as top) is corrected in 2 years.

We may end up where we started 10 years down the road, with wild swings, but surely the killer of your money is INFLATION.

Sunday, August 12, 2012


"Has housing bottomed? Here is the sure-fire way to tell:

Stories titled "Has housing bottomed? Here's how to tell" have vanished for lack of interest.
The absence of stories about the bottom in housing will mark the final nadir, because the real bottom can only be reached when everyone has abandoned housing as a pathway to easy money. Only when the public and investor class alike have completely lost interest in real estate as a "sure-fire" investment can the real trough be reached."

"The housing market has turned—at last.  7/12
The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing."

Stunned Home Buyers Find Bidding Wars Are Back 4/27/12 ?????????????????????



Saturday, August 11, 2012


Transports and mid cap and small cap stocks non confirming new rally highs in Dow and SPX, the rally is getting more selective, less new highs as it goes along. this is NOT indicative of a healthy rally nor one you would expect to see in an ongoing BULL MKT,IMHO


Friday, August 10, 2012

BDI...AGAIN. Baltic Dry Index In Review

Someone criticized me for not mentioning the BDI when it goes up as PROOF of a bull market, only posting it when it goes down as if that is only thing I can point to as reasoning for a bear market and weaker economy ahead.

Dayy to day, even week to week movements are not as important as the TRENDS. Can someone astutue out there give me a guess as to the TREND of this indicator for BULK shipping rates for RAW materials....the stuff that goes into making things?

No doubt recent Chinese weakness has effected inports and exports of these large ships. Not an end all to be all indicator, just one of the indcators on worlwide economic health, not something you TRADE OFF OF.


Wednesday, August 08, 2012

CURRENT YIELD IN S&P 500 is 1.95%

MAJOR BEAR MKTS have typically made their final bottoms with yields of 6% or higher. MAJOR TOPS typically offer the least inducement to hold buy yield and it's more about price appreciation...yields are found near 3%.

Are we near a TOP or a bottom?



Recession Generation Opts to Rent, Not Buy, Houses to Cars

Confronting a jobless rate above 8% since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible. More »

Tuesday, August 07, 2012


"S&P Hits 1,400 on Hopes for Central Bank Action"

Above is another one of mant taglines for the reasons WHY stocks keep heading higher.

Central Bank action has put floor under the mkt, they may even be buying SPX futures, but this is an OLD GAME and it gets less and less bang for the $ each time they do something.

I don't know, is the 0% rate policy the only way out of this mess? WHAT do 25% of all homeowners, who are UNDER WATER In their mortgage do? NO GOV'T program can help them, don't listen to the claims which are either lies or misleading.

You can't refi if you are way under water, can't sell......don't want to renovate or spend money on your home.....

EVERY recovery from Recession has been led by housing until now. Never before have we had yr/yr declines in housing prices, until now.

DO you want to put all your eggs in the stock market basket if the reason it rallies and appears like a bull is "hope for central bank action"?


Monday, August 06, 2012


It certainly looks like it. If prices continue higher and hold the upper range above 1400, that would seal the deal for assault higher in prices.

Nagging laggards such as Transports, RUT (small caps), and the NAZ bring lingering doubts.

EURO CB'S adopting the FED's QE scheme has emboldened the "RISK ON" trade. DAY TRADERS love the market, longer term SWING TRADERS not on solid footing here.


Sunday, August 05, 2012


It never pays to be so one sided that you don't explore or consider all possible outcomes. Did the world end in 2009? We were on BRINK of financial meltdown, fear was at a climax...the darkest hour turned out to be maybe the best time to buy stocks in our lifetime. CAT at $10???

It's not supposed to be easy, or everyone would win, it IS a CASINO! where the house wins 80% of the time. It is a RIGGED game where many know important info before YOU ever's a RIGGED game.

It's election year, the FED will stand by and let economy continue to sink? MY GUY says some kind of surprise action BEFORE next meeting, to maximize effect.....which I suspect will be more short lived than expected....and it may be enough to send stock to their final highs.

Many BULL MKT stocks are already floundering like CAT 20% plus off its highs, ALCOA hurting and single digits. Small and mid caps underperforming, and a non confirmation between Transports and Industrials.

But the top of my broadening megaphone pattern is near 1600 SPX, that option is out there. The 20,50, and 75 week MA'S are all rising, so that is NOT bearish.

GAS has risen 25 cents per gallon in last few weeks, when mkt gets jiggy so does OIL. Maybe game is to talk up EURO, hurts the US $, bully for stocks, commodities get a boom.

1% rates in 2001 led to a HOUSING BOOM, but unfortunately a housing and mortgage finance BUBBLE, when it burst, you know the rest. Now we have 0% rates, mortgage finance rates at HISTORIC LOWS, and the housing mkt barely a rebound pulse, WHY????

Law of diminishing returns, and hard to refinance when you home you bought between 2005-2007 or so is worth 20% or less more than you paid, you don't qualify!

Those heavy into the stock market are benefitting from current policy, but didn't the avg investor head for the hills and Bond Funds and like the Turtle haven ot come out of their shells?

DEMAND for credit has not recovered, ALL this money pumped has not made its way into the REAL ECONOMY, where did it all go? RECORD STOCK RALLY in face of weakest statistical recovery from recession is telling.

Ultimately the bear has been fought with more and more gusto, each time 2003, and 2009 the result from this INTERVENTION has been more costly...... we had a top in 2000, then bottom 3 years later in 2003, we had a 4 year bull and topped 4 years later in 2007, we had a short but painful 2 yr bear that ended in 2009. If this pattern is still playing out this bull will top between 2012-2013....IF.

IF we get near 1600 on the SPX, and you just sit there like lambs at the slaughter house, don't say I didn't warn you.




Saturday, August 04, 2012


Momentum increased not diverged at new market low in 2009,  so it is my belief that we have NOT seen the LOWS in this Secular Bear Mkt. WE should hit that somewhere between 2014-2016 (but could come earlier)

Do you think the excesses have been PURGED from the system? F no! They have been piled on to it!

These assholes that run our gov't and FED Reserve Banks are reckless to avoid the day of reckoning these jerks helped bring about.

Is there anything out there such as a FREE LUNCH? let me know will you.


Friday, August 03, 2012



Trim Tabs is highly respected



600 M shares traded in first half hour, that's pretty strong buying. AS my last long term chart showed, even 1550 SPX not out of question for this move, certainly we will be watching from 1400-1450.

Last night reversal and falling VIX was warning that bullish positioning could be taking place in front of this number. A lot of your thinking will be based on your time horizon. So if in the market first figure out what kind of investor are you?

Staying out if diversified still paying off, But I won't change my longer term outlook for lower prices, that DOESN'T, and I wasn't advocating shorting HERE....there will be time and raising cash would be a conservative man's approach to shorting as you hope to buy at lower prices.

I personally don't worry about missing anything here, I am an observer of the market and doing my best to present an accurate picture of the longer term trend and climate. If you remember the previous 2 Bear markets, the declines come out of nowhere and can be brutal.

The data can be misleading, so when that happens, do you see the value in technical analysis?


"And in the household survey I do not like what I see.
The total number of people of working-age went from 243.155 (million) to 243.354, or 199,000 more working-age people. However, the number of employed people dropped from 143.202 (million) to 143.126, or an actual drop of 76,000 jobs.
Worse, the number of people not in the labor force increased from 86.770 million to 86.828, or an increase of 58,000 -- people who simply gave up."  Labor participation rate fell to near lowest levels.
I wish the data was cut and dry, if you watch that fool Mark Zandi and is always bullish and hard to hear analytical thought.

We don't want bull nor bearish opinions, just someone who cares to present an honest opinion.

The market perhaps will can can make NEW HIGHS within the context of this Secular bear....kind of a crazy premise, but unltimately the folly ends and the target of previous lows is taken on.

3 PLUS years into "recovery" 8.3% OFFICIAL unemployment, one of the weakest labor participation rates since they kept the data, and the pundits will run with todays data and declare VICTORY? PROOF OF HEALTHY ECONOMY?


Thursday, August 02, 2012

S & P 500 CHART FROM 1980- present. SECULAR BEAR RUNNING....


What is U6 unemployment rate ?
The U6 unemployment rate counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts "marginally attached workers and those working part-time for economic reasons." Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the "marginally attached workers" include those who have gotten discouraged and stopped looking, but still want to work. The age considered for this calculation is 16 years and over.


Wednesday, August 01, 2012


AS you can see from my chart both Small caps (RUT) and Transports (both off 2% today) have long since made their highs.

This market is weaker than it appears.