BRIGHT FUTURE

We will approach one key level this morning, futures point to 10 point plus gain on SPX's. Price has risen above the 200 twice before only to fall back, albeit higher lows near 1040.....but you can see why I say a flattening MA is not supportive to price....

You have a concerted world effort to reflate the debt bubble, where private debt is replaced with GOV spending leading to money out of thin air and larger gov deficits.

It's game that Doug Noland(Bubble Thesis at credit bubble report) says can't be won, it's exact end game much harder to predict as THEY ALL try to PROP markets UP.

Duratek

TRUMP CARD OR LAST STRAW?

The Obama Economy WSJ.com

Intro:"How trillions in fiscal and monetary stimulus produced a 1.6% recovery."

"So two months before an election, and 19 months after the mother of all spending programs, President Obama said yesterday he's rolling out one more plan to stimulate the economy. We'll discuss the details when they're released, but the effort itself is a tacit admission that his earlier proposals have flopped. As the autumn economic debate gets underway, it's important to understand how and why we got here."

And further I could not say this any better or communicate with you on any higher level

"To put it another way, the real roots of Mr. Obama's economic problems are intellectual and political. The Administration rejected marginal-rate tax cuts that worked in the 1960s and 1980s because they would have helped the rich, in favor of a Keynesian spending binge that has stimulated little except government. More broadly, Democrats purposely used the recession as a political opening to redistribute income, reverse the free-market reforms of the Reagan era, and put government at the commanding heights of economic decision-making."

Friends, Gov has all the answers, and with this kind of thinking those connected to gov and gov spending especially the military benefit, the private economy has been drained like a corpse sucked by Dracula, then picked clean by buzzards.

As soon as the politically popular (but ineffective) vote getting cash for clunkers and home buyers credits expired so did demand, and as explained ONLY brought FORWARD DEMAND, thisis why stimulus programs do not usually have LASTING EFFECTS....is not a long term solution.

ALL the claims by current adm of what their programs will accomplish, are just hot air wafting into thin air....like vapor.....and we are left some $800 Billion stimulus wise and another
$2 Trillion of worthless paper sucked up by the FED more than DOUBLING their balance sheet and the unemployment rate has narry been effected.....so we should just do more?

ANYTHING Obama does now comes 2 months BEFORE election time and will be targeted more for votes, less for helpful effects.

Yes Obama was handed a LOUSY card hand, which he decided to bluff and make it worse....a losing hand indeed.

"Let NO CRISIS GO UNUSED" and in meantime the helpless caught in middle of the worst economy since the Grat Depression can do nothing more than look on and hope but will mostly get speaches and catch phrases from the many CLUELESS.

Duratek

9/11 WTC Collapse

RIPPLES, WAVES, FORK IN ROAD.....CONFUSION

4 MONTH TRADING RANGE, 25 90% volume days since April 13 down, 12 up. bears calling out the "bear crosses", bulls saying mkt still up 75% from lows this is consolidation to go higher....some OK data, some not so OK data....and here comes Sept/Oct statistically worst time of year for stocks historically.

SO.....are we consolidating and BULL is testing long holders on their conviction, or are we weakening and a nasty decline and maybe another bear market is just around bend? confusion reigns.

Measures of selling in the market have weakened since March 2009 lows and buyers have ruled....but volume has been absent, volume you would expect from a Bull mkt, but most of the gains are intact.....VIX appears dormant at 22 ish.....but not dead.

Much money thrown at the crisis, stabilization in some areas seems accomplished, others little progress.....is the stock market trying to tell us better days lie ahead? OR has all the money just held us at this level...and its all temporary?

Conflicting information, a range bound market and what is reported as news can give conflicting opinions and paint a picture not in focus, or distorted from the truth.

AFTER ALL THE BAD NEWS, a RECESSION that appears to just go on and on, lousy job numbers.....is the worst over and should one GET long if not or hold if already in.....?

2 answers....YES if you believe that the market is saying...better times ahead, when everyone knows good times are here, prices already march much higher......what if selling pressure erupts out of the blue and we find out this was a trap?

I may have not made things any clearer, but that's where we are.....we might muddle along until FINALLY things get better.....or at some point faith will be lost and no measure of comfort found.....that the FED nor GOV can change the outcome.....aren't we near all they could do?

I'll follow with some charts

D

Muse - Hysteria [Live From Wembley Stadium]

Charts FOR SAT

Prices narrowing in a wedge formation with 200 wk RESISTANCE shown above....

Bank index in downtrend, still in defined bear mkt.

Yields are rising, testing resistance just above

KEY LEVELS

IMHO it is he 200 SMA, which now flattened, tends NOT to be supportive to price. Have great weekend, more perhaps SAT afternoon.

D

SQUARE BANK IN ROUND HOLE

From the Editors of American Banker

Deposit Drawdown Puts Squeeze on the Weakest

"Just several weeks ago, executives at several large and midsize banks were discussing the need to shrink swelling deposits in response to the lack of loan demand.

But data released by the Federal Deposit Insurance Corp. last week showed that increasing amounts have been leaving the banking industry. Domestic deposits fell in consecutive quarters for the first time and were down $29 billion at midyear, or 38 basis points, from Dec. 31. The lion's share of that, $24 billion, vanished in the second quarter — a record since the FDIC started tracking the data in 1992.

How can the numbers and the executives' comments square? "

RATE WATCH

SECULAR CHANGE IN BEHAVIOR?

“At this stage in the economic cycle, $10 to $20 billion would normally be flowing into domestic equity funds” rather than the billions that are flowing out, said Brian K. Reid, chief economist of the investment institute. He added, “This is very unusual.” link to full article

Many bullish comments discount the "lack of volume" since March 2009 bottom, but I find thisvery un bullish like as well as the 26 90% volume days since just April 2010 and the slim majority of those were DOWNERS! No secret why Bond Yields are near historic lows.

Another annecdote why I believe this rally is correction in ongoing bear mkt. JMHO

D

ADJUSTED MONEY BASE

The dramatic actions of the FED seen in a more than DOUBLING of said money in just ONE YEAR! (compared to shown historical slow growth) How many X's in this chart is shown an actual decline? This shows how distorted and perverse current policy has become....is the FED trying to slowly drain the system of all the excess? This growth since 2009 had never been seen before.....rather dramatic as to what kind of crisis we have gone through....it does not appear over.

WHAT ARE THE IMPLICATIONS HERE? adj M base (current view no growth since May)

"According to the St. Louis Federal Reserve publication Monetary Base in an Era of Financial Change, the adjusted monetary base is an index that measures the effects on a central bank’s balance sheet of its open market operations, discount window lending, unsterilized foreign exchange market intervention, and changes in statutory reserve requirements.

The Adjusted Monetary Base is the one monetary component completely under the control of the Federal Reserve."

WAITING....IN TRADING RANGE

BS HEADLINES FROM MSM

"Hopes Rise as Jobless Claims Fall (fall to level consistant with recession!), Trade Gap Eases (eases because less imports because less demand because of stalling economy)- AP

The number of people signing up for unemployment benefits dropped to the lowest level in two months, an encouraging sign (only in bizarro world is 450K claims heralded) that companies aren't resorting to deeper layoffs even as the economy has lost momentum. "
(jack biters.....they already chopped 8 MILLION plus.....)

Keep the people dumb, confused, act like Gov can fix everything...make a few speaches...presto

D

ONE OF MY OLDER CHARTS UPDATED

BEAR LOWS WERE TESTED?

FLASHBACK DEC 2008

"Fed slashes key rate to near zero

Ben Bernanke & Co. cite the weakness in the economy and the reduced inflation threat as justification to cut rates to a record low range of 0% to 0.25%."

But article goes on to conclude:

" Despite the dramatic nature of the Fed's move, some economists questioned whether it will have much effect on the economy. They said the problem for consumers and businesses right now is not the cost of borrowing, but the availability of credit and the weaker economic fundamentals."

So it's been 21 months folks and the rate is still 0% ! and it still hasn't produced much for the economy....and hurt savers.....why is everyone keying on what the FED may or may not do?

If the recovery was real and sustainable.....data would be much different.

D

HIP HIP HOORAH AM DATA

"claims FELL unexpectedly (of course) BACK to ONLY (my emphasis) 450,000......."more EVIDENCE the economy is in SECOND GEAR....creating jobs......" and the light trade zombies bidding the market UP!

AM I living in BAZARRO WORLD where 450,000 unemployment claims passes as GOOD NEWS?

As you can see, time to cheer is when it passes below 400,000 and more like 350,000....don't we have 8 MILLION who lost jobs and need work? WTF????? these ninnies are cheering the fact claims "fell" back to 450,000 OMG!!

And all this some 16 months after market bottomed.....WHY hasn't NBER declared Recession over? WHY are REAL SALES only up a scant 1%?

More than meets the eye....what utter BS.....

D

WE MAKE ANYTHING?

this is a recovery?

2 FACE IS BACK

Close tax loopholes to juice economy

5:38am: Obama's plan to cover the $180 billion tab for his latest round of proposals is to close tax loopholes and raise taxes on oil and gas profits.

This dunce must think the American people are totally stupid? He kept Geithner, Larry Summers and gave Bernanke a 2nd term.....who's stupid?

OK, let me try this one....WHO thinks there are actually Social Security FUNDS in the till and not IOU'S?

The truth about current economic stagnation and previous financial crisis is being concealed from the public. WHY do you think after all the supposed investigations have you heard of a SINGLE ARREST? ONE TRIAL?

I guess all those PHONEY mortgages and no doc loans repackaged and sold to an unsuspecting world was just an accident.

Lehman was let fail while Geithner was HEAD OF NY FED! direct competitor to his friends at GS? how convienent...now that boob is SEC TREASURY

FED bullets left? wooden ones maybe. HOT AIR maybe.

Was the FED mandated to buy all the PHONEY paper? WHAT did they use to buy the phoney paper? WHY is Fannie and Freddie allowed to exist? I heard they are now accepting NO MONEY DOWN LOANS AGAIN....

Desperate times call for desperate measures....be careful.

Party out of control wants one that is to FAIL.....one that IS in power will do ALL IT CAN to STAY IN POWER....what a cluster bomb this is

Duratek

WAITING

MORE BROWN SHOOT HEADLINES

Fed Survey: Slower Growth Spreads to More Regions- AP PAINT IT BEIGE BOOK
Of the 12 regions tracked by the Fed's beige book, economic activity was mixed or slowed in five -- New York, Philadelphia, Richmond, Atlanta and Chicago. Activity elsewhere was described as modest or pointed to positive developments. In the previous survey in July, only two regions had reported slower growth.

Obama: U.S. can't afford tax cuts for wealthier Americans- Reuters
Boehner slams Obama's stimulus spending- CNNMoney
Economists further scale back U.S. growth outlook- Reuters

"LEAD A HORSE TO WATER...."

PULLING ON A STRING ST LOUIS FED

QUIET

Between Jewish Holiday (Schools closed Thur) and Options Exp on Friday, I'll pass on action this week.

Next week should see more volume, though addt'l holiday day will effect trading volume.

LOTS of popular stocks showing 50/200 crosses, including PG (3.2%) and JNJ(3.7%)both which sport decent dividends. HOWEVER history shows us bear markets bottom with avg yields closer to 6%

D

DAY LATE AND $ SHORT

OBAMA BEHIND 8 BALL and late for the dance or too little too late

ECRI has fallen back below -10.....NOV elections going to be BRUTAL

Manipulation IMHO only thing keeping market from tailspin....that can't be kept up forever....printing presses....all gummed up

D

TODAYS SPX CHART AND RANT

Action halted at dashed red line near 1099....GAP above red arrow near last 2 white candles probably getting filled, 50 SMA below that near 1082

VIX holding in narrow down trend (volatility) but not at levels of prior bull markets. SO look for 1100 to be bettered or 1040 to fall.....one or other....traders coming back from vacation...volume will pick up...but as I suggested in fear of losing a generation of investors.....for good.

GOV attempts to manipulate popular opinion, appear to be doing SOMETHING.....will result in more debt and little results.

The GOV and FED (central banks) (wall street) are basically scratching each others backs...from the dawn of time the "money"people really ran things.....don't expect policies that improve avg guy to arise....never has....rather cynic isn't it?

If connected, or sell to or employed by GOV....good for you. The BUSINESS of GOV is the BUSINESS OF GOV.....every administration taking us farther down the road AWAY from US CONSTITUTION, engourging the size and scope of government...and empty promises to FIX everything....why not leave us the hell alone and get OUT of our business?

GOV spending is not going to get us out of this mess, more freebies nor programs....GOV not the answer, always been the problem.....more correctly GOV intentions......it will do all it can to survive and grow....but private domains whithers as result....

We are asking for solutions to the problems from the crisis that were directly and indirectly brought about by the same jackasses who caused them...good luck

D

COINCIDENT CHARTING

SINCE 2000 stocks have moved WITH direction of yields....til just recently

THESE HEADLINES DON'T EQUAL "V-SHAPED" RECOEVRY

"Unemployment in U.S. May Rise Toward 10% on 'Feeble' Growth- "Bloomberg

"The jobless rate in the U.S. is likely to approach 10 percent in coming months as the economy fails to grow enough to employ people rejoining the labor force, economists said.

Grim choice: Save housing market by letting it crash?- NYTimes

Stocks fall on fresh European bank concerns- AP" (what a joke, how bout them stress tests?)

And hold onto to your HATS! The President is unveiling yet another in a tired endless stream of ECONOMY BOOSTING Stimulus tricks......TAX CUTS for business!!! WOW...wish I thought of that....pay for them with shutting of? BIZ TAX LOOHOLES!

Does the word MUTED come to mind?

D

ECONOMIC ANNECDOTE

This is a CRAFT and ART show LONGS PARK (PA) I go to every year since late 90’s……. I've made observations thru bull , mania and now 2 bears.

IS ECONOMY HEALING? I heard some people had sold nothing all show. There were spaces for at least 20 more vendors, this is a juried show…..I have never seen more than a few open spaces.

I have never not last year or in 2008, ever seen the crowd this THIN…..all I can say is if we were headed in right direction, improving economy I would not have made these observations.

D

Change In Attitude?

I recently read an article suggesting the "equity cult" may be dead. Meaning investor appetities for stocks may be shifting, are shifting AWAY from equities, into Bonds and other types of investments.

AFter stocks topped in 1929, it took 25 years for stocks to regain their highs.....maybe that sparked a new stock love affair.....and it was long enough for people to forget the fated crash of 1929 and ensuing Depression.

Since 2000....for most stock positions have gone nowhere, or returned very little compared to bonds.....driving 10 year yields down to 2.4% recently....why settle for that when 10% equity yr/yr returns WERE the norm?

Because a HUGE dent has been put into LTBH (long term buy and hold) and many have been FORCED to take money OUT of 401k's, let alone keep money flowing in....others have increased bond fund mix vs stocks....and in 10 years have been brutalized by 2 big bad BEAR MKTS.....even 2009 rally has not healed that pain.....maybe partly why VOLUME is so thin...cept on the down days.

DID the stock cult get derailed in 2000 or was it just 2007 (marginal new SPX high)?

Where will the BUYING volume come from to push equities ahead? from the FED?

D

WEEKEND CHART TO PONDER

What confidence? does this look like '03 recovery of consumer?

Does this look like '03 earnings recovery????

**Click all charts to enlarge

Some suggest the FED will use any and all methods to prop up "assets". WOULD THEY (have they?) outright buy stocks? buy homes?

We need JOB creation and we need it to come from private sector, not public sector. 2 bear markets have been defeated by GOV and FED policy, but 2007 bear far worse than 2000 bear because of actions taken......actions taken to kill current bear even more historic in nature....I suspect end result to follow prior 2 and next downleg to be more severe as meddling has been too.....and to date real world results are suspect.

Gold near its all time high, bond yields near all time lows, US $ at risk to MASSIVE deficits....now approaching 10% of GDP ($14 trillion)

Take time to study above chart, and al its cross currents....outcome not set in stone.

27 90% volume days since last APRIL!!! 3 in the last 5 trading days (2 up one down) this is more than remarkable folks, unheard of! Unnatural

GDP? Q4 2009 5.0%

Q1 2010 3.7%

Q2 2010 1.6% anyone see a pattern? And current rally built on RELIEF Q2 BEAT expectations of 1.4%?????

Net EXPORTS have been falling.

Have I made my point? This is ON RECORD as WEAKEST recovery from a Recession and I wonder have we (recovered) at all?

The market can go up for any reason, no reason.....but what we experience on the ground is real.

Duratek

WEED KILLER

July 2, 2010 Alexandria, Va. — U.S. consumer bankruptcy filings totaled 770,117 nationwide during the first six months of 2010 (Jan. 1-June 30), a 14 percent increase over the 675,351 total consumer filings during the same period a year ago, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC).

2010 foreclosure filings in U.S. may top 3 million
"U.S. foreclosure filings rose 15 percent in January from a year earlier and exceeded 300,000 for the 11th consecutive month as modification programs failed to keep delinquent borrowers in their homes, RealtyTrac Inc. said Thursday."

Bullish news? unemployment (factual?) rose to 9.6% where is the progress?

BIZARRO WORLD: Gov states 67,000jobs created mostly "service jobs"....one hour later ISM Services data comes out with a "surprising" DROP and the employment component fell below 50.00 (contraction"

SO for the stock market what is up is now down and down is up? what passes for bullish news ain't what it used to be....

D

MARKET SETUP AS I SEE IT, AS CHART SEES IT

Monthly charts cut out lots of noise, a downsloping 50 SMA monthly has on avg not been supportive of price and usually turns away rally. 12 months MA is now flat and near current price.

MACD has not crossed, when or if it does addt'l sugnal much greater selling pressure is returning.....this is ONE of our roadmaps.

D.....enjoy weekend holiday

Holiday Weekend Edition Market Wrap

Yields may be ready to rally, making a higher low.....I dont suspect rise above the blue 50 MA

WASHINGTON – "A healthy economy needs bustling Main Streets and a thriving middle class even more than a healthy stock market, President Barack Obama said as he reaffirmed his commitment to work hard for America's hardworking men and women."
"But Obama said that, for a decade, middle-class families have experienced stagnant incomes and declining economic security while tax breaks were given to companies that shifted jobs overseas and Wall Street firms reaped huge profits." *(not wall street friendly)

Over regulated, over taxed small businesses can barely sustain let alone thrive and create jobs.

AAII investors poll shows BEARS above long term average, good chance this will get corrected before decline can continue, that said.......the market is RULES by COMPUTER trading and I'm not so sure how important the individual sentiment is anymore.

Stocks are below levels of 10 years ago!.....so if retirees are to live off their retirement funds more than not will have to liquidate assets as living off YIELD or RETURNS not possible....so principal may be sold.....also cannot easily sell homes to downsize as planned.

AT BEST IMHO this puts stock into a longer term to IT term range bound area that WILL dissapoint....mindlessly running into bonds may also bring pain.....few options remain.....older Americans perhaps remaining in workforce longer than planned.

I showed that Consumer sentiment polls remain BELOW previous recessionary levels.......Consumer sentiment has always been a good indicator of future spending trends.

8 MILLION or more out of jobs....stopped paying mortgages and dropped life insurance......this supporting spending....for now.

If Banks are not required to have ON BOOKS REALISTIC VALUES of mortgage paper they hold, then how can they state REAL EARNINGS? which IMHO are INFLATING S&P 500 earnings reports which make stocks look more reasonable then perhaps they are.....

WILL going into next year the BUSH tax cuts expire? IS that not Obama's intentions? HOW will stocks react if that seems inevitable? STOCKS that pay dividends will be LESS ATTRACTIVE.

Service said to produce jobs, yet ISM Services index fell!!!???? DAMNIT a rally based on BS is doomed to fail and on LOW volume......and in the market is mostly institutions and big financial trading houses.....2 ugly bears, FAILED GOV and FED policies that led to the manias and bubbles which bursting caused the crisis......the FOX is STILL in the HENHOUSE.

Duratek

WHAT KIND OF MARKET IS THIS?

It is not unusual for bull mkts to go through periods of decline and consolidation....this may be one of those periods...so be open minded...about the action.

The 26 90% days have never before been seen in a 5 month period of a market.....and the small majority of them have been down volume days.....now that's NOT characteristic of a bull mkt.

I don't know if any top is in, I feel confident this is a cyclical bull in a secular bear andwhen any gov or fed fairy dust is seen as at an end or not influencing the economy.....deflating values will be the trend.

They did seem to pull out all the plugs, that is worrisome to me, as hasnt the kitchen sink been thrown in, and SO many data points are recessionary....the pulling on a string theory.

Just before bubble popped in 2000, the illusion any internet company could make money had not vaporized, the GLUT of cables and tech stuff not understood....until it was too late....intense selling didnt appear until well into 2001-2002....market can be, is very trickey....fooling most.

INto 2003 the FED policies did ignite the housing industry and debt exploded....much of it bad...tainted....so the 2003-2007 BULL was an illusion a lie....sick growth that grew debt to historic proportions.....we got ways to go to sort it all out....what gets ignited now?..why is GDP shrinking 3 straight qtrs? why is unemployment still high at 9.6%? not much is as it seems....

D

FRIDAY HOLIDAY MARKET WRAP

Now that simple 50 MA has been navigated, next up is the 200 SMA and

double top @ 1129-1130...very light volume...not much selling.

When I see deteriorating economic data, and mountains made out of much ado about nothing....I just don't feel comfortable with the stock mkt in general. I see no bargains

10 yr ended at 2.7%, so we're off the bottom of 2.4%.....not a big deal....that money coming out may be ending up in stocks.

Twice before stocks optimistically rallied to about 1130, and were turned back, that could be key ST level to watch.....bulls even if light volume have the ball.

D

SERVICES CREATES JOBS?

briefing.com ISM data why did ISM services index "unexpectedly" decline?
(barely above contraction!)

"Big Miss in ISM index" @ zero hedge.com
Is anyone else SICK of the games and lies and blatant manipulation? and I smell a rat and a set up

D

HIP HIP HOORAH FOR RECOVERY

briefing.com data

In 2002 market bottomed at 7,286 unemployment rate then was slightly above 6%....and we had the "CREDIT BOOM" just ahead of us...with FED keeping rates at 1%.

Today we have FED keeping rates at 0% (and you know all the other stuff they did to stimulate and liquefy) yet things are MUCH different today, then in 2003.

We don't have a housing market to bubble, we don't have historic expansion of debt/credit to look forward to, or explosion of auto sales or anything to do with housing related....and we are ABOVE historic % of home ownership...we have record inventory and we have 20% of home owners unable to borrow against homes as they are upside down.

We have nothing in place in place like we had in 2003.....but we do have 1 in 6 getting gov dole, and we have $TRILLION deficits......we have 9.6% (OFFICIAL! ) unemployment....not 6%....if we had REAL GROWTH we would create REAL JOBS!

I know what you may be thinking, come on Duratek, why don't you just go along with this?....don't you see the markets reaction.....the worst MUST be over....WHY are you so THICH HEADED and STUBBORN?

Because you cannot paper over your problems nor spend your way out of debt, nor print your way to prosperity.....and the parts of economy that could provide growth have been bubbled and are trying to recover.

Real world data NOT from BLS points to a different reality then today's data is trying to be presented....as PROOF the economy is growing, getting stronger....getting healthy.

Few things to think about. TOO BULLISH sentiment for bonds....drove yield way down...popping today near 2.75% (still damn low). I think this false hope rally will provide a better entry into bonds...AAII polls showed too many bears.....time to slap them around again.

Now triple digit gain or not, we have that upper range to break, first 1100 on SPX then 1130. Market is also overbought.

I posted that chart Thursday I believe.

Funny FED was pondering addt'l QE moves and rates still sit (what 2 years now?) at RECORD LOWS 0%.....ANY REAL STRENGTH they would be preparing at least or moving rates back up....what good has low rates done at 0% for lending? what we can't even stomach .25% rise?

Nothing is what it seems, if it wasn't as bad as it looked, it sure as hell isn't as good as THEY are trying to present, IMHO

Duratek

CORRELATING UNTIL NOW

Plunging yields had spelled trouble for the economy and stock market since 2000.....until now.

D

THURSDAY MARKET WRAP

Dashed red line next resistance level near 1099.....then 1130. Volume this week extremely light. Price sitting on the 50 SMA.

The GOV data ISM and its relationship to the GDP would imply we should be closer to 5-6% GDP but we are at 1.6% maybe lower.....

Can the printing and the borrowing, adding more gov debt cure our ills? thought so.

I think we have a ways to go, hey how many times last 20 years did the Japanese figure they beat DEFLATION? their stock exchange was 45,000 in 1990, last night closed near 9,000

D

IS THE SMOKE CLEARING OR IS THERE FIRE?

We experienced the most amazing bull market in history from 1982-2000, arguably to 2007.

AT end of 2000, the internet craze, Y2K scare, bulletin board stocks (penny) craze....were all coming to a bubbling top, we hit bottom in early 2003 with 1% rates we went right into the NEXT bubble......finance, real estate and debt. This made intenet, tech bubble look like childs play.

Never before had we experienced year over year drop in housing values. The secular trend of expanding credit had been vanquished, and the debt was piled so high it was choking the life out of the economy....make matters worse, most of the debt was now toxic.

The GAO fixed that in early 2009, dropping the mark to market accounting rule...now banks looked much healthier, but were they.

The GOV CAME IN AND BACKED OR BOUGHT ALMOST 100% OF all mortgages....2ndry market was killed.....gov and FED were the liquidity as the Fed's balance sheet doubled almost overnight.

It may FEEL like we've hit bottom, but nothing is as it seems.....and it doesn't appear sustainable.....stimulus alone cannot fix our ills.

Americans are dropping Life Ins so help survive, near 20% are getting gov assistance....after 2 bear markets back to back many have turned away from the stock market, and the money flowing into 401K's going to stocks is not what it was. MOST of the action supplanted with HFT computer algorithyms.

Important to note. Secular Bear Markets of the past, have ended with SINGLE DIGIT PE RATIONS, and 5-6% DIVIDEND YIELDS (s&P 500).......we are not there....SPX yields about 2.2% !!

When you consider what has been done to prop up the economy, we don't have much to show for it!...and that my friends is the very scarey part of it.

We cannot stand on our own 2 feet, and most of the propping has come and went....and at 0% FED funds rates and a doubling of their balance sheets,a gov running a 10% of GDP deficit..............what next?

D

TESTY

3 ASSININE HEADLINES

Stocks Edge Up After Jobless Claims Dip- AP


Bernanke: Shut down banks if they threaten system- AP

Stock market could rally "quickly if there is a soft landing"

the things that pass for rally fodder are mind blowing

DATA LEAVES A SKID MARK

briefing.com silver

472,000 claims......this is more similar to enterring a Recession, not leaving one!

Productivity, the thing of profits takes a nose dive. "castles built from sand, slip into the sea eventually"

D

RALLY ON "UPBEAT" MANUFACTURING DATA?

"The Kansas City Federal Reserve Bank said manufacturing slows in August in the 10th District that includes Kansas.

The Fed said production slowed at both durable and nondurable plants in the district, though some aircraft and electronics producers reported improvement.

Future factory indexes fell in August, though the Fed said they remained suggestive of future modest growth."

Read more: http://www.kansas.com/2010/08/27/1465361/fed-says-manufacturing-slows-in.html#ixzz0yNAOemkN

RALLY ON "UPBEAT"

PLASTICNOMICS

There have been comments that consumer spending has been supplimented from those who stopped making their mortgage payments but make their CREDIT CARD payments on time! PUMPING $Billions into economy....a staggering 20% plus are upside down in their mortgages.

Whatever you want to call this economic environment, it isn't creating many jobs.......when people have jobs secure they can buy houses....lowest rates in generations if not history yet home sales are at depression levels....hardly a situation you can call recovery let alone hardy....no the data is stuck near the worst it was....yet the stock market has made a dramatic move off the lows.

TOO many 90% volume days (another yesterday) to put any value in them anymore, people have lost faith in any fairness or predictability in the stock market....and their choices? near record LOW In yields on bonds.

Gold says inflation, other measures of prices say deflation, perhaps an ugly mix called stagflation is possible.

More brown shoots...mortgage apps down 38% yr/yr.....people are not even looking! and when polled hard to find anyone expecting to buy a home.

Shadow inventory of foreclosed homes and pipeline will keep pressure on prices for some time to come.

last reading of 473,000 claims hardly a sign of recovery......most data gets revised downward but no one pays any attention......what is passing for BULLISH DATA is amazing.....buyer beware....all the while our government and FED play a game of PONZINOMICS.....and threaten the value of our currency

D

GAMED AND RANGE BOUND

SEE high of day 1081.30 and 50 simple moving avergage 1081.31.....still think stocks markets are random not manipulated?

The market REEKS....its not running on a value platform, a sustainable recovery platform....what's it running off of? 10 yr bond yields 2.582.....

D

THE GREAT RECESSION CONTINUES

WHY it has further to go

I will follow after the close with a ST look at the market and why todays rally does nothing to alter the course of the bear market.

D

CHART SPEAK

Turn off the TV, ignore the idiot sound bites the MSM tries to feed you.....we will navigate the alligator filled waters together.

Let those interested in buying the market do their thing, whoever they may be.....as we consider the backdrop of a GDP falling to 0.....intractable unemployment and under employment (goes unreported).....in areas we need to see improvment in housing with RECORD low rates we also get near record LOW sales of new homes...and the GOV is considering more PUBLIC pandering with incentives....which didnt do much last 50 times they did it.

There IS an economy, but considering what hs been thrown at it, this far into the so called "RECOVERY" we would normally we see COnsumer Sentiment 50% higher than it is, and GDP near 5% not 1.5%....and it has now fallen each reading since initial inventory rebuild burst.

Uncertainty over taxes, gov policy, regulation, financial gov intrusion, the wheels of capitalism are falling OFF the cart.

Hate them, those after the almighty profit BUCK, but most are just like you and me, middle class and even those rich guys....will hire the bulk of our population, THEY take ALL the risks.....and should be rewarded.

The f'd up (there I go again!) GOV sees business as the enemy, the rich as a piggy bank to be broken into....look when the markets are working freely and capitalism is flourshing...economies prosper (see CHINA!).....when you get Socialist agenda you get stagnation (see Russia 90's)

Now when the job providers are humming along everybody gets theirs, tax receipts grow...debts get paid...deficits decline or slow...business is not the enemy,,,,the answer it is...set it free..

80% of Gov business is MILITARY or HOME DEFENSE related.....when we can get it to where private enterprise is humming and not overshadowed by Gov ......do we want the jobs created to be mostly GOV, caused by GOV spending....or do we want policies that allow the founding fathers intentions for Capitalism to flow and flourish...creating opportunities for all.......not just the connected.

Has there been a trial or arrest for anyone connected in scheming and creating one of the worst financial crisis in history?

D

A BLIND SQUIRREL

10 year is down to 2.447%......flight to safety at any price?

Does anyone else think it ODD....that energy and electricity, mine production goes into GDP?

Unseasonably hot summer led to more energy use and there you have most of the reasoning behind the 1.6% surprise.

A lot of the data supplied to make a point is rather not worth the paper they might print it on.

IMHO, and take it for what its worth.....I wouldn't be taking ANY unnecessary bets on long on the market in general....I feel FAIR VALUE is not in nsiffing distance to todays print.....bonds are telling us that.

D

LEAP OF TRUTH, NOT DOSE OF

HEADLINE READ ALL ABOUT IT BREAKING NEWS!!!!!

"Stocks rise on surprise jump in consumer strength"- AP

Sorry, here goes the profanity..WTF???!!!!

What passes for UNEXPECTED and JUMP these days.....from briefing.com

"The Conference Board's Consumer Confidence Index unexpectedly rose from 51.0 in July to 53.5 August. The Briefing.com consensus called for the Confidence Index to fall to 50.0. "

PERSPECTIVE TO MY READERS:

The "surprise" 53 isn't within a sharks sniff to 80.00 at BOTTOM of last bear 2003......and not light year close to 100 or better this far into supposed "recovery"

If stocks rally as whatever dumbass is quoted for yhoo finance etc for reasons for stock action, on this not even the flimsiest of reasoning but downright assinine!..what more can I say?

D

DEAF DUMB AND BLIND SPOT

When stock prices go up, and you see the 10 year bond yield plop to 2.49%........do more than scratch your head.....

Bernanke's deaf dumb and BLIND SPOT READ
D

BACK BONE SEMI'S BREAKING DOWN

Let THEM make speaches, we'll watch what the market is saying. any ideas on stocks or sectors you would like to see charted drop me a comment.

Japanese markets fell hard last night erasing prior gains, down over 300 pts back to 8,800. In 1990 Japan's mkt was 45,000.

D

TIME FOR WORDS IS OVER

President gives a speach tonight on Iraq Pullout. We'll leave behind 50,000 or so and now our war efforts are in Afghanistan....a net gain in troops in the region....don't expect that to be mentioned.

What's really on the mind of those who vote is the economy, and jobs.

What I keep hearing is...."we're doing better than last year, the economy is growing and is creating jobs.....not as fast as we like" and "vote for us, not for those who got us here...."

But we ARE going backwards....1st qtr GDP 5.6%, 2nd qtr 2.8%, 3rd qtr 1.6% after hitting low near 400,000 claims now we're back up to 475,000-500,000. Many just worried about return of their money with 2 years breaking .50%....yes that's 1/2%.

Bank stocks appear to have broken down and look like their back in a bear market....maybe never left.

BULL markets in GOLD, WHEAT, and BONDS.

24 90% volume days in just last 5 months. Not sure before uptick rule suspended we had that many last 20 years. I don't know of any precedent where a BULL MKT (that's what they are calling this) has had SO many 90% days and the majority of them have been DOWN VOLUME!
One of the HALLMARKS of BULL MARKETS is the LACK of volatility...at one point between 2003-2007 the VIX hit single digits! It is now in the 20's neat 27.

The governments ready for more FAILED stimulus, the FED is READY TO FORCE BANKS TO LEND (even though their own policies inhibit it), less government, less business regulation, less taxation, government more than ever stands in the way of business.

Speaches make me sick, let's see some action.

D

CONSUMER CYCLICALS

Horrid plunge in 08, after 09 bottom rocket shot back up....longer term I see a bearish wedge formation. Break of support line could a rapid deterioration.

D

FINANCIALS HAVE ROLLED OVER

I keep hearing about "BULL MKTS" and I keep looking for them....

D

COME GET YOUR MONEY

FORTUNE -- "Finally, nearly two years after they were bailed out by Congress, big banks are beginning to ease lending standards for individuals and small businesses. But it's not exactly having the reception many believed it would. Just when credit becomes more available, there's little evidence of a surge in demand for it."

I am not sure there is ANY evidence to support claims of "ease of credit standards...." what BS

D

ARE WE HEADED FOR ZIMBABWE?

….our “reserve”currency allows us to print money at will to cover debts.

INSIDE Zimbabwe the Z $ had become (and is) worthless…destroying their economy and faith in PAPER….”full faith…”

OUR CURRENCY SAYS:

“this note is legal tender for all debts private and public” FEDERAL RESERVE NOTE

In Gd we trust
U.S. Treasury

Z style inflation….. the electronic notes are cast…..to cover the debts we cannot pay….to me $14 TRILLION current IOU’S is rather significant…..we would need to create $14T fiat to pay them off....but it grows and grows as we dont pay them off, add more to it and JUST pay the interest....DOESN'T ANYONE CARE?

IN a US led FED ponzi scheme….we just keep selling more bonds….(which are as US currency) and FED balance sheet (doubled in 1 yr)more funny money….yeah…that’s inflation…and WILL effect prices at some point, has to .

What pray tell is more important than the efficacy, the value of our countries currency? ASK OBAMA, ASK BIG BEN....ask all of them in COngress....who has a clue? win one battle, delay inevitable, lose the war?

Duratek

WE WILL TRACK VOLATILITY FOR CLUES "boxed in"

BREAKOUT or BREAK-A-LEG?

SO many idiot commentaries, just follow the action! BONDS say bleeps hit the fan

KEEP IT SIMPLE "RANGEBOUND"

Bull markets go through corrections, that is true. Bull markets don't display LOTS of volatility, in just 5 months the NYSE has had 24 90% volume days!!!!!!!! and majority 14 have been DOWNERS with 10 up.

Bull markets don't usually have record low bond yields, bond yields rise with optimism.

Bull markets create jobs. Bull markets create sustainable GDP growth. Expanding credit. Business and Consumer optimism.

What we have is musical chairs, and the music playing is MILLI VANILLI

D

A 2 YEAR OLD DISAGREES WITH BULLISH VIEWS

SAD SAD JAPAN

ALL must not be well.....all the kings horses and men...and stimulus....

D

BUYER BEWARE

SOme AM data, personal income, don't expect market moving......Monday usually bullish.....Friday was 90% up day.

Wheels on the cart are broken, no one has even called AAA yet. Deflated home prices accent highs in wheat and other commodities, with nat gas barely $4......maybe we have stagflation....

Housing WAS in a BUBBLE, yes it did pop, no you can't reflate it.....why WASTE taxpayer $'s?

Over at Yelnick Typepad.com he sees resemblence to 2008.

Have a great week, buyer beware!

D

BROAD MARKET INDEX

Puts any rally in context.....fools gold....steaming pile futures. Lying sack of shit for sale....call any politician. The worst of all Obama...one termer......evil enemy of the free market capitalist system....you know the job creating machine.

D

SOVEREIGN DEBT ISSUE

Lowest mortgage rates in history.......look at how the housing market has reposnded! MULTIPLE government GIMMICKs for first time home buyers....it's all in there.

Gov backs, funds 100% of all mortgages now.....Obama is thinking of doing ANOTHER round of housing stimulus.....see how well the others worked?

In the meantime, runaway debt issuance could call into question the very fiat currency we all depend on, that the fed is supposed to protect....unabated GOV DEBT issuance anf FED monetizing threaten our very money system. Maybe Doug Noland and KD talk about it, few others.

I think above chart should put a DAGGER through the head of any speak easy trying to convince you they got your back or we got a plan..they got nothing.

And the market is so manipulated, controlled by the insiders and HFT'S....the real fair market system is broken.

D

UNCERTAINTY THE KILLER OF JOBS

CEO'S speak out about current administration and business environment. Taxes, regulation. and government interference have created atmosphere where business do not want to invest, and obviously don't see even a 3% (cheap money) return on their money.

SO....they don't and won't borrow or invest in this climate, and there is no change in sight.

D

OH CANADA

Wedge forming, under 200 SMA, 50/200 cross

D

NO MINCING WORDS HERE

PIMCO DUDE SPEAKS OUT ON ALARMING DATA

WAY BACK MACHINE

IS IT JUST ME, OR IS 2010 FELLING a LOT Like 2008? by Graham Summers why we are FAR from out of the woods

PAUSE THAT REFRESHES?

Break of 200 SMA above or the 400 below would be GOOD indicator of where IT trend is heading. 400 slightly rising (supportive) 200 flattening (resistance)

Headlines are for fun, the ACTION is all we care about.

D

EYE OPENING CHART

TOTAL CREDIT MARKET DEBT AS % OF DGP CHART LINK

I think this chart more or less speaks for itself.....isn't it OBVIOUS....after a record, historical run of DEBT for growth and consumption....we are now enterring a period of painful of adjustment and contraction....reversion to the mean...and have barely begun....what policies are going to change this?

D

WHAT PASSES FOR THE TRUTH

excerpt from "Let's change the Debate" Doug Noland (weekly MUST read)

"As the great German economist Dr. Kurt Richebacher was fond of saying, “The only cure for a Bubble is not to allow it to inflate.” Regrettably, there is little government policymaking can do in the short run to improve the situation. There is, however, a great deal policymakers are doing to make a bad situation worse. The current backdrop – certainly impacted by the Greek debt crisis, related market tumult and a faltering U.S. recovery – has created an elevated risk of further policy mistakes.

A multi-decade Credit Bubble badly distorted our economy’s underlying structure. The harsh reality is that this structural maladjustment can only be rectified gradually over a period of many years. There’s just no quick fix. Ongoing massive fiscal and monetary stimulus only exacerbates our economy’s ills. Moreover, it risks an inevitable crisis of confidence in our debt markets and monetary system.

The economy is muddling through right now. It’s frustrating and discouraging but, under the circumstances, this is about the best we could have hoped for. I am increasingly troubled by the direction (and tone) of economic analysis and policy discussion. All the inflationism histrionics, including the notion that the Fed and Congress are committing a dereliction of duties by not stimulating more aggressively, are unhelpful. Describing fiscal policy as increasingly “austere” is ridiculous. But mostly, calls for the (un-independent) Federal Reserve to monetize a massive federal spending plan are as irresponsible as they are dangerous."

I could argue we are in some kind of "muddle thru" economy, but IMHO that is a temporary phenomenom that cannot be sustained through FED action and Government stimulus....to UNDERSTAND the issues, the predicament we are currently in is paramount to surviving it.

ONE IN TEN American's are running behind in their mortgage payments. ALL the REAL DATA coming show the housing crisis is very much with us, the only thing that has appeared to change is the perilous plight of the banks. This IMHO is just a smoke screen for many of them as if any of us could show an asset at original or better value instead of CURRENT MARKET VALUE....we'd look pretty good....until we actually had to produce a sale fro the asset at prevailing market value.

Banks are paid on their "excess" banking reserves...of which they got from the FED of which the FED chose to pay .25% of which no doubt they use to buy Treasuries, of which there is no incentive to lend, from which regulators have imposed higher levels of RESERVES to cover potential capital losses leaving less to actually lend, to wit the BANKS have RAISED lending standards to which few can pass, and add to all of that the DESIRE TO BORROW has waned greatly from the masses after decades of debt gourging.......and the topper is the ABILITY to borrow has been crippled by the drop in the average home valuation....good luck fixing all that.

SO as I had said yesterday, what passes for good news to rally these days ain't what it used to be either......a GDP that "BEAT ESTIMATES" and came in a pathetic 1.6% instead of 1.4% or LOWER.....HOORAHHHH? good luck bulls building a rally on that.

D

FRIDAY MARKET WRAP

1039 double bottom perhaps. stochastic overbought, Vix took a hit.....but IMHO it all means little to bigger picture, nothing more than reallocation from bonds (sold off) into equities....not much volume this time of year....just bigger guys duking it out....means little to me.

Market up....INTC lowers estimates, consumer confidence falls, GDP comes in a weak 1.6%.

But isn't it super that it didnt drop to 1.4% GDP? what passes for good news these days..... and remember folks what happened to 2.5% first estimate? why even bother...

We should have confidence in the FED, they will do what is needed....if its needed....even if what already done has not translated into a sustainable economy.....we should have faith and BUY STOCKS?

It wouldn't surprise me if Monday into next week turned this thing right back around.....a rally on nothing, less than nothing unless you are couting all the data that points to not only a slowing but an outright punkish environment.....I ask you, if they had real answers.....wouldn;t they already be doing SOMETHING?

Well....why do something now...after saying we were alright...and look panicked....is this a screwed up situation or what?

Lots of reading to do....try to post this weekend, do come back.

Duratek

Todays Action

1039-1061 range....watching for breakout

Short term bottom for yields?

INTC warns, GDP fall to near minimal growth, consumer sentiment falls again.....= 100 pt rally.....= oversold........players playing by themselves...

D

SICK JUSTICE?

Stock futures pop after GDP revision (from CNN)
Aug 27 8:44am:
U.S. stock futures popped Friday as investors digested a better-than-expected downward revision of second-quarter economic growth.

IS it just me? DO you find the sickness in "REJOICING" ina betternthan expected ugly DOWNWARD REVISION??!!!! That we didn't have 3%....no we didn't even have 2.4% growth....MAYBE we had (2nd revision....why even have the fing #?) 1.6% growth?????????

WELL THANK HEAVEN we didn't have 1.4% !! whoopie! buyer beware

Money base DEAD since MAY

D....see ya'll late...I'm going to eat some glass....

TROUBLE AT RENKO RANCH

**late night add on....1 in 10 homeowners have made at least one late payment..june data. High end meaning NEW homes above $750K last 2 months near NON EXISTANT....this is scarey shit folks (existing homes some did)

2 red bars in bull mkt no big deal, 2 red bars in a continuing bear market may be another technical sign of trouble. CCI topped out, MACD not yet crossed. Price BELOW 13 Week Moving AVG on my chart on a close IMHO would not be very good at all...near SPX 1000.

For now, looking at volume, demand for stocks is not there....selling has not been intense during recent spill.....the buyers have dissapeared....

..and until they come back....common sense adding long positions could bring some pain.

FOLLOW the trend, don;t pick it.....the trend is? RIGHT.....you longs IMHO should be patient and cautious.

D

AN OMEN

"HINDENBURG OMEN SPOOKS MARKET" I'm not much for exotic technical analysis, and when it hits the front pages of YAHOO, I'm even less impressed.

If I was a bullish sort thinking of all the possible reasons to buy and hold stocks, I would be at a loss for finding a good reason to do so.....even with 2.4% 10 yr rates! now that is rather scarey....and more and MORE people NEED some return....it is OBVIOUS to me these low rates are hurting more than its helping......lowest mortgage rates in history.....sales near the same.....conservative Americans royally screwed....they do spend the interest many have forgotten...but now there isnt any.

GDP tomorrow will be putrid IMHO.

D

"HAVE A GOOD FALL"

Market indicators point to new dangers other than me source for some simplified TA

D

MORE THINGS THE SAME

It always amazes me how MSM like to make mountains out of molehills, a 31,000 drop in claims and look at futures rock. But 4 wk moving average still rose by 3,000.

At this point in recovery? we should be well under 400,000, how is 475,000 claims good?...less bad.

The deleveraging is just in its infancy where I read just to get back to the norm we have some
$6 - 7 Trillion of debt to go.....we may be at the head of a new SECULAR trend of less spending, more saving and little job creation.....that doesn't spell a rockin stock market to me.

Nikkei under 9,000 again

D

WHO IS IN THE MARKET?

"SLOW PAINFUL DEATH RATTLE"

PANIC ATTACK

Klorizapan not going to help this one. BOND MKT bigger feet....bigger vote

D

GAG REFLEX

VINEYARD HAVEN, Mass. – "President Barack Obama will address the nation from the Oval Office and visit troops at Fort Bliss, Texas, on Tuesday to mark the end of U.S. combat operations in Iraq."

Make sure you remind them big O you sent them all to Afghan....let the applause die down first....forget to tell them how many you will LEAVE in IRAQ for like forever....

WOW, what a finish to todays stock market, all of MSM is cheering..."DOW HOLD 10,000" (like that means anything anymore!) "Dow reverses earlier losses" or love this one from the worthless street.com "After the Bell: Stocks Recover on Bargain Hunting" (what bleepin bargains! you morons)

How about this one from me "DOW HAS GONE NOWHERE IN TEN YEARS!" or "DOW HAS NOT RALLIED FROM 2009 LOWS IN TERMS OF REAL MONEY" or "YOU CAN'T SPEND YOUR WAY OUT OF DEBT OR TO PROSPERITY"
or "WE'RE NOT AS STUPID AS WE LOOK......stop lying to us"

D

DEFINED DOWN TREND CHANNEL

A story about no one or anyone (OT)

Self loathing, self centered, sociapathic bastard...that about sums up the personality and life of self gratuity of the main character of this story.

And life isn't about the enjoyment you get being around others, sharing and giving, it's about what HE can get out of it....because HE isn't giving anything to anybody, unless maybe it has 4 legs of which if it can't reproduce and become a champion breed, you stay locked up in the kennels.

I don't know what happens to a person to become this way, void of almost any human emotion....and I don't care. Many people experience hardships and mistreatment in childhood and become good people, look at Michael Oher.

Quiet, nice man to those unschooled in his ways of mistreatment give an outward different impression to many, those in the know have a much different opinion from their interaction with the wooden man.

To become involved in others lives one must be able to listen and care, and as always actions speak louder than words, HE has neither.

SO destined to live out what time is remaining in solitude of sorts, with his distorted view of the world and his place in it. Given many opportunities to change and grow, the choice has been made to continue in a life that gratifies or tries to only one person, himself.

As the lights dim on a quiet life, uninspired, not affecting many....in a positive way.....it will get even more quiet when the light flicker out, and when one doesn't leave his mark in life, one is quickly forgotten.

Duratek

PATTERN OF DECLINE

Until broken, lower highs and lower lows shown. If NEW trend develops we'll see it.

D