ALU: CHARTS DO HELP PREDICT

Love the technology, love the forecasts, read all the opinions you want, THIS one ends up the only one that matters. I had warned months ago this stock had topped and don't get near it.

D

I THOUGHT EUROPE WAS ALL SETTLED?

Moody's issued a warning on France's creditworthiness Monday, saying that rising interest rates on French government debt caused the difference in yield between French and German 10-year bonds to widen more than 200 basis points last week -- a record for the eurozone.

"Elevated borrowing costs persisting for an extended period would amplify the fiscal challenges the French government faces amid a deteriorating growth outlook, with negative credit implications," Moody's said in a statement.

And didn't Cramer say BUY? SPX Losing thwe 1215 support zone isn't a good sign, has the Santa rally come and gone? FUTURES DOWN -18

D

SPX CHART

TALE OF 2 HEADLINES

Rise in economic gauge suggests brighter outlook AP

Deep spending cuts pose a new threat to US economy AP

Consumer Sentiment sits at near lowest levels, 3 years into recovery. If you hacve a job , great, if you don't it is difficult.
Around the world Governments are cutting spending in an austerity move to trim budgets, but not here? Gov't spending is keeping the economy at least running on 4 cylinders.

LOW LOW interest rates are goosing certain segments of the economy, but taking toll on others, to be a mortgage banker now must feel good.

WE NEED BALANCE, and tons of commercial space lays vacant....a truely jobless recovery

D

2008 HEAD FAKE

Monthly Contrary Investor, and TODAY'S CHART

http://www.contraryinvestor.com/moprinter.htm  "View from the corner office"

5 MINUTE VIDEO WORTH WATHING

http://www.snotr.com/video/8257/US_Debt_Crisis_-_2012_is_only_for_America

HUGE RISE IN CONSUMER SENTIMENT?

Read what you want, see what you can see. Another triple digit GAIN on EURO fears subsiding.....the market has become a JOKE.

D

VOLATILE MARKETS

It seems now very common place that the markets move triple digit with 80 and 90% volumes up or down of total volume, this used to be a RARE occurrence.

But we can say that this type of market behavior is more commonly found in BEAR MARKETS, know for their volatility.

One day all is lost the GREEK TRAGEDY. Next day the debt gets "RING FENCED" and the bailout mania continues. The next day a referendum spoils th emood and markets sell off, only to come rightback with a triple digit gain when that same referendum is called off. All this DRAMA!!

Yesterday the Dow lost almost 400 points! NO big deal right? It was just MORE DRAMA, coming this time from Italy....10 year yields SOARING to 7% !!!  (here we pay 2% !!)

Today I see pre market futures plus 12 on the SPX, so I am guessing......just another day in the stock market, set your worries aside.

9% unemployment here almost 3 years after the BOTTOM CAME, and recovery was hailed, but don't tell that to the many who have been lost from the unemployment roles and benefits.

Mortgage companies are doing well, lots of ACTION buying and refi's with a 30 year mortgage UNDER 4% !! and maybe 1/2 point. This is great for anyone in the market for a home, maybe not so for those trying to make the payments.

LOW LOW HISTORIC LOWS in Consumer Confidence, a boatload of indicators NOT resembling any kind of recovery based on historical data.

A WORLDWIDE CONTAGION....financial crisis is obviously STILL IN PLAY.....act accordingly.

D

RECOVERY?

WASHINGTON (AP) -- The jobs crisis has left so many people out of work for so long that most of America's unemployed are no longer receiving unemployment benefits.
Early last year, 75 percent were receiving checks. The figure is now 48 percent -- a shift that points to a growing crisis of long-term unemployment. Nearly one-third of America's 14 million unemployed have had no job for a year or more.


RECOVERY "A return to a normal condition. " REALLY?

D

HEADLINES

AIG posts $4.1 billion loss

Jefferies faces possible liquidity crunch

AMD cuts 10% of its workforce

THE MERE THOUGHT

http://news.yahoo.com/analysis-leaving-euro-carries-massive-costs-181337877.html

"Already, Italy's borrowing rates have jumped to record levels at the mere thought of a Greek default. If Greece does default, investors would be prone to think that other countries might, too — and they know full well that Italy's economy is too big for Europe to bail out.

French President Nicolas Sarkozy claimed it would never come to that.

"We cannot accept the explosion of the euro, which would mean the explosion of Europe," he said in Cannes at a summit of leaders from the Group of 20 most powerful economies.

But Europe's defenses are still weak. If it were aggressive in buying national bonds, the European Central Bank might be able for a time to keep a lid on those borrowing costs before they rose to the point that Italy's government would no longer be able to finance itself on capital markets.

On the other hand, if the ECB were to shy away from such an approach then the risk of contagion would grow. The ECB made clear Thursday it is uncomfortable playing such a role.

Greece appeared to step back from the brink on Thursday and canceled plans for a referendum. If its feuding politicians can agree to the plan launched in Brussels last week, they'll get the next batch of euro8 billion ($11 billion) in bailout money.

But even then, the problems are far from over.

True, the agreement would reduce Greece's debt — but not by much. In 2020, in the best scenario, Greece would have the same level of debt that it did three years ago."

When the crisis began.

FED DRIVEL

"The FOMC issued its most recent statement today. To little surprise, the FOMC kept its target interest rate at 0.00% to 0.25%. It also stated that the Fed remains prepared to employ its tools to promote a stronger economic recovery and that it will continue to extend the average maturity of its securities holdings. In a question and answer session, Fed Chairman Bernanke indicated that under the right conditions the Fed's purchase of mortgage-backed securities would be considered.
Just before Bernanke's press conference began the Fed's revised growth forecast was released. For fiscal 2011 the Fed expects economic growth to range from 1.6% to 1.7%, down from the range of 2.7% to 2.9%. For 2012, growth is expected the range from 2.5% to 2.9%, down from a range of 3.3% to 3.7%. Additionally, the Fed raised its long-run umemployment rate forecast to 5.6% from 5.4%."

JOB PICTURE IMPROVES?

http://money.cnn.com/2011/11/02/news/economy/challenger_adp_jobs/index.htm?iid=HP_LN

Historically WEAK in almost every respect, this "recovery" from 2009 has left MOST in the dust.

D

BACK INO TRADING RANGE

WE broke the lower range and it was NO big deal.....when we broke out above they all said "this is proof a big deal" but was it? One good throw over deserves another?

You can read the headlines.......does it matter, one day we got a EURO deal, next day GREECE pops its ugly head again....can;t wait to see headline, "Greece was just messing with us.....we got DEAL!"

D

90% DOWN VOLUME DAY

Market was in an extreme overbought condition, so today was excuse to sell and take some profits. Many think that since the market broke ABOVE a 2 month consolidation range, the worst is over and that level will serve as support.

D

LESS CONFIDENCE BUT MORE CONSUMER SPENDING?

Today’s numbers provide a monthly breakdown of the quarterly data released yesterday by the Commerce Department that showed the U.S. economy grew in the third quarter at the fastest pace in a year. Gross domestic product expanded at a 2.5 percent annual rate, up from 1.3 percent in the prior three months.
Household purchases, the biggest part of the economy, rose at a 2.4 percent pace, contributing 1.7 percentage points to growth.

Less Confidence  http://www.bloomberg.com/news/2011-10-28/consumer-spending-in-u-s-rose-0-6-in-september-as-incomes-increased-0-1-.html

Purchases are climbing even as confidence sinks. The Bloomberg Consumer Comfort Index dropped to minus 51.1 in the week ended Oct. 23, the lowest in a month, from minus 48.4 the prior period. Ninety-five percent of those surveyed had a negative opinion about the economy, the worst since April 2009 and one percentage point shy of a record high.

WILL IT WORK?

"Will it work? I highly doubt it, but it does buy some time - and the markets were content. It appeared to take near-term implosion risk off the table, which set the stage for a huge short squeeze and destabilizing unwind of hedges across virtually all markets."
http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10589

LO AND BEHOLD THE MIGHTY RALLY

NO guesswork here folks, the US $ has been taking it on the chin all month, down another 2% today, so anything priced in $'s will be going up, gas, food etc.

Rally won't end until the excessive bearishness found at bottom in SEPT is vanguished.....might be closer than you think. One target we had was near 1300.

Mutual Fund cash at one of lowest levels ever record, so who is funding the rally? LEVERAGE? The FED GAME continues as unemployment claims remain over 400,000. STock rally helped to goose GDP to a not so rousing 2.5%, that level was higher than previous qtr, but it doesn't create jobs.

The EURO folk have agreed on another BAILOUT DEAL? Isn't that great news? Has what is broken been fixed?

We can all hope the lows are in, we are healing? my nose says different. CONSUMER SENTIMENT sank again to one of its lowest readings, not indicative of a recovery by any measure.....housing prices continue to fall....honestly a great number of Americans might be asking where is the recovery.

D

INTRODUCTION TO NEW CHARLES HUGH SMITH BOOK

http://www.oftwominds.com/investing-chapter1.html

"The monetary and fiscal “fixes” imposed by authorities around the globe since 2008 didn’t reduce the global financial system’s instability, they merely suppressed outward signs of instability. Beneath this tranquil surface, the “fixes” have greatly increased the global financial system’s instability. Like an apparently peaceful forest filled with dry deadwood, a single spark can ignite a new firestorm that will burn with greater ferocity and speed than the financial fire of 2008."

HERE COMES THE 200 DAY MOVING AVG.

I still think the analog with the 2008 rally right before the steep decline could be valid. A breakout of the then trading range preceeded the steep decline into 2009.

D

BREAKOUT OR FALSE BREAKOUT?

BREAKOUT FROM TRADING RANGE

Makes it more likely we get at least a test of the 200 MA.

D

THEN AND NOW

HOUSING RECOVERY

49 years

http://www.forecast-chart.com/graph-housing-starts.html

SELLOFF AT RESISTANCE

Price hits upper range of trading and we get an 87% down volume day. Players are buying the lower range, selling the upper range....there is no voting going on...that mechanism died years ago.

D

PBW WHY YOU DON'T JUST BUY AN IDEA

OBAMA gest elected in 2008 and PBW hits its high near $27, Obama promised clean energy investments and emphasis, also mentioned it in State of teh UNion Address.....lot of good that did.

D

VELOCITY OF MONEY AND WHY YOU SHOULD CARE

Understanding Velocity
velocity of money
Definition

Rate at which money circulates, changes hands, or turns over in an economy in a given period. Higher velocity means the same quantity of money is used for a greater number of transactions and is related to the demand for money. It is measured as the ratio of GNP to the given stock of money. Also called velocity of circulation.

 

Investopedia explains Velocity of MoneyVelocity is important for measuring the rate at which money in circulation is used for purchasing goods and services. This helps investors gauge how robust the economy is. It is usually measured as a ratio of GNP to a country's total supply of money.

 

SIMPLY :"how quickly money moves around economy the rate at which money circulates in an economy"

Read more: http://www.investopedia.com/terms/v/velocity.asp#ixzz1ax6BHPAA

THE IMPLICATIONS OF WHAT MY CHARTS SHOW   **(below is what the FED has tried to do to stimulate economy and economic growth an historic RAPID rise in the money IN CIRCULATION)

Declining Money Velocity and Its Implications

Our economy has a severe circulatory problem. While the Fed has greatly increased the amount of available money in its efforts to restore economic growth (Figure 1), the rate at which money has been flowing through the economy — the “velocity” of money — has been plummeting (Figure 2).

BUT the policies are NOT working, prices of things have gone higher, wages have not, employment is stagnant, pushes to cut govt spending will make it even worse. In the meatime, these FED policies of near 0 interest rates give savers a 0% retrun on money...and VERY LITTLE else to invest in except? THE RISKY STOCK MARKET!!! YOU GOT IT.....which the avg American has littel invested in (unlike the 1%) and their homes are still declining in value....(where most have or HAD investment)

D

UNDERSTANDING INFLATION AND WEIMAR HISTORY

http://www.johnmauldin.com/frontlinethoughts/can-it-happen-here   to access full article all you need do is fill in your name and email, no big deal, Mauldin a good read.

TOO SIMILAR FORMATIONS TO IGNORE

“Risk On” or “Risk Off”? Place your bets"

...." And if you don’t like the game, go protest at the door of your nearest friendly central banker. "
http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10583

WEEKEND REVIEW

Divergence still in place, I am still expecting a retrace to begin shortly. SOme other divergences are beginning to appear, 120 SPX points since the new low was registered, go figure!

This HISTORIC action in the form of unrelenting down and up action, 90% volume days will in the end cause another million or so investors to never put money into stocks again.

1300 SPX or above is possible, at the break of 1100, BEARS were roaring, obviously TOO MUCH. The market basically breaks down into waves of sentiment, and when they reach extremes...like the EURO SKY is falling, and the break BELOW the trading range.....eager bears, especially newbie bears were RIPE for the slaughter.

What you see now is NOT a statement on the economy or earnings, it is a rush to cover by those short a bit too long, and it may have a bit more to go. Then there will be MANY long converts, and if it goes too far north, then you could see an EPIC decline swell when the gas is gone..especially when many see the smoke lift and the anemic FED FED party cannot go on forever.

D

TEST OF 200 SMA COMING?

It has now started to decline in its trajectory

BAFFLING?

Tricks or Treats?

IS THE ALL CLEAR SIGNAL HERE?

"Fitch may downgrade BofA, Morgan Stanley, Goldman

Fitch eyes downgrades for Bank of America, Morgan Stanley, Goldman Sachs, 5 big European banks "

"NEW YORK (AP) -- Gap Inc. plans to close stores in the U.S., while expanding in China."

"S&P downgrades Spain's debt rating on weak economy

Standard & Poor's downgrades Spain's long-term debt rating, citing weak economy, bank risks"

PARIS (AP) -- French President Nicolas Sarkozy promised an "ambitious and humble" year as leader of the Group of 20 rich and developing economies, and he has a lot to be humble about.
Despite a warning earlier this year from Christine Lagarde -- then his finance minister, now IMF chief -- that a failure to address global imbalances would "lead us straight into the wall of another debt crisis," that is exactly where the G-20 has wound up.
Now the finance ministers and central bankers gathering for two days of talks here beginning Friday must explain how they let the global economy run straight towards the edge of a clearly marked cliff -- and what they can still do to stop it from falling over it.

NOT if you keep your eyes open. What is our "OFFICIAL" unemployment rate 2.5 years into some kind of recovery? Anhistoric high of 9.1%

OH yes THEY will keep trying to prop up the stock market, as the squueze continues on interest rates giving savers the shaft....and gd knows what else...

D

GOOG'D

Supply and demand play a part in determining the extent of the social mood and underlying strength in the points move.

Triple digit gains brought about as much movement in these 2 quantifiers as today's lackluster day

Of course GOOG always has the upside surprise, as it did AH.....I DO NOT think GOOG can pick up the mkt, if its time to correct....before maybe that one more push up EW seems to indicate before iii

Yet we are entering a more bullish period approaching xmas. LOOKING for divergences.....could get one tomorrow with a push up and lackluster demand. Ticks say a move down should be upon us.

NO PROBLEMS

NEW YORK (CNNMoney) -- The city council of Harrisburg, Pennsylvania, voted to file for bankruptcy protection Tuesday night.
But the mayor of the state's capital, as well as the governor and a state senator, quickly called the action illegal. State law prohibits the city from filing for bankruptcy, they said.

Nothing money printing and piling on more debt wont cure

D

TICK CHART SAY ST TOP IS NEAR

We also have divergence of lower highs in the ticks with price still rising. Early OCT we had bullish divergence at lows blue circle, which led to this rally.

DO you believe the economy is heading in the right direction?

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OCCUPATION OF WALL STREET

http://www.cnbc.com/id/44787637

“We are all rooting for them and hoping they get (President) Obama and some other people moving in the right direction for a change,” he added.

“The banking system has become a system, which is one large hedge fund supported by the free money of the depositors and by the taxpayers whenever it loses," Edelman said. "That was not the banking system of the 1980s."

WHAT A MOVE....BUT STILL IN CONSOLIDATION ZONE

Even a move to around 1230 is just more of what we've seen last few months.

YIELD ON 10 YEAR TREASURY A CLUE?

Low in yield as we entered 2009, that actually signalled a bottom was coming in the equity market, as the flow OUT of bonds helped fuel a cyclical bull market. yields topped in 2011 and 2001 has not been a great year for stocks. It has also been a record for volatility.

Just recently yields bottomed BELOW 2009 levels, yet stock prices are nowhere near the lows of 2009. Has the 2001 LOW in yields marked a LOW for stocks?

I'm just throwing that out there, just ONE measure, of course historically rates remain VERY LOW.

Stocks tend to rise with a falling $, EURO ZONE supposedly all fixed now so they dumped the $, gold jumped, oil jumped, stocks jumped.

EWT in many circles are calling this a Wave 2 move, which could rise above 1200 before ending helping to correct bearish sentiment.

This time of year also sets up the usual gaming for the Santa end of year rally. I do NOT see the players accumulating here, neither demand, nor selleres have moved enough to signal a CHANGE of trend away from bear mkt action.....it may in the coming weeks.....I still see this move as a reaction to the new down trend, which will resume when this wave does its job

D

WEEKEND COMMENTARY " WHERE ARE WE?"

What a wild few weeks? The most intense selling registered since the 1940's, followed by a jubilent rebound rally cut short with Friday's losses. Did the rebound from the NEW LOWS appear because of a deal in Europe, Greece news, jobs, consumer spending, or just oversold bounce?

Because of the change in trend that appears to be in place from the April highs, with NO signs of ACCUMULATION but only of DISTRIBUTION.....it is more likely any rebound is just a reaction to the new primary trend decline than a new bull mkt, IMHO

Stocks have risen because sentiment got too bearish, oversold condition, and there is always ebb and flow, but I had posted an article entitled "Bear MKT rules apply" and so if we look at what is going on keeping in mind the primary trend has chaned to DOWN.....that changes things.

We could have begun a protracted fall rally, we usually get one into XMAS...the fabled "Santa Rally".....players position for this, and doing it EARLY when sentiment is LOW, is a good way to make good returns....then when the late comers, as they always do hop on, they will sell out their positions leaving thenew comers to take the hit...AGAIN.

Nat GAs may be a play with weather turning soon....lots to think about. End of 3rd year of Pres cycle, 3rd years usually positive for market. I see 2012 possibly a tough year.

With the 50 day moving avg below the 200, I have always found this good indicator to be more cautious and defensive. Selling intensity has swamped the buyers, and last weeks rally did not see sellers pull back much to indicate they are done.

We still have persistent unemployed at 9.1% "officially", we know it is much higher....can companies continue to SURPRISE to the upside in earnings? How many companies like NFLX were buying their stock back at HUGELY INFLATED PRICES?

The current climate has proven to be VERY stubborn and none of the fixes tried have been effective. Current FED policy is KILLING SAVERS and is an attempt to leave NOWHERE xcept stock mkt as a place to find returns....such a long lasting one sided approach....may have unintended disastrous consequences when THAT BURSTS...like a gallup higher in interest rates.....let's hope that doesn't happen....but all bull runs do end...even falling rates (since Volker attacked inflation)

"Volcker's Fed is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was successfully lowered to 3.2% by 1983.^[12]
Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well.



As you can see....since 1981 then interest rates have been in a FALLING TREND 30 YEARS!!!

Duratek

HERE'S YOUR WEEKEND READ

"And it all seems to boil down to this: Credit cannot be stable within a backdrop of such extraordinary uncertainty. And, I would argue, no amount of central bank liquidity (“money”) and bank capital is going to engender sufficient certainty to stabilize global Credit, financial flows and asset markets. "

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10581

RALLY ON THE JOBS NUMBERS?

Jobs Report: Behind the Numbers- Daniel Gross, Y! Finance
The metrics in the report, particularly from the household survey component, remain pathetic: an unemployment rate of 9.1 percent, 6.2 million people employed for more than 27 weeks, an employment-population ratio at an anemic 58.3 percent.

"better than expected"  sure......Some segments are being percolated by historic low rates, but even worse than 2003-2007 the effect on avg American is miniscule and a jobless recovery it is.

Under the conditions I montior, I cannot see this as a continuation of BULL MKT, but more a bounce in a new Bear Mkt, I am hoping I am wrong. But under the numbers, the hype and daily news related rallies is a whole heap of PAIN.

D

UNDER THE INFLUENCE

BEAR MKT BOUNCE APPEARS

My trusty tick chart did spot the divergence and oversold bounce forming, and it turned out to be formidable. Here's the rally, all coming after 3pm!

Stocks Stage Late Rally, Erasing Early Losses, Amid EU Bank Aid Plan Report- AP 

And it came in the last hour of trading!? AS the EURO rose on speculation of addt'l banking measures, blah blah, US $ weakened all coordinated so to speak.

DO you think also after 3 of last 4 trading days contained over 90% down volume, a bounce was near? of course, that's how it works, and shorts covering at close caused even further stampede.

The market is SO volatile, this is not the playground for the avg Joe, or for most. LOW LOW LOW interest rates are sparking a surge of refinancing, could inject some consumer spending, is making some well positioned Mortgage companies and brokers some nice dough, but JOBS JOBS JOBS are what is needed to sustain any kind of recovery.

FED BIG BAD BEN said "the slowdown was worse than we thought, the recovery weaker than we had hoped...." SO we will keep right on doing what we've been doing that isn't working....because of course it could be worse.

THE WORLD is unwinding from years of abusive central bank behaviour and living beyond means...Even now, in the darkest hour, when all the tricks and gimmicks haven't worked, they are doing even more! Selling short term notes for longer dated ones.

Just when the US lost its AAA rating, treasuries have had one its greatest quarters. What will come next? How far can the rally go? Did an important bottom form today?

Now more than ever, technical analysis will play an important role, as the market heaves and ho's on every news report and Eurpoean save effort. Meanwhile.....be careful out there.

D

BOUNCE COULD BE NEAR

THAR SHE BLOWS, SUPPORT BROKEN

**click to enlarge

3 of last 4 days have been 90% down days, but volume wasn't blow out type volume. Here's the issue, sentiment is very bearish, and EWT calling a wave 1 low setting up nice Wave 2 rally and a market wounded like this one, that doesn't rally could be setting up MUCH lower prices immediately before any sustainable rally can begin.

I'm just not sure at this point. My feeling was when that SPX 1100 area broke down, prices would fall deep enough to allow a retest of that break in trading range. But as we feel pretty confident a NEW BEAR MKT is underway, the primary trend is DOWN, and rallies used for selling.

I did my best to pre pare and warn my readers as to the potential dangers lurking. Even with this going on, I've tried to grow my other business, so I can't throw in long posts every day as before.....if you need to make living and survive, just keep plugging away giving it your best efforts.....the market action may be out of your hands, your life isn't.

D

KNOW YOUR FACTS

 "When the facts change, I change my opinion. What do you do, sir?" - Keynes

Arnold Kling and Megan McArdle have pulled a funny and embarrassing quote from Paul Krugman, published in a 2002 NYT column:

The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance.To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Read more: http://articles.businessinsider.com/2009-06-17/wall_street/30100530_1_housing-bubble-slump-fed#ixzz1ZeqBC600

"TESTING A THESIS" Doug Noland

September 29 – Bloomberg (Joshua Zumbrun): “Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank may be undermining its own credibility by pushing forward with monetary easing that will do little to boost growth. ‘The actions taken in August and September tend to undermine the Fed’s credibility by giving the impression that we think such policies can have a major impact on the speed of the recovery,’ Plosser said… ‘It is my assessment that they will not.’

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10578

BEAR MARKET TAKES HOLD

The diving 50 day moving average has repelled rally, and is exerting its presence. The price action looks to me to be a CONSOLIDATION of the decline, not a basing for a new move up.

The sideways price movement is going to break, and I think it will be to the downside, when that happens, selling may intensify and really rock investors just sitting and watching. For months I have suggested taking some off the table and for me that's 100% out of the market. I was also one of the first to suggest the bear market has returned.

Life goes on, and you try to make the best of it, say positive on LIFE by all means, just don't be a patsy for those who play you for a lemming, or the last handoff in a Ponzi scheme and pyramid scheme...the game of musical chairs known as the stock market.

Like any gaming scheme, the insiders (house) almost always wins.....you are told everybody wins if they just STAY IN. When is the last time a Financial Advisor told you to sell?

D

COLLAPSE OF COPPER PRICES

Well,what do you think, not bullish exacly is it?

D

CHART OF THE DAY

REALITY BITES THE SLOPE OF HOPE

By Dhanya Skariachan
NEW YORK (Reuters) - Best Buy Co, the world's largest consumer electronics chain, will cut its hiring of temporary workers in the United States this holiday season by almost half compared with 2010.
The decision is further bad news for the U.S. economy and for the unemployed in particular. A quarter of the retailers surveyed by the Hay Group said they were hiring fewer seasonal workers this year and only 10 percent plan to hire more.
Best Buy is hiring only 15,000 seasonal workers this year, down from 29,000 last year, and is counting on permanent employees to work overtime to close the gap in terms of hours worked, Chief Executive Brian Dunn told Reuters in an interview on Tuesday.
He said the retailer is not counting on any help from the economy this Christmas as it sees consumers staying cautious about spending on nonessential items.<<

In my own life and business, I go about my daily chores looking for new clients, taking care of existing ones, without a THOUGHT to the economy. But when it comes time for portfolio positioning, IMHO, MR CONSERVATIVE is sitting this period OUT.

D

CHINESE MARKET BREAKING DOWN

"HOPE" RALLY CONTINUES

Here is from a FED dissenter
"WASHINGTON (AP) -- Richard Fisher, president of the Federal Reserve Bank of Dallas, said he opposed the Fed's latest attempt to boost economic growth because he fears it won't work -- and it could scare consumers and squeeze bank earnings."

Volume SWELLS on the declines, diminishes on the "rallies". Still in a range of price, but again real signs of stock ACCUMULATION are not present, expanding volume NOT present.

The FED is AGAIN targeting asset prices or why would these insane men playing with fire trying to lower already insanely LOW long term interest rates.

What segment of economy needs lower than historic LOWS in interest rates? Retired folk? Savers? UHM....try to force people back into stocks? Wall Street.....aren't we tired of these games? ineffective policy?

The Federal Reserve acts independently of our government, but isn't it time for someone to speak OUT against these harmful policies? We can follow back all our recent bubbles and economic woes IMHO to interestrate policy, ALL controlled by the Federal Reserve.

I don't think the market is done to the downside. HERE is my thinking, after reviewing several EWT charters, I like Daneric's thinking. I can sum by saying I think we break down 1100 on the SPX and that is going to bring out of hibernation a lot of Johnny bear latelies. SOMEWHERE Under that level might be interesting place to buy, and position for Winter promised rally.

To see stocks run as headlines say from hope and fear of European debt defaaults or some supposed fix is amusing. The PLAYERS who have enough money, fire power are just buying 1100 and selling 1200 area...sooner or later one will break.

Go Rays

D

FED ACTION TRYING RE RE RE INFLATE STOCK BUBBLE

"The "Risk On" trade is back today sending stocks and commodities sharply higher, and the US 10-year Treasury yield back up towards 2%. Meanwhile, as of Monday's close the S&P 500 dividend yield remained higher than the 10-year T-note, a move seen only 20 times in the past 58 years on a quarterly basis according to S&P research. The phenomenon rewrites the rulebook for yield-seeking investors, as the broader stock market offers more than a traditional bond investment."

Duratek

WEEKEND POST "THE MORE THINGS CHANGE"

....the more they remain the same. The FED announced Tuesday they had a NEW "TWIST" to energize the economy....you sitting down?  SELL short dated treasuries, BUY long dated ones!! YEAH! that's it's it. Lower long term rates from next to nothing to nothing. 10 year yields are already below 1.9% !!!

Record low mortgage rates haven't hurt the housing market, but how much more could already historic low rates improve the situation? I think you got your answer from the last few days market reaction. The Fed meeting and announcement preceded back to back 90% down volume days, the 2nd one increasing volume from heavy to blowout rising by some 44%....a strong opinion was registered by Mr Market.

Friday appeared to be a "turnaround" day with prices falling early, and we keep hearing about these smart guys running in to BUY THE BARGAINS....NO....the market short term oversold will get a pathetic bounce of pity before it heads lower once again.

One of the main differences is that we are seeing tell tale signs of DISTRIBUTION this time around, not signs of ACCUMULATION. SO I can safely say, there is pretty good chance the Aug lows break down, maybe next week. It's going to get even uglier in a hurry, IMHO.

HIGH unemployment (record actually for a supposed recovery) and business taxation uncertainty, does set stage for a sustainable recovery. What you get is lame congress, lame President and more of the same from those idiots and the FED, a real cast of ignorant characters that JUST DON'T GET IT!

If businesses see a climate of LOWER TAXATION, LOWER COST OF EMPLOYMENT and HEALTH CARE too.....they will act accordingly and expand...look ahead. Right now, what they see is chance of higher taxes and a government that keeps growing and running huge deficits with no real plan to change.

2 years of unemployment benefits have not been enough for a large group of unemployed, weeks to find a job is at an all time high....over 2 years into recovery...for many it has not felt like recovery.

Consumer Sentiment polls near the lows of crisis, never rose to even the worst it was after 911 !! very telling.

Gold and silver, oil all seemed to have popped, even if temporarily. The US $ has popped, but popped higher...we look that much better than Europe?

DO you ever wonder why Oil at near $140 got us $4 gas......and $80 OIL gets us near $4 gas?

What has helped me slightly, is that I am SO engrossed in running and growing my new business that I started, after 30 years involved in family business, that I don't have time to worry about economy and I am smart enough to NOT be exposed to stocks at this time. YES I AM 100% cash whoopie.

There ARE times not to sit around and take a 40% draw down lump!!! IF you can see it coming, IF you don't think the sky is falling and DO come back and buy low. you can't buy LOW if you sit like a squirrel with a nut and don't react....most will not.

It's taken me 20 years of study and PROOF to myself in how I avoided the bear markets that began in 2000....to understand its time in the market that counts...EXCEPT when you should be out or super defensive...like now IMHO

Hey, it's not for everyone, maybe sitting around for the 50% haircut is worth it for those who don't want to miss the rise. BUT, since 2000 LTBH strategy has returned 0%, losses even. You must be fluid, move to the hot sectors, like gold and commodities last 10 years. I don't know if thatrun is OVER, not with the growing new world populations CHina and India, BUT it appears to be taking a big pause and nasty correction has begun. I honestly don't know if this is the pause that refreshes between 2nd and final BLOWOFF stage for that sector.

The law of SUPPLY and DEMAND don't seem to favor sticking in toes just yet....if we watch closely, we won't have to guess when to hard.

Duratek

CREDIT BUBBLE REPORT

..." It is not easy to envisage a scenario that would, at this point, reverse global risk aversion and de-leveraging. But, then again, most participants seem more fixated on areas of market technical support that could signal the rush of sideline cash into U.S. equities. Not the mood one would expect at an important market bottom."

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10576

BEAR IS BACK, BE WARNED

Today the market saw a SURGE in volume, and a 2nd consecutive 90% down volume day. This is not run of the mill bull mkt shake out, this is....do you want to stay around and see your portfolio shrink like a scared turtle?

Does being diversified help? to some extent maybe, but when the baby flies by with the bath water....just like floats all boats.....a bear can sink all ships...NOWHERE TO HIDE.

I like to AVOID a bear puckering 40% draw down, call me crazy. AS 2009 showed, you CANNOT stay like a scared kitten forever, BEARS lay out true values....mkt got overvalued again. NO ONE on TV warned take your profits, be careful. NO all those jerks kept telling to keep buying.

The stench from the TV advice man fills your nostrils right through the ethernet....go ahead dip buyer, make my day.....stocks will go MUCH lower before this is all said and down IMHO.

Those FULLY invested have and will feel severe pain, IMHO YOU NEED CASH to buy bargains...how do you do that if you NEVER COME OUT?

D

A FOOL AND HIS MONEY ARE SOON DEPARTED

"Nowhere is this situation more egregious than at Netflix (NFLX), where the company bought back its own shares at ridiculously high prices. Over the last year and a half or so, Netflix has traded with a P/E of between 60 and 90. Despite this, those in charge thought it made sense to spend not some, but all of the corporation's earnings on share buybacks. In the last 1.5 years, Netflix has earned $290 million; it spent $305 million on buybacks over this same period!"

Or is this a story on how you can SCREW up a great dominant business? I canceled half my NFLX service when rate change was announced, so did anyone else I know and many exited altogether....now RUMOR is buyout! haaaa as the prie is 1/3 almost what it was....shorts were WRONG until finally right.

TRANSPORTS are at NEW LOW for move, SPX 1100 is line drawn in sand.....FED says "significant risks to economy" so what will they do? they will sell short term treasuries andbuy longer dated one!!! to??? LOWER interest rates MORE????? a 4% mortgage not low enough? SAVERS? if they BENDOVER anymore they will break in half!

JOBS JOBS says Dem's? TAX TAX and spend on roads....bleep me!!! I HAVE been warning for months, there is AMPLE warning and proof....the ugly BEAR MKT has returned and that can't be good for stock values.....but great news for those who pared exposure and RAISED cash to buy at appropriate time some good long term values.

The avg dude will have sworn off stocks for a lifetime, just at the time maybe they are best values in lifetime, should this POS collapse....that's how it works friends...you don't make bottoms on hope...you make tops. You don't make tops on fear, you make bottoms....let us hope the bear doesn't want to revisit SPX lows of 666

D

DOWNSIDE TEST LOOMING OF THE LOWS

"NEW YORK (CNNMoney) -- The world's financial markets took a beating Thursday as investors saw signs of economic weakness around the globe.
Contributing to the losses were the Federal Reserve's statement on Wednesday warning of a "significant" downside risk to the U.S. economy, as well as reports from global bank HSBC showing contraction in the Chinese and eurozone manufacturing sectors."

FED'S LATEST BRAINSTORM

Stocks sold off today with at least 88% of all volume down. After the Fed meeting it was announced another GREAT IDEA, hey let's take our maturing 3-6 month bonds and buy longer dated ones!!! THUS lowering interestrates from their already historic lows!!

Hey, this way NO ONE will make any yield at ANY maturity!@ ingenious. 10 yr bond yield slipped to 1.87%. 2 yr yields at 0.18%. 3 month 0.01% wow

Transports reacted violently to the FED decision and sold off over 5% ! only 60 pts from recent lows.

Stocks still in trading range until they aren't. Look forward to Santa rally right? LOOK we already have lowest rates in most recent history. Sales of homes are being made, lots are foreclosures....one day this will be over..But IMHO we have well past peak profits and I think the market can go much lower.

D

CHARTS WORTH A THOUSAND WORDS

DISTRIBUTION

The market continues to flounder, but underneath the characteristics are more closely aligned with DITSRIBUTION, not ACCUMULATION....and the chances are greater that when the market breaks it will be to the downside.

I have been SWAMPED with my other business, Im doing the best I can to keep up my blog. Maybe more short and sweet, but maybe for now that's the best for everyone....what more is there to say?
The 50 DMA is moving down and we get more and more into bear territory....where bad things happen....chart to follow

WEEKEND POST

The market since making its low on August 5th has had multiple 90% days and triple digit gains and losses and seemingly has no direction.

The bears will say distribution and the bulls will say accumulation is taking place. According to the data of supply and demand, it is more likely IMHO that the lows currently in place along with the inability to break out will get tested.

We are back to policies of fix the roads and bridges from Obama administration and claims it will ADD ONE MILLION JOBS??!! again!! how well did it work last time? and at 2 to 3 X the cost.

We need policies that will STIMULATE small business and investment. We need policies that will help grow good jobs and steady employment gains, we need lower taxes on businesses, but perhaps close some tax loopholes and slight increases on families over $250,000 and more so on dividends....the ones making hay on dividends don't need addt'l gov't asssistance...a MEASURED equal approach to working down the deficits and debt....any CUTS by the gov't will SLOW the economy down however.

We are at a crossroads, after all that has been done, the 0% interest rates, all the bailouts.....we are still stuck in the mud. This is NOT a NORMAL business/inventory cycle slowdown , this is a debt crisis and nothing will stop the march back to the mean.....historical norms....and the dealing with the debt binging of the past several deacdes....you DO eventually have to pay the piper....and UNWIND the excesses.

This is a powerful 60-70 year cycle forces at work, and it is TOO powerful for govt and FED policies to dismiss it. One can hope their policies have NOT made it worse and last longer!

WHO cares for the conservative and the SAVER? As these policies of ZIRP wreck havoc on investment and savings, it has helped to PROP UP the stock market and raise OTHER assets, mainly commodities. The end result of much higher commodity prices has made the position of the Consumer even more difficult.

The climate uncertain, polls show the approval rating for the President at the lowest levels and even lower for Congress where not even 20% feel they know their ass from a hole in the ground!

Consumer Sentiment readings are still 2 years after "RECOVERY" BELOW the lowest readings after 911. Not an end all to be all, but sentiment DOES effect spending habbits and investment decisions.

Friends, there is a BRIGHTER day in our future, but those charting the course may not have the visions to guide us there.

If the stock market spins its wheels at best, or crashes at worst, with 0% interest rates and longer term yields barely enough to pay for coffee, what is left for the avg Joe to do?

Duratek

GLOBAL MARKETS CONVULSING

"Liquidity-challenged global markets are convulsing through a problematic period of de-risking and de-leveraging, and once such a process commences it basically has to run its course. Efforts to intervene in the marketplace, as we’ve been witnessing, are likely to beget only greater uncertainty and instability. Fed take note."

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10571

AN HISTORIC LEVEL OF DEBT, NOW UNWINDING

http://www.chrismartenson.com/blog/crisis-explained-one-chart-debt-gdp/11570

First chart shows debt a s% of GDP up to 2005, not one politician or economists ever mentioned this relationship to anyone.

2nd chart shows current DELEVERAGING process inmotion, and yyes you are right, this hasn't occured in more than 70 years!

Let OBAMA make his senseless stump speaches onhis NEW STIM job creation plan....$200B is nothing...$trillions thrown at have done little except make things we all need cost more!!!

We are in a debt buuble burst K WINTER cycle.....and we are heading back to the norm causing lots of pain on the way....nothing can hold it back, only make it worse.

D

WORLD ECONOMIES CONTINUE TO SHRINK

Japan economy shrank more than initial report

12 minutes ago

Japan's economy contracted in the April-June quarter at an annual rate of 2.1 percent, worse than the initial estimate, the government said Friday, underlining the damage from the March earthquake disaster.

There is an end to all this economic woes, but we are not in a normal inventory business cycle slowdown, we are in a debt binge deleveraging cycle that spanned deacdes in the making. Another gov't stimulus package wont make any difference.

$Trillions have been thrown and printed at the crisis and we still don;t have a REAL RECOVERY. This is the weakest statistical recovery on record. With the avg weeks needed to find a job still rising 2 years intot he supposed recovery....we have a ways to go, and IMHO there is great risk in being long the stock market.

D

CRACK BABY ECONOMY. Financial Armageddon

Stocks slide after Bernanke offers no new stimulus- AP
Stocks closed sharply lower Thursday after Federal Reserve Chairman Ben Bernanke offered no new insight into whether the central bank will act soon to prop up the economy.

STOCKS RALLY

Stocks rallied on WED because "German courts ruled it's OK to bail out Greece". Meanwhile back at the ranch, Small Business polls show 90% feel we've enterred another Recession.

I have not changed my stance that we are in a Bear mkt,

D

BEAR MARKET WARNING

"IT'S A LONG HARD ROAD"

http://contraryinvestor.com/mo.htm  Who in elected office is either aware or will admit these facts?

D

"BEAR MARKET RULES APPLY"

http://blogs.stockcharts.com/chartwatchers/2011/09/bear-market-rules-apply.html

WHERE ARE THE JOBS?

How do you keep bidding up stocks when you continue to see proof that the economy which if NOT already contracting, is BARELY growing? ZERO jobs in Friday report sent stocks sprawling and the unemployment rate nearly 3 years into recovery stands stubbornly at 9.1%!

The gov't and FEd have thrown $TRILLIONS at the problem, and the situations has not improved. Proponents of these ineffective measures argue "it could have been worse". How do you move the houses, the demand of such could stabilize pricing and put in the bottom, when jobs are not being created to supply the investment needed?

And then there is confidence. Maybe you will go out and buy a dress, 3 for 1 at Joe Banks, dinner at Red Lobster, but you aren't going to replace that old dishwasher, or make a needed home improvement. Consumer confidence languishes near record lows. It IS at record lows for any recovery and so are many other stats including job creation.

Gold near $1,900 and a 10 yr not barely above 2%, highlight the problems. Should the gov't significantly CUT BACK spending, the economy could grind to a halt and even more pain felt.

There is tons of backed up demand, and when a REAL BOTTOM is put in, a long real recovery can begin. First REAL ISSUES must be dealt with.

You cannot just print money and stimulate, spend your way to prosperity, the DEBT must be A) inflated away or B) defaulted. I left out C) paid back.....what we get from Politico's who all want re-election is EXTEND and PRETEND....this ugly can can't be kicked down the road anymore.

Our debt is spiraling out of control. New revenues or taxes are a done deal, along with spending cuts. Buy I think the bald heads are playing games and maybe all they end up doing is SLOWING growth of spending.

Record debt and need for floating this funding and YET long term interest rates at near or at record lows......gold and treasuries enterring a bubble....all bubbles pop and end in pain.

CLEAR direction, LOW taxes and incentives to small business are just a piece of how to get our economy to grow again,but I fear until we hit ROCK BOTTOM....wherever that may be.....we will continue to slug along and leave Americans wondering where is the recovery for them and the jobs.....and when they LOSE hope......what then? 20% of Americans rely on gov't assistance....that is IN consumer spending and economy.

Duratek

WEEKEND POST

Recovering from kidney stone!!! and no power for 4 days I am working on some commentary and will post before Monday, stay safe

D

"CONFIDENCE WEARING THIN"

"Both the Fed and ECB are at respective policy crossroads and markets have ample reason to fret. Confidence is wearing thin."

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10569 Doug Noland

POWER BACK ON. GLOOMY OUTLOOK

America's Debt Crisis

Slower jobs recovery

White House's budget experts have grown less optimistic about economic growth and jobs. More

8 in 10 think we're in a recession

Most Americans think the economy is in another recession, according to a new CNN/ORC poll. One-third of those surveyed think it's serious. More

Downgrade revision of July jobs report, August job report was dismal not since 1945 have ZERO jobs been created in a month