TW3 TECHNICAL

DJIA 10467.16 -30.72 VIX24.13 -.12 10 year 2.98.09 -.0039 30 year 4.0804 +0166
Gold 1181.70 +13.30 Oil 78.95 +.59 USD 81.65 +.03

Economic Conditions -10.7

Mikey Power Index (MPI)
ST Trends Uptrend >60 Downtrend <40

Stocks 50 Oil 53 Gold 25 Bonds 50 Emerging Mkts 62

Short ETF
BGZ 42 DZZ 69 ERY 39 EDZ 46 SMN 47 FAZ 46 SCO 39 SRS 47
Long ETF
BGU 44 UGL 26 ERX 50 EDC 63 UYM 59 FAS 54 URE 59

Mikey Power Stock index Score 5613

AAPL 46 IBM 49 HPQ 54 INTC 51 AMAT 50 TXN 49
ORCL 66 MSFT 63 SYMC 33 INTU 77 ADBE 67
COST 52 TGT 52 WMT 66 BBY 43 AMZN 38 JWN 56 JCP 56
LVS 72 WYNN 57 CCL 53 DIS 35 MCD 43 YUM 52
DAL 56 CAL 64 UAUA 56 AMR 55
CAT 68 DE 74 CMI 67 FCX 59 POT 84 NEM 39 ABX 40
DD 58 DOW 67 MOS 50 MON 76 APD 50 AGU 69
UNP 62 CSX 44 NSC 57 FDX 62 UPS 63
APA 74 CNQ 41 DVN 53 PTR 41 BTU 70 XOM 55 VLO 45
SLB 40 BHI 55 RIG 25
JPM 57 BAC 37 WFC 42 GS 76 MS 47 AXP 43 V 45 COF 42
SPG 54 KBH 58 LEN 63 HD 64 LOW 50
ABT 56 JNJ 30 CL 37 CLX 63 PG 50 K 29 KFT 51 KO 68
NUE 52 X 58 F 77 TM 53 HMC 66
BA 71 HON 50 GD 45 LMT 61 HON 44 NOC 71
MRK 30 LLY 55 GSK 64 PFE 55 UNH 59 AET 60 WLP 42 AFL 57
QCOM 62 CSCO 61 BRCM 48 VZ 66 T 57 BIDU 72 GOOG 61

Stock Universe Plus 23
Up 32
Down 9
Neutral 55

Advisers Bullish 35.6% (High 62 Low 21.3) Bearish 35.6 (High 54.4 Low 15.6)
Mutual Fund purchase/redemption's 1.29 High 1.50 Low .66
Ratio of Premiums Put/Calls .82 High 2.58 Low .34

Mikey OB/OS index (80=OB 20=OS) 66 High 97 Low 0

Monday Obama touted the comeback in Detroit as he visited GM and Chrysler plants in that city. Sounds like the recovery the whole economy is having. Maybe he should visit California there is a great recovery there too.

China announced that it has passed Japan as the world's No 2 economy. It is expect to overtake the US in 2025. Per capita income is just 3800 which is where the US is going.

NATO announced the deaths of 6 more US troops in Afghanistan bringing the July toll to at least 66 surpassing June's record. The White House implored the Web site WikiLeaks to stop posting US war document. A Taliban spokesman told British TV that they were studying the leaks. Who is kidding who?

Q2 GDP growth slows to 2.4% annual rate, that is down from Q1 upwardly revised 3.7% annual rate. Business investment increased 17% on strong demand for equipment and software. Strong corporate profits supported that gain.Consumer spending grew at a 1.6% rate down from a 1.8% rate in Q1. The US economy has typically grown at a 7 to 8% pace at this point after a deep recession.

The GDP report showed that inventories expanded by an annual rate of 75.7 billion in Q2. That was the second straight gain after 2 years of decline. Restocking added 1.1 to GDP growth.

New Home sales rose to a 330,000 annual rate in June after May's record 36.7% dive to a record low of 267,000. In an average economy sales will average around 1 million. New home inventories are at a 7.6 month supply even though new home builders cut building activity. The a normal inventory reading is 3 to 4 months.

Home ownership rate fell to 66.6% in Q2 the lowest since Q4 of 1999.
Foreclosures rose in 75% of the big cities in the 1 st half of 2010. Over 1.6 million homes have been foreclosed.

The Chicago Fed said that Nations economic index fell to -.63 in June form .31 in May as the output and Jobs measures dropped. Negative reading indicate below average growth.

New jobless claims fell by 11000 to 457000. Claims have stuck around 450000 for most of the year after falling for most of 2009.

Consumer debt falls for the 21st straight months to 831 billion. Credit card rates are averaging over 14% to the consumer. You can see why consumer spending is weak they are not getting loans and the consumer loans they getting average 14% which makes paying those loans off impossible. What is happening is that banks have enslaved the consumer. The Fed loans the money to banks at .25% and the banks loan it to the consumer at an average of 14%.

Fed's Beige book reports economic activity rose in the last several weeks but only modestly Growth was flat in Cleveland and Kansas City. and slowed in Chicago and Atlanta. Factory and retail spending rose a little and labor markets improved, real estate and lending remained weak.

Fed chairman Ben Bernanke says the outlook for the economy is "unusually uncertain.

St. Louis Fed's James Bullard said policy makers vow to keep interest rates near zero could encourage a Japanese style of deflation.

Durable Goods, orders for big ticket items fell 1% in June.

Earnings of note:

Fed Ex beats and boosts outlook.
Dupont EPS beats and raises outlook.
Broadcom maker of chips for Iphone and IPad beats and raises outlook.
Swiss investment bank UBS made a profit and cuts losses.
Deutshe Bank rose 6%
SAP EPS rose 15% lowers outlook
Boeing profits fall layoffs seen
Wellpoint Q2 enrollment drops earnings up 11%
Visa earnings beats still concerns about cuts in debit interchange fees
Kellogg Q2 earning fell 3% and net sales dropped 5%.
Colgate profits beat but sales miss.
Exxon Mobil EPS grew 91% in Q2 revenues rose 24%
Royal Dutch said profits rose 15%

Arizona immigration law blocked by federal Judge.

Rangel hit with 13 ethics charges. Only 13?

This week was all about bad economic numbers and good earnings. The boys ran with the earnings and the market rallied. You can see by the numbers above that most stocks are in some kind of an uptrend.

Summary:

Market ended the week slightly over bought with the Mikey Oscillator at 66
Mikey universe is at plus 23 indicating that we are in rally mode.
The weak groups are in Gold and consumer staples.
The strong groups are in economically sensative and commodities.
The bulls and the bears advisors are dead even.
Mutial funds are being redeemed at a 1.29 rate probably because they need the money
Put Premiums are coming down at .82 which is average
The economic reading is at a negative 10.7 and falling.
The Fed is downgrading their forecasts and deflation is being mentioned.
Economic numbers weakened on average with housing boucing off of record May lows.
CNBC website is turing bullish

Mikey

China's Number Sunday

There is always a number coming out that tells us the state of the economy. The next number is the China PMI. Basically if it is over 50 that means growth and if it is below 50 that means weakness. So if that number "shows growth" you can forget about the US numbers because they can point to something positive and run stocks especially commodities again. If the number shows weakness they can gap the market lower and punish the longs that just bought into the current rally. Here is the skinny

China PMI due Sunday night

According to Reuters estimates China's official PMI will likely be at a 17-month low as Beijing’s policies to curb lending and rein in the property market weigh on manufacturing.

China July PMI Estimate
Median: 51.1 (Lowest Since Feb. 2009)
Range: 50.0 to 51.7 (11 forecasts)
Previous: 52.1 in June, 53.9 in May

The headlines number is expected to be weak, but it’s what lies beneath that matters more. Investors will be paying particular attention to the new orders and stocks of finished goods. The former slumped in July, while the latter rose, suggesting big inventory accumulation and possibly future cuts in factory production, writes Reuters.

It is just another way to jerk us around and confuse the issue. What does it mean? It means whatever they want it to mean. Notice that they say they already know the number is weak, so the number doesn't matter. The number that matters is new orders. That is the key to the whole truth of the Chinese economy truth seekers.

Mark Twain said that there are lies, damn lies, and statistics. Statistics are the tool that the Investment Bankers and Central Banks use to justify the actions that they take. They can paint a green picture and call it red. It is what they say it is because they control the short term reality of the investment markets.

I have a hard time with that but if you don't accept that you can get run over. The point is they want to control the behavior of consumer and investor by using these numbers to tell their story.

Mikey

GDP Slows to 2.4% in Q2

The second Quarter GDP grew at 2.4%. Consumer spending, which is 70% of the economy grew at 1.6% down from 1.8% in Q1. The other .8% came from inventory building and government stimulus. Consumer spend peaked on this cycle in 2009 Q3 at 2%. Government spending was the highest since 2009 Q2, which means the government carried the economy in this quarter.

Consumer spending is being squeezed by jobs and a tightened of credit to them. The interest rates are a record lows for banks and corporations but not for the average guy on the street. He is getting his credit reviewed by banks every day. If he is late on a payment the banks cut his credit line. If thought the mortgage rates a at record lows their is little equity to borrow on so those loans that he used to transfer his credit card debt to are not available to him.

The debt bubble is going to take a long time to wind down. It is cutting off money flow to the consumer and it is putting pressure on prices. Commodities and stock prices are being held up by government intervention so the consumer should have 1 dollar gas is still paying 3. His house is declining in value and so is his 401K.

The ECRI fell again this week to -10.7 that is the lowest reading since May of 09. What we have is a picture of good earnings brought on by government stimulus and increases that are compared to recession lows that paint a picture that the economy is in recovery. On the other hand, the leading indicators are pointing back to the lows of 2009.

In conclusion, if you look back things are getting better if you look forward it looks like we are going back to the lows. Stocks are at the present time in a trading range between 9700 and 10700. We closed Friday at 10465 and the Mike Power index (MPI) closed at 50 which is short term neutral.

Mikey

Watching Apple (257)

DJIA 10467.16 -30.72 VIX24.13 -.12 10 year 2.98.09 -.0039 30 year 4.0804 +0166
Gold1168.58 +8.18 Oil 78.18 +1.37 USD 81.62 -.012

Mikey OB/OS index (80=OB 20=OS) 63

Mikey Power Index (MPI)
ST Trends Uptrend >60 Downtrend <40

Stocks 55 Oil 52 Gold 25 Bonds 49 Emerging Mkts 67
Short ETF
BGZ 36 DZZ 69 ERY 39 EDZ 34 SMN 45 FAZ 40 SCO 39 SRS 42
Long ETF
BGU 50 UGL 27 ERX 55 EDC 70 UYM 59 FAS 60 URE 64

Mikey 50 Stock index

AAPL 45 IBM 44 HPQ 42 CRM 62 BIDU 64 GOOG 73 AMZN 44 JWN 56
COST 53 TGT 61 MCD 48 NFLX 33 CAT 67 DE 73 FCX 62 BTU 75
POT 83 NEM 40 EGO 43 DAL 50 CAL 69 APA 78 COP 66 SLB 44
JPM 61 GS 76 MS 52 AXP 48 V 43 COF 42 SPG 60 KBH 58
LEN 63 ABT 55 JNJ 31 K 29 CL 37 CLX 68 VZ 65 T 57
FDX 61 UPS 63 UNP 61 CSX 43 NUE 51 X 57 AMGM 44 BIIB 74
F 76 TM 60

Downtrends 4 Uptrends 24 Neutral 22 = +20 DJIA 55

Apple had its great earnings and according to CNBC has laid to rest the doubters. The stock closed at 251.89 on 7/20. Earnings were released after the close and the stock made a high the next day of 265.15. That high has held now for 6 days.

The money flow is a weak 47 today and falling. The 50 day average is at 256.32. A close below the 50 day and a reading of less than 40 would put me short. I would consider a close below 251.89 a reversal of the whole uptrend. If the stock reverses from here holders would not sell and will be trapped into buying the pullback.

Mikey

How the News is manipulated

DJIA 10497.88 -39.81 VIX 24.25 +1.06 10 year 2.9866 -.0038 30 year4.0655 +.0017
Gold 1160.40 +2.40 Oil 76.99 -.51 USD 82.11 -.062
Mikey OB/OS index (80=OB 20=OS) 63

ST Trends Uptrend >60 Downtrend <40

Stocks 63 Oil 52 Gold 20 Bonds 50 Emerge Mkts 67

Short ETF BGZ 23 DZZ 79 ERY 28 EDZ 34 SMN 44 FAZ 33 SCO 41 SRS 39
Long ETF BGU 58 UGL 22 ERX 55 EDC 70 UYM 60 FAS 67 URE 70

Stocks AAPL 52 AMZN 42 BIDU 73 GOOG 75 CAT 73 NFLX 41 CRM 69 MCD 55 GDX 37 NEM 42 EGO 37 JWN 66 COST 64 TGT 65 SPG 66 DAL 51 CAL 78 APA 81 KBH 68 LEN 65 JPM 70 ABT 54 VZ 60 FDX 71 UPS 73 UNP 68 CSX 48 NUE 61 X 68

I woke up this morning and turned on the radio to XX Sports 1090 a local sports talk radio show. They were doing a commercial for a local mortgage broker. They were talking about equity increases in homes in San Diego. They excitedly mentioned that housing prices were up 12.4% in May.

They said look in the local newspaper and look at the headlines in the business section. I looked in the paper and saw the same headlines. It says "San Diego housing prices up 12.4% in May". The article says that that housing prices were up 12.4% from last May. A 1 year ago period. Buried in the article they said that May prices had increased 1.1% from the prior month. The article should have said May housing prices increased 1.1%.

I also know that May prices reflected the last of the tax credit buyers and this is July 28th and why are they so happy about May? The Jocks on XX Sports are reading a script that deliberately misleads the listener. Just like the headline in the newspaper does. The Jocks probably can't read and could care less about the accuracy of what they read. Trust me no one is going to take the time to actually read the article, and also question why the May numbers are so important, its almost August.

This type of reporting creates a false impression and that is what the writer wants to do. It is now a game of gossip where the listeners are telling people that housing prices were up 12.4% in May. I called the radio station and they said they were just reading the headline and they would let the statement stand. That goes on everyday and it is just what the system counts on. It may be helpful if you read past the headlines to find out the truth.

The earnings reports that are coming out now show big increases too. That's right they are all year over year and I suspect that most of the gains for the year were in April and May. That was when the stimulus was in full force. The fact that May of 2009 was a complete disaster make the year over year comparison very easy. Earnings are backward looking and the stimulus ran out in April. If you read the headlines for the current earnings reports they are all comparing stellar profits from 1 year ago.

Take a look at the stock market. When did it top. April 23




When did the Housing index top? April 23



I would suspect the housing prices were down in May and actually peaked in late April. The timimg of the article is disingenuous at best. The jocks at XX Sports act like your buddy but are they really? I see this stuff constantly on TV and on the radio. The lesson is don't take things at face value and read between the lines for the real message behind the story.


Mikey

Gold breaks 20 month trendline

DJIA 10537.69 +12.26 VIX 23.19 +.46 10 year 3.3002 -.0165 30 year 4.0813 -.0165 Gold 1158 -25.10 Oil 77.01 -.49 USD 82.222 +.037
Mikey OB/OS index (80=OB 20=OS) 67

Gold broke a 20 month trendline and traded close to its 200 day average closing down 25.10 at 1158. Here is what the gamekeeper had to say about Gold today.

Gold Settles Below $1,160 as Safe Haven Allure Fades

Gold dropped 2 percent on Tuesday to a near three-month low under $1,160 an ounce, as weak consumer confidence data and an option expiration triggered heavy technical selling.

After trading modestly weaker in early sessions, bullion prices accelerated losses to hit a low of $1,157.65 an ounce, the cheapest price since May 5 despite firm U.S. stock markets and a flat dollar. Gold also posted also its biggest one-day decline since July 1.

Silver and platinum group metals tracked gold and crude oil to fall sharply after data showed stagnant growth of U.S. home prices and as job worries drove July U.S. consumer confidence to its lowest since February.

Sean Lusk, market specialist at Chicago-based futures broker PFGBest, said that dealers sold heavily in an attempt to push gold futures prices lower as COMEX August gold options were expiring on Tuesday. Gold prices sometimes gravitate toward an option strike price as traders try to profit from their bets when options are about to expire. "In conjunction with the option expiration here, you have a lot of longs liquidating and rolling into another forward months," Lusk said.

Price volatility has spiked ahead of August's first-notice day on Friday, as gold investors rolled their August futures into December contracts, traders said.

They blame it on Options expiration and the fading of the safe haven allure. They do not mention any fundamental reasons for the sell off. In other words, they give no real reason to sell just a technical selloff. This kind of news will not draw any real selling.

The sell off in Gold implies that the problems of the early part of the year are not as great. That takes the edge off of the nervous market traders. It also gives a reason that no Gold bug would believe for the sell off.

They have told us that the stock market is in a trading range and that stocks are cheap. They have told us that the earnings are great and the outlook is great. Now the safe haven status means that the problems that took the market down are going away because Gold is selling off. They have taken the spotlight away from the economy and are making it look safe to get back in. I have said many times that the economy calls the final tune. Where the economy goes the market will follow.

Before they market can resume its decline they must convince the traders and investors that everthing is OK and they should buy the pullback. This is what they are doing now. Here are the trends:


Down <40 Up >60 Neutral 40>&<60

Stocks: ST 69 IT 46

Oil ST 61 IT 51

Gold ST 27 IT 72

Bonds ST 50 IT 61

Emerging Markets ST 68 IT 43



Mikey

Traders turning bullish

DJIA 10525.43 +100.81 VIX 22.73 -.74 10 year 2.9942 -.002 30 year4.0156 -.0043 Gold 1181 -2.10 Oil 78.98 unch USD 82.037 -.427
Mikey OB/OS index (80=OB 20=OS) 69

Trends:

Economy Fundamentals Negative -10 Falling

Stocks----------ST:UP-------IT: DOWN---LT:DOWN---Money Flow: 69
Gold------------ ST:Down-----IT: UP:----LT:UP------Money Flow: 29
Oil --------------ST:-UP------IT: DOWN---LT:DOWN:---Money Flow: 69
LT Bond --------ST:Neutral--IT: UP----LT:UP------Money Flow: 50
Emerging Mkts--ST UP-------IT: UP-----LT:Neutral----Money Flow: 73

Money Flow under 40 is negative over 60 is positive. Generally when MF goes above 60 it is an uptrend and when it goes below 40 it is a downtrend. These indicators are daily indicators and, therefore, are considered short term indicators.

Conclusions: Economic fundamentals are bad and weakening. Stocks are challenging the IT downtrend on recent strong earnings reports. All markets are in up trends. Gold is the weakest with money appearing to go back into equities. Gold is near its breking point of 1180 and a 20 month uptrendline. It would be just like this guys to clock Gold now to prove that everything is OK. Considering that over the last 9 months they have been selling it to the public it seems logical to me.

The Mikey OB/OS index is nearing overbought a reading of 80 should put a ceiling on this rally. The news on Europe is turning giddy and is telling us the worst is over. This shows up in the strength of the emerging markets. The Euro is at a 7 week high at 129.86 and stocks in Europe are at a 5 week high.

Here is trader talk from CNBC

Some encouraging signs for bulls this afternoon at the close as the markets ended the day at session highs:

1) The Dow Industrials and S&P 500 are up 4 percent during their current 3-day winning streak. In fact, the Dow has now posted its 3rd straight triple-digit gain — something it hasn’t done since Dec. 30, Dec. 31, 2008 and Jan. 2, 2009.

2) The Dow Industrials index is now back in the black year-to-date (up almost 1 percent in 2010). The S&P is just a fraction of a point shy of turning positive this year (1,115.10 is its 12/31/09 close)

3) Dow Theory holds: both the Dow Industrials & Dow Transports have closed at 2-month highs today

4) As mentioned earlier, both the Dow Industrials and S&P 500 are hitting higher highs, reversing a recent trend of lower highs

5) New highs abound: 131 NYSE-listed companies are hitting new highs at the NYSE, the greatest number in 3 months. Additionally, 111 stocks are hitting new 52-week highs at the Nasdaq, the most in 2.5-months.

Like I said just like 2008 stocks rallying on bad fundamentals and good earnings.

Mikey

The ECRI, who they are and what is their forecast

ECRI is an independent institute dedicated to economic cycle research in the tradition established by its founder, Geoffrey H. Moore, whom The Wall Street Journal called "the father of leading indicators." Our mission is to advance the tradition of business cycle research established at the National Bureau of Economic Research (NBER) and Center for International Business Cycle Research (CIBCR). When Moore passed away in 2000, his former student, Alan Greenspan, called him "a major force in economic statistics and business cycle research for more than a half-century."

Following in the footsteps of his mentors, Wesley Mitchell and Arthur Burns, Moore developed the first list of leading indicators of recession and recovery in 1950, the composite index method in 1958, and the original index of leading economic indicators (LEI) in 1967. Today, ECRI represents the third generation of researchers carrying on this tradition of cyclical investigation. Standing on the shoulders of these giants, we have refined the scope and accuracy of cyclical forecasting tools to the point where ECRI can reliably predict the timing of cyclical turns.


December 2009
ECRI Outlook
Job growth will soon turn positive, but a (new) U.S growth rate cycle downturn could begin in the first half of 2010.

As we said in Nov. 2009, the implication is that, "unless we are about to experience a long expansion, it will be many years, and possibly decades, before we see the jobless rate drop to the lows seen only a couple years ago."

But, if the jobless rate – and especially the long-term unemployment rate – stays high over the course of several tightly grouped business cycles, the fiscal outlook would be far more grim... result(ing) in more frequent recessions that ultimately compound the problem.

In sum, with the U.S. economy more likely to dip in and out of recession in the years ahead, it will be increasingly necessary to keep close watch on ECRI’s array of leading indexes.




This ECRI leading index turned negative in late 2007. The market continued to ignore the economic weakness. International companies continued to have great earning. The stock market rallied until July of 2008. The chart above is saying the same thing that it did in 2008. We have a weak economy coming and still the market celebrates the great earnings.

This one is worse than 2008 because this "recovery" was brought on by government stimulus. The nation debt has exploded and we are rolling over again. We need more stimulus to keep this going but remember what happens to countries that spend spend spend. They see their ability to borrow shrink. I don't think we have the ability to do what we did before. That makes this one more dangerous.

Mikey

TW3 Stock Market Parties as the Economy sinks

DJIA 10424.62 +102.32 VIX 23.51 -1.12 10 year 2.9871 +.04 30 year 4.0081 +.056 Gold 1184.80 -11.20 Oil 79.02 -.28 USD 82.66 -.122
Mikey OB/OS index (80=OB 20=OS) 66
Trends:
STOCKS:
ST: UP---IT: Neutral--- LT: Down--- Currency Flow: 69 Positive
MACD Positive no divergence
Fundamentals Negative -10 Falling

Gold ST:Down---IT: Up--- LT: Up--- Money Flow: 29
Oil ST:UP---IT:DOWN--- LT:DOWN:--- Money Flow: 68
Summary:Short term rally in a bear market on bad fundamentals. Market is mildly overbought. Gold is showing an outflow of money and is in a short term downtrend. Oil is a lay over to the market.


This week the stock market celebrated earnings and outlook. Just about every report contained better than expected earnings and a rosy outlook. Buried in all of this merriment was the economic news that continues to deteriorate. Chairman Ben downgraded his assessment of the economy at capital hill but said if things get worse we will keep money cheap and stop paying banks interest on money held at the Fed.

Ben said that even though the economy is "fragile" he does not see a double dip. I feel alot better now because Ben was there to "save us" for the first dip. He said that employment will take longer to recovery than expected. Congress agreed because they passed a bill extending benefits for the long term unemployed who were not receiving benefits.

Ben says that businesses are not hiring because they are hoarding cash. That is part of the problem in the jobs market. It appears that when the meltdown occurred they cut benefits and jobs and after this recovery started they decided that they could make more money without hiring anyone back. Jobs being scare with the workers that remained just increased productivity. That means working longer hours for less pay and benefits. That may explain why earnings are so good and the economy is bad.

The banks who pushed subprime loans down the public's throat are still receiving free money from the FED and benefits, spelled TARP, from the treasury. The treasury is still helping the banks in their time of need. That is good because we need the banks to continue to give the economy the loans it needs to keep this "recovery" going. You know the corporate recovery. The government reported that the projected deficit for the year will be 1.5 trillion. Where is the money going? That's right look at the earnings reports.

This week Congress passed the biggest financial legislation since the Great Depression, They seemed to be real proud of that and said the crooks will never be able to take advantage of the people again. Goldman Sac, one of the crooks, then settled over the phone for 500 million. That will teach them a lesson. It will take those guys a month to earn that back. No indictments were handed down and no one was named or took responsibility for anything that happen, however.

I have an idea maybe we could make 500 million from Chase. They bought Bears Sterns and Bear Sterns was knee deep in the derivatives markets. They had 14 trillion of those critters. How about looking at Bank of America they bought Merrill Lynch they were players in the scam too. What ever happened to the mess created by Lehman. Their trading operations were bought by Barkley's. Lets get 500 million from them.

Most importantly of all is not to pass meaningless laws that have no teeth to them. We need to lock up the people who continually abuse the system. This behaviors happens because they never punish anyone. The US treasury has been robbed. Now they are stealing by adding debt.

Goldman Sacs is an example of this. This group is the system manipulator. It is ruthless and will do anything for money. It is in bed with the government. Their CEO's become the Secretary of the treasury. They and the government are out of control and have no fear of punishment because they run the government. It is time to try something different. What they are doing does not work. Look at the national debt.

This week the congress passed an extension to the unemployment bill. This amounted to 33 billion dollars. There was much debate over this and it took weeks to pass. Hey, 20% of the country is out of work and Goldman reports paying compensation of 9.3billion dollars for the Quarter to a few select people and they debate over giving 300 bucks a week to guys who want a job.

Here are the crooks:

The US Treasury Department's pay czar Kenneth Feinberg called out 17 companies who took money from the Troubled Asset Relief Program and then handed out $1.6 billion in "ill-advised payments" to employees during the height of the financial crisis, reports CNBC's Mary Thompson on the Fast Money Halftime Report.

These payments were troubling, Feinberg said, because they were "way too excessive" where in a five-month window, some earned $10 million or more. Many times, the payments lacked "any kind of principle" and weren't performance-based. Most, he said, were severance packages for individuals "walking out the door."

Feinberg is not asking that the companies repay the money that was handed out during the financial crisis, reports Thompson. He is, however, requesting that they voluntarily adopt a "brake provision" that would allow companies to break pay contracts during future financial crises. When asked by Thompson if adopting such a policy would put businesses at a competitive disadvantage, Feinberg said no.

Feinberg listed these 17 companies as those, who handed out the lavish payments:

American International Group [AIG 36.77 0.28 (+0.77%) ]
American Express [AXP 44.79 1.60 (+3.7%) ]
Bank of America [BAC 13.74 0.08 (+0.59%) ]
Bank of New York Mellon [BK 25.82 0.12 (+0.47%) ]
Boston Private Financial Holdings [BPFH 7.03 0.18 (+2.63%) ]
Capital One Financial [COF 40.84 -1.24 (-2.95%) ]
CIT Group [CIT 37.76 0.56 (+1.51%) ]
Citigroup [C 4.02 -0.07 (-1.71%) ]
Goldman Sachs [GS 147.38 0.83 (+0.57%) ]
JPMorgan Chase [JPM 39.83 0.48 (+1.22%) ]
M&T Bank [MTB 89.56 2.88 (+3.32%) ]
Morgan Stanley [MS 26.89 0.10 (+0.37%) ]
PNC Financial Service Group [PNC 61.02 1.24 (+2.07%) ]
Regions Financial [RF 6.65 0.05 (+0.76%) ]
SunTrust Banks [STI 25.04 0.46 (+1.87%) ]
US Bancorp [USB 23.70 0.04 (+0.17%) ]
Wells Fargo [WFC 27.42 0.03 (+0.11%) ]


NOTICE HE IS NOT ASKING THEM TO PAY IT BACK BUT HE WANT TO PASS A LAW SO THEY WILL NEVER DO IT AGAIN. He is, however, requesting that they voluntarily adopt a "brake provision" that would allow companies to break pay contracts during future financial crises. Allow? What the hell does that mean. It means that we have a nice loop hole for you the next time you do it. The rub is that he is only talking about stealing the money that the government gave them after they created the problem. How greedy can you get. What about the mess they created.

Does this sound familiar? How about investigating them for how their banks were run. Then throwing them in jail. What they don't tell you is the most of these guys bought their stock at the lows of the crash and made a killing as the "recovery" came. That recovery was financed with money from the treasury. We are not investigating them we have a pay Czar that tells them that they did not do a nice thing and please don't do it again because if you do you may not be able to keep all of the money. Nice!!!

Well it has been going on for years and they are just blatant about it now. They have no shame because they have the media to cover it up. This will continue until it can continue no more. The volatility it creates just makes them more money and eats away at the core of the system.

This administration is just the same as the last one. It has been bought by the very money interests that created the problem. It may look different sadly it is the same. The beat goes on.

Mikey

Market Rallies Gold sells off

DJIA 10424.62 +102.32 VIX 23.51 -1.12 10 year 2.9871 +.04 30 year 4.0081 +.056 Gold 1184.80 -11.20 Oil 79.02 -.28 USD 82.66 -.122
Mikey OB/OS index (80=OB 20=OS) 66
Trends: ST: UP---IT: Down--- LT: Down--- Money Flow: Positive

It appears that the "fear" created by the European meltdown is waning. Gold is selling off as the market rallies. We are nearing the 1180 trendline again. I have been thinking that they would tank Gold to add to the all clear in the European market and that may still be the case. Remember the trendline is at 1180 (GLD 115.75) and the reversal is at 1160 (GLD 114.13).

All the attention is on the stock market now. Gold is silently sneaking lower with little fanefare. Most Gold stocks have traded down to their 200 day average. The GDX (Gold Miners index) bounced off of its 200 day 2 days ago. The stocks usually lead. The 200 day on Gold is at 1147 which is GLD 112. A break of that average would tigger sell stops.

Mikey

Adding Mikey Trend and Currencies flow indicators

I am adding a daily post of four new indicators. Three are trend indicators and one is a money flow indicator. The three trend indicators are Short term (20 day) Intermediate Term (50 week) and the Long Term (200 week). The fourth indicator is a money flow indicator that I will call currency flow.

The signals will be straight forward. They will be positive or negative. The short term indicator will be subject to whip saws. In general when all of these indicators are going in the same direction we have a trend. The longer term has priority so that all trades should conform to the longer trend.

The Currency flow is something I am adding because it appears to me that the central banks interchange money through the currencies markets to add or subtract money into their equity markets to add reality to their stories. A positive reading in this indicator means that money is flowing into the US market.

The Mikey OB/OS index measures the believabiltiy of the story. In other words are the traders inclined to believe the story or not. When this indicator is at 80 or higher they believe it it safe to invest and are adding to their positions. When the indicator is at 20 or lower they believe that it is not safe to invest and are reducing their positions. The bankers are on the other side of that trade so I like to be on the same side of their trade.

Long Term Negative
Intermediate Term Negative
Short Term Positive
Currency Flow Positive

Mikey OB/OS indicator 61

As you can see the short term is positive and the Intermediate and Long term trends are negative. Money Flow is positive meaning that the central banks are adding money to the US market. The Mikey OB/OS index is mildly over bought.

Mikey

Want a job? Out source yourself.

Want a job? Check this out.

In October 2008, when the world was reeling from the collapse of Lehman Brothers and job markets were freezing up everywhere, Akane Natori waltzed into a new position she liked. “Things went so smoothly after applying online, and before I knew it, I had the job,” said Ms. Natori, who was then a 26-year-old sales assistant at an import-export company in Tokyo.

There was just one catch, one that speaks volumes about the Japanese economy and the challenges younger Japanese face in a country where college graduates used to count on lifetime employment with the company they joined right out of school. Ms. Natori’s new job — working in a call center answering queries from customers in Japan — was in Bangkok.

Under fierce pressure to cut costs, large Japanese companies are increasingly outsourcing and sending white-collar operations to China and Southeast Asia, where doing business costs less than in Japan. But while many American companies have been content to transfer work to, say, an Indian outsourcing company staffed with English-speaking Indians, Japanese companies are taking a different tack. Japanese outsourcers are hiring Japanese workers to do the jobs overseas — and paying them considerably less than if they were working in Japan.

Japanese outsourcers like Transcosmos and Masterpiece have set up call centers, data-entry offices and technical support operations staffed by Japanese workers in cities like Bangkok, Beijing, Hong Kong and Taipei.

Such outposts cater to Japanese employers who say they cannot do without Japanese workers for reasons of language and culture. Even foreign citizens with a good command of the Japanese language, they say, may not be equipped with a sufficiently nuanced understanding of the manners and politesse that Japanese customers often demand.

“If you used Japanese-speaking Chinese, for example, the service quality does not match up with the expectations of the end customers,” said Tatsuhito Muramatsu, managing director at Ms. Natori’s employer, Transcosmos Thailand, a unit of Transcosmos, which is based in Tokyo.

Statistics on exactly how many Japanese have taken jobs outside the country at lower wages are hard to come by. But according to the Japanese Ministry of Internal Affairs and Communications, there was a net outflow of 100,000 Japanese in the year that ended in September 2008, the most recent for which statistics were available. It was the highest number in the past 20 years.

Honey, start packing, I have a new job. I am going to a call center in Hong Kong.
I wonder if that counts in the jobs number in the employment report for next month.
If it does we many want to buy more stock. Then we can make back the wages I am losing from the new job.


Notes" Gold held the trendline and is back up to 1196. The break down is still 1160.

Mikey

Market Surges on earnings news

DJIA10323 +202.68 VIX 24.33 -1.31 10 year2.9335 -1.31 30 year 3.931 +.0389 Gold 1196 +3.90 Oil 78.70 +2.14 USD 82.75 -.843
Mikey OB/OS index (80=OB 20=OS) 63

The gamekeeper is playing the good earnings and better outlook card today. The DJIA is up 200 points on earnings news. Of course these earnings and outlooks are much better than originally forecasted. The outlook by almost every corporation is very up beat. I guess they see more stimulus money coming from Uncle Sugar.

Today is telling us that things are great and if you don't believe it look at this great rally. The financial recovery continues and the gap between this and the real economy widens. Like I said the if you can't make money in the economy where do you go. The casino, of course. They are telling you today to come to the casino and make money. Listen to Cramer on CNBC he is working hard for the casino today. Today's market is saying come and play, that is what today is all about.

This so reminds me of 2008 when the economy was heading south but earnings were great and according to Bernanke the economy was not going into a recession. I remember George Bush standing on the White house lawn and talking about the strong economy, remember? His economic advisor was, of course, Ben Bernanke. The market was making new highs and real estate was tanking and no one could get a loan. The subprime lenders were going under but they told us that the big banks were not going to be hurt by the problem.

What is happening now? The earnings are great and the economy is sinking. Real Estate is dropping again and the banks are making record earnings as the foreclosure rate increases. GM is talking about making subprime loans to boost car sales and Bernanke says there is no double dip in sight.

He says the Fed is going to see to it that that does not happen by keeping rates low. He wants Congress to provide more stimulus to the economy. Maybe so the stock market can keep the corporations in cash. Employment rates that they say are at 9% are really at 22% and the Congress is going to pass a law extending unemployment benefits. This produces nothing it only launders money from the treasury into the economy without any real production.

The government and the bankers and the investment analysts are on the take. They have a vested interest in keeping the scam going for as long as they can. The investment bankers are banks now as Glass Segall is dead. They have permanently raised the FDIC insurance to 250K so that the treasury is backing this at an increased level. Those are the people that are benefiting from the "recovery" not the public.

Like I said this is a financial recovery and not an economic recovery. Financial recoveries are alot of hot air without an underlying economy. Just like 2008 the day of reckoning will come when they can no long pull this off. They will then pass a new laws so that it will never happen again.


Mikey

Existing Home Sales Fall

Existing Home Sales Fall, Putting More Drag on Economy

Sales of previously occupied homes fell in June and are expected to keep sinking, indicating that the housing market's troubles are likely to drag on the economic recovery.


Sales fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million, the National Association of Realtors said Thursday. Economists polled by Thomson Reuters had expected sales of 5.18 million.

The report counts home sales once a deal closes. Last month's report captured some buyers receiving federal tax credits of up to $8,000 that boosted sales this year. Buyers initially had to close their purchases by June 30, but Congress extended the deadline to the end of September.

Since the tax credits expired, the number of people buying homes has fallen sharply, despite lower prices and the lowest mortgage rates in decades. The situation has been worsened by high unemployment, tight lending standards and rising foreclosures.

"Economic uncertainty is clouding that buying opportunity," said Lawrence Yun, the Realtors' chief economist. "It's still a fragile situation in the housing market."

As sales have slowed, the inventory of unsold homes on the market has risen 2.5 percent to nearly 4 million. That's a nearly nine-month supply at the current sales pace, the highest level since August. It compares with a healthy level of about six months.

The tax credit scam has ended and the sales and prices are seeking their real levels now. Tax credits were part of the smoke and mirrors recovery. The cash for clunkers, the Census workers hiring all temporarily boosted the numbers. There has been no real fix. Low interest rates are not available to the current homeowner unless they can prove income and have equity. What stimulius are they going to give us next?

Mikey

Government Motors( GM) to buy subprime loan lender

No Credit, Bad credit, No Job?....No Problem

Remember what subprime loans did to the housing market? It goosed sales of homes by lending to people who could not afford to buy a house. Well, GM has decided that the way to increase sales is to make subprime loans available to low end buyers.

General Motors said it will acquire auto financing company AmeriCredit so it can increase leasing and make more loans to buyers with low credit scores.

The Detroit automaker said it will pay $3.5 billion to buy all of AmeriCredit's [ACF 24.02 4.32 (+21.93%) ] stock at $24.50 per share — a 24 percent premium over Wednesday's close. It expects the deal to close in the fourth quarter.

GM CEO Ed Whitacre said Wednesday — the deal will make GM more competitive in auto financing. GM executives have said their sales have been hurt by a lack of subprime and lease financing.

"It's good for customers, it's good for dealers and good for us. It's good for our customers because it gives them more choice, more competition," Chris Liddell, the company's chief financial officer, told CNBC Thursday. "It's good for dealers for the same reason."

The acquisition is also another step in the company's move to file for an IPO, Liddell said.

"It's useful, it's another helpful building block is the way that I'd put it, and we've been putting in place all the necessary building blocks during the course of this year for the IPO and this is another useful step in that direction," said Liddell.

Liddell, however, said owning the subprime lender will help the company repay its debt to the American government."Not everything associated with non-prime is necessarily bad. We think these are important people who are responsible with the way they deal with their loans and there's an opportunity to market to them," said Liddell. "In terms of the IPO and getting the government back its investment, if anything we think this enhances it because it actually allows us to sell more vehicles in a responsible way and a profitable way."


You can see the mentality of this corporate/government executive when Liddell says, Not everything associated with non-prime is necessarily bad. There's an opportunity to market to them," said Liddell. "In terms of the IPO and getting the government back its investment, if anything we think this enhances it because it actually allows us to sell more vehicles in a responsible way and a profitable way."

No credit bad credit no problem. Do you have a job? No, well come in anyway. Come on down to Government Motors. We will do anything to get your business. Everyone wins, you get the car on easy credit terms and we get to take our stock public and pay back the government all that money we borrowed. Including the 3.5 billion we borrowed for Americredit.

Mikey

Bernanke Testimony a load of Manure...You read it

Bernanke Open to New Steps to Keep Recovery Going

Federal Reserve Chairman Ben Bernanke told Congress Wednesday the economic outlook remains "unusually uncertain," and the central bank is ready to take new steps to keep the recovery alive if the economy worsens.

Testifying before the Senate Banking Committee, Bernanke also said record low interest rates are still needed to bolster the economy. He repeated a pledge to keep them there for an "extended period." Bernanke downplayed the odds that the economy will slide back into a "double-dip" recession. But he acknowledged the economy is fragile.

Senate Committee on Banking Housing and Urban Affairs hearing during which Federal Reserve Board Chairman Ben Bernanke delivers second semi-annual report on monetary policy.

Given that, the Fed is "prepared to take further policy actions as needed" to keep the recovery on track, he said. Bernanke said Fed policymakers haven't settled on "leading options" but they are being explored. Those options include lowering the rate the Fed pays banks to keep money parked at the Fed, strengthening the pledge to hold rates at record lows and reviving some crisis-era programs, Bernanke said.

"If the recovery seems to be faltering, we have to at least review our options," Bernanke told lawmakers. However, he added later: "We are not prepared to take any specific steps in the near term" because the Fed is still evaluating the strength of the recovery.


Bernanke is trying to send Congress, Wall Street and Main Street a positive message that the recovery will last in the face of growing threats. At the same time, he wants to assure Americans that the Fed will take new stimulative actions if necessary.

The recovery, which had been flashing signs of strengthening earlier this year, is losing momentum. And fears are growing that it could stall.

Consumers have cut spending. Businesses, uncertain about the strength of their own sales or the economic recovery, are sitting on cash, reluctant to beef up hiring and expand operations. A stalled housing market, near double-digit unemployment and an edgy Wall Street shaken by Europe's debt crisis are other factors playing into the economic slowdown.

"In short, it look likes our economy is in need of additional help," said the committee's chairman, Sen. Chris Dodd, D-Conn. And, Sen. Richard Shelby of Alabama, the highest-ranking Republican on the panel, said the economic outlook has become a "bit more cloudy."

With little appetite in Congress to provide a major new stimulus package, more pressure falls on Bernanke to keep the recovery going. Bernanke and his Fed colleagues have cut their forecasts for growth this year.

If the recovery were to flash serious signs of backsliding, the Fed could revive programs to buy mortgage securities or government debt. It could cut to zero the interest rate paid to banks on money left at the Fed or lower the rate banks pay for emergency Fed loans. The Fed also could create a new program to spark more lending to businesses and consumers in a bid to lure them to ratchet up spending and grow the economy.


Bernanke said the debt crisis in Europe, which has rattled Wall Street, played a role in the Fed's "somewhat weaker outlook." Although financial markets have improved considerably since the depth of the financial crisis in the fall of 2008, conditions have become "less supportive of economic growth in recent months," he explained.

As a result, Bernanke said progress in reducing the nation's unemployment rate, now at 9.5 percent, is now expected to be "somewhat slower" than thought. Unemployment is expect to stay high, in the 9 percent range, through the end of this year, under the Fed's forecast.

High unemployment is a drag on household spending, Bernanke said, although he believed both consumers and businesses would spend enough to keep the recovery intact.

Bernanke also said it would take a "significant amount of time" to restore the nearly 8.5 million jobs wiped out over 2008 and 2009.

And, Bernanke said the housing market remains "weak" and noted that the overhang of vacant or foreclosed houses are weighing on home prices and home construction.

Given the weak recovery, inflation is not a problem, Bernanke said. However, Bernanke didn't talk about deflation, a prolonged and destabilizing drop in prices for goods, the values of stocks and homes and in wages. Although most economists think the prospects of deflation are remote, some Fed officials have expressed concern about it.

To strengthen the economy, many economists predict the Fed will hold a key bank lending rate at a record low near zero well into 2011, or possibly into 2012. Doing so, would help nip any deflationary forces.

And keeping that bank rate at super low levels also would mean rates on certain credit cards, home equity loans, some adjustable-rate mortgages and other consumer loans would stay at their lowest point in decades.

Ultra-low lending rates, however, haven't done much lately to rev up the economy. Consumers and businesses are cautious and aren't showing an appetite to spend as lavishly as they usually do in the early stages of economic recoveries.

Bernanke, meanwhile, welcomed Congress' new revamp of financial regulations signed into law by President Barack Obama on Wednesday. The new law, he said, "will place our financial system on a sounder foundation and minimize the risk of a repetition of the devastating events of the past three years

-------------------------------------------------------------------------------------
This guy is an arrogant SOB he says:

Record low interest rates are still needed to bolster the economy. What good are low interest rates when equity values are falling and people are out of work and have no income.

High unemployment is a drag on household spending. This is news??

Bernanke said the housing market remains "weak" and noted that the overhang of vacant or foreclosed houses are weighing on home prices and home construction. Really???

Regarding the new financials law passed by congress. He says, The new law, "will place our financial system on a sounder foundation and minimize the risk of a repetition of the devastating events of the past three years. To this I say that is the biggest load of crap he testified to today.

Tell me why no one has been indicted for the financial melt down. Goldman Sacs ,who is one of the major players, settled OVER THE PHONE, with the justice department for a miserly sum of 500 million. These guys make 20 million dollars a day. Not one CEO or any government official has been charge with anything.

The new "sweeping financial law" is a sweeping alright. It is sweeping the whole mess under the carpet. This is what they always do after their schemes blow up. Remember the last one, the Dot com bubble and financial disclosure laws. How did that one work and who was brought to justice for that one.

Obviously the low interest loans are not going to the problem which is the real economy. Who wants to loan money on a falling asset. Hell, who wants to buy one. The money is going to the banks and brokers and the banks and brokers are playing in the casino (stock and bond markets) to make their money.

This recovery is a financial recovery not an economic recovery in the real economy. Jobs in this country have ONLY BEEN CREATED BY SMALL BUSINESS. THE LARGE CORPORATIONS HAVE BEEN SHIPPING JOBS OVERSEAS, TO FATTEN THEIR EARNINGS, EVER SINCE FREE TRADE CAME INTO BEING.

The reason they say it is a recovery is that the US economy is just a paper pushing financial economy now. The US is just a very large casino where stock and debt is issued to something that exists overseas.

You can dummy up a financial economy and call it anything you want to but in the real economy where people live, money flow is being shut off. Hell, for those who saved all of their lives can't earn a damn thing in interest and are being forced to invest in the casino. That very investment along with the trillions of dollars being poured into the banks and corporations by the US treasury is keeping this Faux recovery going financially and not economically.

Ben here is what happened. You and your friends in congress and on Wall Street forced a housing and debt bubble on this country that is now in the process of deflating. The deleveraging process is causing high unemployment, lost wealth, and lost homes. This is going to last for a long time and you know it.

Your buddies on Wall Street have been saying that you are printing money and there is going to be inflation. You and you fellow central bankers have propped up the price of Gold to give the impression that inflation is coming.

You and you friends in government and on Wall Street are taking money from the US treasury and directing these funds into the financial markets. Every mortgage in the US could have been paid off with the money you have stolen from the treasury. In short you are covering up the biggest crime in history.

I do not agree on many things that Jim Cramer says but I agree that this is a government of the corporations, by the Corporations, for the Corporations. Bernanke is there to maintain the status quo. Cramer is there to take advantage of the casino.


Mikey

Apple "Blows away

DJIA 10120.53 -109.43 VIX25.64 +1.71 10 year 2.8746 -.0789 30 year 3.8838 -.0977
Gold 1185.60 -6.20 Oil 76.40 -1.18 USD 83.49 +.57 Mikey OB/OS index (80=OB 20=OS) 57


Apple Answers the Big Question
Published: Tuesday, 20 Jul 2010

This is Bob Pasinis' take:

Apple lays the doubts to rest. Earnings of $3.51 is not just above consensus of $3.11, but above even the HIGHEST analyst estimate of $3.47.

Big question: how many marginal customers were lost from the iPhone antennaegate imbroglio? Answer: not many. 8.4 million iPhone was at the high end of most analyst expectations.

iPad sales at 3.27 million were also excellent.

Pleasant surprise: 3.47 million Macintoshes sold.

Even guidance was a bit stronger than usual. Q4 guidance of $3.44 is well below analyst expectations of $3.82 — while they always lowball the estimates, this is slightly higher than they normally give relative to estimates--it would have been around $3.35 if a typical pattern was evident.

The stock opened at 264.73 up 12.89 from the prior days close. The high was 271 on June 21. By my math 264 is lower than 271. It is currently trading at 256.97 +5.08.
A close below yesterdays close of 251.89 is a reversal to me.

I am hearing the JP Morgan saying this stock is going to go to 350. I would love to see the position that JPM has in this stock. I bet they are short. The shorts have no leg to stand on now. The antenna problem is solved, the earning are great and the outlook is fantastic. Let's see what happens now.


Notes: 10yr and 30 yr interest rates falling like a rock.
Gold trades down with the market tests trend line and holds 1180 again.
Mikey

Gamekeeper plays the stocks are cheap card

DJIA 10204.61 +50.18 VIX 24.12 -1.84 10 year 2.9491% -.0181 30 year 3.9823% +.0034 Gold 1192.20 +10.30 Oil 7752 +.62 USD 82.96 +.26
Mikey OB/OS index (80=OB 20=OS) 64

I have mentioned before that the last reason you want to buy a stock is that it is cheap. A cheap stock always gets cheaper. It, however, makes logical sense to buy something that is cheap. That is the biggest hook in the stock market. Through the years I have learned that the best way to lose money is buy a cheap stock in a downtrend.

The other idea the gamekeeper is floating is that we are in a trading range 9800 on the low and 11000 on the high. You combine the cheap idea with the fact that we are on the low end of the trading range. It implies that the market is both cheap and at the low end of the trading range. They are minimizing the weakness in economic numbers over the past 2 months. They are saying is the weak economy does not matter.

I conclude that they want us to buy the low end of the trading range. If they want to take it lower that is exactly the message they would give us. It is giving the shorts time to cover just as the economy fails. The way the market is trading now is giving the impression that it does not want to go lower. The Mikey index has now risen to 64 today so as we work lower we are actually doing so by being slightly overbought.

The is classic Gamekeeper the old misdirection play. Change the subject from the bad economy to something exactly the opposite. They can't hide the economic numbers so they misdirect you into what appears to be new rules for the game. Like I said they are telling us the weak numbers are old news. Cheap also implies that it is TOO LATE TO SELL. Who want to sell something that is already cheap.

The weak economy is now a reality and will not go away anytime soon. It will rear its ugly head again in the coming months. The gamekeeper knows this and so creates reasons why you should be in. The main reason now is CHEAP. Cheap is a buzz word for going lower.

Mikey

GOLD (or Mikey) nearing the Hangmans noose

DJIA 10111.41 +13.13 VIX 26.55 +.30 10 year 2.93% 30 year 3.96% Gold 1178.50 -8.70 Oil 76.58 +.57 USD 82.43 -.28
Mikey OB/OS index (80=OB 20=OS) 58

Watch two numbers on Gold 1180 and 1160.

Gold is trading at 1179.58. Looking at a weekly chart, Gold broke a downtrend line in the week of 3/5/10 at 1127. It then had a 3 week pullback to 1085 where I said if if broke 1080 that would be it. It held that level and broke out above the 1150 top in the week of 4/9/10. The high that week was 1164.80 There was alot of breakout buying and alot of hype going on in Gold in that week. My conclusion is that once we close below 1160 then alot of those buyers are going to be underwater and the top will be complete.

There is a 21 month uptrend line that drawn from the lows of 10/08/08 of 681 through the low of 2/10/10 at 1052.40 and the low of 3/26/10 at 1085.20 that crosses today at 1180. The 20 week average is also at 1180 so that is a very critical number that we are sitting on today. I see no mention of this by the Gamekeeper today. They do mention that it is down on technical selling but they are not raising too many concerns.

I conclude, that the focus is on the market and not Gold. These are the conditions they need to move Gold lower without the whole world selling it back to them. A close below 1180 I think seals the deal but a reversal below 1160 that traps the buyers of the last breakout would be final confirmation in my mind.

The gamekeeper tells us that Gold goes up when the market goes down. Well today Gold is down and the market is up. That is something different. To me a close below 1180 does it but the real breakdown comes on a reversal of the 4/29 breakout at 1163. That is were the rats jump ship.

If you cannot get a quote on Gold in the commodities market the GLD is a close surrogate. The two numbers you need to watch here is 115.75 (1180 Gold) and 114.07 (1160 Gold)


Silver (17.57) has already broken its 21 month trendline that came through at 17.83 today. It 20 week average is at 18.05. The ZSL (2X silver short) is trading at 35.91 +1.02. The DZZ (2X short Gold ) is trading at 11.80 +.20 on the day.

Mikey

TW3 Earning outlook and Bad economic numbers.

The first week of earnings and outlook kicked off with Alcoa's better than expected earnings and outlook. That pattern stayed the same for the entire week. Almost every earnings report beat and the week ended on Friday with options expiration and a series of bad numbers on the economy.

The gamekeeper asked the question what is more important the earnings or the economy. I guess they are saying the economy doesn't matter if the earnings are great. It does not take a great leap of faith to conclude that at some point bad earning will come from a bad economy unless you believe that the recovery is just stalled and will pick up later.

I heard the mention of deflation in several article's this week. The price of Gold is weakening and the long term US bond market is very strong. In other words, the story is starting to head toward bad economy and a flight to safety. The kind of safety that happened I believe in late 2008.

The poor public sold their stocks and bonds in late 2008 and early 2009 and after 1 year of earning almost nothing in the bank they ventured out in mainly the corporate and Muni bond markets to prop up their income on their cash. If I am right they will be fleeing back into the banks again later this year and next year as the the word deflation and depression will be tossed about by the gamekeeper. When they do I will be a buyer but not before then.



Mikey

Safe Haven Metal follows market lower

DJIA 10147 -211.64 VIX 27.62 +2.48 Gold 1189.50 -18.50 Oil 74.54 -1.08 USD 82.77 +.027 30 year 3.9328 -.0531 10 Yr 2.9323 -.0632
Mikey OB/OS index (80=OB 20=OS) 50

The DJIA is down over 200 points today and the price of Gold has declined by 19.20 to 1189.50 -18.50. Remember yesterday they told us that if it declined to 1185 it was a buy? It is now breaking a trend line drawn through the Feb 5 low the March 25 low and the July 7 low. The 50 day is at 1215 and was broken on July 1. They say that today is technical selling. I would agree the position looks technically weak in the near term. I, however, believe that on a close below 1180 that the top is set and the Bugs are trapped.

Here is the Gamekeeper line on Gold today:

Gold Slides on Technical Selling
Gold slipped to a one-week low on Friday as heavy fund selling of Comex futures pushed it through technical levels below $1,200 an ounce, with a retreat in safe-haven buying leaving little support for prices.

A fresh outflow from the world's largest gold ETF has undermined appetite for the precious metal, analysts said.

Spot gold [XAU=X 1188.25 -19.50 (-1.61%) ] slipped as low as $1,186.95 an ounce and was last bid around $1,190 Friday morning, against $1,207.75 late in New York on Thursday.

U.S. gold futures [GCQ0 1190.4 -17.90 (-1.48%) ] for August delivery was also down sharply.

Comex floor trader Jonathan Jossen said there was heavy selling of gold call options by a fund manager in early trade.

"There were sell-stops that set it off this morning," he said. "There has been pressure in the market for weeks now. Every time it gets up, the sellers come in."

Gold hit a record $1,264.90 an ounce in late June, after worries over the sovereign debt of some euro zone economies sparked buying of the metal as a haven from volatility in the currency markets. As those fears recede, it has slipped back.

"The story of Spain, Portugal and Greece is now calming down and people are taking their chips off the table, so we are seeing gold under pressure," said Jeremy East, global head of commodity derivatives trading at Standard Chartered.

"We are seeing (a return) to normality as people accept that markets are calming down."

Earlier on Friday the premium investors demanded to hold 10-year Spanish government bonds rather than German benchmarks fell following a successful auction the previous day.

The dollar meanwhile held near two-month lows against the euro [EUR=X 1.2919 -0.0009 (-0.07%) ], with the single currency benefiting from rising European money market rates and a deteriorating outlook for the U.S. economy.


I like the terminology, safe haven every time the mention Gold. Save-haven is attached at the hip to Gold. How can you get hurt in a safe haven??? The meaning of the word safe-haven is you can't lose. The Gamekeeper uses word association with price movement in a very clever way. The public actually believes the story now. This is a dangerous conclusion.

The stops on the GLD are at 114. I expect it to gap below that number trapping the longs.

Al: buying FAZ and BGZ I expect Gold to gap lower monday I also think that was the top yesterday in the market.

Mikey

Bond offering is Spain and Geece come at perfect time

FYI currencies trade vs the relative strengths of their economies. For example if the European economy is seen as stronger than the US the EURO goes up vs the dollar. If the US economy is seen a stronger the EURO goes down vs the dollar

The weakness in the US economy coincidentally happed just as new bonds were issued by the Spanish and the Greeks. You remember the disaster there don't you? Well gee the US economy suddenly got weak and it boosted the value of those offerings which were of course priced in Euros. Here is today's note on our market.

On the currency markets, the euro [EUR=X 1.2898 0.016 (+1.26%) ] extended gains against the dollar, nearing $1.29 for the first time in two months, after data showed the Philadelphia Federal Reserves business conditions index fell in July.

Here is a chart of the EURO..Nice little rally going on now.




If you remember the turmoil in the PIGS Portugal, Ireland. Greece and Spain that was hyped in the papers until early June then you would think that the EURO decline against the dollar. That is shown in the above chart. The good news for Europe is that the US economy just happened to get weak right as they were issuing bonds...in EUROS. I'll be damned if they got the issue off and now they are making in in the currencies market. Thanks of course to our timely economic weakness.

This international finance moment brought to you by Mikey

Safe Haven is the word they use now for Gold

Gold Rises on Safe Haven Status

Gold rose on Thursday, benefitting from a retreat in risk appetite after soft U.S. economic data knocked stocks, the dollar and industrial commodities lower.

Spot gold [XAU=X 1207.85 0.35 (+0.03%) ] was last bid around $1,208 midday Thursday, against $1,207.50 late in New York on Wednesday.

U.S. gold futures [GCQ0 1208.1 1.10 (+0.09%) ] for August delivery also rose.

Stock markets weakened in Europe and the United States after a lower-than-expected reading from the Philadelphia Federal Reserve's index of business conditions in the U.S. Mid-Atlantic region pointed to sluggish U.S. growth.

Concerns over the economy tend to support gold, but the precious metal remains in a narrow range.

"Bargain hunters want to buy it around $1,200, and (at) $1,217, profit takers are all lined up," said Afshin Nabavi, head of trading at MKS Finance.

"Overall a break above $1,225 should trigger more interest from the buyers who are currently on the sidelines. On the downside, $1,200 to $1,185 should bring in some physical related buying." (Hey its a win win if it goes up to 1225 they buy if it goes down to 1185 they buy)..well I guess that is why it is a safe-haven...you can't lose.
On the currency markets, the euro [EUR=X 1.2898 0.016 (+1.26%) ] extended gains against the dollar, nearing $1.29 for the first time in two months, after data showed the Philadelphia Federal Reserve's business conditions index fell in July.


I pointed this out yesterday they are not talking about Gold as an inflation hedge but a safe haven. It is almost like putting the money in the bank when you want to be safe. I promise you this. The people who are putting their money in Gold because they want a safe-haven are going to find out just how the safe it is.

These are the same folks that told people to invest in real estate in 2005 and the people who told you to invest in the stock market in 2007 and to invest in oil in 2008. The reality is that the very people who got nailed in the Stock Market and Oil and Real Estate are going to have the exact same thing happen to them in Gold. Those were all safe-havens too. Think about it.

Mikey

Economy being choked by Money supply contraction

DJIA 10269 -97.85 VIX 26.49 +1.60 Gold 1208.50 +1.50 Oil 75.62 -1.42 USD 82.89 -.70 30 year 3.9713 -.0561 10 Yr 2.9775 -.0669
Mikey OB/OS index (80=OB 20=OS) 54

This article by Dick Bove is right on the button. I have being talking about the falling money supply for a long time. This is the first time I see it mentioned in the press.


Millions of Americans Will Lose Access to Banks: Bove

Financial regulation reforms, now in the last stages before becoming law, will mean that millions of people will lose access to banking services, Dick Bove, banking analyst at Rochdale Securities, told CNBC Thursday.

Congress will vote later Thursday on the Wall Street reform bill, which is the biggest attempt to revamp financial regulations since the Great Depression and aims to tighten regulation to avoid a new crisis like the one that swept through the world economy between 2007 and 2009.

Under the bill there will be new limits on risky trading by large banks and many of them will have to hoard more capital to prepare for times of crisis to avoid being bailed out by taxpayers.

A new consumer protection authority will oversee financial services companies such as mortgage brokers or student lenders and regulators will be able to dismantle troubled banks and impose leverage limits on the banks deemed too big to fail.

All this will mean that banks will impose fees on existing consumers to try to make up for cash they need to store as capital or spend on levies, and consumers who cannot pay the fees will have to give up on banking services, Bove said.

He estimates that "at least 10 million people" will lose banking services in the US after the new financial regulations come into force, because "they just won't be profitable for banks and banks won't keep them."

JPMorgan [JPM 40.10 -0.25 (-0.62%) ] reported a better-than-expected second-quarter profit earlier Thursday, but Bove said the figure was not good because it was partly boosted by the fact that it took money out of its reserves to put into earnings.

"What you're going to see is that just about any bank that reports numbers… is going to do the same thing," he said. "That's something that banks have always done in recoveries."

High Risk of Double Dip

But the risk of a double-dip recession is not yet in the past, and banks will have to put this money back into reserves if the economy tumbles again, Bove warned.

"What they're doing is increasing their vulnerability if there is another downturn," he said.

Money supply is shrinking because banks are not lending further, despite the Federal Reserve's efforts to flood the market with cheap money, he said, adding that banks are not lending because of the various claims on their capital from regulations.

"How can economy expand if money supply is shrinking?" Bove said.

"I think that there is a 40-60 percent shot… if they cannot get money supply to go up, there is a probability of a double dip," he said.
Because trading in asset markets - an important component of banks that also have investment banking arms – has been bad over the second quarter, investors should not expect increase in big banks' revenues, according to Bove.

Regional banks such as BB&T [BBT 27.67 -0.25 (-0.9%) ] and US Bancorp [USB 24.10 -0.04 (-0.17%) ] are the ones where a rise in revenues may be seen, he said.

JPMorgan, with a 37 percent fall in investment banking fees, showed what a bad trading season can do to revenue, Bove said.

"I think they took reserves down too dramatically, given that we do not have a clear picture of where this economy is going to be on Dec. 31 this year," he said.


Gold bugs the money supply is falling. This is going to bust your inflation senario. They now refer to Gold as a safe-haven investment they have stopped talking about Fed printing. We are heading for DEFLATION not inflation and Gold will be a source of funds.

Mikey

Gamekeeper linking lower market to higher Gold

The gamekeeper is linking the price of Gold to movements in the stockmarket.

Here is the line:
Gold Ends Below $1,208 as Stocks Retain Interest

Gold pared earlier gains Wednesday, slipping off a brief rally as U.S. equities and foreign exchange markets held steady and dampened interest in the safe-haven metal.
Spot gold [XAU=X 1208.45 -2.20 (-0.18%) ] was last bid around $1,208 an ounce midday Wednesday, against $1,210.65 late in New York on Tuesday.

U.S. gold futures [GCQ0 1208.4 -5.10 (-0.42%) ] for August delivery settled down $6.50 at $1,207 an ounce.

A weak reading of U.S. retail sales earlier Wednesday bucked investor confidence, helping to push the yellow metal higher for a brief rally.

Meanwhile, the euro [EUR=X 1.2738 0.0016 (+0.13%) ] hit its highest in two months against the U.S. dollar, reversing earlier losses. Analysts said the second monthly drop in retail sales and the international trade data this week had prompted some economists to scale back their U.S. growth forecasts.

"You have got to be frightened to want to be long of gold, and we don't have that factor," said Credit Agricole analyst Robin Bhar. "But we still have uncertainties. There are still worries about debt, about currency devaluation, about inflation becoming higher. That is all supportive of this notion of there being a fairly solid floor for gold."


The reality is that Gold will follow the market down. As the news get worst for the economy the bugs will be buying the pullback. What cracks me up is the reference to Gold as the safe-haven metal. There is nothing safe in Gold. Gold is a commodity just like oil when it tanked from 148 to 30 in 2008. There is a lot of leverage in this stuff and they are running out of people who are going to buy here. The only people buying here are the ones that just woke up from a 2 year comma because all I have heard on radio, TV, and investment experts for the past 2 years is buy gold.

Mikey

Fed downgrades outlook

DJIA 10327 -34 VIX 25.64 +1.08 Gold 1204.30 -9.20 Oil 76.92 -.23
USD 83.37 -.28 30 year 4.1071% -.0771 10 Yr 3.1245% -.0783
Mikey OB/OS index 65 (80=OB 20=OS) 57


Federal Reserve officials have a slightly dimmer view of the economy than they did in April, reflecting worries about how the European debt crisis could affect U.S. growth and job prospects.


Fed officials say in an updated economic forecast that they think the economy, as measured by the gross domestic product, will grow between 3 percent and 3.5 percent this year. That's a downward revision from a growth range in their April forecast of 3.2 percent to 3.7 percent.

The Fed's latest forecast sees the unemployment rate, now at 9.5 percent, possibly staying at that figure or in the best case falling to 9.2 percent. In the April forecast, the Fed had a slightly lower bottom number of 9.1 percent.

Federal Reserve officials also weighed whether new steps would be needed to keep the economic recovery alive.

A new document, released Wednesday, shows Fed officials saw the need to explore new options for bolstering the economy in light of Europe's debt crisis, a volatile Wall Street, a stalled housing market and high unemployment.

That's a turnaround from earlier this year when they were moving to wind down crisis-era supports.

No new specific steps were disclosed or agreed upon.


They are right on top of it. Wow a down grade to 3 to 3.5 from 3.2 to 3.7. They also are blaming Europe. They also say Fed officials saw the need to explore new options for bolstering the economy. Hey Dallas Fed Chairman said last week that the economy was OK and nothing needed to be done.

From my post of July 7 TW3: Dallas Fed Foster says law changes in Health care and Financials are holding back the economy. He says he does not expect a double dip recession or further Fed actions to fuel the economy.

This forecast is a joke. The money supply is negative which means that the banks are not loaning money. Consumer credit is tanking which means that the retailers are hurting. The employment rate is at a true 22% counting discouraged workers who have exhausted benefits. The states are in a financial crisis and are cutting back workers hours or cutting services. Housing prices are declining again after the tax credit stopped.

The Fed is covering this all up and the earnings season is being touted as a reason to buy stocks. Like I have said many times over it is the economy that matters most in the end. They better come up with something in the way of another stimulus soon so they can extend this "recovery" out longer.


Mikey

Redirection...The Magicians best tool

Over the past 2 months it has become apparent that the economy is winding down. Every economic stat says slowdown. The gamekeepers have now redirecting the attention away from the economy to earnings and outlook. They are saying ignore the stats and look at the earnings and outlook. I pointed that out to you and posted the article on CNBC that said the new game would earnings and outlook.

Shazaam almost every earnings report has beat expectations and in almost every case the outlooks are positive. That is remarkable considering the state of the economy. Either these analyst and companies are lying or they are not seeing what everyone else sees. After Intel's earning Bob Pasini said that the earnings proved that there will not be a double dip recession. Thanks Bob, I feel better now.

Meanwhile, in the economy:

Demand for loans to purchase U.S. homes sunk to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates, the Mortgage Bankers Association said on Wednesday.Requests for loans to buy homes dropped 3.1 percent in the week ended July 9, after adjusting for the Independence Day holiday, to the lowest level since December 1996, the industry group said. Refinancing applications fell 2.9 percent, and the mortgage market index that reflects total loan demand also fell 2.9 percent.


Home Sellers Slashing Prices, While Banks Mow the Lawn

That heady buzz from the home buyer tax credit is now turning into a grinding headache, as home sellers realize their very temporary, government-induced catbird seat has now fallen back to earth. As of July 1st, 24 percent of sellers on the market had cut their asking prices at least once, according to Trulia.com. That's up 9 percent from the previous month and represents about $27 billion worth of vanished national home equity (or home equity hopes).

WASHINGTON - A second straight month of declining retail spending will likely keep unemployment high and help weaken the recovery. Retail sales revenue fell 0.5 percent in June, the Commerce Department reported Wednesday. That followed a 1.1 percent fall in May.

"Clearly, the consumer is being more cautious now," said David Wyss, chief economist at Standard & Poor's in New York. Consumer spending accounts for 70 percent of economic activity. It grew at a solid rate during the first three months of the year. But consumers have since held back in the past two months. Many are worried about high unemployment, a volatile stock market and a housing industry that has struggled without government incentives.

In other words the bad numbers are being covered up by the earnings that are being compared to 1 year ago. One year ago is an easy number to beat. What they are doing is drowing out the bad news with the earning news and then saying that everything will be OK. They they give you a list of 10 stocks that will do well. This is all extending and pretending. The very thing that was happening in July of 2008.

By the way our buddy Warren Buffett is going to the White house to talk to Obama about the economy. I am sure they will emerge with a very positive picture for the economy. The state of the economy now is not good. They need the father figure to come out and assure us that everything is OK.


Mikey

Getting close to a top

DJIA 10381 +151.85 VIX 23.70 -.73 Gold 1213 +14.30 Oil 76.83 +1.88 USD 83.77 -.63
Mikey OB/OS index 65 (80=OB 20=OS)

We are breaking above the 200 at 10370 and the 50 day at 10265 averages and the downtrend line drawn off the April high. The shorts have to start to think about covering now. The rally may take us to between 10500 and 10700. I am getting close to a sell point at this level. I would like to see the Mikey index go to 80 plus before I pull the trigger. That may be a little too ambitious I am not sure it will go that high this time. The last rally on June 21 topped out at 68.

Mikey

Let them eat cake!!!

In the world of corporations and deficit spending governments there are the haves and the have nots. The haves have access to money the have nots do not. The earnings season is on now and the corporations are reporting better than expected earnings. They are doing so because they have slashed expenses and cut employment. Their governments who were bought and paid for by their contributions have manufactured a recovery and exclaimed to their constituents that all is going to be well.

There is a different set of lending rules for the haves and the have nots. The bank tells us that they loan money based on your credit score. If you do not have the income or you have too much debt they will not loan you the money. On the other hand, if a bank grades out with a low credit score the government will take public money (TARP) and loan it to them until they get back on their feet. That will happen because the Fed will drop the discount rate to zero and give the banks money for free.

The public is feeling something entirely different. Their way of life is changing. They have to rely on the handouts that are left over from the stimulus package. They are eating from the crumbs that fall from the table. They see the erosion of their assets. Their property values that used to increase every year. Their stock values that they were told would keep up with inflation.

The stimulus has benefited the banks and the corporations at the expense of the public. It is not a problem for the corporations , banks or government to get a loan. The public is in a different place. Consumer debt is falling like a rock. Why? The banks are not extending new credit. They trade the markets and use the profits to prop up earnings as they write off their loans. The money is being held and they are gaming the markets at the expense of the public. It is so so obvious.

Marie Antoinette said let them eat cake and that is exactly what is happening now. The public is not buying into the recovery but is praying for one as their world get taken down a notch every month. The skill that the investment bankers, the corporation and the government is using is creating a slow death. The air is being let out of the balloon slowly and the public is getting choked a little more each month that goes by.

The rally the last 6 days is a testimony to their skill. Just when the economic numbers started to head south they changed the game to earnings and not the economy. This wipes out the July puts and keeps the public from selling their stock. The truth is that this game will continue until it is too late for most people to do anything.

I am doing my best to point out what is happening, why? I don't know for some reason I feel the need to do it. I guess I do because let them eat cake is beyond my comprehension. The gamekeepers will make anyone who plays this game humble because reality only rears its head at the end of the game. The road in between will be choppy. You will see opinions change from good to bad until the resolution, which in my opinion is disastrous. That is when they will take the stock that the public will willing sell to them. I will continue to blog my opinions and do my best to point out what I see happening. I will do so from my perspective and not the gamekeeper's.


Mikey

Update on Money supply and Employment

Money Supply upticking but negative



Real Employment 22%

What a surprise Alcoa beats raises outlook

In a shocking surprise Alcoa beats earnings estimates despite lower aluminum prices. You know what they said that are raising our projection for aluminum consumption from 10 percent to 12 percent this year.'' Golly Gee that decline in their stock price must have been a mistake.

Here is the take:

The quarterly report was "constructive and it helps start the earnings season off on a positive note," said portfolio manager Brian Hicks of US Global Investors. "From the standpoint of Alcoa, they see the economy continuing to expand. It's robust enough that they have to increase their forecast for global aluminum production."

If they are telling the truth why is the stock down from 17.60 to 10. Second, notice the new low last week and the 4 day rally into the "great news". This gives you the impression that the stock is cheap. That is what they are selling now, cheap.




Like I said its lying season

The beat goes on...Mikey

The New Mantra...The economy doesn't matter

DJIA 10209 +10.97 VIX 24.52 -.46 Mikey Overbought/oversold index
Overbought/Oversold (1-100, 20<=oversold, >80=overbought) 62
Gold 1199.10 -10.70 Oil 74.15 -.95 US Dollar 84.44 +.29

I said in my July 7th blog if the news is bad and you need a rally just make something up. This is what they made up:

Many Americans are still waiting for an economic recovery. But for corporate America, a recovery of sorts is already at hand.

The corporate earnings season, that quarterly rite of Wall Street, begins in earnest on Monday, and investors are hoping for some good news. Major corporations are expected to report some of their strongest profits in years.

“It has been one of the strongest profits recoveries ever,” said David S. Bianco, chief United States equity strategist for Bank of America Merrill Lynch. “You have got to go back to the Depression to find a profits recovery that outpaces this one.”

The question on many economists’ minds is whether this corporate recovery will last — and if it does, when it will yield jobs for recession-weary Americans.

This week, corporate bellwethers like Alcoa [AA 10.85 -0.09 (-0.82%) ], Google [GOOG 476.98 9.49 (+2.03%) ], JPMorgan Chase [JPM 39.212 0.362 (+0.93%) ] and Intel [INTC 20.5675 0.3275 (+1.62%) ] are scheduled to report second-quarter results. While earnings will vary by company and industry, economists say that, taken together, the reports will point to some bright spots for the economy, as well as to some enduring obstacles.

Since profits plunged in late 2008, along with the economy, earnings have been increasing fairly steadily for many companies, partly because they have been coming off such a low base.

For the second quarter, earnings per share for companies whose stocks are included in the Standard and Poor’s 500-stock index are expected to have expanded 25 to 30 percent from the same period a year earlier. If the results beat analysts’ expectations, they could add fuel to the nascent rally in the stock market, bolster the pace of the economic recovery and possibly hint at what many Americans hope for the most: a return to hiring.

But analysts say they also believe that now, perhaps more than at any other time since 2008, the numbers will be only part of the story. Many investors will comb the results for clues about where corporate executives think their businesses, and by extension, the broader economy, will go from here.

How will companies weather the expiration of the federal stimulus program and tax cuts? How will they deal with the running financial crisis in Europe? What about exports and the looming midterm elections?

For now, the view from the corner office looks quite different than the view from the street corner.

“You are going to hear outlooks from companies that are more upbeat than the sentiments you are going to get from workers and households,” Mr. Bianco said.

So far, the rebound in corporate profits has not translated into a rebound in jobs. Many companies have cut costs and increased productivity. Manufacturers have mothballed plants and equipment. Consumers remain anxious.

With earnings reports looming, the stock market rose for the fourth consecutive day on Friday, rounding out its strongest week this year.

Economists said many investors would examine the business outlooks that companies provide even more than those companies’ income statements. The question is whether companies expect to expand and hire, or instead seem to be bracing for a double-dip recession.

“Investors look through the front window more than the rearview windows,” said David A. Rosenberg, the chief economist for Gluskin Sheff.


-----------------------------------------------------------------------------------

What they are saying is don't pay attention to the economic numbers look at the corporate earnings and the outlook. They say that the rest will take care of itself. They are saying trust us we know what we are doing. Like I said in my last blog the economy is good if your earnings are good. The heck with the rest of you.

I am starting my version of an overbought/oversold index. Generally, when that index is 80 or higher and is falls below 65 I will be looking to add on shorts. When the index is 20 or lower and rises above 35 I will be looking for longs or covering shorts.

Mikey

That was the week that was TW3

Tuesday July 6 DJIA 9743.62 +57.14 10Yr note 2.94 -.04 Gold 1195.1 -12.60
Oil 71.99 -.16 US Dollar 84.30 -.37

Chip sales rose 47% year over year April was 50%. EPA wants to cut emissions on coal burning plants. ISM service sector index fell 1.6 pts to 53.8 in June. 50 is considered growth. World biggest IPO coming the Ag bank of China to raise 220.12 billion. Germany raise healthcare premiums to reduce deficit.

Tuesday started with an strong rally but retreated on the close. Stock funds fell 11%in June the worst since 2008

Wednesday July 7 DJIA 10018.28 +274.66 10 Year 2.99 +.05 Gold 1198.90 +3.80 Oil 74.07 +2.09 US Dollar 84.03 -.27

ISCS June retail sales strong same store sales rose 3.9% vs a year earlier. Dallas Fed Foster says law changes in Health care and Financials are holding back the economy. He says he does not expect a double dip recession or further Fed actions to fuel the economy. Credit delinquencies on consumer loans fell to 2.98% of all accounts. Credit card delinquencies fell to 3.88% an 8 year low.

Market was up strong on mixed volume. Commodities rally and the dollar sells off

Thursday July 8 DJIA 10130.99 +120.71 10 Year note 3.03 Gold 1196.10 -2.80 Oil 75.44 +1.37 US Dollar 84.03 unch

June sales rose 3.1% vs same in 2009. Sales have moderated in the last few months. Jobless claims fell to 454,000 down 12,000 from previous week. Continuing claims hit a 7 month low as benefits ran out for many unemployed. Federal deficit topped 1 trillion for the fiscal year. Payroll taxes declined 4% but receipts rose .5% due to higher corporate profits.

Stocks close up for the third day in a row on lower volume. The market focus is shifting from the current economy to earnings and corporate outlook for the future.

Friday July 9 DJIA 10198.03 +59.04 10 yr 3.05 +.02 Gold 1209.60 +13.80 Oil 76.09 +.65 US Dollar 84.15 +.12

ECRI leading index fell .07 points to 121.5 the lowest level since July 2009. The gauge annual growth rate fell to -8.3% from -7.6% suggesting that the US expansion will decelerate or even stall. Inventory restocking rose .5% in May but wholesale levels fell .3% the first drop this year.

The market trended higher all day in quiet trading. Next week the corporate earnings season starts. The market rally everyday this week and is in the midpoint of a trading range of 9750 to 10500. They are now turning their attention to outlook and earnings as the data on the economy turns sour. The fact about earnings is that they are rear view mirror and have nothing to do with outlook. Gold is weakening and is trading quietly below the 50 day average at 1209. My take on the process is that as the market is weakens, they shift the focus to something that cannot be proved, the future.

Mikey