DJIA 10014 +4.99 VIX 26.05 -1.16 10 year 2.50 -.02 30 year 3.54 -.03
Gold 1250.30 +14.70 Oil 71.92 USD 83.15 -.02
Days to option expiration 13
Economic Conditions: Negative -10
Fundamentals very negative
Mikey OB/OS index 56, Neutral
Put/Call Ratio .84 10 day average .894
Ratio Put Premiums/Call Premium 1.13 Elevated
Put Premium 10 day average 1.036
DJIA MACD -100 Cross Negative 8/12 14 days old
Summary: Indicates a downtrend in progress
% Advisory Service Bulls 33.3 Bears 31.2 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Summary: Experts too bullish for a good low now
NYSE New Highs ..78 New Lows ..94
Nasdaq New Highs ..20 New Lows ..111
IBD : Confirmed downtrend as of 8/24
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 26 Bonds 79 Emerging Mkts 18 China 27 Brazil 32
Oil 34 Nat Gas 19 Copper 63 Gold 66 Silver 74
USD 64 Aussie 29 Euro 29 Brit Pd 38
Short ETF SCORE 833
DXD 70 DZZ 34 ZSL 25 DUG 71 EDZ 68 SMN 49 SKF 67 SRS 59 SZK 68
QID 78 SCO 77 RXD 69 TBT 19 SDP 79
Long ETF SCORE 602
DDM 31 UGL 61 AGQ 75 DIG 30 EDC 29 UYM 51 UYG 37 URE 43 UGE 60 QLD 24 UCO 30 RXL 31 UBT 71 UPW 29
Total Score -231(Positive number indicates uptrend)
In a move that may reflect a growing unwillingness to tie their personal fortunes to those of their companies, Wall Street insiders this year have undertaken more than five times the number of stock sales of their corporate shares as they have purchases.
Officers and directors of Goldman Sachs, J.P. Morgan, Citigroup, and Wells Fargo have sold about $100 million worth of stock so far this year, amid relatively small buying activity, according to public stock filings with the U.S. Securities and Exchange Commission that have been analyzed by the research firm InsiderScore.
Year to date, Goldman [GS 136.93 0.27 (+0.2%) ] insiders—a list including CEO Lloyd Blankfein, President Gary Cohn, and Chief Financial Officer David Viniar—have sold a combined $64 million worth of shares.
J.P. Morgan [JPM 36.36 0.51 (+1.42%) ] insiders, including treasury and securities services head Michael Cavanagh and vice chairman Steven Black, have sold about $16 million.
Citi [C 3.709 0.039 (+1.06%) ] executives, including institutional client group head John Havens and Asia Pacific region head Stephen Bird, have sold about $5 million. At Wells Fargo[WFC 23.55 0.30 (+1.29%) ], CEO John Stumpf recently sold nearly $6 million worth of shares, following wealth-management head David Carroll, who sold roughly $5 million in stock this past March.
Ben Silverman, research director at InsiderScore, said the recent swath of insider sales at banks signifies that “business is back to normal.” After wild swings in valuation at the major Wall Street firms, “we’ve got a degree of stabilization at the banks,” he said, and insiders may be looking for attractive prices at which to sell.
Another factor: the increasing degree to which annual bonuses are made up of stock or options rather than cash. Last year, about 70 percent of companies used stock options for compensation, up from 63 percent for the prior year, according to the management consulting firm the Hay Group. Banks say that a larger proportion of pay is now doled out in options as well—making recipients want to cash out at an earlier date than in past years.
For many on Wall Street, the pre-crisis buy-and-hold mentality may be changing, say bank employees and compensation trackers. Holding company stock was once a chance for great wealth creation, as well as a source of pride for bank employees. But after the bankruptcy of Lehman Brothers rendered its shares worthless and the fire sale of Bear Stearns dropped its stock to rock-bottom levels, more and more bank workers are reluctant to keep the company shares longer than they have to.
Tuesday, August 31, 2010
Monday, August 30, 2010
Success is.....
DJIA 10009.73 -140.92 VIX 27.21 +2.76 10 year 2.2.52 -.01 30 year 3.57
Gold 1236.76 Oil 74.70 USD 83.17 +.17
Days to option expiration 14
Economic Conditions: Negative -10
Fundamentals very negative
Mikey OB/OS index 51, Neutral
Put/Call Ratio .86 7 day average .894
Ratio Put Premiums/Call Premium 1.07 Elevated
Put Premium 7 day average 1.019
DJIA MACD -100 Cross Negative 8/12 15 days old
Summary: Indicates a downtrend in progress
% Advisory Service Bulls 33.3 Bears 31.2 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Summary: Experts too bullish for a good low now
NYSE New Highs 66.. New Lows ..34
Nasdaq New Highs ..23 New Lows ..60
IBD : Confirmed downtrend as of 8/24
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 32 Bonds 79 Emerging Mkts 18 China 27 Brazil 31
Oil 37 Nat Gas 19 Copper 65 Gold 63 Silver 74
USD 64 Aussie 29 Euro 25 Brit Pd 40
Short ETF SCORE 811
DXD 67 DZZ 37 ZSL 27 DUG 67 EDZ 66 SMN 54 SKF 63 SRS 55 SZK 62
QID 77 SCO 75 RXD 63 TBT 20 SDP 78
Long ETF SCORE 617
DDM 34 UGL 59 AGQ 73 DIG 35 EDC 29 UYM 47 UYG 41 URE 46 UGE 61 QLD 26 UCO 32 RXL 36 UBT 67 UPW 31
Total Score -194(Positive number indicates uptrend)
Winston Churchill said: Success is going from failure to failure without a loss of enthusiasm. In the stock market most people stop at the one yard line and that is by design. It is said that the market can act irrationally longer than you have money. The point is that the market never discounts anything. It will frustrate anyone who is smart enough to figure out what is going to happen. That is why you will always hear I knew that was going to happen. You knew it was going to happen because is was happening right before your eyes and still the price went in the opposite direction. It did so as the public clamored for more and pounded on their chests in delight. This is the way of the market.
Such is the state of the market now. The DJIA is at 10000 and the economy is at 8000. Now the Fed steps up with its we will do anything speech. Of course they will, but not now. They need to sell their bonds and that will be easy in a stock market getting drilled. It's coming and I think soon. The last bounce off of 10000 was an attempt to show that the Fed has the muscle to do anything at any time. Lows only come when the Fed look toothless so low is going to break and break big.
There was a story told about J.Paul Getty. In this story he was approached by his pastor at the end of a service and was asked by the pastor what he should invest in. J. Paul said, I have a railroad that is making alot of money and investors will do well by buying shares in it.
The railroad did well and the shares went up for the first year that the Pastor held the stock. Fast forward to the end of year 2. The pastor sees J. Paul back in church again and tells him that he invested in his railroad. He says that he had lost all of the money he had invested. J. Paul then asks him how much did you lose, Pastor? The Pastor replied 25,000. J. Paul then pulls out his checkbook and writes the Pastor a check for the full amount. The pastor thanks him but says I told alot of people about this railroad. J. Paul says, that is why I told you.
These stories about sum up all you need to know about the stock market.
Mikey
Gold 1236.76 Oil 74.70 USD 83.17 +.17
Days to option expiration 14
Economic Conditions: Negative -10
Fundamentals very negative
Mikey OB/OS index 51, Neutral
Put/Call Ratio .86 7 day average .894
Ratio Put Premiums/Call Premium 1.07 Elevated
Put Premium 7 day average 1.019
DJIA MACD -100 Cross Negative 8/12 15 days old
Summary: Indicates a downtrend in progress
% Advisory Service Bulls 33.3 Bears 31.2 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Summary: Experts too bullish for a good low now
NYSE New Highs 66.. New Lows ..34
Nasdaq New Highs ..23 New Lows ..60
IBD : Confirmed downtrend as of 8/24
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 32 Bonds 79 Emerging Mkts 18 China 27 Brazil 31
Oil 37 Nat Gas 19 Copper 65 Gold 63 Silver 74
USD 64 Aussie 29 Euro 25 Brit Pd 40
Short ETF SCORE 811
DXD 67 DZZ 37 ZSL 27 DUG 67 EDZ 66 SMN 54 SKF 63 SRS 55 SZK 62
QID 77 SCO 75 RXD 63 TBT 20 SDP 78
Long ETF SCORE 617
DDM 34 UGL 59 AGQ 73 DIG 35 EDC 29 UYM 47 UYG 41 URE 46 UGE 61 QLD 26 UCO 32 RXL 36 UBT 67 UPW 31
Total Score -194(Positive number indicates uptrend)
Winston Churchill said: Success is going from failure to failure without a loss of enthusiasm. In the stock market most people stop at the one yard line and that is by design. It is said that the market can act irrationally longer than you have money. The point is that the market never discounts anything. It will frustrate anyone who is smart enough to figure out what is going to happen. That is why you will always hear I knew that was going to happen. You knew it was going to happen because is was happening right before your eyes and still the price went in the opposite direction. It did so as the public clamored for more and pounded on their chests in delight. This is the way of the market.
Such is the state of the market now. The DJIA is at 10000 and the economy is at 8000. Now the Fed steps up with its we will do anything speech. Of course they will, but not now. They need to sell their bonds and that will be easy in a stock market getting drilled. It's coming and I think soon. The last bounce off of 10000 was an attempt to show that the Fed has the muscle to do anything at any time. Lows only come when the Fed look toothless so low is going to break and break big.
There was a story told about J.Paul Getty. In this story he was approached by his pastor at the end of a service and was asked by the pastor what he should invest in. J. Paul said, I have a railroad that is making alot of money and investors will do well by buying shares in it.
The railroad did well and the shares went up for the first year that the Pastor held the stock. Fast forward to the end of year 2. The pastor sees J. Paul back in church again and tells him that he invested in his railroad. He says that he had lost all of the money he had invested. J. Paul then asks him how much did you lose, Pastor? The Pastor replied 25,000. J. Paul then pulls out his checkbook and writes the Pastor a check for the full amount. The pastor thanks him but says I told alot of people about this railroad. J. Paul says, that is why I told you.
These stories about sum up all you need to know about the stock market.
Mikey
Friday, August 27, 2010
The old better than expected bad number rally
DJIA 10150.65 +165.84 VIX 24.45 -2.92 10 year 2.64 +.16 30 year 3.69 +.18
Gold 1237.70 -3.60 Oil 75.57 +2.21 USD 82.74 -.18
Days to option expiration 15
Economic Conditions: Negative -10
Fundamentals very negative
Mikey OB/OS index 62, Neutral
Put/Call Ratio .74 7 day average .93
Ratio Put Premiums/Call Premium 1.10 Elevated
Put Premium 7 day average 1.023
DJIA MACD -81.20 Cross Negative 8/12 12 days old
Summary: Indicates a downtrend in progress
% Advisory Service Bulls 33.3 Bears 31.2 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Summary: Experts too bullish for a good low now
NYSE New Highs 81 New Lows 70
Nasdaq New Highs 22 New Lows 60
IBD : Confirmed downtrend as of 8/24
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 31 Bonds 77 Emerging Mkts 30 China 31 Brazil 30
Oil 26 Nat Gas 11 Copper 58 Gold 58 Silver 70
USD 67 Aussie 26 Euro 22 Brit Pd 37
Short ETF SCORE 829
DXD 66 DZZ 49 ZSL 28 DUG 70 EDZ 64 SMN 60 SKF 61 SRS 59 SZK 76
QID 79 SCO 74 RXD 56 TBT 22 SDP 65
Long ETF SCORE 614
DDM 35 UGL 53 AGQ 71 DIG 30 EDC 32 UYM 44 UYG 43 URE 42 UGE 62 QLD 23 UCO 30 RXL 39 UBT 67 UPW 33
Total Score --215(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally complete, downtrend resuming
Economy: Double dip coming
Bonds: Strong uptrend telling us the story is about to turn ugly
U.S. Federal Reserve Chairman Ben Bernanke said on Friday the recovery has softened more than expected and the Fed is ready to take further steps if needed to spur the stumbling economy. Federal Reserve Chairman Ben Bernanke said Friday that the central bank is prepared to offer additional monetary support if the U.S. economy stumbles further.
"The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly," he said in remarks prepared for delivery at a Fed conference in Jackson Hole, Wyoming.
Additional monetary support Look at this chart of the year over year change on M2:
Bernanke also said the continued persistence of high U.S. unemployment remains a central concern to Fed policy. However, he made clear the Fed has not decided what would prompt additional Fed easing. "At this juncture, the committee has not agreed on specific criteria or triggers for further action," he said.
U.S. economic growth slowed more sharply than initially thought in the second quarter, held back by the largest increase in imports in 26 years, a government report showed on Friday.
Gross domestic product expanded at a 1.6 percent annual rate, the Commerce Department said, instead of the 2.4 percent pace it had estimated last month.
However, the reading was a touch better than market expectations. Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, revised down to a 1.4 percent growth rate. The economy grew at a 3.7 percent pace in the first three months of the year.
Mikey
Gold 1237.70 -3.60 Oil 75.57 +2.21 USD 82.74 -.18
Days to option expiration 15
Economic Conditions: Negative -10
Fundamentals very negative
Mikey OB/OS index 62, Neutral
Put/Call Ratio .74 7 day average .93
Ratio Put Premiums/Call Premium 1.10 Elevated
Put Premium 7 day average 1.023
DJIA MACD -81.20 Cross Negative 8/12 12 days old
Summary: Indicates a downtrend in progress
% Advisory Service Bulls 33.3 Bears 31.2 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Summary: Experts too bullish for a good low now
NYSE New Highs 81 New Lows 70
Nasdaq New Highs 22 New Lows 60
IBD : Confirmed downtrend as of 8/24
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 31 Bonds 77 Emerging Mkts 30 China 31 Brazil 30
Oil 26 Nat Gas 11 Copper 58 Gold 58 Silver 70
USD 67 Aussie 26 Euro 22 Brit Pd 37
Short ETF SCORE 829
DXD 66 DZZ 49 ZSL 28 DUG 70 EDZ 64 SMN 60 SKF 61 SRS 59 SZK 76
QID 79 SCO 74 RXD 56 TBT 22 SDP 65
Long ETF SCORE 614
DDM 35 UGL 53 AGQ 71 DIG 30 EDC 32 UYM 44 UYG 43 URE 42 UGE 62 QLD 23 UCO 30 RXL 39 UBT 67 UPW 33
Total Score --215(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally complete, downtrend resuming
Economy: Double dip coming
Bonds: Strong uptrend telling us the story is about to turn ugly
U.S. Federal Reserve Chairman Ben Bernanke said on Friday the recovery has softened more than expected and the Fed is ready to take further steps if needed to spur the stumbling economy. Federal Reserve Chairman Ben Bernanke said Friday that the central bank is prepared to offer additional monetary support if the U.S. economy stumbles further.
"The committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly," he said in remarks prepared for delivery at a Fed conference in Jackson Hole, Wyoming.
Additional monetary support Look at this chart of the year over year change on M2:
Bernanke also said the continued persistence of high U.S. unemployment remains a central concern to Fed policy. However, he made clear the Fed has not decided what would prompt additional Fed easing. "At this juncture, the committee has not agreed on specific criteria or triggers for further action," he said.
U.S. economic growth slowed more sharply than initially thought in the second quarter, held back by the largest increase in imports in 26 years, a government report showed on Friday.
Gross domestic product expanded at a 1.6 percent annual rate, the Commerce Department said, instead of the 2.4 percent pace it had estimated last month.
However, the reading was a touch better than market expectations. Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, revised down to a 1.4 percent growth rate. The economy grew at a 3.7 percent pace in the first three months of the year.
Mikey
Thursday, August 26, 2010
Down into the Hole
DJIA 9985.81 -74.25 VIX 27.37 +.67 10 year 2.48 -.05 30 year 3.51 -.06
Gold 1237.70 -3.60 Oil 73.36 +.84 USD 82.92 -.08
Days to option expiration 16
Economic Conditions: Negative -10
Fundamentals very negative
Mikey OB/OS index 50, Neutral
Mikey Confidence Index (MCI) 49, Traders: negative
Mikey OB/OS is dead center not extreme enough for a low.
Put/Call Ratio .91 ten day average .916
Ratio Put Premiums/Call Premium 1.18 Elevated
Put Premium 10 day average 1.007
Summary: Ten day average of P/C ratio should be over 1 to look for a low not extreme enough yet for a good low
DJIA MACD -80.74 Cross Negative 8/12 11 days old
Summary: Indicates a downtrend in progress
% Advisory Service Bulls 33.3 Bears 31.2 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Summary: Experts too bullish for a good low now
NYSE New Highs 41 New Lows 143
Nasdaq New Highs 14 New Lows 161
Summary: New lows expanding indicating further downside
IBD : Confirmed downtrend as of 8/24
Would not go against their signals
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 25 Bonds 87 Emerging Mkts 18 China 24 Brazil 21
Oil 26 Nat Gas 12 Copper 55 Gold 59 Silver 67
USD 60 Aussie 29 Euro 28 Brit Pd 43
Short ETF SCORE 883
DXD 75 DZZ 41 ZSL 30 DUG 79 EDZ 78 SMN 61 SKF 70 SRS 67 SZK 79
QID 78 SCO 82 RXD 59 TBT 14 SDP 70
Long ETF SCORE 576
DDM 29 UGL 53 AGQ 68 DIG 18 EDC 26 UYM 43 UYG 34 URE 35 UGE 61 QLD 24 UCO 21 RXL 40 UBT 85 UPW 40
Total Score -307(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally complete, downtrend resuming
Economy: Double dip coming
Bonds: Strong uptrend telling us the story is about to turn ugly
The Dow lost its grip on 10,000, ending near session lows Thursday as trading was light and investors braced for two events Friday: the latest reading on second-quarter GDP and a speech by Fed Chairman Ben Bernanke.Central bankers gathered in Jackson Hole, Wyoming, today for the Fed's annual symposium on the economy. Fed Chairman Ben Bernanke is expected to speak Friday, though he isn't expected offer much in the way of clues on the Fed's next move.
I think you can see that my blog is getting more technically oriented. I will be keeping my views and rants to a bare bones minimum. The numbers above represent what is happening in the market. I am showing you my indicators and and interpretation them for you. You may use them any way you wish. Feel free to disagree with me.
The ETF section represents double short and double long ETF on a diverse set of industry sectors. I keep a cumulative score for both and take the difference. A positive number is an uptrend and a negative number is a downtrend. An MPI over 60 is a buy, crossing below 50 is a sell. An MPI of 40 or lower is a short crossing above 50 is a cover.
I am going to include the new highs and new lows for both the NYSE and the NASDAQ. You can watch these to get a truer picture of the overall market than just looking at the averages.
The put call ratios and put premium to call premium are measurements of fear in the market. Generally, the greater the fear the closer to a low we are on a short term basis.
I conclude that the market currently has a negative economic environment and there is some fear in the markets but I do not believe anyone has acted on it. For these reasons I say we are going lower in the near term.
I believe that the Fed wants the markets to go lower now to allow them to sell their treasuries and put that money to work in the economy. If that is the case the media will start to portray the FED as toothless and unable to stop the decline in the economy. I believe tomorrow will be the kickoff to that story.
I hope this helps, as I say I use these to help be trade. I am not giving these numbers as a recommendations but only as information. I am not a financial advisor just a guy trading the market. If you have any suggestions email me at mikey22222,@gmail.com.
All the best, Mikey
Gold 1237.70 -3.60 Oil 73.36 +.84 USD 82.92 -.08
Days to option expiration 16
Economic Conditions: Negative -10
Fundamentals very negative
Mikey OB/OS index 50, Neutral
Mikey Confidence Index (MCI) 49, Traders: negative
Mikey OB/OS is dead center not extreme enough for a low.
Put/Call Ratio .91 ten day average .916
Ratio Put Premiums/Call Premium 1.18 Elevated
Put Premium 10 day average 1.007
Summary: Ten day average of P/C ratio should be over 1 to look for a low not extreme enough yet for a good low
DJIA MACD -80.74 Cross Negative 8/12 11 days old
Summary: Indicates a downtrend in progress
% Advisory Service Bulls 33.3 Bears 31.2 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Summary: Experts too bullish for a good low now
NYSE New Highs 41 New Lows 143
Nasdaq New Highs 14 New Lows 161
Summary: New lows expanding indicating further downside
IBD : Confirmed downtrend as of 8/24
Would not go against their signals
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 25 Bonds 87 Emerging Mkts 18 China 24 Brazil 21
Oil 26 Nat Gas 12 Copper 55 Gold 59 Silver 67
USD 60 Aussie 29 Euro 28 Brit Pd 43
Short ETF SCORE 883
DXD 75 DZZ 41 ZSL 30 DUG 79 EDZ 78 SMN 61 SKF 70 SRS 67 SZK 79
QID 78 SCO 82 RXD 59 TBT 14 SDP 70
Long ETF SCORE 576
DDM 29 UGL 53 AGQ 68 DIG 18 EDC 26 UYM 43 UYG 34 URE 35 UGE 61 QLD 24 UCO 21 RXL 40 UBT 85 UPW 40
Total Score -307(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally complete, downtrend resuming
Economy: Double dip coming
Bonds: Strong uptrend telling us the story is about to turn ugly
The Dow lost its grip on 10,000, ending near session lows Thursday as trading was light and investors braced for two events Friday: the latest reading on second-quarter GDP and a speech by Fed Chairman Ben Bernanke.Central bankers gathered in Jackson Hole, Wyoming, today for the Fed's annual symposium on the economy. Fed Chairman Ben Bernanke is expected to speak Friday, though he isn't expected offer much in the way of clues on the Fed's next move.
I think you can see that my blog is getting more technically oriented. I will be keeping my views and rants to a bare bones minimum. The numbers above represent what is happening in the market. I am showing you my indicators and and interpretation them for you. You may use them any way you wish. Feel free to disagree with me.
The ETF section represents double short and double long ETF on a diverse set of industry sectors. I keep a cumulative score for both and take the difference. A positive number is an uptrend and a negative number is a downtrend. An MPI over 60 is a buy, crossing below 50 is a sell. An MPI of 40 or lower is a short crossing above 50 is a cover.
I am going to include the new highs and new lows for both the NYSE and the NASDAQ. You can watch these to get a truer picture of the overall market than just looking at the averages.
The put call ratios and put premium to call premium are measurements of fear in the market. Generally, the greater the fear the closer to a low we are on a short term basis.
I conclude that the market currently has a negative economic environment and there is some fear in the markets but I do not believe anyone has acted on it. For these reasons I say we are going lower in the near term.
I believe that the Fed wants the markets to go lower now to allow them to sell their treasuries and put that money to work in the economy. If that is the case the media will start to portray the FED as toothless and unable to stop the decline in the economy. I believe tomorrow will be the kickoff to that story.
I hope this helps, as I say I use these to help be trade. I am not giving these numbers as a recommendations but only as information. I am not a financial advisor just a guy trading the market. If you have any suggestions email me at mikey22222,@gmail.com.
All the best, Mikey
Wednesday, August 25, 2010
Bad news no sell off
DJIA 10060.06 +19.61 VIX 26.70 -.76 10 year 2.53 -.04 30 year 3.57 -.06
Gold 1241.30 +8.30 Oil 72.52 -.29 USD 83.00 -.23
Days to option expiration 17
Economic Conditions: Negative -10
Mikey OB/OS index 53, Neutral
Mikey Confidence Index (MCI) 34, Traders: negative
Ratio Put Premiums/Call Premium 1.06 Elevated
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
IBD : Confirmed downtrend as of 8/24
Numbers are from the prior day close
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 28 Bonds 86 Emerging Mkts 19 China 27 Brazil 27
Oil 9 Nat Gas 15 Copper 51 Gold 58 Silver 57
USD 62 Aussie 30 Euro 19 Brit Pd 37
Short ETF SCORE 935
DXD 70 DZZ 37 ZSL 38 DUG 76 EDZ 74 SMN 63 SKF 76 SRS 76 SZK 88
QID 83 SCO 87 RXD 81 TBT 16 SDP 70
Long ETF SCORE 543
DDM 32 UGL 53 AGQ 64 DIG 22 EDC 24 UYM 43 UYG 28 URE 26 UGE 65 QLD 26 UCO 9 RXL 27 UBT 82 UPW 32
Total Score -392(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40. ETF score of -392 still expanding indicating downtrend is in place. Mikey OB/OS index is at 53 which is still not oversold indicating more downside is available for this move. Put premiums are expanding and are over 1 and the MCI is at a negative 34. This may mean that some short term rally is near.
Economic numbers are morose with existing housing numbers hitting all time lows. The economy is dead in the water. Corporations still have cash but their business are slowing and they are unwilling to hire. The Fed meets at Jackson hole lets see what comes out of that.
Mikey
Gold 1241.30 +8.30 Oil 72.52 -.29 USD 83.00 -.23
Days to option expiration 17
Economic Conditions: Negative -10
Mikey OB/OS index 53, Neutral
Mikey Confidence Index (MCI) 34, Traders: negative
Ratio Put Premiums/Call Premium 1.06 Elevated
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
IBD : Confirmed downtrend as of 8/24
Numbers are from the prior day close
Mikey Power Index (MPI)Uptrend Above 60, Sell below 50, Downtrend below 40
Stocks 28 Bonds 86 Emerging Mkts 19 China 27 Brazil 27
Oil 9 Nat Gas 15 Copper 51 Gold 58 Silver 57
USD 62 Aussie 30 Euro 19 Brit Pd 37
Short ETF SCORE 935
DXD 70 DZZ 37 ZSL 38 DUG 76 EDZ 74 SMN 63 SKF 76 SRS 76 SZK 88
QID 83 SCO 87 RXD 81 TBT 16 SDP 70
Long ETF SCORE 543
DDM 32 UGL 53 AGQ 64 DIG 22 EDC 24 UYM 43 UYG 28 URE 26 UGE 65 QLD 26 UCO 9 RXL 27 UBT 82 UPW 32
Total Score -392(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40. ETF score of -392 still expanding indicating downtrend is in place. Mikey OB/OS index is at 53 which is still not oversold indicating more downside is available for this move. Put premiums are expanding and are over 1 and the MCI is at a negative 34. This may mean that some short term rally is near.
Economic numbers are morose with existing housing numbers hitting all time lows. The economy is dead in the water. Corporations still have cash but their business are slowing and they are unwilling to hire. The Fed meets at Jackson hole lets see what comes out of that.
Mikey
Tuesday, August 24, 2010
Approaching the low end of the trading range.
DJIA 10040 133.96 VIX 27.46 +1.80 10 year 2.48 -.13 30 year 3.57 .04
Gold 1233 +10.00 Oil 71.63 -1.18 USD 83.27 -.07
Days to option expiration
Economic Conditions: Negative -10.0
Mikey OB/OS index Neutral ---50 (80=OB 20=OS)
Mikey Confidence Index (Traders: Low) 34
Ratio Put Premiums/Call Premium Elevated 1.11
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 26 Bonds 83 Emerging Mkts 20 China 27 Brazil 31
Oil 11 Nat Gas 14 Copper 43 Gold 50 Silver 47
USD 64 Aussie 32 Euro 18 Brit Pd 41
Short ETF SCORE 906
DXD 68 DZZ 46 ZSL 46 DUG 68 EDZ 72 SMN 55 SKF 71 SRS 75 SZK 86
QID 82 SCO 87 RXD 66 TBT 17 SDP 67
Long ETF SCORE 546
DDM 35 UGL 44 AGQ 43 DIG 22 EDC 24 UYM 51 UYG 32 URE 25 UGE 71
QLD 20 UCO 8 RXL 55 UBT 79 UPW 41
Total Score -360(Positive number indicates uptrend)
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40.
Gold, US dollar, and Bonds have strong MPI power numbers above 60.
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
The DJI is approaching the low end of the trading range. I am not yet oversold on my indicators but the sentiment is getting negative traders are at 34 and the put premiums are over 1 at 1.06. A put reading of 1.2 would be high. The only long in an uptrend is the bond market.
The commodities are starting to break as the dollar strengthens. In times like these the old flight to safety rings a bell with me. The rats are starting to jump ship. I am seeing alot of the names that just had "great" earnings giving me sell signals. Gold is still hanging on but some morning we will wake up and see it down 50 bucks and never look back.
Mikey
Gold 1233 +10.00 Oil 71.63 -1.18 USD 83.27 -.07
Days to option expiration
Economic Conditions: Negative -10.0
Mikey OB/OS index Neutral ---50 (80=OB 20=OS)
Mikey Confidence Index (Traders: Low) 34
Ratio Put Premiums/Call Premium Elevated 1.11
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 26 Bonds 83 Emerging Mkts 20 China 27 Brazil 31
Oil 11 Nat Gas 14 Copper 43 Gold 50 Silver 47
USD 64 Aussie 32 Euro 18 Brit Pd 41
Short ETF SCORE 906
DXD 68 DZZ 46 ZSL 46 DUG 68 EDZ 72 SMN 55 SKF 71 SRS 75 SZK 86
QID 82 SCO 87 RXD 66 TBT 17 SDP 67
Long ETF SCORE 546
DDM 35 UGL 44 AGQ 43 DIG 22 EDC 24 UYM 51 UYG 32 URE 25 UGE 71
QLD 20 UCO 8 RXL 55 UBT 79 UPW 41
Total Score -360(Positive number indicates uptrend)
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40.
Gold, US dollar, and Bonds have strong MPI power numbers above 60.
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally over, downtrend in progress
Gold: Primary Top Forming
Oil Secondary: Bear market rally complete, downtrend in progress
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Major long term Bottom complete, uptrend in progress
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
The DJI is approaching the low end of the trading range. I am not yet oversold on my indicators but the sentiment is getting negative traders are at 34 and the put premiums are over 1 at 1.06. A put reading of 1.2 would be high. The only long in an uptrend is the bond market.
The commodities are starting to break as the dollar strengthens. In times like these the old flight to safety rings a bell with me. The rats are starting to jump ship. I am seeing alot of the names that just had "great" earnings giving me sell signals. Gold is still hanging on but some morning we will wake up and see it down 50 bucks and never look back.
Mikey
Monday, August 23, 2010
Jackson Hole
DJIA 10174 -39.21 VIX 25.66 +.17 10 year 2.57 -.04 30 year 3.63 -.03
Gold 1223 -6.80 Oil 72.81 -.14 USD 72.81 -.23
Days to option expiration 19
Economic Conditions: Negative -10
Mikey OB/OS index Elevated ---57 (80=OB 20=OS)
Mikey Confidence Index (Traders: Neutral) 61
Ratio Put Premiums/Call Premium Elevated 1.00
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)Uptrend 60+ Sell 50- Short 40-
Stocks 37 Bonds 81 Emerging Mkts 25 China 32 Brazil 34
Oil 25 Nat Gas 13 Copper 50 Gold 55 Silver 46
USD 66 Aussie 35 Euro 24 Brit Pd 40
Short ETF SCORE 853
DXD 66 DZZ 40 ZSL 50 DUG 60 EDZ 70 SMN 53 SKF 70 SRS 72 SZK 83
QID 77 SCO 73 RXD 55 TBT 20 SDP 64
Long ETF SCORE 631
DDM 38 UGL 52 AGQ 43 DIG 32 EDC 28 UYM 57 UYG 35 URE 30 UGE 71
QLD 24 UCO 21 RXL 62 UBT 77 UPW 38
Total Score --222(Positive number indicates uptrend)
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40.
The Fed meets in Jackson hole this week to decide to quantitatively ease or not. Gee what will they do? The markets says that they need to and fast.
Mikey
Gold 1223 -6.80 Oil 72.81 -.14 USD 72.81 -.23
Days to option expiration 19
Economic Conditions: Negative -10
Mikey OB/OS index Elevated ---57 (80=OB 20=OS)
Mikey Confidence Index (Traders: Neutral) 61
Ratio Put Premiums/Call Premium Elevated 1.00
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)Uptrend 60+ Sell 50- Short 40-
Stocks 37 Bonds 81 Emerging Mkts 25 China 32 Brazil 34
Oil 25 Nat Gas 13 Copper 50 Gold 55 Silver 46
USD 66 Aussie 35 Euro 24 Brit Pd 40
Short ETF SCORE 853
DXD 66 DZZ 40 ZSL 50 DUG 60 EDZ 70 SMN 53 SKF 70 SRS 72 SZK 83
QID 77 SCO 73 RXD 55 TBT 20 SDP 64
Long ETF SCORE 631
DDM 38 UGL 52 AGQ 43 DIG 32 EDC 28 UYM 57 UYG 35 URE 30 UGE 71
QLD 24 UCO 21 RXL 62 UBT 77 UPW 38
Total Score --222(Positive number indicates uptrend)
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40.
The Fed meets in Jackson hole this week to decide to quantitatively ease or not. Gee what will they do? The markets says that they need to and fast.
Mikey
Trading Signals
I will be listing individual stocks and ETF's under the following format.
Stock MPI(Mikey Power Index)
RSI (Relative Strength)
MACD (Moving Ave/Convergence Divergence)
MACD Cross Negative or Positive
MACD Divergence
An uptrend will have:
An MPI greater than 55
An RSI greater than 60
An MACD greater than 0
A Positive MACD Cross
And no divergences ( I will use the term In Gear to indicate this)
A divergence is an early trend change warning
A Downtrend will have:
An MPI Less than 45
An RSI Less than 40
An MACD Less than 0
A negative MACD cross (Date of Cross)
No divergences ( I will use the term In Gear to indicate this)
A divergence is an early trend change warning
AAPL 247.82.MPI 40, RSI 39, MACD -229(new low), Negative cross(8/11), In Gear
Mikey
Stock MPI(Mikey Power Index)
RSI (Relative Strength)
MACD (Moving Ave/Convergence Divergence)
MACD Cross Negative or Positive
MACD Divergence
An uptrend will have:
An MPI greater than 55
An RSI greater than 60
An MACD greater than 0
A Positive MACD Cross
And no divergences ( I will use the term In Gear to indicate this)
A divergence is an early trend change warning
A Downtrend will have:
An MPI Less than 45
An RSI Less than 40
An MACD Less than 0
A negative MACD cross (Date of Cross)
No divergences ( I will use the term In Gear to indicate this)
A divergence is an early trend change warning
AAPL 247.82.MPI 40, RSI 39, MACD -229(new low), Negative cross(8/11), In Gear
Mikey
Friday, August 20, 2010
Quantative easing begins as refies rise and stocks and commodities sink
DJIA 10213.62 -57.59 VIX 25.49 -.95 10 year 2.62 30 year 3.66
Gold 1229.80 -5.60 Oil 72.95 -.85 USD 83.04
Days to option expiration 0
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Neutral) 51
Ratio Put Premiums/Call Premium Elevated .89
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 38 Bonds 82 Emerging Mkts 33 China 42 Brazil 44
Oil 33 Nat Gas 12 Copper 46 Gold 60 Silver 50
USD 66 Aussie 40 Euro 30 Brit Pd 41
Short ETF SCORE 755
DXD 65 DZZ 33 ZSL 47 DUG 58 EDZ 63 SMN 45 SKF 67 SRS 70 SZK 81
QID 72 SCO 63 RXD 55 TBT 20 SDP 61
Long ETF SCORE 649
DDM 36 UGL 57 AGQ 47 DIG 36 EDC 34 UYM 57 UYG 37 URE 32 UGE 76
QLD 30 UCO 36 RXL 63 UBT 79 UPW 37
Total Score -146(Positive number indicates uptrend)
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40.
Gold, US dollar, and Bonds have strong MPI power numbers above 60.
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary: Bear market Rally ending
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
Refie demand is rising this is the first attempt by the Fed to help the consumer. Refies rose 13%. The highest since May 2009. Purchase apps fell 3.44%. They have taken the last year to provide liquidity to the banks and corporations and now the process is beginning for the homeowner with equity to do the same. The problem is that alot of who could have qualified in early 09 can not do so today. Too little too late for the economy at this time. We have a long way to fall to get back into balance.
Mikey
Gold 1229.80 -5.60 Oil 72.95 -.85 USD 83.04
Days to option expiration 0
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Neutral) 51
Ratio Put Premiums/Call Premium Elevated .89
% Advisory Service Bulls 36.7 Bears 31.1 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 38 Bonds 82 Emerging Mkts 33 China 42 Brazil 44
Oil 33 Nat Gas 12 Copper 46 Gold 60 Silver 50
USD 66 Aussie 40 Euro 30 Brit Pd 41
Short ETF SCORE 755
DXD 65 DZZ 33 ZSL 47 DUG 58 EDZ 63 SMN 45 SKF 67 SRS 70 SZK 81
QID 72 SCO 63 RXD 55 TBT 20 SDP 61
Long ETF SCORE 649
DDM 36 UGL 57 AGQ 47 DIG 36 EDC 34 UYM 57 UYG 37 URE 32 UGE 76
QLD 30 UCO 36 RXL 63 UBT 79 UPW 37
Total Score -146(Positive number indicates uptrend)
Summary: Stocks, Emerging Markets, Oil, Euro, Aussie, Tech, Utilities, Real estate, Banks have weak MPI power numbers below 40.
Gold, US dollar, and Bonds have strong MPI power numbers above 60.
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary: Bear market Rally ending
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
Refie demand is rising this is the first attempt by the Fed to help the consumer. Refies rose 13%. The highest since May 2009. Purchase apps fell 3.44%. They have taken the last year to provide liquidity to the banks and corporations and now the process is beginning for the homeowner with equity to do the same. The problem is that alot of who could have qualified in early 09 can not do so today. Too little too late for the economy at this time. We have a long way to fall to get back into balance.
Mikey
Thursday, August 19, 2010
Bond market telling a grim story
DJIA 10271.21 -144.33 VIX 26.44 +1.85 10 year 2.57 30 year 3.65
Gold 1235.40 +10.40 74.43 -.99 USD 82.45
Days to option expiration 1
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Elevated) 65
Ratio Put Premiums/Call Premium Elevated 1.08
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 42 Bonds 79 Emerging Mkts 35 China 46 Brazil 54
Oil 41 Nat Gas 18 Copper 50 Gold 65 Silver 56
USD 62 Aussie 54 Euro 35 Brit Pd 46
Short ETF SCORE 755
DXD 64 DZZ 28 ZSL 39 DUG 55 EDZ 62 SMN 35 SKF 65 SRS 68 SZK 80
QID 71 SCO 56 RXD 53 TBT 20 SDP 58
Long ETF SCORE 649
DDM 38 UGL 63 AGQ 57 DIG 39 EDC 37 UYM 68 UYG 36 URE 34 UGE 74
QLD 29 UCO 42 RXL 62 UBT 76 UPW 21
Total Score -76(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary: Bear market Rally ending
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
You will notice that the power index has the bonds at 79. The 10 year yield is at 2.57 and the 30 year is at 3.65. That is saying that all is not well in the economy. The early groups of Housing and Retail and Banks are showing severe weakness and the only thing holding this thing together are the late cyclicals. I don't think they will hold up much longer.
Gold 1235.40 +10.40 74.43 -.99 USD 82.45
Days to option expiration 1
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Elevated) 65
Ratio Put Premiums/Call Premium Elevated 1.08
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 42 Bonds 79 Emerging Mkts 35 China 46 Brazil 54
Oil 41 Nat Gas 18 Copper 50 Gold 65 Silver 56
USD 62 Aussie 54 Euro 35 Brit Pd 46
Short ETF SCORE 755
DXD 64 DZZ 28 ZSL 39 DUG 55 EDZ 62 SMN 35 SKF 65 SRS 68 SZK 80
QID 71 SCO 56 RXD 53 TBT 20 SDP 58
Long ETF SCORE 649
DDM 38 UGL 63 AGQ 57 DIG 39 EDC 37 UYM 68 UYG 36 URE 34 UGE 74
QLD 29 UCO 42 RXL 62 UBT 76 UPW 21
Total Score -76(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary: Bear market Rally ending
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
You will notice that the power index has the bonds at 79. The 10 year yield is at 2.57 and the 30 year is at 3.65. That is saying that all is not well in the economy. The early groups of Housing and Retail and Banks are showing severe weakness and the only thing holding this thing together are the late cyclicals. I don't think they will hold up much longer.
Technically Speaking
Technical analysts seek to identify price patterns and trends in financial markets and attempt to exploit those patterns. While technicians use various methods and tools, the study of price charts is primary.
Technicians especially search for archetypal patterns, such as the well-known head and shoulders or double top reversal patterns, study indicators such as moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.
Technical analysts also extensively use indicators, which are typically mathematical transformations of price or volume. These indicators are used to help determine whether an asset is trending, and if it is, its price direction. Technicians also look for relationships between price, volume and, in the case of futures, open interest. Examples include the relative strength index, and MACD. Other avenues of study include correlations between changes in options (implied volatility) and put/call ratios with price. Other technicians include sentiment indicators, such as Put/Call ratios and Implied Volatility in their analysis.
Technicians seek to forecast price movements such that large gains from successful trades exceed more numerous but smaller losing trades, producing positive returns in the long run through proper risk control and money management.
There are several schools of technical analysis. Adherents of different schools (for example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one school. Some technical analysts use subjective judgment to decide which pattern a particular instrument reflects at a given time, and what the interpretation of that pattern should be. Some technical analysts also employ a strictly mechanical or systematic approach to pattern identification and interpretation.
Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, cycles or, classically, through recognition of chart patterns.
Technical analysis stands in contrast to the fundamental analysis approach to security and stock analysis. Technical analysis "ignores" the actual nature of the company, market, currency or commodity and is based solely on "the charts," that is to say price and volume information, whereas fundamental analysis does look at the actual facts of the company, market, currency or commodity.
In my next blog I will list the things I use in my approach.
Mikey
Technicians especially search for archetypal patterns, such as the well-known head and shoulders or double top reversal patterns, study indicators such as moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.
Technical analysts also extensively use indicators, which are typically mathematical transformations of price or volume. These indicators are used to help determine whether an asset is trending, and if it is, its price direction. Technicians also look for relationships between price, volume and, in the case of futures, open interest. Examples include the relative strength index, and MACD. Other avenues of study include correlations between changes in options (implied volatility) and put/call ratios with price. Other technicians include sentiment indicators, such as Put/Call ratios and Implied Volatility in their analysis.
Technicians seek to forecast price movements such that large gains from successful trades exceed more numerous but smaller losing trades, producing positive returns in the long run through proper risk control and money management.
There are several schools of technical analysis. Adherents of different schools (for example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one school. Some technical analysts use subjective judgment to decide which pattern a particular instrument reflects at a given time, and what the interpretation of that pattern should be. Some technical analysts also employ a strictly mechanical or systematic approach to pattern identification and interpretation.
Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, cycles or, classically, through recognition of chart patterns.
Technical analysis stands in contrast to the fundamental analysis approach to security and stock analysis. Technical analysis "ignores" the actual nature of the company, market, currency or commodity and is based solely on "the charts," that is to say price and volume information, whereas fundamental analysis does look at the actual facts of the company, market, currency or commodity.
In my next blog I will list the things I use in my approach.
Mikey
Fundamentally speaking..Or the Titanic approach
The stock market can be analysed by fundamentals or by technicals. Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management.
When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis. The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis.
Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts.
The problem with this approach is that it is backwards looking. It will not spot changes that are taking place in the economy because the data it uses is already history. Most analysts look at what is happen and say it will continue to happen. They will not change their opinion until they have the raw data to do it. By that time the stock has crashed. Here is a recent example:
VISA
Notice the sudden change in direction. Holders of this stock have not been told to sell. This was a favorite of Cramer's. Now the shareholders are trapped and are praying because the fundamentals are still good. That is the way good fundamental stock end.
When you hear the stock reports on various companies the report you will hear is usually a list of fundamental reasons why the stock is doing well. The public is exploited with these reasons. Most of the time everything is just fine but when it changes LOOK OUT. They will never tell you to get out, It is just like riding the Titanic, everything is first class until you hit the iceberg, then you sink. Does this sound familiar???
There is another way to analyze stocks and that is technical analysis. It uses price action to analyst future direction. I will talk about that approach in my next blog.
Mikey
When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis. The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis.
Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts.
The problem with this approach is that it is backwards looking. It will not spot changes that are taking place in the economy because the data it uses is already history. Most analysts look at what is happen and say it will continue to happen. They will not change their opinion until they have the raw data to do it. By that time the stock has crashed. Here is a recent example:
VISA
Notice the sudden change in direction. Holders of this stock have not been told to sell. This was a favorite of Cramer's. Now the shareholders are trapped and are praying because the fundamentals are still good. That is the way good fundamental stock end.
When you hear the stock reports on various companies the report you will hear is usually a list of fundamental reasons why the stock is doing well. The public is exploited with these reasons. Most of the time everything is just fine but when it changes LOOK OUT. They will never tell you to get out, It is just like riding the Titanic, everything is first class until you hit the iceberg, then you sink. Does this sound familiar???
There is another way to analyze stocks and that is technical analysis. It uses price action to analyst future direction. I will talk about that approach in my next blog.
Mikey
Wednesday, August 18, 2010
Moody's warns on US Euro debt citing weak economy
DJIA 10415.54 +9.69 VIX 24.30 -.03 10 year 2.62 30 year 3.73
Gold 1231.40 Oil 75.42 -.01 USD 82.47 +.12
Days to option expiration 2
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Elevated) 65
Ratio Put Premiums/Call Premium Elevated 1.08
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 38 Bonds 73 Emerging Mkts 42 China 47 Brazil 57
Oil 48 Nat Gas 26 Copper 53 Gold 67 Silver 59
USD 59 Aussie 58 Euro 40 Brit Pd 48
Short ETF SCORE 755
DXD 68 DZZ 25 ZSL 35 DUG 51 EDZ 57 SMN 32 SKF 67 SRS 71 SZK 81
QID 74 SCO 50 RXD 57 TBT 26 SDP 61
Long ETF SCORE 669
DDM 34 UGL 62 AGQ 57 DIG 44 EDC 41 UYM 70 UYG 36 URE 32 UGE 70
QLD 29 UCO 50 RXL 56 UBT 70 UPW 21
Total Score -86(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary: Bear market Rally ending
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
Americans borrowing was 11.7 trillion at the end of Q2 down 1.5% from Q1 and down 6.5% from the top in Q3 2008. When did the market and economy break down? Q3 2008 right with the top in borrowing. That borrowing is still declining. Consumer debt delinquencies fell to 11.4% from 11.9% from Q1. The first drop since 2006.
PPI rose for the first time in 4 months. The weakness in the dollar was the primary culprit that drove the market and commodities higher this last month. The only way these guys can show market strength is to nail the dollar. They did that all through 2007 and the middle of 2008 to prop the market and commodities up. They are doing the same thing again. We all know what happened to that one. Reality caught up with their game and the market and commodities crashed. Throughout the process the Fed and the government maintained that everything was alright.
Housing starts rose 1.7% but building permits were hitting a 14 month low.
Moody is warning about a possible downgrade of US, UK, German and French bonds. Maybe that explains the hype about deflation now. We seem to be coming to a crossroads on debt in this country. How much more can the US add on? The stimulus has only put a band aide on the problem.
The up moves in the market are directly related to currency movements. I do not know the mechanism but it is easy to make that correlation. Keep you eye on the dollar power index and the Aussie. If the dollar index starts trading above 60 and the Aussie trades below 40 the market should be selling off.
Mikey
Gold 1231.40 Oil 75.42 -.01 USD 82.47 +.12
Days to option expiration 2
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Elevated) 65
Ratio Put Premiums/Call Premium Elevated 1.08
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40
Stocks 38 Bonds 73 Emerging Mkts 42 China 47 Brazil 57
Oil 48 Nat Gas 26 Copper 53 Gold 67 Silver 59
USD 59 Aussie 58 Euro 40 Brit Pd 48
Short ETF SCORE 755
DXD 68 DZZ 25 ZSL 35 DUG 51 EDZ 57 SMN 32 SKF 67 SRS 71 SZK 81
QID 74 SCO 50 RXD 57 TBT 26 SDP 61
Long ETF SCORE 669
DDM 34 UGL 62 AGQ 57 DIG 44 EDC 41 UYM 70 UYG 36 URE 32 UGE 70
QLD 29 UCO 50 RXL 56 UBT 70 UPW 21
Total Score -86(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary: Bear market Rally ending
Commodities: Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy: Double dip coming
Americans borrowing was 11.7 trillion at the end of Q2 down 1.5% from Q1 and down 6.5% from the top in Q3 2008. When did the market and economy break down? Q3 2008 right with the top in borrowing. That borrowing is still declining. Consumer debt delinquencies fell to 11.4% from 11.9% from Q1. The first drop since 2006.
PPI rose for the first time in 4 months. The weakness in the dollar was the primary culprit that drove the market and commodities higher this last month. The only way these guys can show market strength is to nail the dollar. They did that all through 2007 and the middle of 2008 to prop the market and commodities up. They are doing the same thing again. We all know what happened to that one. Reality caught up with their game and the market and commodities crashed. Throughout the process the Fed and the government maintained that everything was alright.
Housing starts rose 1.7% but building permits were hitting a 14 month low.
Moody is warning about a possible downgrade of US, UK, German and French bonds. Maybe that explains the hype about deflation now. We seem to be coming to a crossroads on debt in this country. How much more can the US add on? The stimulus has only put a band aide on the problem.
The up moves in the market are directly related to currency movements. I do not know the mechanism but it is easy to make that correlation. Keep you eye on the dollar power index and the Aussie. If the dollar index starts trading above 60 and the Aussie trades below 40 the market should be selling off.
Mikey
RSI ..Relative Strength Number
The RSI is a measurement of the strength of one stock or average vs the the overall market. A reading of less than 50 means that that stock is not performing as well as the market. A reading of greater than 50 means is is performing better than the overall market.
Generally, if the RSI is greater than 50 and rising the stock is in a uptrend. If the stock is less than 50 and falling it is in a downtrend. I will be reporting these numbers on my blog from time to time when I see shifts taking place.
An RSI number of 55R would mean that the RSI is 55 and it is rising. A reading of 40 F would mean that the RSI is 40 and falling. This way if you like to go by the numbers it will be an easy way to determine what the current trend. Of course, these trends can reverse at any time so you need to keep your eye on them.
The RSI on the DJIA is 35 F which means that the RSI is 35 and it is falling, That would indicate that some kind of a downtrend is going on now. I will post RSI numbers that I find interesting and I am working on a format to do this now.
The pros like to work with the extremes. A number of 90 or greater tells them they have a very strong stock. A RSI of 20 or lower tells them they have a very weak stock. They will usually buy an RSI of 90 and short an RSI of 20. The idea here is that a strong stock will stay strong and a weak one will stay weak. This will work most of the time particularly in the very short term.
Traders are not in the business of economics, they are pragmatic. It is just an odds play. They could care less about the earnings or the economy or the Fed. They could also care less about what is going to happen next month. The RSI does well in a trending market. In a trading range market it will whipsaw you. It is just another tool I use to help me trade.
The RSI number will tell you what the institutions and traders are thinking at that moment, it will not forecast a trend change. I look for trend changes that are brought on by economic changes. My outlook is based on mainly econmic fundamentals. That by itself can get me into trouble. I have to respect the technical aspects of the market because the market can go along way against the fundamentals before it breaks.
Mikey
Generally, if the RSI is greater than 50 and rising the stock is in a uptrend. If the stock is less than 50 and falling it is in a downtrend. I will be reporting these numbers on my blog from time to time when I see shifts taking place.
An RSI number of 55R would mean that the RSI is 55 and it is rising. A reading of 40 F would mean that the RSI is 40 and falling. This way if you like to go by the numbers it will be an easy way to determine what the current trend. Of course, these trends can reverse at any time so you need to keep your eye on them.
The RSI on the DJIA is 35 F which means that the RSI is 35 and it is falling, That would indicate that some kind of a downtrend is going on now. I will post RSI numbers that I find interesting and I am working on a format to do this now.
The pros like to work with the extremes. A number of 90 or greater tells them they have a very strong stock. A RSI of 20 or lower tells them they have a very weak stock. They will usually buy an RSI of 90 and short an RSI of 20. The idea here is that a strong stock will stay strong and a weak one will stay weak. This will work most of the time particularly in the very short term.
Traders are not in the business of economics, they are pragmatic. It is just an odds play. They could care less about the earnings or the economy or the Fed. They could also care less about what is going to happen next month. The RSI does well in a trending market. In a trading range market it will whipsaw you. It is just another tool I use to help me trade.
The RSI number will tell you what the institutions and traders are thinking at that moment, it will not forecast a trend change. I look for trend changes that are brought on by economic changes. My outlook is based on mainly econmic fundamentals. That by itself can get me into trouble. I have to respect the technical aspects of the market because the market can go along way against the fundamentals before it breaks.
Mikey
Watch the Aussie power number
Keep an eye on the Aussie power number currently at 59. A drop below 50 would indicate a sell and would to me be a sell signal for the stock market.
Tuesday, August 17, 2010
They want us to think the Economy doesn't matter
DJIA 10405.85 +103.84 VIX 24.33 -1.77 10 year 2.62 30 year 3.75
Gold 1225.05 +2.75 Oil 75.43 -.08 USD 82.35 -.18
Days to option expiration 3
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Elevated) 65
Ratio Put Premiums/Call Premium Elevated 1.02
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40<
Stocks 35 Bonds 72 Emerging Mkts 42
Oil 48 Nat Gas 28 Copper 58 Gold 61 Silver 64
USD 28 Aussie 60 Euro 44 Brit Pd 43
Short ETF SCORE 798
DXD 77 DZZ 29 ZSL 34 DUG 48 EDZ 61 SMN 37 SKF 75 SRS 81 SZK 88
QID 79 SCO 48 RXD 59 TBT 30 SDP 65
Long ETF SCORE 643
DDM 25 UGL 63 AGQ 62 DIG 44 EDC 43 UYM 65 UYG 28 URE 22 UGE 58
QLD 24 UCO 50 RXL 54 UBT 80 UPW 21
Total Score -172(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary Bear market Rally ending
Commodities Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy Double dip coming
Cramer (Gamekeeper Pimp) writes 10 Reasons Why We Won’t Crash. I won't bore you with the details
Fast Money trader says: Market Has Legs to Sustain Rally: Trader
Most posts I read say the same thing. Weak economy, yes; double dip, no. Trading range market no crash.
Yes we have been in a trading range, but it is my opinion that the "experts will get the trading public to buy the trading range story and they will be buying the bottom end of the range when we get there. That will give the gamekeeper willing buyers all the way down to 9700.
Below 9700 they will change their story to the Its to late to sell and stocks are cheap. That is how you move stocks lower and have the traders buy from you.
This rally today looks real bogus to me. They need a sell off to get out of their bond positions. They also need to make deflation real. That reality will hit home when the commodities and GOLD take a huge dive.
The story we have now is about the bond market. Stocks are secondary now. The prime directive will be to sell their bonds. I am starting to believe that the bond market is forming a major long term top and that is what this deflation talk is all about. THEY WANT OUT OF THEIR BOND POSITIONS. I think the double dip deflation story will heat up and soon.
Mikey
Gold 1225.05 +2.75 Oil 75.43 -.08 USD 82.35 -.18
Days to option expiration 3
Economic Conditions: Negative -10.3
Mikey OB/OS index Elevated ---63 (80=OB 20=OS)
Mikey Confidence Index (Traders: Elevated) 65
Ratio Put Premiums/Call Premium Elevated 1.02
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40<
Stocks 35 Bonds 72 Emerging Mkts 42
Oil 48 Nat Gas 28 Copper 58 Gold 61 Silver 64
USD 28 Aussie 60 Euro 44 Brit Pd 43
Short ETF SCORE 798
DXD 77 DZZ 29 ZSL 34 DUG 48 EDZ 61 SMN 37 SKF 75 SRS 81 SZK 88
QID 79 SCO 48 RXD 59 TBT 30 SDP 65
Long ETF SCORE 643
DDM 25 UGL 63 AGQ 62 DIG 44 EDC 43 UYM 65 UYG 28 URE 22 UGE 58
QLD 24 UCO 50 RXL 54 UBT 80 UPW 21
Total Score -172(Positive number indicates uptrend)
Long Term Opinions:
Bonds: Major long term top forming
Stocks: Secondary Bear market rally ending
Gold: Primary Top Forming
Oil Secondary Bear market Rally ending
Commodities Bear Market Rally ending
Real Estate: Bottoming no uptrend
US Dollar: Forming a Major long term Bottom
Emerging Markets: Bear Market Rally ending
Economy Double dip coming
Cramer (Gamekeeper Pimp) writes 10 Reasons Why We Won’t Crash. I won't bore you with the details
Fast Money trader says: Market Has Legs to Sustain Rally: Trader
Most posts I read say the same thing. Weak economy, yes; double dip, no. Trading range market no crash.
Yes we have been in a trading range, but it is my opinion that the "experts will get the trading public to buy the trading range story and they will be buying the bottom end of the range when we get there. That will give the gamekeeper willing buyers all the way down to 9700.
Below 9700 they will change their story to the Its to late to sell and stocks are cheap. That is how you move stocks lower and have the traders buy from you.
This rally today looks real bogus to me. They need a sell off to get out of their bond positions. They also need to make deflation real. That reality will hit home when the commodities and GOLD take a huge dive.
The story we have now is about the bond market. Stocks are secondary now. The prime directive will be to sell their bonds. I am starting to believe that the bond market is forming a major long term top and that is what this deflation talk is all about. THEY WANT OUT OF THEIR BOND POSITIONS. I think the double dip deflation story will heat up and soon.
Mikey
Friday, August 13, 2010
Double Dip talk heats up
DJIA 10303.15-16.80 VIX 26.24 +.51 10 year 2.66 30 year 3.85
Gold 1216.70 unch Oil 75.72 -.02 USD 82.92 +.45
Days to option expiration 5
Economic Conditions: Negative -10.3
Mikey OB/OS index Neutral ---55 (80=OB 20=OS)
Mikey Confidence Index (Traders: negative) 32
Ratio Put Premiums/Call Premium Neutral .95
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40<
Stocks 38 Bonds 68 Emerging Mkts 43
Oil 49 Nat Gas 33 Copper 55 Gold 41 Silver 47
USD 59 Aussie 58 Euro 48 Brit Pd 51
Short ETF SCORE 798
DXD 71 DZZ 49 ZSL 47 DUG 47 EDZ 62 SMN 48 SKF 69 SRS 4 SZK 76
QID 71 SCO 55 RXD 58 TBT 32 SDP 59
Long ETF SCORE 643
DDM 29 UGL 41 AGQ 47 DIG 44 EDC 48 UYM 54 UYG 36 URE 44 UGE 64 QLD 30 UCO 49 RXL 56 UBT 64 UPW 40
Total Score -155(Positive number indicates uptrend)
The Fed is "quantitatively easing". Of course they say that they are buying bonds but I say they are marking them up with the double dip talk to sell them. They need a good old fashioned sell off in the market and a crash in the commodities to cement the deflation story that popped up 2 weeks ago. The idea of a double dip is pretty well accepted now but many of the experts are saying that it does not matter. Here is an example:
Despite Summer Stock Blues, Market Pros Say Don't Panic
While the stock market may look like it was panicking over a possible double-dip recession, this week's selloff may simply be the normal volatility of a range-bound market during August.
Despite this week's losses, advisers caution against reading much into a low-volume market, The stock selloff likely came in part from the Fed confirming that the economy was not recovering quickly.Stocks have been in sell-off mode since Tuesday afternoon, when the Federal Reserve issued another warning about weak economic conditions and said it would continue buying up government debt to keep interest rates low.
While the central bank's statement contained little that was new, Wall Street took the opportunity to sell after a July rally that saw the major averages surge 7 percent. Talk immediately began to spread about the possibility of a second leg down in the recession.
"What is it that the Fed told us that we didn't already know? What is it that has us panicked?" asks Art Hogan, managing director at Jefferies in Boston. "What the Fed really did was confirm our concern that this soft patch is persistent."
In fact, some think the fact that the Fed wasn't more worried and didn't promise more aggressive measures may have sparked the sell-off, which saw the averages lose about 0.5 percent Tuesday, add another 2.5 percent Wednesday, then pile on the losses Thursday.
Cramer in his Mad money blog says "Unemployment? A Double Dip? Who Cares?" You know we already knew it was bad and the market is still up tell us something new.
As I have said many times,in the end, the economy does matter.
Mikey
Gold 1216.70 unch Oil 75.72 -.02 USD 82.92 +.45
Days to option expiration 5
Economic Conditions: Negative -10.3
Mikey OB/OS index Neutral ---55 (80=OB 20=OS)
Mikey Confidence Index (Traders: negative) 32
Ratio Put Premiums/Call Premium Neutral .95
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutual Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40<
Stocks 38 Bonds 68 Emerging Mkts 43
Oil 49 Nat Gas 33 Copper 55 Gold 41 Silver 47
USD 59 Aussie 58 Euro 48 Brit Pd 51
Short ETF SCORE 798
DXD 71 DZZ 49 ZSL 47 DUG 47 EDZ 62 SMN 48 SKF 69 SRS 4 SZK 76
QID 71 SCO 55 RXD 58 TBT 32 SDP 59
Long ETF SCORE 643
DDM 29 UGL 41 AGQ 47 DIG 44 EDC 48 UYM 54 UYG 36 URE 44 UGE 64 QLD 30 UCO 49 RXL 56 UBT 64 UPW 40
Total Score -155(Positive number indicates uptrend)
The Fed is "quantitatively easing". Of course they say that they are buying bonds but I say they are marking them up with the double dip talk to sell them. They need a good old fashioned sell off in the market and a crash in the commodities to cement the deflation story that popped up 2 weeks ago. The idea of a double dip is pretty well accepted now but many of the experts are saying that it does not matter. Here is an example:
Despite Summer Stock Blues, Market Pros Say Don't Panic
While the stock market may look like it was panicking over a possible double-dip recession, this week's selloff may simply be the normal volatility of a range-bound market during August.
Despite this week's losses, advisers caution against reading much into a low-volume market, The stock selloff likely came in part from the Fed confirming that the economy was not recovering quickly.Stocks have been in sell-off mode since Tuesday afternoon, when the Federal Reserve issued another warning about weak economic conditions and said it would continue buying up government debt to keep interest rates low.
While the central bank's statement contained little that was new, Wall Street took the opportunity to sell after a July rally that saw the major averages surge 7 percent. Talk immediately began to spread about the possibility of a second leg down in the recession.
"What is it that the Fed told us that we didn't already know? What is it that has us panicked?" asks Art Hogan, managing director at Jefferies in Boston. "What the Fed really did was confirm our concern that this soft patch is persistent."
In fact, some think the fact that the Fed wasn't more worried and didn't promise more aggressive measures may have sparked the sell-off, which saw the averages lose about 0.5 percent Tuesday, add another 2.5 percent Wednesday, then pile on the losses Thursday.
Cramer in his Mad money blog says "Unemployment? A Double Dip? Who Cares?" You know we already knew it was bad and the market is still up tell us something new.
As I have said many times,in the end, the economy does matter.
Mikey
Thursday, August 12, 2010
GM turns 1.33 billion in profits will Schedule IPO
DJIA 10319.95 -58.88 VIX 25.73 +.34 10 year 2.7418 +.0316 30year 3.9519 +.0372
Gold 1216.70 +17.50 Oil 75.74 -2.28 USD 82.47 +.09
Days to option expiration 7
Economic Conditions: Negative -10.3
Mikey OB/OS index Neutral ---57 (80=OB 20=OS)
Mikey Confidence Index (Traders: negative) 28
Ratio Put Premiums/Call Premium Neutral .75
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutial Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY >60 SELL 50< Short 40<
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40<
Stocks 45 Bonds 60 Emerging Mkts 46
Oil 62 Nat Gas 36 Copper 62 Gold 38 Silver 34
USD 56 Aussie 62 Euro 44 Brit Pd 56
Short ETF SCORE 782
DXD 64 DZZ 53 ZSL 46 DUG 53 EDZ 59 SMN 43 SKF 62 SRS 49 SZK 75
QID 64 SCO 53 RXD 66 TBT 40 SDP 55
Long ETF SCORE 673
DDM 35 UGL 40 AGQ 47 DIG 45 EDC 45 UYM 59 UYG 43 URE 50 UGE 63
QLD 38 UCO 52 RXL 54 UBT 61 UPW 41
Total Score -109 (Positive number indicates uptrend)
General Motors is preparing to report second-quarter results that will show a substantial gain over the first quarter, bolstering its bid to return to capital markets and pay back taxpayers, two people familiar with the matter said.
GM, now 61 percent-owned by the U.S. government, is counting on the momentum from its quarterly results to help it clinch a $5 billion bank credit facility as it prepares a stock offering expected to be the largest ever for the U.S. market.
GM Chief Executive Ed Whitacre, appointed by the Obama administration to oversee the automaker's turnaround, said last week he expected the automaker's second-quarter result would be viewed positively by both potential investors and creditors.
"It will be good. It will be impressive," said Whitacre, who has also said his top priority is shedding the automaker's ties to the U.S. government and the label "Government Motors" used by critics of its bailout.
A GM spokeswoman said the automaker was not providing financial forecasts and would not comment. GM could finalize its bank credit facility by the end of August, allowing it to press ahead with its stock offering by the end of the year, the sources said.
For 2011, GM is projecting that it could generate $16 billion in earnings before interest, taxes, depreciation and amortization, one of the sources said. JPMorgan debt analyst Eric Selle has forecast GM's 2010 EBITDA at $11.4 billion.
What a company! While the economy goes into the tank GM earns 1.33 billion. Then they declare victory and will take the new company public. I'll bet that the "investors" that buy the stock will make money on it too. Notice the timing of the IPO will not be until the end of the year. I would guess more like April of 2011.
This stock will probably end up in your 401K as the funds sell out to the government and buy the IPO.
Mikey
Gold 1216.70 +17.50 Oil 75.74 -2.28 USD 82.47 +.09
Days to option expiration 7
Economic Conditions: Negative -10.3
Mikey OB/OS index Neutral ---57 (80=OB 20=OS)
Mikey Confidence Index (Traders: negative) 28
Ratio Put Premiums/Call Premium Neutral .75
% Advisory Service Bulls 41.7 Bears 27.5 Moderately Bullish
US Mutial Funds cash position 3.5% Low cash (high 6.2% Low 3.3%)
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY >60 SELL 50< Short 40<
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY 60> SELL 50< Short 40<
Stocks 45 Bonds 60 Emerging Mkts 46
Oil 62 Nat Gas 36 Copper 62 Gold 38 Silver 34
USD 56 Aussie 62 Euro 44 Brit Pd 56
Short ETF SCORE 782
DXD 64 DZZ 53 ZSL 46 DUG 53 EDZ 59 SMN 43 SKF 62 SRS 49 SZK 75
QID 64 SCO 53 RXD 66 TBT 40 SDP 55
Long ETF SCORE 673
DDM 35 UGL 40 AGQ 47 DIG 45 EDC 45 UYM 59 UYG 43 URE 50 UGE 63
QLD 38 UCO 52 RXL 54 UBT 61 UPW 41
Total Score -109 (Positive number indicates uptrend)
General Motors is preparing to report second-quarter results that will show a substantial gain over the first quarter, bolstering its bid to return to capital markets and pay back taxpayers, two people familiar with the matter said.
GM, now 61 percent-owned by the U.S. government, is counting on the momentum from its quarterly results to help it clinch a $5 billion bank credit facility as it prepares a stock offering expected to be the largest ever for the U.S. market.
GM Chief Executive Ed Whitacre, appointed by the Obama administration to oversee the automaker's turnaround, said last week he expected the automaker's second-quarter result would be viewed positively by both potential investors and creditors.
"It will be good. It will be impressive," said Whitacre, who has also said his top priority is shedding the automaker's ties to the U.S. government and the label "Government Motors" used by critics of its bailout.
A GM spokeswoman said the automaker was not providing financial forecasts and would not comment. GM could finalize its bank credit facility by the end of August, allowing it to press ahead with its stock offering by the end of the year, the sources said.
For 2011, GM is projecting that it could generate $16 billion in earnings before interest, taxes, depreciation and amortization, one of the sources said. JPMorgan debt analyst Eric Selle has forecast GM's 2010 EBITDA at $11.4 billion.
What a company! While the economy goes into the tank GM earns 1.33 billion. Then they declare victory and will take the new company public. I'll bet that the "investors" that buy the stock will make money on it too. Notice the timing of the IPO will not be until the end of the year. I would guess more like April of 2011.
This stock will probably end up in your 401K as the funds sell out to the government and buy the IPO.
Mikey
Wednesday, August 11, 2010
"Quantitative Easing" underway
DJIA 10378.83 -265.42 VIX 25.39 +3.02 10 year 2.7003 +.0259 30year 3.9137 -.0025
Gold 1199.20 +2.00 Oil 78.02 -2.23 USD 82.36 +1.65
Days to option expiration 8
Economic Conditions: Negative -10.3
FED Easing Outlook uncertain
Mikey OB/OS index Neutral (80=OB 20=OS)---58
Mikey Confidence Index (Traders: confident = 100) 90
Ratio Put Premiums/Call Premium 65 ( Range 258 high 34 Low) High=Traders Bearish
% Advisory Service Bulls 38.9 Bears 33.3
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY >60 SELL 50< Short 40<
Stocks 53 Bonds 52 Emerging Mkts 52
USD 49 Aussie 65 Euro 57 Brit Pd 60
Oil 62 Copper 62 Gold 38 Silver 34
Short ETF SCORE 666
DXD 55 DZZ 53 ZSL 43 DUG 47 EDZ 49 SMN 34 SKF 52 SRS 39 SZK 69
QID 54 SCO 39 RXD 53 TBT 48 SDP 31
Long ETF SCORE 743
DDM 41 UGL 38 AGQ 50 DIG 52 EDC 52 UYM 65 UYG 50 URE 59 UGE 74
QLD 45 UCO 62 RXL 61 UBT 52 UPW 42
Total Score +77
The DJI is down 224 this AM. the 10 yr bond is now 2.70 and the 30 year is at 3.96. The dollar index is up a nice 1.34. Oil is down 1.76 at78.49. Gold is unch at 1196 but should follow the market lower, The term Quantitative easing means blow it up and start over again. See my posts of last week.
Fed yesterday issued a weaker outlook at its FMOC meeting. To bad they were not reading Mikey for the past 6 months. Sources say that the Fed is going to buy Treasuries to force down rates. That is a complete load of crap. They are going to be selling their holdings regardless of what their balance sheet says. I talked about that over the past few blogs.
China import growth slows. Really, it has been slowing for quite some time. The timing of this news gave the boys an excuse to rally the dollar. Nobody believes this dollar rally you know with the Fed buying treasuries. Everything these jokers say is a lie. They then spin it to time the moves in the various markets to suit their needs.
The IBD TIIP poll shows Economic Optimism fell to 43.6 (below 50 is pessimistic). The IBD TIIP personal finance fell to 49.2 showing pessimism for the first time since June 2008.
Wholesale inventories rose a less than expected .1% in June and wholesale sales dropped .7%. This is evidence that firms have replaced the inventories that were used up during the slump.
Isn't it interesting how fast the news turns negative. You think they have been holding it back to suit their needs? Maybe it is time to step into reality for a while and let the Fed do its easing. That means a full on market decline followed by a full on decline in commodities and Gold.
What is the Fed going to do? The Fed is going to be selling bonds as the investment professionals tell the public to seek the safety if treasuries. They will also say that the Fed has used all of the arrows in its quiver and they are now powerless. That too is a load of crap.
Mikey
Gold 1199.20 +2.00 Oil 78.02 -2.23 USD 82.36 +1.65
Days to option expiration 8
Economic Conditions: Negative -10.3
FED Easing Outlook uncertain
Mikey OB/OS index Neutral (80=OB 20=OS)---58
Mikey Confidence Index (Traders: confident = 100) 90
Ratio Put Premiums/Call Premium 65 ( Range 258 high 34 Low) High=Traders Bearish
% Advisory Service Bulls 38.9 Bears 33.3
Numbers are from the prior day close
Mikey Power Index (MPI)
BUY >60 SELL 50< Short 40<
Stocks 53 Bonds 52 Emerging Mkts 52
USD 49 Aussie 65 Euro 57 Brit Pd 60
Oil 62 Copper 62 Gold 38 Silver 34
Short ETF SCORE 666
DXD 55 DZZ 53 ZSL 43 DUG 47 EDZ 49 SMN 34 SKF 52 SRS 39 SZK 69
QID 54 SCO 39 RXD 53 TBT 48 SDP 31
Long ETF SCORE 743
DDM 41 UGL 38 AGQ 50 DIG 52 EDC 52 UYM 65 UYG 50 URE 59 UGE 74
QLD 45 UCO 62 RXL 61 UBT 52 UPW 42
Total Score +77
The DJI is down 224 this AM. the 10 yr bond is now 2.70 and the 30 year is at 3.96. The dollar index is up a nice 1.34. Oil is down 1.76 at78.49. Gold is unch at 1196 but should follow the market lower, The term Quantitative easing means blow it up and start over again. See my posts of last week.
Fed yesterday issued a weaker outlook at its FMOC meeting. To bad they were not reading Mikey for the past 6 months. Sources say that the Fed is going to buy Treasuries to force down rates. That is a complete load of crap. They are going to be selling their holdings regardless of what their balance sheet says. I talked about that over the past few blogs.
China import growth slows. Really, it has been slowing for quite some time. The timing of this news gave the boys an excuse to rally the dollar. Nobody believes this dollar rally you know with the Fed buying treasuries. Everything these jokers say is a lie. They then spin it to time the moves in the various markets to suit their needs.
The IBD TIIP poll shows Economic Optimism fell to 43.6 (below 50 is pessimistic). The IBD TIIP personal finance fell to 49.2 showing pessimism for the first time since June 2008.
Wholesale inventories rose a less than expected .1% in June and wholesale sales dropped .7%. This is evidence that firms have replaced the inventories that were used up during the slump.
Isn't it interesting how fast the news turns negative. You think they have been holding it back to suit their needs? Maybe it is time to step into reality for a while and let the Fed do its easing. That means a full on market decline followed by a full on decline in commodities and Gold.
What is the Fed going to do? The Fed is going to be selling bonds as the investment professionals tell the public to seek the safety if treasuries. They will also say that the Fed has used all of the arrows in its quiver and they are now powerless. That too is a load of crap.
Mikey
Monday, August 9, 2010
The Risk Trade
DJIA 10698.75 +45.19 VIX 22.14 +.40 10year 2.8312 +.0159 30year 4.0191 +.0251
Gold 1203.30 -2.00 Oil 81.48 +.78 USD 80.711 +.34
Days to option expiration 9
Economic Conditions: Negative -10.3
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---71
Mikey Confidence Index (Traders: confident = 100) 70
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 60 Oil 60 Gold 45 Bonds 50 Emerging Mkts 70
USD 45 Aussie 74 Euro 68 Brit Pd 67
Short ETF SCORE 549
DXD 48 DZZ 48 ZSL 31 DUG 30 EDZ 30 SMN 18 SKF 35 SRS 36 SZK 52
QID 37 SCO 33 RXD 62 TBT 52 SDP 33
Long ETF SCORE 849
DDM 49 UGL 47 AGQ 65 DIG 58 EDC 71 UYM 80 UYG 65 URE 65 UGE 79
QLD 61 UCO 66 RXL 60 UBT 38 UPW 45
Power index +300 up 54
Risk trade basically means that investors, traders and / or financial institutions would rather own assets that can make them profits, instead of holding cash. We have been witnessing this event in large fashion even though we are coming off of the worst financial crisis since the great depression. It is a strange, but true.
The dollar is at the root of the risk trade mentality. As the dollar sinks in value, investors move their cash into stocks, commodities and even other currencies instead of watching their purchasing power erode with the dollar. There are other factors that impact the price of these hard assets, but this is the main reason.
This is the same thing that drove the market in late 2007 and into July of 2008
Dollar
DJI
You can see the inverse relationship between the dollar and the DJI. The idea is utter nonsense. The idea that the dollar goes down with economic weakness and the stock market goes up makes me scratch my head. This seems to be what is happening now. In mid 2008 the idea was that the world economy was going to be OK even though the US was going into a recession. You had a big disconnect between the US economy and the US market. It feels like the same thing is happening today.
Mikey
Gold 1203.30 -2.00 Oil 81.48 +.78 USD 80.711 +.34
Days to option expiration 9
Economic Conditions: Negative -10.3
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---71
Mikey Confidence Index (Traders: confident = 100) 70
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 60 Oil 60 Gold 45 Bonds 50 Emerging Mkts 70
USD 45 Aussie 74 Euro 68 Brit Pd 67
Short ETF SCORE 549
DXD 48 DZZ 48 ZSL 31 DUG 30 EDZ 30 SMN 18 SKF 35 SRS 36 SZK 52
QID 37 SCO 33 RXD 62 TBT 52 SDP 33
Long ETF SCORE 849
DDM 49 UGL 47 AGQ 65 DIG 58 EDC 71 UYM 80 UYG 65 URE 65 UGE 79
QLD 61 UCO 66 RXL 60 UBT 38 UPW 45
Power index +300 up 54
Risk trade basically means that investors, traders and / or financial institutions would rather own assets that can make them profits, instead of holding cash. We have been witnessing this event in large fashion even though we are coming off of the worst financial crisis since the great depression. It is a strange, but true.
The dollar is at the root of the risk trade mentality. As the dollar sinks in value, investors move their cash into stocks, commodities and even other currencies instead of watching their purchasing power erode with the dollar. There are other factors that impact the price of these hard assets, but this is the main reason.
This is the same thing that drove the market in late 2007 and into July of 2008
Dollar
DJI
You can see the inverse relationship between the dollar and the DJI. The idea is utter nonsense. The idea that the dollar goes down with economic weakness and the stock market goes up makes me scratch my head. This seems to be what is happening now. In mid 2008 the idea was that the world economy was going to be OK even though the US was going into a recession. You had a big disconnect between the US economy and the US market. It feels like the same thing is happening today.
Mikey
Saturday, August 7, 2010
TW3 The stock Market yawns on bad news.
DJIA 10653.56 -21.42 VIX 21.74 -.36 10year 2.8183 -.0846 30year 3.994 -.0591 Gold 1205.30 Oil 80.70 -1.31 USD 80.37 -.44
Days to option expiration 10
Economic Conditions: Negative -10.3
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---73
Mikey Confidence Index (Traders: confident = 100) 70
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 50 Oil 67 Gold 34 Bonds 49 Emerging Mkts 65
USD 45 Aussie 74 Euro 56 Brit Pd 59
Short ETF SCORE 563
DXD 53 DZZ 57 ZSL 40 DUG 33 EDZ 32 SMN 35 SKF 40 SRS 42 SZK 46
QID 43 SCO 29 RXD 74 TBT 55 SDP 38 to to
Long ETF SCORE 809
DDM 46 UGL 37 AGQ 55 DIG 60 EDC 73 UYM 70 UYG 63 URE 62 UGE 70 QLD 57 UCO 74 RXL 48 UBT 35 UPW 46
The best way to sum up this week was that the economy went into the tank. The word deflation was heard many times and everyone looked to see what the Fed was going to do about it. Through it all the stock market refused to sell off.
The Treasury is auctioning billion in bonds next week which may account for the deflation talk or it may be the start of a new story. The Fed will probably downgrade the economy in their policy statement on Tuesday.
Technically The bulls have the trend and the Bears have the economy. The score ended 809 for Long ETF vs 563 for the short ETF. Mikey OB /OS reading is at 73 so we are very close to being overbought.
The ECRI leading indicator bounced off of its 14 month low of -10.7 to -10.3. The jobs numbers continued to show weakness. There were 131000 jobs lot in July. The jobless rate remained at 9.5% but only because people left the workforce.
They are now saying that the rate of job growth is too small to sustain an economic recovery. I guess the word jobless recovery is being set aside for now. In all the economy peaked in April right with the market.
This rally is now 5 weeks old. It started on July 1 at 9732 and has risen over 900 points. We have rallied back to near the May break of the 50 day at 10865. That would have been where the shorts came in. They have now seen bad economic news for the past 3 months and have nothing to show for it. The market has a way of doing that.
The focus has been on earnings which are backward looking. The forward looking indicators are negative and falling. If you are confused join the club. I am economically oriented so I will stay the course on that approach. Technically, I am waiting for this thing to get overbought and have some "technical breakout" that will send the shorts for cover before I short some more.
Here are the individual stocks I am going to use RSI for these. Over 60 is a buy under 50 is a sell and under 40 is a short. A reversal back above or below 50 cloes the position
AAPL 54 IBM 60 HPQ 35 INTC 46 AMAT 41 TXN 58
ORCL57 MSFT 50 SYMC 33 INTU 46 ADBE 54
COST 55 TGT 60 WMT 63 BBY 50 AMZN 66 JWN 53 JCP 38
LVS 71 WYNN 67 CCL 57 DIS 61 MCD 66 YUM 60
DAL 53 CAL 55 UAUA 55 AMR 54
CAT 67 DE 76 CMI 65 FCX 65 POT 73 NEM 47 ABX 56
DD 72 DOW 49 MOS 65 MON 63 APD 70 AGU 72
UNP 66 CSX 55 NSC 58 FDX 67 UPS 68
APA 59 CNQ 55 DVN 56 PTR 57 BTU 69 XOM 61 VLO 57
SLB 60 BHI 36 RIG 62
JPM 49 BAC 41 WFC 55 GS 68 MS 61 AXP 53 V 51 COF 67
SPG 64 KBH 54 LEN 50 HD 49 LOW 43
ABT 72 JNJ 59 CL 31 CLX 60 PG 45 K 48 KFT 62 KO 79
NUE 51 X 61 F 63 TM 52 HMC 70
BA 59 HON 59 GD 61 LMT 50 HON 59 NOC 61
MRK 52 LLY 69 GSK 61 PFE 68 UNH 73 AET 62 WLP 62 AFL 61
QCOM 68 CSCO 65 BRCM 53 VZ 79 T 70 BIDU 71 GOOG 60
Mikey
Days to option expiration 10
Economic Conditions: Negative -10.3
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---73
Mikey Confidence Index (Traders: confident = 100) 70
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 50 Oil 67 Gold 34 Bonds 49 Emerging Mkts 65
USD 45 Aussie 74 Euro 56 Brit Pd 59
Short ETF SCORE 563
DXD 53 DZZ 57 ZSL 40 DUG 33 EDZ 32 SMN 35 SKF 40 SRS 42 SZK 46
QID 43 SCO 29 RXD 74 TBT 55 SDP 38 to to
Long ETF SCORE 809
DDM 46 UGL 37 AGQ 55 DIG 60 EDC 73 UYM 70 UYG 63 URE 62 UGE 70 QLD 57 UCO 74 RXL 48 UBT 35 UPW 46
The best way to sum up this week was that the economy went into the tank. The word deflation was heard many times and everyone looked to see what the Fed was going to do about it. Through it all the stock market refused to sell off.
The Treasury is auctioning billion in bonds next week which may account for the deflation talk or it may be the start of a new story. The Fed will probably downgrade the economy in their policy statement on Tuesday.
Technically The bulls have the trend and the Bears have the economy. The score ended 809 for Long ETF vs 563 for the short ETF. Mikey OB /OS reading is at 73 so we are very close to being overbought.
The ECRI leading indicator bounced off of its 14 month low of -10.7 to -10.3. The jobs numbers continued to show weakness. There were 131000 jobs lot in July. The jobless rate remained at 9.5% but only because people left the workforce.
They are now saying that the rate of job growth is too small to sustain an economic recovery. I guess the word jobless recovery is being set aside for now. In all the economy peaked in April right with the market.
This rally is now 5 weeks old. It started on July 1 at 9732 and has risen over 900 points. We have rallied back to near the May break of the 50 day at 10865. That would have been where the shorts came in. They have now seen bad economic news for the past 3 months and have nothing to show for it. The market has a way of doing that.
The focus has been on earnings which are backward looking. The forward looking indicators are negative and falling. If you are confused join the club. I am economically oriented so I will stay the course on that approach. Technically, I am waiting for this thing to get overbought and have some "technical breakout" that will send the shorts for cover before I short some more.
Here are the individual stocks I am going to use RSI for these. Over 60 is a buy under 50 is a sell and under 40 is a short. A reversal back above or below 50 cloes the position
AAPL 54 IBM 60 HPQ 35 INTC 46 AMAT 41 TXN 58
ORCL57 MSFT 50 SYMC 33 INTU 46 ADBE 54
COST 55 TGT 60 WMT 63 BBY 50 AMZN 66 JWN 53 JCP 38
LVS 71 WYNN 67 CCL 57 DIS 61 MCD 66 YUM 60
DAL 53 CAL 55 UAUA 55 AMR 54
CAT 67 DE 76 CMI 65 FCX 65 POT 73 NEM 47 ABX 56
DD 72 DOW 49 MOS 65 MON 63 APD 70 AGU 72
UNP 66 CSX 55 NSC 58 FDX 67 UPS 68
APA 59 CNQ 55 DVN 56 PTR 57 BTU 69 XOM 61 VLO 57
SLB 60 BHI 36 RIG 62
JPM 49 BAC 41 WFC 55 GS 68 MS 61 AXP 53 V 51 COF 67
SPG 64 KBH 54 LEN 50 HD 49 LOW 43
ABT 72 JNJ 59 CL 31 CLX 60 PG 45 K 48 KFT 62 KO 79
NUE 51 X 61 F 63 TM 52 HMC 70
BA 59 HON 59 GD 61 LMT 50 HON 59 NOC 61
MRK 52 LLY 69 GSK 61 PFE 68 UNH 73 AET 62 WLP 62 AFL 61
QCOM 68 CSCO 65 BRCM 53 VZ 79 T 70 BIDU 71 GOOG 60
Mikey
It this August 2008??
Here is the chart of the long term government bond market. Notice the action between June 2008 and October 2008. Are we there again?
This is the bond market. That period is the consolidation period just before the blast off in Dec of 2008
This is the stock market notice that the market rallied from mid July of 2008 into the second week of August 2008, just before the crash.
This is a chart of the money supply. I think easing is appropriate don't you?
This is an interesting quote:
"The thing that set the tone and the catalyst for the move in bonds was the employment report and the propensity for that to really fuel the discussion about whether or not the Fed resumes their quantitative easing measures when they have their discussion next week at their meeting."
What is quantitative easing? It is when the Fed pumps money into the money supply. You can see the money supply has had negative growth since the end of 2009. How do they do it? They sell their bond holdings. Who is going to buy bonds with such low yields? The answer is that the buyers are convinced that we are going to have deflation.
The last time we had quantitative easing was between August of 2008 and March of 2009. Notice the money supply growth between on the chart from the middle of 2008 to the Spring of 2009. That is the Fed selling their bond holdings. You can see it by the decline in bond chart from late 2008 until June of 2009. There was a story going around in late 2008 that the Fed was going to buy treasuries and mortgages in the open market to help the economy. Take a look at the bond chart from late 2008 until mid 2009 when they were "buying".
You can see by the charts above the spike in the bonds and the sell off in the market. I think the reality is that the economy is running out of steam and that the story is starting to go towards deflation. You know the Fed is tightening when they buy bonds. They are talking about "quantitative easing" which is code for selling bonds. My interpretation is that the deflation story is about to get legs so the Fed can "qualitatively ease". The Fed will ease to save us from deflation and the story will be so bad that the government will have to step up to the plate and have stimulus package part 2 but that is another story.
Mikey
This is the bond market. That period is the consolidation period just before the blast off in Dec of 2008
This is the stock market notice that the market rallied from mid July of 2008 into the second week of August 2008, just before the crash.
This is a chart of the money supply. I think easing is appropriate don't you?
This is an interesting quote:
"The thing that set the tone and the catalyst for the move in bonds was the employment report and the propensity for that to really fuel the discussion about whether or not the Fed resumes their quantitative easing measures when they have their discussion next week at their meeting."
What is quantitative easing? It is when the Fed pumps money into the money supply. You can see the money supply has had negative growth since the end of 2009. How do they do it? They sell their bond holdings. Who is going to buy bonds with such low yields? The answer is that the buyers are convinced that we are going to have deflation.
The last time we had quantitative easing was between August of 2008 and March of 2009. Notice the money supply growth between on the chart from the middle of 2008 to the Spring of 2009. That is the Fed selling their bond holdings. You can see it by the decline in bond chart from late 2008 until June of 2009. There was a story going around in late 2008 that the Fed was going to buy treasuries and mortgages in the open market to help the economy. Take a look at the bond chart from late 2008 until mid 2009 when they were "buying".
You can see by the charts above the spike in the bonds and the sell off in the market. I think the reality is that the economy is running out of steam and that the story is starting to go towards deflation. You know the Fed is tightening when they buy bonds. They are talking about "quantitative easing" which is code for selling bonds. My interpretation is that the deflation story is about to get legs so the Fed can "qualitatively ease". The Fed will ease to save us from deflation and the story will be so bad that the government will have to step up to the plate and have stimulus package part 2 but that is another story.
Mikey
Friday, August 6, 2010
Treasury to sell 74 billion in Bonds as yields hit record lows. How nice for them
Here is an article I got from CNBC on the state of the bond market. It says the bonds rallied because of two factors. Weak economic news and the expectation that the Fed is going to buy Treasuries to "spur" growth. That is complete and utter nonsense. The Fed and the banks are loaded up to their eyeballs with treasuries and mortgages and are looking to sell treasuries to raise cash pump money into the money supply.
I believe what is happening is that money is getting scared and it is running into treasuries because the economy is sinking like a rock. The Fed and the banks will have a great opportunity here to blow out their treasuries and raise cash to fund the next cycle. The last time I heard they were going to buy treasuries was late 2008. The bond market topped with the news. The economic news at that time was extremely negative and stocks were making new lows. The experts were telling us to sell. sell, sell stocks and be safe. This time they are not worried but the story is one of temporary softness.
Normally, when the FED and the banks are trying to get out of their bond positions the stock market is getting blown out on the downside. That gives the Fed and their buddies, the banks, time to sell their bonds and get into cash. They want to raise cash so they can buy stocks that have crashed because of the bad economy. The public is being told to sell their stocks and buy bonds. The last time that happened was between the Winter of 2008 and into the Spring of 2009.
The reason they need panic is because the bond positions are so large and they need a negative cover story to get it done. The crossover is made out of bonds and into cash and from cash and into stocks as the bad news is being made public on TV and in the newspapers. The public is going the other way from stocks and corporate bonds into cash and government bonds. The Fed and banks will sell their bonds and are loaded to the hilt with cash. That gives them the ability to loan money for the next expansion. It also gives them time to take a nice profit when they sell their treasuries.
What we don't have yet is the Oh My God! in the market yet.
Here is the story as it stands today:
From CNBC:
U.S. Treasuries prices rallied on Friday, sending two-year yields to record lows again as dismal jobs data rekindled speculation the Federal Reserve could consider new stimulus measures as early as next week. Private-sector job growth stagnated at anemic levels last month. The overall situation was made worse by losses in government employment as temporary census workers were laid off while state and local governments also made cuts.
The news gave a lift to bonds, which investors usually favor in weak economic times and which could get an additional boost if the Fed were to revive its recent quantitative easing campaign of buying assets such as Treasuries to spur growth. Traders said it was not yet a foregone conclusion the Fed would take such measures, especially at next Tuesday's policy meeting, but the risk was that it would consider some kind of bond-positive measures if economic indicators didn't improve soon.
"I think the discussion will be had. I question the timing. I don't know that the timing of such a move will be announced as soon as the statement to this Fed meeting," said Marty Mitchell, head of government bond trading at Stifel Nicolaus in Baltimore. "The thing that set the tone and the catalyst for the move in bonds was the employment report and the propensity for that to really fuel the discussion about whether or not the Fed resumes their quantitative easing measures when they have their discussion next week at their meeting."
The two-year note, which is particularly sensitive to changing perceptions on Fed policy, was last up 1/32 in price, yielding 0.51 percent versus Thursday's close of 0.54 percent. The two-year yield hit a record low of 0.50 percent earlier in the session. Based on the drop in yield, two-year notes had their best week since the end of June, as traders priced in the possibility the Federal Reserve will drive short-term rates lower this year and keep them there for some time.
The benchmark 10-year note was last up 23/32 in price, yielding 2.82 percent versus Thursday's close of 2.91 percent. During the session, 10-year yields fell as far as 2.81 percent, their lowest since April 2009.
The 30-year long bond rallied a point in price at the session's highs. It was last up 30/32, yielding just under 4.0 percent versus Thursday's close of 4.05 percent. The upcoming Fed meeting could complicate the market's usual positioning ahead of government bond auctions.
Treasury will sell a total of $74 billion worth of bonds and most dealers would probably like to see prices cheapen before taking down the supply, which is how they usually approach auctions. The sales include three-, 10- and 30-year bonds.
Some investors also have concluded that the more distant the threat of inflation becomes amid economic weakness, the more it hurts 30-year bonds in relation to other maturities. Investors' apparent renewed love of Treasuries on Friday drove swap spreads wider as government bonds outperformed other fixed income sectors.
If you were the Fed and wanted to sell your bonds what kind of story would you make up? I think I would run the bad news story about the economy and say that the Fed is going to being buying treasuries. How about you?
Mikey
I believe what is happening is that money is getting scared and it is running into treasuries because the economy is sinking like a rock. The Fed and the banks will have a great opportunity here to blow out their treasuries and raise cash to fund the next cycle. The last time I heard they were going to buy treasuries was late 2008. The bond market topped with the news. The economic news at that time was extremely negative and stocks were making new lows. The experts were telling us to sell. sell, sell stocks and be safe. This time they are not worried but the story is one of temporary softness.
Normally, when the FED and the banks are trying to get out of their bond positions the stock market is getting blown out on the downside. That gives the Fed and their buddies, the banks, time to sell their bonds and get into cash. They want to raise cash so they can buy stocks that have crashed because of the bad economy. The public is being told to sell their stocks and buy bonds. The last time that happened was between the Winter of 2008 and into the Spring of 2009.
The reason they need panic is because the bond positions are so large and they need a negative cover story to get it done. The crossover is made out of bonds and into cash and from cash and into stocks as the bad news is being made public on TV and in the newspapers. The public is going the other way from stocks and corporate bonds into cash and government bonds. The Fed and banks will sell their bonds and are loaded to the hilt with cash. That gives them the ability to loan money for the next expansion. It also gives them time to take a nice profit when they sell their treasuries.
What we don't have yet is the Oh My God! in the market yet.
Here is the story as it stands today:
From CNBC:
U.S. Treasuries prices rallied on Friday, sending two-year yields to record lows again as dismal jobs data rekindled speculation the Federal Reserve could consider new stimulus measures as early as next week. Private-sector job growth stagnated at anemic levels last month. The overall situation was made worse by losses in government employment as temporary census workers were laid off while state and local governments also made cuts.
The news gave a lift to bonds, which investors usually favor in weak economic times and which could get an additional boost if the Fed were to revive its recent quantitative easing campaign of buying assets such as Treasuries to spur growth. Traders said it was not yet a foregone conclusion the Fed would take such measures, especially at next Tuesday's policy meeting, but the risk was that it would consider some kind of bond-positive measures if economic indicators didn't improve soon.
"I think the discussion will be had. I question the timing. I don't know that the timing of such a move will be announced as soon as the statement to this Fed meeting," said Marty Mitchell, head of government bond trading at Stifel Nicolaus in Baltimore. "The thing that set the tone and the catalyst for the move in bonds was the employment report and the propensity for that to really fuel the discussion about whether or not the Fed resumes their quantitative easing measures when they have their discussion next week at their meeting."
The two-year note, which is particularly sensitive to changing perceptions on Fed policy, was last up 1/32 in price, yielding 0.51 percent versus Thursday's close of 0.54 percent. The two-year yield hit a record low of 0.50 percent earlier in the session. Based on the drop in yield, two-year notes had their best week since the end of June, as traders priced in the possibility the Federal Reserve will drive short-term rates lower this year and keep them there for some time.
The benchmark 10-year note was last up 23/32 in price, yielding 2.82 percent versus Thursday's close of 2.91 percent. During the session, 10-year yields fell as far as 2.81 percent, their lowest since April 2009.
The 30-year long bond rallied a point in price at the session's highs. It was last up 30/32, yielding just under 4.0 percent versus Thursday's close of 4.05 percent. The upcoming Fed meeting could complicate the market's usual positioning ahead of government bond auctions.
Treasury will sell a total of $74 billion worth of bonds and most dealers would probably like to see prices cheapen before taking down the supply, which is how they usually approach auctions. The sales include three-, 10- and 30-year bonds.
Some investors also have concluded that the more distant the threat of inflation becomes amid economic weakness, the more it hurts 30-year bonds in relation to other maturities. Investors' apparent renewed love of Treasuries on Friday drove swap spreads wider as government bonds outperformed other fixed income sectors.
If you were the Fed and wanted to sell your bonds what kind of story would you make up? I think I would run the bad news story about the economy and say that the Fed is going to being buying treasuries. How about you?
Mikey
Jobs Data weak
DJIA 10653.56 -21.42 VIX 21.74 -.36 10year 2.8183 -.0846 30year 3.994 -.0591 Gold 1205.30 Oil 80.70 -1.31 USD 80.37 -.44
Days to option expiration 11
Economic Conditions: Negative -10.7
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---73
Mikey Confidence Index (Traders: confident = 100) 70
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 50 Oil 67 Gold 34 Bonds 49 Emerging Mkts 65
USD 45 Aussie 74 Euro 56 Brit Pd 59
Short ETF SCORE 563
DXD 53 DZZ 57 ZSL 40 DUG 33 EDZ 32 SMN 35 SKF 40 SRS 42 SZK 46
QID 43 SCO 29 RXD 74 TBT 55 SDP 38
Long ETF SCORE 809
DDM 46 UGL 37 AGQ 55 DIG 60 EDC 73 UYM 70 UYG 63 URE 62 UGE 70 QLD 57 UCO 74 RXL 48 UBT 35 UPW 46
Power Index +246
Non-farm payrolls fell 131,000, while private employment, considered a better gauge of labor market health, rose 71,000 after increasing 31,000 in June. Analysts had expected a much better report, with overall employment falling 65,000 and private-sector hiring increasing 90,000.
The jobless rate held steady at 9.5 percent, defying expectations for a slight increase, but that was only because thousands more people dropped out of the labor force.
Companies cut back on temporary hires, a segment normally considered a harbinger of future hiring. Government jobs dried up much faster than anticipated and not just because it saw the end of short-term census jobs.
Temporary jobs dropped by 5,600, reversing a streak of strong gains that economists had viewed as a hopeful sign that hiring would pick up.
Normally, companies load up on temps at the beginning of a recovery when they are waiting for confirmation that growth is gaining momentum. This recovery has been unusual in that temporary hiring did not herald a jump in private hiring.
Private hiring totaled a lackluster 71,000 in July, below expectations for 90,000 in a Reuters poll. June's tally was revised down to just 31,000 from an initially reported 83,000.
Government hiring was another worrisome sign. The loss of 202,000 positions reflected the loss of 143,000 temporary Census jobs.
The total also included 38,000 jobs lost in local government. For most municipalities, the fiscal year began on July 1, and government associations have been warning that huge budget gaps would force aggressive job and spending cuts. July's report suggests local governments got a quick start.
There were a few positive signs buried among the bad news. The average work week edged up to 34.2 hours from 34.1, suggesting companies were squeezing more out of existing workers and may soon need more. Earnings also rose slightly, adding to consumers' spending power.
The jobless recovery continues. This reminds me late 2007 when everyone believed the Fed could navigate us into a soft landing in the face of a credit collapse. Well guess what the indicators are all down there is no jobs growth. Credit has not been repaired to the average guy and no one sees a recession coming. Through it all they tell us the recession is not coming and the stock market parties.
Maybe next week Apple will report great sales of their IPad and the market will rally 200 points because some "expert" on CNBC and in Investors Daily will say that there has never been a recession with great IPAD sales. That may happen but it still does not change what is happening to the economy and the average guy out there.
Notes: APPL 258.25 is right on the 50 day for the 4th time in the last 2 weeks.The stock is still below the high of 265 hit on its earnings day. The 20 week average is at 249.50 and the 200 day is at 227. I keep expecting the stock to be at 227 every day I wake up in the morning. A close below 258 would be a start. A close below 249.50 would do the trick. What would happen then is that 60 analysts would all recommend the stock as being cheap.
Mikey
Days to option expiration 11
Economic Conditions: Negative -10.7
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---73
Mikey Confidence Index (Traders: confident = 100) 70
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 50 Oil 67 Gold 34 Bonds 49 Emerging Mkts 65
USD 45 Aussie 74 Euro 56 Brit Pd 59
Short ETF SCORE 563
DXD 53 DZZ 57 ZSL 40 DUG 33 EDZ 32 SMN 35 SKF 40 SRS 42 SZK 46
QID 43 SCO 29 RXD 74 TBT 55 SDP 38
Long ETF SCORE 809
DDM 46 UGL 37 AGQ 55 DIG 60 EDC 73 UYM 70 UYG 63 URE 62 UGE 70 QLD 57 UCO 74 RXL 48 UBT 35 UPW 46
Power Index +246
Non-farm payrolls fell 131,000, while private employment, considered a better gauge of labor market health, rose 71,000 after increasing 31,000 in June. Analysts had expected a much better report, with overall employment falling 65,000 and private-sector hiring increasing 90,000.
The jobless rate held steady at 9.5 percent, defying expectations for a slight increase, but that was only because thousands more people dropped out of the labor force.
Companies cut back on temporary hires, a segment normally considered a harbinger of future hiring. Government jobs dried up much faster than anticipated and not just because it saw the end of short-term census jobs.
Temporary jobs dropped by 5,600, reversing a streak of strong gains that economists had viewed as a hopeful sign that hiring would pick up.
Normally, companies load up on temps at the beginning of a recovery when they are waiting for confirmation that growth is gaining momentum. This recovery has been unusual in that temporary hiring did not herald a jump in private hiring.
Private hiring totaled a lackluster 71,000 in July, below expectations for 90,000 in a Reuters poll. June's tally was revised down to just 31,000 from an initially reported 83,000.
Government hiring was another worrisome sign. The loss of 202,000 positions reflected the loss of 143,000 temporary Census jobs.
The total also included 38,000 jobs lost in local government. For most municipalities, the fiscal year began on July 1, and government associations have been warning that huge budget gaps would force aggressive job and spending cuts. July's report suggests local governments got a quick start.
There were a few positive signs buried among the bad news. The average work week edged up to 34.2 hours from 34.1, suggesting companies were squeezing more out of existing workers and may soon need more. Earnings also rose slightly, adding to consumers' spending power.
The jobless recovery continues. This reminds me late 2007 when everyone believed the Fed could navigate us into a soft landing in the face of a credit collapse. Well guess what the indicators are all down there is no jobs growth. Credit has not been repaired to the average guy and no one sees a recession coming. Through it all they tell us the recession is not coming and the stock market parties.
Maybe next week Apple will report great sales of their IPad and the market will rally 200 points because some "expert" on CNBC and in Investors Daily will say that there has never been a recession with great IPAD sales. That may happen but it still does not change what is happening to the economy and the average guy out there.
Notes: APPL 258.25 is right on the 50 day for the 4th time in the last 2 weeks.The stock is still below the high of 265 hit on its earnings day. The 20 week average is at 249.50 and the 200 day is at 227. I keep expecting the stock to be at 227 every day I wake up in the morning. A close below 258 would be a start. A close below 249.50 would do the trick. What would happen then is that 60 analysts would all recommend the stock as being cheap.
Mikey
Thursday, August 5, 2010
Jobs Data Tomorrow..I Can Hardly wait!!
DJIA 10674.98 -5.45 VIX 22.10 -.11 year 2.9204 +.0175 30year 4.0618 +.0087 Gold 1199.20 Oil 82.01 -.46 USD 80.90 -.045
Days to option expiration 11
Economic Conditions: Negative -10.7
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---72
Mikey Confidence Index (Traders: confident = 100) 57
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 51 Oil 74 Gold 36 Bonds 47 Emerging Mkts 68
USD 47 Aussie 66 Euro 59 Brit Pd 65
Short ETF SCORE 617
DXD 53 DZZ 57 ZSL 40 DUG 33 EDZ 32 SMN 35 SKF 40 SRS 42 SZK 46
QID 43 SCO 29 RXD 74 TBT 55 SDP 38
Long ETF SCORE 796
DDM 46 UGL 37 AGQ 55 DIG 60 EDC 73 UYM 70 UYG 63 URE 62 UGE 70 QLD 57 UCO 74 RXL 48 UBT 35 UPW 46
Many Retailers Post Weak July Sales, Short of Estimates
With few exceptions, retailers reported weak sales for the month of July, as consumers continue to rein in spending amid an uncertain employment outlook and continuing fears that the economic recovery is slowing. "The consumer has definitely taken a more cautious stance and retailers need to keep their inventories sharp in order to manage these prices and changes," said Dana Telsey, CEO of Telsey Advisory Group, in an interview on CNBC.
New U.S. claims for unemployment benefits unexpectedly rose last week, government data showed on Thursday, underscoring a weak labor market and the fragile economic recovery.
Initial claims for state unemployment benefits rose 19,000 to a seasonally adjusted 479,000 in the week ended July 31, the Labor Department said. That was the highest level in claims since early April.
The scarcity of jobs is putting a strain on the economy's fragile recovery from its longest and deepest downturn since the Great Depression. Growth slowed to a 2.4 percent annual rate in the second quarter after expanding at a 3.7 percent pace in the first three months of this year.
Other data on Thursday showed several U.S. retailers posted July sales below analysts' expectations in the latest sign that skittishness about high unemployment and the economy in general are causing consumers to cut spending.
So far seven of the 11 retailers that reported sales have missed analysts' forecasts, according to Thomson Reuters data. In the week ended July 24, a total of 4.54 million people were still receiving benefits after an initial week of aid, down 34,000 from the prior week. Analysts polled by Reuters had forecast so-called continuing claims slipping to 4.54 million.
The number of people on emergency benefits increased 60,993 to 3.31 million in the week ended July 17.
Tomorrow is the Jobs report and it is two weeks before options expiration. I wonder what is up their sneaky little sleeves?
Mikey
Days to option expiration 11
Economic Conditions: Negative -10.7
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---72
Mikey Confidence Index (Traders: confident = 100) 57
Mikey Power Index (MPI)
BUY >60 SELL<50 Short <40
Stocks 51 Oil 74 Gold 36 Bonds 47 Emerging Mkts 68
USD 47 Aussie 66 Euro 59 Brit Pd 65
Short ETF SCORE 617
DXD 53 DZZ 57 ZSL 40 DUG 33 EDZ 32 SMN 35 SKF 40 SRS 42 SZK 46
QID 43 SCO 29 RXD 74 TBT 55 SDP 38
Long ETF SCORE 796
DDM 46 UGL 37 AGQ 55 DIG 60 EDC 73 UYM 70 UYG 63 URE 62 UGE 70 QLD 57 UCO 74 RXL 48 UBT 35 UPW 46
Many Retailers Post Weak July Sales, Short of Estimates
With few exceptions, retailers reported weak sales for the month of July, as consumers continue to rein in spending amid an uncertain employment outlook and continuing fears that the economic recovery is slowing. "The consumer has definitely taken a more cautious stance and retailers need to keep their inventories sharp in order to manage these prices and changes," said Dana Telsey, CEO of Telsey Advisory Group, in an interview on CNBC.
New U.S. claims for unemployment benefits unexpectedly rose last week, government data showed on Thursday, underscoring a weak labor market and the fragile economic recovery.
Initial claims for state unemployment benefits rose 19,000 to a seasonally adjusted 479,000 in the week ended July 31, the Labor Department said. That was the highest level in claims since early April.
The scarcity of jobs is putting a strain on the economy's fragile recovery from its longest and deepest downturn since the Great Depression. Growth slowed to a 2.4 percent annual rate in the second quarter after expanding at a 3.7 percent pace in the first three months of this year.
Other data on Thursday showed several U.S. retailers posted July sales below analysts' expectations in the latest sign that skittishness about high unemployment and the economy in general are causing consumers to cut spending.
So far seven of the 11 retailers that reported sales have missed analysts' forecasts, according to Thomson Reuters data. In the week ended July 24, a total of 4.54 million people were still receiving benefits after an initial week of aid, down 34,000 from the prior week. Analysts polled by Reuters had forecast so-called continuing claims slipping to 4.54 million.
The number of people on emergency benefits increased 60,993 to 3.31 million in the week ended July 17.
Tomorrow is the Jobs report and it is two weeks before options expiration. I wonder what is up their sneaky little sleeves?
Mikey
Wednesday, August 4, 2010
More weak numbers..More deflation Talk
DJIA 10680.43 +44.05 VIX22.21 -.42 10 year 2.9406-.0092 30year 4.0777+.0298
Gold 1195.90 +6.40 Oil 82.47 -.05 USD 80.946 +.054
Economic Conditions -10.7
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---71
Days to option expiration 12
Mikey Power Index (MPI)
BUY >60 Sell <40
Stocks 50 Oil 70 Gold 34 Bonds 52 Emerging Mkts67
USD 24 Aussie 64 Euro 65 Brit Pd 68
Short ETF SCORE 635
DXD 57 DZZ 59 ZSL 43 DUG 35 EDZ 36 SMN 40 SKF 45 SRS 46 SZK 36
QID 46 SCO 32 RXD 73 TBT 51 SDP 36
Long ETF SCORE 751
DDM 44 UGL 35 AGQ 51 DIG 58 EDC 62 UYM 64 UYG 57 URE 59 UGE 67 QLD 56 UCO 70 RXL 44 UBT 37 UPW 47
U.S. private employers added a tepid 42,000 jobs in July, versus a revised gain of 19,000 in June, a report by payrolls processor ADP Employer Services showed, two days before the government's more comprehensive jobs reading for the month.
The rise in hiring was slightly higher than an estimate from economists surveyed by Reuters for a gain of 40,000 private-sector jobs. The June ADP figure originally was reported as a gain of 13,000 jobs.
Local and state governments, as well as some companies, are squeezing their employees to work the same amount for less money in cost-saving measures that are often described as a last-ditch effort to avoid layoffs.
A new report on Tuesday showed a slight dip in overall wages and salaries in June, caused partly by employees working fewer hours.
Though average hourly pay is still higher than when the recession began, the new wage rollbacks feed worries that the economy has weakened and could even be at risk of deflation. That is when the prices of goods and assets fall and people withhold spending as they wait for prices to drop further, a familiar idea to those following the recent housing market.
Mikey
Gold 1195.90 +6.40 Oil 82.47 -.05 USD 80.946 +.054
Economic Conditions -10.7
Mikey OB/OS index High 97 Low 0 (80=OB 20=OS)---71
Days to option expiration 12
Mikey Power Index (MPI)
BUY >60 Sell <40
Stocks 50 Oil 70 Gold 34 Bonds 52 Emerging Mkts67
USD 24 Aussie 64 Euro 65 Brit Pd 68
Short ETF SCORE 635
DXD 57 DZZ 59 ZSL 43 DUG 35 EDZ 36 SMN 40 SKF 45 SRS 46 SZK 36
QID 46 SCO 32 RXD 73 TBT 51 SDP 36
Long ETF SCORE 751
DDM 44 UGL 35 AGQ 51 DIG 58 EDC 62 UYM 64 UYG 57 URE 59 UGE 67 QLD 56 UCO 70 RXL 44 UBT 37 UPW 47
U.S. private employers added a tepid 42,000 jobs in July, versus a revised gain of 19,000 in June, a report by payrolls processor ADP Employer Services showed, two days before the government's more comprehensive jobs reading for the month.
The rise in hiring was slightly higher than an estimate from economists surveyed by Reuters for a gain of 40,000 private-sector jobs. The June ADP figure originally was reported as a gain of 13,000 jobs.
Local and state governments, as well as some companies, are squeezing their employees to work the same amount for less money in cost-saving measures that are often described as a last-ditch effort to avoid layoffs.
A new report on Tuesday showed a slight dip in overall wages and salaries in June, caused partly by employees working fewer hours.
Though average hourly pay is still higher than when the recession began, the new wage rollbacks feed worries that the economy has weakened and could even be at risk of deflation. That is when the prices of goods and assets fall and people withhold spending as they wait for prices to drop further, a familiar idea to those following the recent housing market.
Mikey
Tuesday, August 3, 2010
Technical Day
DJIA 10636.38 -38 VIX 22.63 +.62 10 year 2.8887 -.0234 30 year 4.0401 -.0078
Gold 1189.30 +4.20 Oil 82.55 +1.05 USD 80.665 -.019
Economic Conditions -10.7
Mikey OB/OS index (80=OB 20=OS) 69 High 97 Low 0
Days to option expiration 13
Mikey Power Index (MPI)
ST Trends Uptrend >60 Downtrend <40
Stocks 50 Oil 57 Gold 26 Bonds 55 Emerging Mkts 66
USD 30 Aussie 66 Euro 69 Brit Pd 77
Short ETF SCORE 630
DXD 57 DZZ 66 ZSL 36 DUG 42 EDZ 40 SMN 39 SKF 44 SRS 46 SZK 37
QID 47 SCO 34 RXD 67 TBT 50 SDP 37
Long ETF SCORE 727
DDM38 UGL28 AGQ55 DIG50 EDC66 UYM61 UYG51 URE57 UGE70
QLD 56 UCO 68 RXL 37 UBT 42 UPW 48
Consumer spemding was sluggish in May. Incomes were flat in June failing to rise for the first time since September. GM and Ford reported weaker than expect sales in July. Natl association of Realtors said pending sales of exixting homes fell 2.6% in June. They are 18.6% below last year. Retail stocks were hit hard on misses by Coach and Office Max and Proctor and Gamble.
Mikey
Gold 1189.30 +4.20 Oil 82.55 +1.05 USD 80.665 -.019
Economic Conditions -10.7
Mikey OB/OS index (80=OB 20=OS) 69 High 97 Low 0
Days to option expiration 13
Mikey Power Index (MPI)
ST Trends Uptrend >60 Downtrend <40
Stocks 50 Oil 57 Gold 26 Bonds 55 Emerging Mkts 66
USD 30 Aussie 66 Euro 69 Brit Pd 77
Short ETF SCORE 630
DXD 57 DZZ 66 ZSL 36 DUG 42 EDZ 40 SMN 39 SKF 44 SRS 46 SZK 37
QID 47 SCO 34 RXD 67 TBT 50 SDP 37
Long ETF SCORE 727
DDM38 UGL28 AGQ55 DIG50 EDC66 UYM61 UYG51 URE57 UGE70
QLD 56 UCO 68 RXL 37 UBT 42 UPW 48
Consumer spemding was sluggish in May. Incomes were flat in June failing to rise for the first time since September. GM and Ford reported weaker than expect sales in July. Natl association of Realtors said pending sales of exixting homes fell 2.6% in June. They are 18.6% below last year. Retail stocks were hit hard on misses by Coach and Office Max and Proctor and Gamble.
Mikey
Monday, August 2, 2010
Technical Pattern Head with a feather
Here is a classic chart pattern. A head with a feather. The chart is DE
The head is from the end of Feb to the beginning of July. The feather is from the beginning of July to present. These charts can end very bad. A close below its 50 day average now at 59 would be very negative. Notice the low volume on this last rally.
The head is from the end of Feb to the beginning of July. The feather is from the beginning of July to present. These charts can end very bad. A close below its 50 day average now at 59 would be very negative. Notice the low volume on this last rally.
Look at July 1 on these charts. The stock market was on the low and it looks like they started printing again as the dollar goes in the tank. Where did they put the money?
The Dollar
The DJIA Did the new money go here?
The Bond market Peaked on Jul 1 as the bonds become a source of funds
Gold Peaked with the Dollar breakdown on Jul 1 and it also became a source of funds
The Euro broke out on Jul 1. This is after the bond sales in Spain and Greece. Why did the Euro rally and who did it benefit? Did the money go here?
Spanish Market..Just like the Euro Did it go here.
These markets are tied together. The currencies market makes this a one world government.We have seen them and they are us.
Mikey
The Dollar
The DJIA Did the new money go here?
The Bond market Peaked on Jul 1 as the bonds become a source of funds
Gold Peaked with the Dollar breakdown on Jul 1 and it also became a source of funds
The Euro broke out on Jul 1. This is after the bond sales in Spain and Greece. Why did the Euro rally and who did it benefit? Did the money go here?
Spanish Market..Just like the Euro Did it go here.
These markets are tied together. The currencies market makes this a one world government.We have seen them and they are us.
Mikey
Market Rallies on ---------Deflation worries?
DJIA 10674 +208.44 VIX 22.01 -1.49 10 year 2.9627 +.0557 30 year 4.0654 +.0747
Gold 1185.20 -.20 Oil 81.50 +2.55 USD 80.87 -.662
Economic Conditions -10.7
Mikey OB/OS index (80=OB 20=OS) 72 High 97 Low 0
Days to option expiration 14
Mikey Power Index (MPI)
ST Trends Uptrend >60 Downtrend <40
Stocks 50 Oil 53 Gold 25 Bonds 50 Emerging Mkts 62
USD 28 Aussie 70 Euro 72 Brit Pd 79
Short ETF SCORE 630
DXD 41 DZZ 63 ZSL 36 DUG 40 EDZ 37 SMN 41 SKF 45 SRS 47 SZK 31
QID 41 SCO 33 RXD 88 TBT 50 SDP 37
Long ETF SCORE 727
DDM 43 UGL 26 AGQ 58 DIG 52 50 EDC 63 UYM 59 UYG 57 URE 59 UGE 71
QLD 59 UCO 62 RXL 58 UBT 38 UPW 49
Amid Deflation Worries, Pros Turning to Long-Term Bonds
With investment advisers convinced the economy may be headed for a bout of deflation, they're turning to longer-term bonds for safety.
Key Points A deflationary environment has advisers looking toward longer-dated fixed income.Investors going longer even as inflation remains the longer-term worry.
The uncertainty of the current environment creates a complicated picture for investors, but many advisers continue to feel comfortable with the safety of bonds, particularly those from the US government and for a longer duration.
It's part of a mindset that believes inflation could well be the economy's long-term worry—going out two, three or four years from now—but in the near term prices could turn negative and bring about deflation.
"It's hard to see where the inflation is going to come from," says Brian Nick, investment strategist for Barclays Wealth in New York. "The longer-duration bonds look expensive but also look like stable, safe assets."
Nick recommends investors target 7- to 10-year durations in bonds and Treasury notes, though some strategists are even backing the 30-year long bond [US30YT=XX 4.0506 0.0626 (+1.57%) ].
Long-term bonds are a bad bet in an inflationary environment as their value erodes as costs go up.
But in deflation, they make attractive tools for investors who have the security of decent yields but also see increases in their face value and collect handsome coupon payments. Prices and yields move in opposite directions, with higher demand driving up prices and pushing down yields.
Government bonds had a remarkable July, with the yield on the benchmark 10-year note [US10YT=XX 2.95 0.045 (+1.55%) ] ending the month virtually unchanged even as the stock market roared higher by 7 percent. Stocks and bonds often move in opposite directions as risk dims the allure of safe-haven investments like government debt, so a stronger stock market would drive yields higher
Nick recommends a barbell strategy, with longer-dated US Treasury's on one end and triple-A rated sovereign notes from companies like Germany and Sweden on the other end. The middle would include investment-grade corporates, high-yield Treasures, convertible bonds and defensive stocks.
"Equities are going to be tough to pick individually in a declining market...You want to be in our opinion looking at higher-quality fixed-income," says Steve Baffico, senior managing director at Claymore Securities in Chicago. "That brings you to things like corporate bonds, asset-backed securities, even into the high-yield market, where there's a degree of undervaluation and some pretty high-quality product that's mispriced."
As with the question of whether the economy will enter a double-dip, the situation with deflation may be as much perception as reality.
Analysts say the economy may not actually meet the dictionary definition of a double-dip, though it will still feel like one. The same may be true for deflation, defined as a drop in prices often due to a decrease in money supply.
The Consumer Price Index has declined for three straight months but is up 1.1 percent for the 12-month period ended June 2010. And inflation slipped to 1.05 percent in June but trended above 2 percent for the preceding five months, according to the Bureau of Labor Statistics.
"A base case could be made for generally improving growth and moderate inflation. From an investment perspective, long-term assets such as long-term Treasury equities, corporate bonds and structured products are relatively attractively valued," says Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, N.J. "A diversified portfolio among these longer-term assets is going to offer some protection against deflation."
The story is changing that means that the FED wants to start unloading the massive amounts of bonds that it has bought. That also means that they are ready to pump up the money supply. I still maintain that Gold will be a casualty to prove that we are going to have a deflation. The St Louis Fed chairman made mention of deflation last week. The story is starting to go in that direction and Gold is acting weak.
They ran this story on a day where Oil was up 2.55, Bonds were down and the dollar got its butt kicked. I think their program is a little off.
Mikey
Gold 1185.20 -.20 Oil 81.50 +2.55 USD 80.87 -.662
Economic Conditions -10.7
Mikey OB/OS index (80=OB 20=OS) 72 High 97 Low 0
Days to option expiration 14
Mikey Power Index (MPI)
ST Trends Uptrend >60 Downtrend <40
Stocks 50 Oil 53 Gold 25 Bonds 50 Emerging Mkts 62
USD 28 Aussie 70 Euro 72 Brit Pd 79
Short ETF SCORE 630
DXD 41 DZZ 63 ZSL 36 DUG 40 EDZ 37 SMN 41 SKF 45 SRS 47 SZK 31
QID 41 SCO 33 RXD 88 TBT 50 SDP 37
Long ETF SCORE 727
DDM 43 UGL 26 AGQ 58 DIG 52 50 EDC 63 UYM 59 UYG 57 URE 59 UGE 71
QLD 59 UCO 62 RXL 58 UBT 38 UPW 49
Amid Deflation Worries, Pros Turning to Long-Term Bonds
With investment advisers convinced the economy may be headed for a bout of deflation, they're turning to longer-term bonds for safety.
Key Points A deflationary environment has advisers looking toward longer-dated fixed income.Investors going longer even as inflation remains the longer-term worry.
The uncertainty of the current environment creates a complicated picture for investors, but many advisers continue to feel comfortable with the safety of bonds, particularly those from the US government and for a longer duration.
It's part of a mindset that believes inflation could well be the economy's long-term worry—going out two, three or four years from now—but in the near term prices could turn negative and bring about deflation.
"It's hard to see where the inflation is going to come from," says Brian Nick, investment strategist for Barclays Wealth in New York. "The longer-duration bonds look expensive but also look like stable, safe assets."
Nick recommends investors target 7- to 10-year durations in bonds and Treasury notes, though some strategists are even backing the 30-year long bond [US30YT=XX 4.0506 0.0626 (+1.57%) ].
Long-term bonds are a bad bet in an inflationary environment as their value erodes as costs go up.
But in deflation, they make attractive tools for investors who have the security of decent yields but also see increases in their face value and collect handsome coupon payments. Prices and yields move in opposite directions, with higher demand driving up prices and pushing down yields.
Government bonds had a remarkable July, with the yield on the benchmark 10-year note [US10YT=XX 2.95 0.045 (+1.55%) ] ending the month virtually unchanged even as the stock market roared higher by 7 percent. Stocks and bonds often move in opposite directions as risk dims the allure of safe-haven investments like government debt, so a stronger stock market would drive yields higher
Nick recommends a barbell strategy, with longer-dated US Treasury's on one end and triple-A rated sovereign notes from companies like Germany and Sweden on the other end. The middle would include investment-grade corporates, high-yield Treasures, convertible bonds and defensive stocks.
"Equities are going to be tough to pick individually in a declining market...You want to be in our opinion looking at higher-quality fixed-income," says Steve Baffico, senior managing director at Claymore Securities in Chicago. "That brings you to things like corporate bonds, asset-backed securities, even into the high-yield market, where there's a degree of undervaluation and some pretty high-quality product that's mispriced."
As with the question of whether the economy will enter a double-dip, the situation with deflation may be as much perception as reality.
Analysts say the economy may not actually meet the dictionary definition of a double-dip, though it will still feel like one. The same may be true for deflation, defined as a drop in prices often due to a decrease in money supply.
The Consumer Price Index has declined for three straight months but is up 1.1 percent for the 12-month period ended June 2010. And inflation slipped to 1.05 percent in June but trended above 2 percent for the preceding five months, according to the Bureau of Labor Statistics.
"A base case could be made for generally improving growth and moderate inflation. From an investment perspective, long-term assets such as long-term Treasury equities, corporate bonds and structured products are relatively attractively valued," says Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, N.J. "A diversified portfolio among these longer-term assets is going to offer some protection against deflation."
The story is changing that means that the FED wants to start unloading the massive amounts of bonds that it has bought. That also means that they are ready to pump up the money supply. I still maintain that Gold will be a casualty to prove that we are going to have a deflation. The St Louis Fed chairman made mention of deflation last week. The story is starting to go in that direction and Gold is acting weak.
They ran this story on a day where Oil was up 2.55, Bonds were down and the dollar got its butt kicked. I think their program is a little off.
Mikey
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