Q3 GDP grew at 2% annual rate..The games (Liars poker) begin next week

DJIA 11118.49 +4.54 S & P 500 1183.26 -.52 NASDAQ 2507.41 +.04
DJT4754.29 +20.11 DJU 404.86 +.88 IBD100 274.22 +.82 VIX 21.20 +.32
US Gov rates: 6 mo ..157%  2 yr .3357 % 10 yr 2.61 -.04 30 yr 3.009 -.05 
Gold 1359.80 +17.30 Silver 24.73 +.86 Oil 81.45 -.73 USD 77.16 -.33
Days to option expiration 16 Day 10 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening

Gold: Primary top forming crash expected.....  Current trend up

Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral, weakening
US Dollar: Major long term bottom forming .....Current trend down
US Economy: Double dip coming .....Current trend neutral, weakening
Emerging Markets: Bear market rally ending..... Current trend up
World economy: Current trend up..slowing
World politcal environment: Tensions increasing

Economic Conditions: Poor

Week ended 10/22 ECRI Index  -6.5% annualized
10/6 ADP employment report -39,000  jobs by private employers in Sept
  Foreclosures rose to 282,528 in August
10/7 Nonfarm payrolls declined 95000 in Sept
Jobless rate 9.6% , underemployed rate 17.1%
Sept Manufacturing jobs -6000
Long Term unemployment (% out of work  26 weeks) 41.7%
10/14 Mortgage Applications  rise 14.6% last week Purchase apps fell 8.5%
Core PPI +.1%
Trade Balance -46.3 Bil
10/15 U of Mich Consumer sentiment 67.9
Core PPI .8% (49 year low)
Sept Retail Sales 0.6% Ex Autos +0.4% 

Aug Business inventories +0.6%

10-18 Sept industrial production fell .2%, Homebuilder confidence 16 (50 is average)
10-19 China raises rates to curb inflation: French riot over increase in retirement age
Intel will invest 6 billion in US chip plant
Housing starts rose .3% annual rate 610000, Building permits fell to annual rate of 579000
.10-20 Mortgage apps fell 10.5% last week Purchase demand fell 6.7% near a 13 year low  Refi's were down 11.2% 6th decline in 7 weeks
30 year mtg rates  averaged 4.34%
Yield on Chinese 5 year bonds jumped to 2.97% highest yield since 2009
10-21 China GDP slows to 9.6% Industrial Production 13.3% Consumer Prices +3.6% Retail Sales 18.8%
10-25 Sept existing home sales rose 10% annual rate 4.53 mil an annual decline of 19.1%
 Inventory of unsold homes 4.04 mil, Mortgage apps index 803.4
Chicago Fed activity index fell .9 in Sept to -.58 (reading below zero indicate negative growth)
Credit card write offs rose to 10.3% from 9.45% in July
10-26 Consumer confidence 50.2, Jobs hard to get index 45.8, Jobs plentiful index fell to 3.5 from 3.8
Economist expect GDP 3Q release on Friday to be 2% rate
10-27 Durable goods +3.3%, ex-aircraft -.07%, Inventory to shipment ratio 1.59, Sept Order backlog 1%
Sept new home sales +6.6% 307,000 annual rate, near May record low of 282,000
10-28 Continuing jobless claims 434 K, Continuing Claims 4356 K
10-29 Q3 GDP grew at 2% annual rate..wink, wink
Consumer spending +2.6% annual rate in Q3
Final sales rose .6% in Q3 ( peaked in Q4 90)
Business investment +12% ,
Business inventories 115.5 billion (off the charts, inventories are bloated)
Residential investment -29.1% (at 09 lows)
U of Mich consumer sentiment 67.7
Chicago ISM 60.6

Noteworthy
10-5 IMF, Goldman Gloomy on economy expects sluggish or renewed recession over next 6-9 months
10-15 Atlanta Fed chief Dennis Lockhart: "US Economic growth has slowed pretty dramatically and deflation is a concern."
South Korea: Warns of trade war wants compromise on exchange rates
Japans PM Naoto Kan: Yen's rise is extremely excessive
Beige book survey of economic conditions noted retail sales flat to mod positive in 10 of 12 districts with 2 districts saw declining traffic
10-19 Brazil raises taxes on bonds and asks for a stop to the currency wars.
Goods producers are facing higher prices for shipping and are having trouble passing those increases on to customers squeezing profits
Fiscal policy is tightening at all levels of government . State and local governments have cut 54,000 jobs in each of the last 3 months.
Labor dept estimate that 3 million unemployed workers will have exhausted their 99 weeks of jobless benefits by year end.
G-20 will meet the end of this week. Will focus on $ weakness
Commercial property prices fell 3.3% in August, lowest level in 8 years
10-20 US wants G-20 finance ministers to address trade imbalances and wants developing countries to let their currencies rise in line with market forces
10-25 French strikes on 62 retirement age costing economy
10-26 Iran begins fueling Nuke reactor, Steel stocks fall on weak demand, DuPont outlook disappoints
Data to be released Inflation adjust disposable income to be a weak .8%
Bin Laden warns France of Vail ban "we will compromise your security"
China warns of inflationary risks
10-29 Next Wednesday Fed statement on QE next week along with the elections.
Japan-China tensions increasing
Creditable terrorist threat found in US bound packages

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 75
Put/Call Ratio(.6 OB 1.2 OS) .81 
10 day average .83
Ratio Put Premiums/Call Premium .65 (OB .53/ OS 1.54)
Put Premium 10 day average .66
Williams %R 12 day -40.50 ( uptrend OB:-1.00, downtrend OS -99): Weekly -10.07
% Advisory Service Bulls 45.6  Bears 24.4  Bear/Bull ratio .535   Bullish
Mikey Thrust indicator: Daily 6 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +123.26 Falling/ Negative cross 10/19
NYSE New Highs 145  New Lows 11
NASDAQ New Highs 112 New Lows 36
NYSE Advance-Decline +569 NASDAQ Advance-Decline +283
Mikey A/D line.(from 9/17/10). NYSE +7916  NASDAQ +4630
Support: 1130 S & P, 10720 DJIA Breakout 9/20
Resistance: 1220 S & P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Mikey power index on DJIA peaked on 9/22 at 88
MACD  First negative cross 10/19
Interest rates turning higher (is Fed Printing or selling?) Rates at 1 month highs
Dollar stabilizing
Put Premiums remain low indicating low demand for puts

Moving Averages
DJIA 5 day 11137  Falling/Price above
DJIA 20 day 11054 Rising/Price above
DJIA 50 day 10702 Rising/Price above
DJIA 200 day 10527 Rising/Price above

Mikey Power Index (MPI)
 (Uptrend Above 60, Sell below 40)
 (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 58, Bonds 30 Emerging Mkts 57, China 65, Brazil 36, Oil 53, Nat Gas 41, Copper 56, Gold 51, Silver 56, USD 58,  Aussie 64, Euro 70, Brit Pd 55

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....41 trading days.. 8 weeks
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

2x Short ETF Score 841( 3 up, 6 down, 9 neutral)
Green=up, Red= down, Black = neutral

DXD 52, SDS 36, DZZ 59, ZSL 50, DUG 37, EEV 57, FXP 43, SMN 60, CMD 41, SKF 41, SRS 39, SZK 20, QID 22, SCO 54, RXD 48, TBT 76, SDP 74, REW 32

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Long ETF SCORE 1026   (8 up, 2 down, 8 neutral) Green=up, Red= down, Black = neutral

DDM 41, SSO 69, UGL 52, AGQ 52, DIG 66 , EET 65, XPP 54, UYM 49, UCD 66, UYG 55, URE 57, UGE 31, QLD 78, UCO 51, RXL 81, UBT 22, UPW 63, ROM 74

Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology


Total Score (uptrend is positive) +185

GDP grew at an annual rate of 2% in Q3. The increase came from an increases in business spending,  consumer spending. and increases in inventories. Inventories are off the charts so I doubt there is anywhere to go but down on this. Businesses are not hiring so I doubt that they will increase their spending in the coming quarters. The consumer is seeing his house decline in value again. The state and local governemnts continue to lay off and the Federal Government is tapped out. The only thing left is the Fed. The story goes that they will just buy everything until the economy grows. The markets are acting that way now.

The power numbers are winding down for most groups but the AD line is still hanging in there and I see no major stocks breaking trend. We are still in an uptrend and that is all I can say for now. Gold and the commodities had a minor break but have rallied sharply back up. This move is creating a divergence in their MACD lines. The MACD \for the market is also falling and diverging from price.

Next week we have the elections. The story goes that they want the Republicans to win. I could care less but that is their spin and I will bet that the Fed and their buddies can manipulate to their hearts desire if they do win. The Fed will announce how much money they will spend propping up the markets.  The talk now is that the Fed will pump in, in the initial program 250 to 500 billion in their market asset buys. That will be the over-under number to beat. I think that the action in the bond markets will be interesting to watch as they have been selling off lately. It would not surprise me if they spiked the bonds, stocks and gold and trashed the dollar to give credibility to the story.

The focus of the market story is on the US and the Fed printing to prop things up. I believe the real story is inflation overseas and the cheap dollar squeezing their economies. Just like 2008 the rest of the world will follow us down the drain. That is a story that is going to be told and when it does the current game will be unwound in a hurry.
Mikey

Consumer sentiment declines ISM grew

U.S. consumer sentiment worsened more than expected in October, hitting its weakest level since November, with concern about the economy high leading into next week's election, a survey showed on Friday.
The Thomson Reuters/University of Michigan's final October reading on the overall index on consumer sentiment came in at 67.7, down from 68.2 in September and below the 68.0 median forecast among economists polled by Reuters.
"Residents of nearly all local areas expressed economic discontent. It would not be surprising for consumer confidence to rebound following the election; it would be surprising if those gains proved to be more than temporary," the survey's director, Richard Curtin, said in Friday's report.

Consumer spending typically accounts for about two-thirds of U.S. economic activity and is considered critical to the recovery.
The survey's barometer of current economic conditions declined to 76.6 in October from 79.6 in September. It was forecast by economists to come in at 73.5.

Business activity in the U.S. Midwest grew more than expected this month, a report showed Friday.

The Institute for Supply Management-Chicago business barometer unexpectedly rose to 60.6 in October. The reading was 60.4 in September, and economists had forecast an October reading of 58.0.
A reading above 50 indicates expansion in the regional economy.
The employment component of the index rose to 54.6. It was 53.4 in September. New orders rose to 65.0, from 61.4 last month.

Goldman says QE 2 will be 2 trillion

DJIA 11113.95 -12.33 S&P 500 1183.78 +1.33 NASDAQ 2507.37 +4.11
DJT 4734.18 -3.01 DJU 403.98 +1.14 IBD100 273.40 -.44 VIX 20.88 +.17
US Gov rates: 6 mo .175%  2 yr .3632 % 10 yr 2.65 -.07 30 yr 4.04 -.01
Gold 1342.50 +19.90 Silver 23.87 +.46 Oil 82.18 +.24 USD 77.32 -.65
Days to option expiration 17 Day 9 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening

Gold: Primary top forming crash expected.....  Current trend up

Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral
US Dollar: Major long term bottom forming .....Current trend down
Emerging Markets: Bear market rally ending..... Current trend up
Economy: Double dip coming .....Current trend down

Economic Conditions: Poor

Week ended 10/15 ECRI Index  -6.8% annualized
CEO economic index Sept 86 , June 94.6
ISM Index Aug  56.3 (above 50 is growth) new low for 2010
New orders index 51.1 Lowest since June 09
Backlog index 46.5 lowest since April 09
Inventories 55.6 Highest since July 1984 a 26 year high.
Auto and light trucks Aug 11.7 (16 million was average for past 15 years)
Jobless initial claims fell to 453,000
Chicago PMI 60.4
Sept Employment index 53.4
10/6 ADP employment report -39,000  jobs by private employers in Sept
  Foreclosures rose to 282,528 in August
10/7 Nonfarm payrolls declined 95000 in Sept
Jobless rate 9.6% , underemployed rate 17.1%
Sept Manufacturing jobs -6000
Long Term unemployment (% out of work  26 weeks) 41.7%
10/14 Mortgage Applications  rise 14.6% last week Purchase apps fell 8.5%
Core PPI +.1%
Trade Balance -46.3 Bil
10/15 U of Mich Consumer sentiment 67.9
Core PPI .8% (49 year low)
Sept Retail Sales 0.6% Ex Autos +0.4% 

Aug Business inventories +0.6%

10-18 Sept industrial production fell .2%, Homebuilder confidence 16 (50 is average)
10-19 China raises rates to curb inflation: French riot over increase in retirement age
Intel will invest 6 billion in US chip plant
Housing starts rose .3% annual rate 610000, Building permits fell to annual rate of 579000
.10-20 Mortgage apps fell 10.5% last week Purchase demand fell 6.7% near a 13 year low  Refi's were down 11.2% 6th decline in 7 weeks
30 year mtg rates  averaged 4.34%
Yield on Chinese 5 year bonds jumped to 2.97% highest yield since 2009
10-21 China GDP slows to 9.6% Industrial Production 13.3% Consumer Prices +3.6% Retail Sales 18.8%
10-25 Sept existing home sales rose 10% annual rate 4.53 mil an annual decline of 19.1%
 Inventory of unsold homes 4.04 mil, Mortgage apps index 803.4
Chicago Fed activity index fell .9 in Sept to -.58 (reading below zero indicate negative growth)
Credit card write offs rose to 10.3% from 9.45% in July
10-26 Consumer confidence 50.2, Jobs hard to get index 45.8, Jobs plentiful index fell to 3.5 from 3.8
Economist expect GDP 3Q release on Friday to be 2% rate
10-27 Durable goods +3.3%, ex-aircraft -.07%,Inventory to shipment ratio 1.59, Sept Order backlog 1%
Sept new home sales +6.6% 307,000 annual rate, near May record low of 282,000

Noteworthy
10-5 IMF, Goldman Gloomy on economy expects sluggish or renewed recession over next 6-9 months
10-15 Atlanta Fed chief Dennis Lockhart: "US Economic growth has slowed pretty dramatically and deflation is a concern."
South Korea: Warns of trade war wants compromise on exchange rates
Japans PM Naoto Kan: Yen's rise is extremely excessive
Beige book survey of economic conditions noted retail sales flat to mod positive in 10 of 12 districts with 2 districts saw declining traffic
10-19 Brazil raises taxes on bonds and asks for a stop to the currency wars.
Goods producers are facing higher prices for shipping and are having trouble passing those increases on to customers squeezing profits
Fiscal policy is tightening at all levels of government . State and local governments have cut 54,000 jobs in each of the last 3 months.
Labor dept estimate that 3 million unemployed workers will have exhausted their 99 weeks of jobless benefits by year end.
G-20 will meet the end of this week. Will focus on $ weakness
Commercial property prices fell 3.3% in August, lowest level in 8 years
10-20 US wants G-20 finance ministers to address trade imbalances and wants developing countries to let their currencies rise in line with market forces
10-25 French strikes on 62 retirement age costing economy
10-26 Iran begins fueling Nuke reactor, Steel stocks fall on weak demand, DuPont outlook disappoints
Data to be released Inflation adjust disposable income to be a weak .8%
Bin Laden warns France of vail ban "we will compromise your security"
China warns of inflationary risks

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 77
Put/Call Ratio(.6 OB 1.2 OS) .80 .10 day average .82
Ratio Put Premiums/Call Premium .66 (OB .53/ OS 1.54) Put Premium 10 day average .66
Williams %R 12 day -42.50 ( uptrend OB:-1.00, downtrend OS -99): Weekly -10.07
% Advisory Service Bulls 45.6  Bears 24.4  Bear/Bull ratio .535   Bullish
Mikey Thrust indicator: Daily 6 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +129.88 Falling/ Negative cross 10/19
NYSE New Highs 149  New Lows 14
NASDAQ New Highs 120 New Lows 33
NYSE Advance-Decline +56  NASDAQ Advance-Decline -416
Mikey A/D line.(from 9/17/10). NYSE +7347  NASDAQ +4347
Support: 1130 S&P, 10720 DJIA Breakout 9/20
Resistance: 1220 S&P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Mikey power index on DJIA peaked on 9/22 at 88
MACD  First negative cross 10/19
Interest rates turning higher (is Fed Printing or selling?) Rates at 1 month highs
Dollar stabilizing
Put Premiums remain low indicating low demand for puts

Moving Averages
DJIA 5 day 11139  Falling/Price above
DJIA 20 day 11040 Rising/Price above
DJIA 50 day 10685 Rising/Price above
DJIA 200 day 10525 Rising/Price above

Mikey Power Index (MPI)
 (Uptrend Above 60, Sell below 40)
 (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 51 0, Bonds 23 Emerging Mkts 50, China 61, Brazil 38, Oil 49, Nat Gas 39, Copper 57, Gold 51, Silver 59, USD 56,  Aussie 51 0, Euro 57, Brit Pd 56

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....41 trading days.. 8 weeks
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

2x Short ETF Score 788 ( 2 up, 6 down, 10 neutral)
Green=up, Red= down, Black = neutral

DXD 46, SDS 30, DZZ 50, ZSL 43, DUG 32, EEV 50, FXP 38, SMN 53, CMD 42, SKF 40, SRS 45, SZK 19, QID 23, SCO 49, RXD 48, TBT 77, SDP 71, REW 32

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Long ETF SCORE 1041   (9 up, 2 down, 7 neutral) Green=up, Red= down, Black = neutral

DDM 47, SSO 68, UGL 52, AGQ 60, DIG 71 , EET 64, XPP 54, UYM 48, UCD 66, UYG 55, URE 58, UGE 31, QLD 78, UCO 51, RXL 81, UBT 22, UPW 62, ROM 73
Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology


Total Score (uptrend is positive) +253

The yarn of QE 2 continues as Goldman says the Fed will buy 2 trillion in assets. They interesting thing is that the markets have reacted to all of this supposed stimulus and yet nothing has happened. It seems to me that the Fed through its flunkies are trying to get others to provide the stimulus for QE 2. I don't think they want to be buyers of this sinking ship.

Mikey

Rates continue to rise in front of QE 2

DJIA 11126.28 -43.18 S&P 500 1182.45 -3.19 NASDAQ 2503.26 +5.97
DJT 4737.19 -42.53 DJU 402.77 -1.49 IBD100 273.84 -.22 VIX 20.77 +.55
US Gov rates: 6 mo .175%  2 yr ..414% 10 yr 2.72 +.07 30 yr 4.05 +.06
Gold 1322.60 -16.00 Silver 23.41 -.43 Oil 81.94 -.61 USD 77.97 +.23
Days to option expiration 18 Day 8 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening

Gold: Primary top forming crash expected.....  Current trend up

Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral
US Dollar: Major long term bottom forming .....Current trend down
Emerging Markets: Bear market rally ending..... Current trend up
Economy: Double dip coming .....Current trend down

Economic Conditions: Poor

Week ended 10/15 ECRI Index  -6.8% annualized
CEO economic index Sept 86 , June 94.6
ISM Index Aug  56.3 (above 50 is growth) new low for 2010
New orders index 51.1 Lowest since June 09
Backlog index 46.5 lowest since April 09
Inventories 55.6 Highest since July 1984 a 26 year high.
Auto and light trucks Aug 11.7 (16 million was average for past 15 years)
Jobless initial claims fell to 453,000
Chicago PMI 60.4
Sept Employment index 53.4
10/6 ADP employment report -39,000  jobs by private employers in Sept
  Foreclosures rose to 282,528 in August
10/7 Nonfarm payrolls declined 95000 in Sept
Jobless rate 9.6% , underemployed rate 17.1%
Sept Manufacturing jobs -6000
Long Term unemployment (% out of work  26 weeks) 41.7%
10/14 Mortgage Applications  rise 14.6% last week Purchase apps fell 8.5%
Core PPI +.1%
Trade Balance -46.3 Bil
10/15 U of Mich Consumer sentiment 67.9
Core PPI .8% (49 year low)
Sept Retail Sales 0.6% Ex Autos +0.4% 

Aug Business inventories +0.6%

10-18 Sept industrial production fell .2%, Homebuilder confidence 16 (50 is average)
10-19 China raises rates to curb inflation: French riot over increase in retirement age
Intel will invest 6 billion in US chip plant
Housing starts rose .3% annual rate 610000, Building permits fell to annual rate of 579000
.10-20 Mortgage apps fell 10.5% last week Purchase demand fell 6.7% near a 13 year low  Refi's were down 11.2% 6th decline in 7 weeks
30 year mtg rates  averaged 4.34%
Yield on Chinese 5 year bonds jumped to 2.97% highest yield since 2009
10-21 China GDP slows to 9.6% Industrial Production 13.3% Consumer Prices +3.6% Retail Sales 18.8%
10-25 Sept existing home sales rose 10% annual rate 4.53 mil an annual decline of 19.1%
 Inventory of unsold homes 4.04 mil, Mortgage apps index 803.4
Chicago Fed activity index fell .9 in Sept to -.58 (reading below zero indicate negative growth)
Credit card write offs rose to 10.3% from 9.45% in July
10-26 Consumer confidence 50.2, Jobs hard to get index 45.8, Jobs plentiful index fell to 3.5 from 3.8
Economist expect GDP 3Q release on Friday to be 2% rate
10-27 Durable goods +3.3%, ex-aircraft -.07%,Inventory to shipment ratio 1.59, Sept Order backlog 1%
Sept new home sales +6.6% 307,000 annual rate, near May record low of 282,000

Noteworthy
10-5 IMF, Goldman Gloomy on economy expects sluggish or renewed recession over next 6-9 months
10-15 Atlanta Fed chief Dennis Lockhart: "US Economic growth has slowed pretty dramatically and deflation is a concern."
South Korea: Warns of trade war wants compromise on exchange rates
Japans PM Naoto Kan: Yen's rise is extremely excessive
Beige book survey of economic conditions noted retail sales flat to mod positive in 10 of 12 districts with 2 districts saw declining traffic
10-19 Brazil raises taxes on bonds and asks for a stop to the currency wars.
Goods producers are facing higher prices for shipping and are having trouble passing those increases on to customers squeezing profits
Fiscal policy is tightening at all levels of government . State and local governments have cut 54,000 jobs in each of the last 3 months.
Labor dept estimate that 3 million unemployed workers will have exhausted their 99 weeks of jobless benefits by year end.
G-20 will meet the end of this week. Will focus on $ weakness
Commercial property prices fell 3.3% in August, lowest level in 8 years
10-20 US wants G-20 finance ministers to address trade imbalances and wants developing countries to let their currencies rise in line with market forces
10-25 French strikes on 62 retirement age costing economy
10-26 Iran begins fueling Nuke reactor, Steel stocks fall on weak demand, DuPont outlook disappoints
Data to be released Inflation adjust disposable income to be a weak .8%
Bin Laden warns France of vail ban "we will compromise your security"
China warns of inflationary risks

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 77
Put/Call Ratio(.6 OB 1.2 OS) .86 .10 day average .81
Ratio Put Premiums/Call Premium .64 (OB .53/ OS 1.54) Put Premium 10 day average .66
Williams %R 12 day -36.4( uptrend OB:-1.00, downtrend OS -99): Weekly -9.27
% Advisory Service Bulls 45.6  Bears 24.4  Bear/Bull ratio .535   Bullish
Mikey Thrust indicator: Daily 6 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +137.60 Falling/ Negative cross 10/19
NYSE New Highs 80 New Lows 16
NASDAQ New Highs 91 New Lows 26
NYSE Advance-Decline -898 NASDAQ Advance-Decline -632
Mikey A/D line.(from 9/17/10). NYSE +7291 NASDAQ +4763
Support: 1130 S&P, 10720 DJIA Breakout 9/20
Resistance: 1220 S&P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Mikey power index on DJIA peaked on 9/22 at 88
MACD  First negative cross 10/19
Interest rates turning higher (is Fed Printing or selling?) Rates at 1 month highs
Dollar stabilizing
Put Premiums remain low indicating low demand for puts

Moving Averages
DJIA 5 day 11083 Falling/Price above
DJIA 20 day 11024 Rising/Price above
DJIA 50 day 10671 Rising/Price above
DJIA 200 day 10523 Rising/Price above

Mikey Power Index (MPI)
 (Uptrend Above 60, Sell below 40)
 (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 46 0, Bonds 23- Emerging Mkts 45 0, China 58 0, Brazil 33 -, Oil 42 0, Nat Gas 27-, Copper 50 0, Gold 41 0, Silver 51 0, USD 56 0  Aussie 51 0, Euro 63 +, Brit Pd 50 0

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....40 trading days.. 8 weeks
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

2x Short ETF Score 841 ( 4 up, 6 down, 8 neutral)
Green=up, Red= down, Black = neutral

DXD 52, SDS 35, DZZ 60, ZSL 50, DUG 37, EEV 57, FXP 43, SMN 60, CMD 41, SKF 41, SRS 39, SZK 20, QID 22, SCO 54, RXD 48, TBT 76, SDP 74, REW 32

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Long ETF SCORE 1032   (10 up, 1 down, 7 neutral) Green=up, Red= down, Black = neutral

DDM 41, SSO 62 , UGL 42, AGQ 52, DIG 66 , EET 61, XPP 50, UYM 43, UCD 64, UYG 54, URE 63, UGE 74, QLD 78, UCO 43, RXL 81, UBT 22, UPW 64, ROM 72

Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology


Total Score (uptrend is positive) +191

Housing Prices fall in August near 2003 & 2004 levels.

Prices of U.S. single-family homes fell for a second straight month in August, hovering around recent lows after the expiration of popular homebuyer tax credits, according a Standard & Poor's/Case-Shiller home price report on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.3 percent in August from July on a seasonally adjusted basis where a Reuters poll of economists forecast a drop of 0.2 percent. The dip followed a seasonally adjusted decline of 0.2 percent in July.

S&P, which publishes the indexes, also said home prices in the 20 cities index rose 1.7 percent from August 2009, a slower annual pace than the 3.2 percent increase in July.

Unadjusted for seasonal impact, the 20-city index fell 0.2 percent after a 0.6 percent July gain. A 0.2 percent rise was expected.

"A disappointing report. Home prices broadly declined in August. Seventeen of the 20 cities and both composites saw a weakening in year-over-year figures, as compared to July, indicating that the housing market continues to bounce along the recent lows," David M. Blitzer, chairman of the index committee at Standard & Poor's, said in a statement.

"Over the last four months both the 10- and 20-City Composites show slowing growth, after sustaining consistent gains since their April 2009 troughs," he said.

Blitzer said the housing market appears to have stabilized at new lows.

"At this time, it does not seem that any of the markets are hanging on to the temporary momentum caused by the homebuyers' tax credits," he said.

The housing market has been struggling since home buyer tax credits expired earlier this year. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30.

Contracts originally had to close by June 30, but that was extended by three months.

Cary Leahey, economist at Decision Economics in New York, said the problem right now is the potential shadow inventory of foreclosures. With a flood of foreclosures, which typically sell at steep discounts, in the pipeline, home prices will likely remain depressed for some time.

"If you believe that you can't have a vibrant economy without a vibrant housing market, then you have to deal with the foreclosure problem," he said.

Home prices in August reflect conditions before banks temporarily halted foreclosures due to questionable documentation. Home prices may benefit from fewer foreclosures in the mix, but any rise should prove to be temporary.

As of August 2010, average home prices across the United States are back to the levels where they were in late 2003 and early 2004, S&P said.

Interest rates creeping up QE 2 bond buys coming, or is it a bluff ???

DJIA 11169.46 +5.41  S&P 500 1185.64 +.02 NASDAQ 2497.29 +6.44
DJT 4779.72 +4.86 DJU 404.26 -.96IBD100 274.06 +.72 VIX 20.22 +.37
US Gov rates: 6 mo .175%  2 yr .3986% 10 yr 2.65 +.08 30 yr 3.99 +.08
Gold 1338.60 Silver 23.84 Oil 82.55 USD 77.74 +.60
Days to option expiration 19 Day 7 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening

Gold: Primary top forming crash expected.....  Current trend up

Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral
US Dollar: Major long term bottom forming .....Current trend down
Emerging Markets: Bear market rally ending..... Current trend up
Economy: Double dip coming .....Current trend down

Economic Conditions: Poor

Week ended 10/15 ECRI Index  -6.8% annualized
CEO economic index Sept 86 , June 94.6
ISM Index Aug  56.3 (above 50 is growth) new low for 2010
New orders index 51.1 Lowest since June 09
Backlog index 46.5 lowest since April 09
Inventories 55.6 Highest since July 1984 a 26 year high.
Auto and light trucks Aug 11.7 (16 million was average for past 15 years)
Jobless initial claims fell to 453,000
Chicago PMI 60.4
Sept Employment index 53.4
10/6 ADP employment report -39,000  jobs by private employers in Sept
 IMF, Goldman Gloomy on economy expects sluggish or renewed recession over next 6-9 months
 Foreclosures rose to 282,528 in August
10/7 Nonfarm payrolls declined 95000 in Sept
Jobless rate 9.6% , underemployed rate 17.1%
Sept Manufacturing jobs -6000
Long Term unemployment (% out of work  26 weeks) 41.7%
10/14 Mortgage Applications  rise 14.6% last week Purchase apps fell 8.5%
Core PPI +.1%
Trade Balance -46.3 Bil
10/15 U of Mich Consumer sentiment 67.9
Core PPI .8% (49 year low)
Sept Retail Sales 0.6% Ex Autos +0.4% 

Aug Business inventories +0.6%

Atlanta Fed chief Dennis Lockhart: "US Economic growth has slowed pretty dramatically and deflation is a concern."
South Korea: Warns of trade war wants compromise on exchange rates
Japans PM Naoto Kan: Yen's rise is extremely excessive
10-18 Sept industrial production fell .2%, Homebuilder confidence 16 (50 is average)
10-19 China raises rates to curb inflation: French riot over increase in retirement age
Intel will invest 6 billion in US chip plant
Housing starts rose .3% annual rate 610000, Building permits fell to annual rate of 579000
Commercial property prices fell 3.3% in August, lowest level in 8 years
Brazil raises taxes on bonds and asks for a stop to the currency wars.
G-20 will meet the end of this week. Guess what they will be talking about that's right the $ weakness.
10-20 Mortgage apps fell 10.5% last week Purchase demand fell 6.7% near a 13 year low  Refi's were down 11.2% 6th decline in 7 weeks
30 year mtg rates  averaged 4.34%
US wants G-20 finance ministers to address trade imbalances and wants developing countries to let their currencies rise in line with market forces
Yield on Chinese 5 year bonds jumped to 2.97% highest yield since 2009
10-21 China GDP slows to 9.6% Industrial Production 13.3% Consumer Prices +3.6% Retail Sales 18.8%
10-25 Sept existing home sales rose 10% annual rate 4.53 mil an annual decline of 19.1%
Dollar falls after G-20
French strikes on 62 retirement age costing economy, Inventory of unsold homes 4.04 mil,

Mortgage apps index 803.4

Chicago Fed activity index fell .9 in Sept to -.58 (reading below zero indicate negative growth)
Credit card write offs rose to 10.3% from 9.45% in July
10-26 Consumer confidence 50.2, Jobs hard to get index 45.8, Jobs plentiful index fell to 3.5 from 3.8

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 79
Put/Call Ratio(.6 OB 1.2 OS) .59 .10 day average .80
Ratio Put Premiums/Call Premium .61 (OB .53/ OS 1.54) Put Premium 10 day average .66
Williams %R 12 day -23.26( uptrend OB:-1.00, downtrend OS -99): Weekly -6.37
% Advisory Service Bulls 45.1  Bears 22  Bear/Bull ratio .48   Bullish
Mikey Thrust indicator: Daily 8 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +1.4399 Falling/ Negative cross 10/19
NYSE New Highs 126 New Lows 10
NASDAQ New Highs 109 New Lows 22
NYSE Advance-Decline -254 NASDAQ Advance-Decline -37
Mikey A/D line.(from 9/17/10). NYSE +8189 NASDAQ +5395
Support: 1130 S&P, 10720 DJIA Breakout 9/20
Resistance: 1220 S&P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Note: Bears are at same level they were at April top

Non confirmation on New Highs 442 on 10/13
Mikey OB/OS remains high
Mikey power index on DJIA peaked on 9/22 at 88 now 52
MACD  First negative cross 10/19
Interest rate turning higher (is Fed Printing or selling?)
Dollar stabilizing
Put Premiums remain low inducatng low demand for puts

Moving Averages
DJIA 5 day 11144 Rising/Price above
DJIA 20 day 11009 Rising/Price above
DJIA 50 day 10657 Rising/Price above
DJIA 200 day 10520 Rising/Price above

Mikey Power Index (MPI) (Uptrend Above 60, Sell below 50, Downtrend below 40) (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 52 0, Bonds 31- Emerging Mkts 51 0, China 63+, Brazil 29 -, Oil 64+, Nat Gas 29-, Copper 55 0, Gold 54 0, Silver 61+, USD 41 0  Aussie 59+, Euro 67+, Brit Pd 50 0

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....39 trading days.. 7.6 weeks
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Short ETF Score 739  ( 2 up, 9 down, 7 neutral)

DXD 46 - SDS 26-, DZZ 56 0, ZSL 48 0, DUG 28 - , EEV 46 0, FXP 31 -, SMN 50 0, CMD 42 0, SKF 38 -, SRS 35 -, SZK 14-, QID 26 -SCO 48 0 , RXD 28-, TBT 65+, SDP 72 + REW 40 0

Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology

2x Long ETF SCORE 1150   (10 up, 1 down, 7 neutral)

DDM 51 0, SSO 74+, UGL 47 0, AGQ 55 0, DIG 76+, EET 71+,XPP 58 0, UYM 53 0, UCD 68 +, UYG 57 0, URE 67 +, UGE 89 0, QLD 75 +, UCO 44 0, RXL 88 +, UBT 31 - , UPW 70 +, ROM 71+

ETF Total Score +411 (Positive total indicates uptrend)

They are all certain that the Fed is printing and inflation is coming. If they are wrong they have a problem. Maybe just maybe a stronger dollar is what they the central banks want now.

Mikey

Stock prices and reality widen

;DJIA11164.05 +31.49 S&P 500 1185.62 +2.54 NASDAQ 2490.85 +11.46
DJT 4774.86 +19.86 DJU 405.20 -1.63 IBD100 276.34 +3.00 VIX 19.85 +1.07
US Gov rates: 6 mo .167%  2 yr ..3628% 10 yr 2.56 +.01 30 yr 3.91
Gold 1339.85 Silver 23.46 +.17 Oil 81.91 +82.34 +.43 USD 77.14 -.11
Days to option expiration 20 Day 6 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening

Gold: Primary top forming crash expected.....  Current trend up

Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral
US Dollar: Major long term bottom forming .....Current trend down
Emerging Markets: Bear market rally ending..... Current trend up
Economy: Double dip coming .....Current trend down

Economic Conditions: Poor

Week ended 10/15 ECRI Index  -6.8% annualized
Consumer confidence 48.5 (Above 50 is good)
CEO economic index Sept 86 , June 94.6
ISM Index Aug  56.3 (above 50 is growth) new low for 2010
New orders index 51.1 Lowest since June 09
Backlog index 46.5 lowest since April 09
Inventories 55.6 Highest since July 1984 a 26 year high.
Auto and light trucks Aug 11.7 (16 million was average for past 15 years)
Jobless initial claims fell to 453,000
Chicago PMI 60.4
Sept Employment index 53.4
10/6 ADP employment report -39,000  jobs by private employers in Sept
 IMF, Goldman Gloomy on economy expects sluggish or renewed recession over next 6-9 months
 Foreclosures rose to 282,528 in August
10/7 Nonfarm payrolls declined 95000 in Sept
Jobless rate 9.6% , underemployed rate 17.1%
Sept Manufacturing jobs -6000
Long Term unemployment (% out of work  26 weeks) 41.7%
10/14 Mortgage Applications  rise 14.6% last week Purchase apps fell 8.5%
Core PPI +.1%
Trade Balance -46.3 Bil
10/15 U of Mich Consumer sentiment 67.9
Core PPI .8% (49 year low)
Sept Retail Sales 0.6% Ex Autos +0.4% 

Aug Business inventories +0.6%

Atlanta Fed chief Dennis Lockhart: "US Economic growth has slowed pretty dramatically and deflation is a concern."
South Korea: Warns of trade war wants compromise on exchange rates
Japans PM Naoto Kan: Yen's rise is extremely excessive
10-18 Sept industrial production fell .2%, Homebuilder confidence 16 (50 is average)
10-19 China raises rates to curb inflation: French riot over increase in retirement age
Intel will invest 6 billion in US chip plant
Housing starts rose .3% annual rate 610000, Building permits fell to annual rate of 579000
Commercial property prices fell 3.3% in August, lowest level in 8 years
Brazil raises taxes on bonds and asks for a stop to the currency wars.
G-20 will meet the end of this week. Guess what they will be talking about that's right the $ weakness.
10-20 Mortgage apps fell 10.5% last week Purchase demand fell 6.7% near a 13 year low  Refi's were down 11.2% 6th decline in 7 weeks
30 year mtg rates  averaged 4.34%
US wants G-20 finance ministers to address trade imbalances and wants developing countries to let their currencies rise in line with market forces
Yield on Chinese 5 year bonds jumped to 2.97% highest yield since 2009
10-21 China GDP slows to 9.6% Industrial Production 13.3% Consumer Prices +3.6% Retail Sales 18.8%
10-25 Sept exisiting home sales rose 10% annual rate 4.53 mil an annual decline of 19.1%
Dollar falls after G-20
French strikes on 62 retirement age costing economy, Invenory of unsold homes 4.04 mil,

Mortgage apps index 803.4

Chicago Fed activity index fell .9 in Sept to -.58 (reading below zero indicate negative growth)
Credit card write offs rose to 10.3% from 9.45% in July

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 81
Put/Call Ratio(.6 OB 1.2 OS)  .89 10 day average .81
Ratio Put Premiums/Call Premium ..62 (OB .53/ OS 1.54) Put Premium 10 day average .66
Williams %R 12 day -24.51( uptrend OB:-1.00, downtrend OS -99): Weekly -6.24
% Advisory Service Bulls 45.1  Bears 22  Bear/Bull ratio .48   Bullish
Mikey Thrust indicator: Daily 8 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +1.4591 Falling/ Negative cross 10/19
NYSE New Highs 311 New Lows 7
NASDAQ New Highs 191 New Lows 27
NYSE Advance-Decline +612 NASDAQ Advance-Decline +556
Mikey A/D line.(from 9/17/10). NYSE +8434 NASDAQ +5432
Support: 1130 S&P, 10720 DJIA Breakout 9/20
Resistance: 1220 S&P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Note: Bears are at same level they were at April top

Non confirmation on New Highs 442 on 10/13
Mikey OB/OS remains high
NYSE new high on AD line in gear.

Moving Averages
DJIA 5 day 11138 Rising/Price above
DJIA 20 day 10994 Rising/Price above
DJIA 50 day 10640 Rising/Price above
DJIA 200 day 10518 Rising/Price above

Mikey Power Index (MPI) (Uptrend Above 60, Sell below 50, Downtrend below 40) (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 58 0, Bonds 30- Emerging Mkts 57 0, China 65+, Brazil 36 -, Oil 52+, Nat Gas 30-, Copper 56 0, Gold 51 0, Silver 56+, USD 39 -, Aussie 64 +, Euro 70 +, Brit Pd 55 0

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....38 trading days.. 7.6 weeks
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Short ETF Score 684  ( 2 up, 10 down, 6 neutral)

DXD 38 - SDS 28-, DZZ 51 0, ZSL 45 0, DUG 25 - , EEV 50 0, FXP 28 -, SMN 46 0, CMD 31 0, SKF 35 -, SRS 31 -, SZK 13-, QID 24 -SCO 44 0 , RXD 23-, TBT 67+, SDP 70 + REW 35 -

Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology

2x Long ETF SCORE 1097   (11 up, 1 down, 6 neutral)

DDM 55 0, SSO 76+, UGL 55 0, AGQ 59 0, DIG 72+, EET 67+,XPP 72+, UYM 45 0, UCD 59 0, UYG 60+, URE 66 +, UGE 51 0 QLD 56 + UCO 69 0, RXL 64 +, UBT 33 - , UPW 73 +, ROM 65+

ETF Total Score +413 (Positive total indicates uptrend)

• Dollar falls after G-20
• French strikes on 62 retirement age costing economy
• Exisitng home sales rise 10%  in Sept to depressed level of 4.53 mil ann rate
• Invenory of unsold homes 4.04 mil
• Mortgage apps index 803.4
• Chicago Fed activity index fell .9 in Sept to -.58 (reading below zero indicate negative growth)
• Credit card write offs rose to 10.3% from 9.45% in July 

The economy remains weak in spite of the Feds efforts to save the economy and stock prices rise. The spread between stock prices and reality are widening but stocks are still in an uptrend.  

Mikey

G20 meeting today expect a dollar sell off after the meeting

DJIA 11132.-14.01 S&P 500 1180.44 +2.82 NASDAQ 2470.87 +11.20 
DJT 4754.97 +19.40 DJU 406.83 -2.93 IBD100 270.34 +4.62 VIX 19.16 -.11
US Gov rates: 6 mo .167%  2 yr ..3547% 10 yr 2.55 +.02 30 yr 3.93 -.02
Gold 1327.90 +2.30 Silver 23.29 +.14 Oil 81.91 +1.31 USD 77.25 -.26
Days to option expiration 21 Day 5 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening

Gold: Primary top forming crash expected.....  Current trend up

Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral
US Dollar: Major long term bottom forming .....Current trend down
Emerging Markets: Bear market rally ending..... Current trend up
Economy: Double dip coming .....Current trend down

Economic Conditions: Poor

Week ended 10/15 ECRI Index  -6.8% annualized
Consumer confidence 48.5 (Above 50 is good)
CEO economic index Sept 86 , June 94.6
ISM Index Aug  56.3 (above 50 is growth) new low for 2010
New orders index 51.1 Lowest since June 09
Backlog index 46.5 lowest since April 09
Inventories 55.6 Highest since July 1984 a 26 year high.
Auto and light trucks Aug 11.7 (16 million was average for past 15 years)
Jobless initial claims fell to 453,000
Chicago PMI 60.4
Sept Employment index 53.4
10/6 ADP employment report -39,000  jobs by private employers in Sept
 IMF, Goldman Gloomy on economy expects sluggish or renewed recession over next 6-9 months
 Foreclosures rose to 282,528 in August
10/7 Nonfarm payrolls declined 95000 in Sept
Jobless rate 9.6% , underemployed rate 17.1%
Sept Manufacturing jobs -6000
Long Term unemployment (% out of work  26 weeks) 41.7%
10/14 Mortgage Applications  rise 14.6% last week Purchase apps fell 8.5%
Core PPI +.1%
Trade Balance -46.3 Bil
10/15 U of Mich Consumer sentiment 67.9
Core PPI .8% (49 year low)
Sept Retail Sales 0.6% Ex Autos +0.4% 

Aug Business inventories +0.6%

Atlanta Fed chief Dennis Lockhart: "US Economic growth has slowed pretty dramatically and deflation is a concern."
South Korea: Warns of trade war wants compromise on exchange rates
Japans PM Naoto Kan: Yen's rise is extremely excessive
10-18 Sept industrial production fell .2%, Homebuilder confidence 16 (50 is average)
10-19 China raises rates to curb inflation: French riot over increase in retirement age
Intel will invest 6 billion in US chip plant
Housing starts rose .3% annual rate 610000, Building permits fell to annual rate of 579000
Commercial property prices fell 3.3% in August, lowest level in 8 years
Brazil raises taxes on bonds and asks for a stop to the currency wars.
G-20 will meet the end of this week. Guess what they will be talking about that's right the $ weakness.
10-20 Mortgage apps fell 10.5% last week Purchase demand fell 6.7% near a 13 year low  Refi's were down 11.2% 6th decline in 7 weeks
30 year mtg rates  averaged 4.34%
US wants G-20 finance ministers to address trade imbalances and wants developing countries to let their currencies rise in line with market forces
Yield on Chinese 5 year bonds jumped to 2.97% highest yield since 2009
10-21 China GDP slows to 9.6% Industrial Production 13.3% Consumer Prices +3.6% Retail Sales 18.8%

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 83
Put/Call Ratio(.6 OB 1.2 OS)  .93 10 day average .80
Ratio Put Premiums/Call Premium .72 (OB .53/ OS 1.54) Put Premium 10 day average .66
Williams %R 12 day -20.59( uptrend OB:-1.00, downtrend OS -99): Weekly -4.35
% Advisory Service Bulls 45.1  Bears 22  Bear/Bull ratio .48   Bullish
Mikey Thrust indicator: Daily 8 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +1.4994 Rising/ Negative cross 10/19
NYSE New Highs 127 New Lows 4
NASDAQ New Highs100 New Lows 31NYSE Advance-Decline +586 NASDAQ Advance-Decline +718
Mikey A/D line.(from 9/17/10). NYSE +7822 NASDAQ +4876
Support: 1130 S&P, 10720 DJIA Breakout 9/20
Resistance: 1220 S&P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Note: Bears are at same level they were at April top
Non confirmation on Mike A/D line Oct 13 AD high 8163

Non confirmation on New Highs 442 on 10/13

Moving Averages
DJIA 5 day 11091 Flat/Price above
DJIA 20 day 10976 Rising/Price above
DJIA 50 day 10622 Rising/Price above
DJIA 200 day 10515 Rising/Price above

Mikey Power Index (MPI) (Uptrend Above 60, Sell below 50, Downtrend below 40) (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 52 0, Bonds 29- Emerging Mkts 51 0, China 67+, Brazil 37 0, Oil 53+, Nat Gas 29-, Copper 52 0, Gold 48 0, Silver 52+, USD 43 0, Aussie 59 0, Euro 67+, Brit Pd 53 0

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....33days
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Short ETF Score 760  ( 1 up, 9 down, 8 neutral)

DXD 44 0, SDS 28-, DZZ 53 0, ZSL 49 0, DUG 31 - , EEV 50 0, FXP 27 -, SMN 52 0, CMD 45 0, SKF 40 0, SRS 30 -, SZK 19-, QID 31 -SCO 44- , RXD 31-, TBT68+, SDP 78- REW 40 0

Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology

2x Long ETF SCORE 1077   (11 up, 1 down, 6 neutral)

DDM 47 0, SSO 69+, UGL 51 0, AGQ 52 0,DIG 71+, EET 71+,XPP 58+, UYM 49 0, UCD 61 +, UYG 63+, URE 70 +, UGE 65 +, QLD 70 + UCO 55 0, RXL 64 +, UBT 30 - , UPW 68 +, ROM 63+

ETF Total Score +317 (Positive total indicates uptrend)

The dollar has reached a level that is causing the emerging countries of the world to cry uncle. They have pegged their currencies to the dollar and have cheated the US out of its jobs and wealth. The US politicians mandated easy money and allow this process to go on for the last 20 years. The game is still going on but by allowing their currencies to be pegged to the dollar they are importing inflation. The US is experiencing deflation whole the developing countries are seeing their costs inflate.

 The emerging markets are losing their competitive edge now and the US consumer is getting squeezed. The business pie is shrinking.  This game is coming to an end, It can end with those countries imploding with inflation or it can end with them being more responsible with their currencies.

The G-20 will issue a statement that will say that they will end the currency war. It doesn't matter if they do or not the process will end it for them. The current environment will make emerging markets a bad investment going foreword. The analogy would be US real estate in 2005. It was hotter than hot and you see the result now. That is what I see for the emerging markets in the next 5 years. Their markets are slowing and their costs are rising. Not a good formula and they are crying about it now. By pegging their currency to a falling dollar they are able to increase market share at the expense of rising costs. That game is about to end. The net result is a  rising dollar as their economies roll over. The process is in motion now and the results are predictable.

Mikey

FYI
Daily dose of aspirin could cut cancer. .
Low dose aspirin may cut the risk of developing colon cancer, a European study found. People who took a baby dose aspirin daily for 6 years reduced their colon cancer risk by 24% the study found.

Bonds, Gold and Commodities taking hits as G-20 nears

DJIA 11146.57 +38.60  S&P 5001180.26 +2.09 NASDAQ 2949.67+2.28
DJT 4735.57 -13.81 DJU 409.26 -1.57 IBD100 265.72 +.69 VIX 19.27
US Gov rates: 6 mo .167%  2 yr .3506% 10 yr 2.53 +.05 30 yr 3.95 +.06
Gold 1325.60 -18.60 Silver 23.15 -.71 Oil 80.56 -1.98 USD 77.51 +.14
Days to option expiration 22 Day 4 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening

Gold: Primary top forming crash expected.....  Current trend up

Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral
US Dollar: Major long term bottom forming .....Current trend down
Emerging Markets: Bear market rally ending..... Current trend up
Economy: Double dip coming .....Current trend down

Economic Conditions: Poor

Week ended 10/8 ECRI Index  -6.9 % annualized
Consumer confidence 48.5 (Above 50 is good)
CEO economic index Sept 86 , June 94.6
ISM Index Aug  56.3 (above 50 is growth) new low for 2010
New orders index 51.1 Lowest since June 09
Backlog index 46.5 lowest since April 09
Inventories 55.6 Highest since July 1984 a 26 year high.
Auto and light trucks Aug 11.7 (16 million was average for past 15 years)
Jobless initial claims fell to 453,000
Chicago PMI 60.4
Sept Employment index 53.4
10/6 ADP employment report -39,000  jobs by private employers in Sept
 IMF, Goldman Gloomy on economy expects sluggish or renewed recession over next 6-9 months
 Foreclosures rose to 282,528 in August
10/7 Nonfarm payrolls declined 95000 in Sept
Jobless rate 9.6% , underemployed rate 17.1%
Sept Manufacturing jobs -6000
Long Term unemployment (% out of work  26 weeks) 41.7%
10/14 Mortgage Applications  rise 14.6% last week Purchase apps fell 8.5%
Core PPI +.1%
Trade Balance -46.3 Bil
10/15 U of Mich Consumer sentiment 67.9
Core PPI .8% (49 year low)
Sept Retail Sales 0.6% Ex Autos +0.4% 

Aug Business inventories +0.6%

Atlanta Fed chief Dennis Lockhart: "US Economic growth has slowed pretty dramatically and deflation is a concern."
South Korea: Warns of trade war wants compromise on exchange rates
Japans PM Naoto Kan: Yen's rise is extremely excessive
10-18 Sept industrial production fell .2%, Homebuilder confidence 16 (50 is average)
10-19 China raises rates to curb inflation: French riot over increase in retirement age
Intel will invest 6 billion in US chip plant
Housing starts rose .3% annual rate 610000, Building permits fell to annual rate of 579000
Commercial property prices fell 3.3% in August, lowest level in 8 years
Brazil raises taxes on bonds and asks for a stop to the currency wars.
G-20 will meet the end of this week. Guess what they will be talking about that's right the $ weakness.
10-20 Mortgage apps fell 10.5% last week Purchase demand fell 6.7% near a 13 year low  Refi's were down 11.2% 6th decline in 7 weeks
30 year mtg rates  averaged 4.34%
US wants G-20 finance ministers to address trade imbalances and wants developing countries to let their currencies rise in line with market forces
Yield on Chinese 5 year bonds jumped to 2.97% highest yield since 2009
10-21 China GDP slows to 9.6% Industrial Production 13.3% Consumer Prices +3.6% Retail Sales 18.8%
Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 83
Put/Call Ratio(.6 OB 1.2 OS)  .99 10 day average .79
Ratio Put Premiums/Call Premium .74 (OB .53/ OS 1.54) Put Premium 10 day average .66
Williams %R 12 day -20.59( uptrend OB:-1.00, downtrend OS -99): Weekly -4.35
% Advisory Service Bulls 45.1  Bears 22  Bear/Bull ratio .48   Bullish
Mikey Thrust indicator: Daily 8 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +1.4862 Falling/ Negative cross 10/19
NYSE New Highs 239 New Lows 8
NASDAQ New Highs 123  New Lows 8
NYSE Advance-Decline -57 NASDAQ Advance-Decline -591
Mikey A/D line.(from 9/17/10). NYSE +7236 NASDAQ +4156
Support: 1130 S&P, 10720 DJIA Breakout 9/20
Resistance: 1220 S&P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Note: Bears are at same level they were at April top
Non confirmation on Mike A/D line Oct 13 AD high 8163

Non confirmation on New Highs 442 on 10/13

Moving Averages
DJIA 5 day 11094 Rising/Price above
DJIA 20 day 10963 Rising/Price above
DJIA 50 day 10606 Rising/Price above
DJIA 200 day 10512 Rising/Price above

Mikey Power Index (MPI) (Uptrend Above 60, Sell below 50, Downtrend below 40) (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 45 0, Bonds 28- Emerging Mkts 52 0, China 71+, Brazil 44 0, Oil 56+, Nat Gas 29 -, Copper 55 0, Gold 53 0, Silver 57+, USD 38-, Aussie 61 +, Euro 71+, Brit Pd 58 0

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....32days
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Short ETF Score 699  ( 1 up, 9 down, 8 neutral)

DXD 40 0, SDS 28-, DZZ 50 0, ZSL 45 0, DUG 30 - , EEV 47 0, FXP 23 -, SMN 47 0, CMD 43 0, SKF 36 0, SRS 27 -, SZK 22-, QID 37 -SCO 43- , RXD 39 -, TBT 69 +, SDP 29- REW 44 0

Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology

2x Long ETF SCORE 1113   (11 up, 1 down, 6 neutral)

DDM 44 0, SSO 70+, UGL 53 0, AGQ 57 0,DIG 72+, EET 73+,XPP 63+, UYM 54 0, UCD 58 0, UYG 67+, URE 74 +, UGE 62 +, QLD 65 + UCO 59 0, RXL 81 +, UBT 30 - , UPW 71 0, ROM 60+

ETF Total Score +414 (Positive total indicates uptrend

I am getting non-confirmations on my ad line  and new highs on the NYSE and NASDAQ. Today e were back to the highs of 10/13 but we had net declines on both indexes. The Gold market has been clipped from its high of 1388 on 10/14 to a low of 1322 today. Bonds for all of the talk of Fed buying have clearly entered a downtrend and sold off again today since August 26 the yields on the 30 year have risen from 3.46% to 3.96% today. The decline in the bonds is not consistent to the QE 2 story.

Mikey