一个笨蛋的股指交易记录-地狱级炒手 - 〖期货技术交流〗 - MACD俱乐部_专业的技术分析交流

hefeiddd 发表于 2009-3-25 15:32

Tuesday, January 20, 2009Today's Markets
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Prices dropped below key levels today -- levels established last Thursday.

Also note the following:

-- All the SMAs are moving lower

-- The shorter SMAs are before longer SMAs

-- Prices are below all the SMAs

http://3.bp.blogspot.com/_4jIlyJ10uJU/SXZoHQd1jqI/AAAAAAAABEI/bs1FunsnF7A/s400/Chart+of+SPY.gif

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Notice the following on the daily chart:

-- Prices are below all the SMAs

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

Also note the extremely important downward bar today; prices took a major move lower.

Posted by bonddad at 1/20/2009 06:09:00 PM

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About the Whole "Making Banks Lend" Thing....
From the blog Information Arbitrage:

Forcing banks to lend couldn't be a more intellectually bankrupt idea. The business of commercial banks is to lend money when the risk-adjusted returns exceed its cost of capital. Just lend money, because we said so? We've seen this movie before - it's called Fannie Mae and Freddie Mac - and it doesn't end well. The right way to approach the problem is to create truly healthy banks, either out of currently sick institutions or de novo, and to let them make rational lending decisions. If the Government sees a particular constituency that requires funding, don't force a bank to do it if it doesn't make economic sense. Either create a discrete program or use tax incentives to generate the necessary resources. The worst possible outcome of TARP is to create another generation of sick institutions by forcing them to make irrational loans to satisfy the moral (or public relations) objectives of our Government representatives. Obama needs to fight this urge with a vengance.

While I respectfully disagree with his statement about Fannie and Freddie, I agree wholeheartedly with everything else stated. You can't force banks to lend. Doing so will only lead to a host of other new problems.

Posted by bonddad at 1/20/2009 01:30:00 PM

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A Closer Look At Lending
Below are charts from the St. Louis Federal Reserve of various components of lending. All charts show a year over year percentage change. Please click on all images for a bigger image.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SXW0ed_9mfI/AAAAAAAABD4/w7KSaVJfPXY/s400/total.png

Above is a chart for total credit outstanding. While the number is still positive it has taken a bit hit over the last year or so.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SXW0Nui227I/AAAAAAAABDo/U8CH2a_NO60/s400/nonrevolv.png
Total non-revolving credit outstanding is dropping. As is

http://1.bp.blogspot.com/_4jIlyJ10uJU/SXW0Nt-7u0I/AAAAAAAABDY/q4FK9r_P0hA/s400/revolv.png
Total non-revolving

http://1.bp.blogspot.com/_4jIlyJ10uJU/SXW0Nt-TO3I/AAAAAAAABDg/WI0gsMrTiio/s400/real+estate.png
Real estate loans outstanding are dropping as are

http://4.bp.blogspot.com/_4jIlyJ10uJU/SXW0NXar6wI/AAAAAAAABDI/nYDdSqzZEhM/s400/c+and+i.png
Commercial and industrial loans

http://1.bp.blogspot.com/_4jIlyJ10uJU/SXW0NVFUW8I/AAAAAAAABDQ/nDjlvJKpFi4/s400/consumer.png

However, total consumer loans have leveled off.

What does this tell us? While the rate of change is still positive for all areas, the rate of change is decreasing. In some cases, the rate of change is very large and sudden. This is consistent with the anecdotal information from the Beige Book at the Senior Loan Survey mentioned below.

Posted by bonddad at 1/20/2009 11:30:00 AM

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It's Not About Lending
From the WSJ:

The previous version of the U.K. rescue plan has failed to stem economic erosion or to revive lending. How much worse it will get for banks remains largely unknown. That was made plain on Monday when RBS said it expects to report a 2008 loss of £22 billion to £28 billion ($31.8 billion to $40.5 billion). Under the latest rescue provisions, the government's share of RBS will increase to 70% from 58%. RBS shares fell 67% on Monday.

In the US, we are in the middle of a recession that has gone on for over a year. According to the FDIC's latest Quarterly Banking survey, banks are in extremely bad shape:

Troubled assets continued to mount at insured commercial banks and savings institutions in the third quarter of 2008, placing a growing burden on industry earnings. Expenses for credit losses topped $50 billion for a second consecutive quarter, absorbing one-third of the industry's net operating revenue (net interest income plus total noninterest income). Third quarter net income totaled $1.7 billion, a decline of $27.0 billion (94.0 percent) from the third quarter of 2007. The industry's quarterly return on assets (ROA) fell to 0.05 percent, compared to 0.92 percent a year earlier. This is the second-lowest quarterly ROA reported by the industry in the past 18 years. Evidence of a deteriorating operating environment was widespread. A majority of institutions (58.4 percent) reported year-over-year declines in quarterly net income, and an even larger proportion (64.0 percent) had lower quarterly ROAs. The erosion in profitability has thus far been greater for larger institutions. The median ROA at institutions with assets greater than $1 billion has fallen from 1.03 percent to 0.56 percent since the third quarter of 2007, while at community banks (institutions with assets less than $1 billion) the median ROA has declined from 0.97 percent to 0.72 percent. Almost one in every four institutions (24.1 percent) reported a net loss for the quarter, the highest percentage in any quarter since the fourth quarter of 1990, and the highest percentage in a third quarter in the 24 years that all insured institutions have reported quarterly earnings.

In Every Beige book issued in 2008 has indicated credit conditions were tightening and loan demand was decreasing.

January 16, 2008:

Reports from banks and other financial institutions noted further declines in residential real estate lending, and lending to the commercial real estate sector was generally described as mixed. Some Districts reported lower consumer loan volumes, whereas the volume of commercial and industrial lending varied. Most Districts cited tighter credit standards.

March 4, 2008:

Most Districts reporting on banking cite tight or tightening credit standards and stable or weaker loan demand.

April 16, 2008:

Financial institutions in many Districts indicated some deceleration in consumer loan demand, tightening in lending standards, and deterioration in asset quality

June 11, 2008:

Lending activity also varied across Districts and market segments, though tighter credit standards were reported for most loan categories.

July 23, 2008

In banking, loan growth was generally reported to be restrained, with residential real estate lending and consumer lending showing more weakness than commercial lending.

September 3, 2008

Most Districts reported easing loan demand, especially for residential mortgages and consumer loans; lending to businesses was mixed.

October 15, 2008:

Credit conditions were characterized as being tight across the twelve Districts, with several reporting reduced credit availability for both financial and nonfinancial institutions

December 3, 2008:

Lending contracted, with many Districts reporting reductions in residential, commercial and industrial lending and tightening lending standards.

In addition to the Beige Book, the Federal Reserve issues a Senior Loan Officer Survey every three months. These reports stated the following:

January 2008:

In the January survey, domestic and foreign institutions reported having tightened their lending standards and terms for a broad range of loan types over the past three months. Demand for bank loans reportedly had weakened, on net, for both businesses and households over the same period.

April 2008:

Compared with the January survey, the net fractions of banks that tightened lending standards increased significantly for consumer and commercial and industrial (C&I) loans. Demand for bank loans from both businesses and households reportedly weakened further, on net, over the past three months, although by less than had been the case over the previous survey period.

July 2008:

In the current survey, large net fractions of domestic institutions reported having tightened their lending standards and terms on all major loan categories over the previous three months. In particular, the net fractions of banks that had tightened credit standards on consumer loans increased notably relative to the April survey.

October 2008:

In the current survey, large net fractions of domestic institutions reported having continued to tighten their lending standards and terms on all major loan categories over the previous three months. The net percentages of respondents that reported tightening standards increased relative to the July survey for both C&I and commercial real estate loans, as did the fractions reporting tightening for all price and nonprice terms on C&I loans.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SXWu-_bACKI/AAAAAAAABDA/iI-QElhywDM/s400/total.png
Total credit is dropping on a year over year basis,

http://3.bp.blogspot.com/_4jIlyJ10uJU/SXWu-s0xKiI/AAAAAAAABC4/bcUYQhspI0I/s400/consumer.png
As is consumer credit.

And then we have this from the incoming administration:

The new team will manage the TARP “in a much different way,” David Axelrod, Obama's chief political adviser, said Jan. 18 on ABC's “This Week” program.
“He is going to have a strong message for the bankers,” Axelrod said. “We want to see credit flowing again.”
Another aide went further, criticizing the results of TARP under Paulson.
“Anyone who looks at it has got to be disappointed when they look at what's happened to lending, have got to think the results have been unsatisfactory,” Lawrence Summers, director-designate of the National Economic Council, said on CBS's “Face the Nation” program Jan. 18.

Simply put, we are not in a credit expansion friendly environment. That is not the point of what is happening. The government is attempting to prevent a broad-based financial meltdown. That's the metric for judging the current action.

They are making things up as they go along in this process -- that is incredibly obvious. But it's also important to remember, the last time we were here was 1929. It's been awhile. And while there has been a lot of debate about how to prevent a wide scale financial meltdown, there has been little practice at it.

Posted by bonddad at 1/20/2009 09:30:00 AM

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Treasury Tuesdays
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On the year long chart notice we're still in bubble territory; investors are still looking for safety and are finding it in the Treasury market

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Notice the following on the daily chart

-- Prices have not yet rebounded to the 38.2% fibonacci level

-- The SMAs are sending a mixed signal; the 10 is below the 20, but the 20 has just turned lower.

-- Meanwhile the 50 and 200 are moving higher

-- After prices sold off, they did not reach the previous highs

Posted by bonddad at 1/20/2009 04:39:00 AM

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Monday, January 19, 2009Deflation ... Or The Effect of a Commodity Bear Market?
There has been increased talk of deflation over the last few weeks. What people are concerned about is a deflationary spiral:

A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price. Since reductions in general price level are called deflation, a deflationary spiral is when reductions in price lead to a vicious circle, where a problem exacerbates its own cause. The Great Depression was regarded as a deflationary spiral.

However, I'm not sure this is an issue. From a look at the following charts, it looks as though we're feeling the effect of a commodity price bubble popping.

First, consider these three charts:

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While industrial metals probably weren't in a bubble, prices have collapsed over the last six months. Given the major drop in industrial production this is to be expected.

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There is a higher possibility agricultural prices were in a price bubble of sorts. They formed a double top in 2008 and have since fallen approximately 50% since their second top at the end of the second quarter 2008.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SXSK2UfZwhI/AAAAAAAABBQ/IhBt1Jxufs0/s400/crb+week.png
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The CRB index is heavily influenced by oil, which hit the 140+ level at the end of last summer. Now this index has also dropped about 50%.

So, two groups of commodities (agriculture and energy) were at really high prices. Some would argue these commodities were in a price bubble. I'm not sure if that was true or not -- there were strong reasons for a fundamental bull market. However, the rapid descent of the respective prices does give strong ammunition to the people who argue there was a bubble.

That being said... consider these charts.

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Above is a chart of the year over year change in CPI for all goods. Notice we are approaching the 0% level. That is something we haven't done for over 50 years. This is one of the primary problems of the Great Depression -- a deflationary spiral. Now prices are moving into that direction which has everybody understandably concerned.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SXSiFg03KjI/AAAAAAAABBw/3rpv4BSpcF4/s400/CPI+CORE.png
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However, notice that the year over year rate of change for core CPI is still high. This tells us that the deflationary problems are commodity based. As does this chart of CPI's energy component

http://1.bp.blogspot.com/_4jIlyJ10uJU/SXSipSrBK8I/AAAAAAAABCA/CcC2TVaJf4M/s400/ENergy.png
http://4.bp.blogspot.com/_4jIlyJ10uJU/SXSi86WGR-I/AAAAAAAABCI/E7mTO7Z7k5g/s400/FOOD.png
But note that food prices are still increasing year over year. In other words, from a CPI perspective, the drop in energy prices is a big reason for the big overall year over year drop.

Let's go a bit farther back in the product life cycle:
http://1.bp.blogspot.com/_4jIlyJ10uJU/SXSiZMDqPrI/AAAAAAAABB4/XTojpmbXAAo/s400/PP+Commodities.png

Above is the PPI for all commodities. Notice this has taken a nose dive. But:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SXSmP0pvujI/AAAAAAAABCQ/-B08KZVpYjo/s400/PP+less+food+and+energy.png

Core producer prices prices still have a healthy year over year price gain. That's because

http://1.bp.blogspot.com/_4jIlyJ10uJU/SXSmc1tXNRI/AAAAAAAABCY/yfTD8A4vzRA/s400/PP+Commodities.png
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Producer prices for all commodities are dropping like a stone.

In other words, assuming the commodity prices were in a trading bubble, does that mean this isn't really deflation but instead a commodity based correction?

Posted by bonddad at 1/19/2009 11:30:00 AM

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hefeiddd 发表于 2009-3-25 15:32

Posted by bonddad at 1/19/2009 11:30:00 AM

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Pay Cuts and Freezes Increasing
From the WSJ:

In addition to layoffs, companies are increasingly trimming wages, a tactic economic historians said hasn't been wielded broadly since the Great Depression.

Heavy equipment maker Caterpillar Inc. announced in late December it would cut executive pay by half, and many salaried employees would see cuts of as much as 15%. Hutchinson Technology, a Hutchinson, Minn., maker of disk drive components, cut salaries 5% for employees who remained after a round of layoffs concluded this week. In Galveston, Texas, police and firefighters unions agreed to a 3% pay cut as the city grapples with the recession and the aftermath of Hurricane Ike.

Saks Inc. plans to eliminate 1,100 jobs, or 9% of its work force, and slash its capital expenditures. In addition, the luxury retailer will eliminate 2009 merit-based wage increases. Saks will also suspend matching contributions for 401(k) retirement accounts for at least a year and suspend benefit accruals for the few remaining employees in its pension plan.

And consider these points from the latest Beige Book:

(Boston) Most contacted firms anticipate cutting employment and capital spending in 2009. Those reporting on intended pay increases for 2009 say they will be below those in recent years. Companies typically are planning raises that are 0.5 percentage point to 1.5 percentage points lower than in 2008, but some are enacting partial or across-the-board pay freezes.

(Chicago) Wage pressures were limited. However, several contacts noted that firms were choosing to freeze or cut pay instead of laying off workers to lower labor costs. In addition, contacts also reported that firms were reducing or eliminating elements of non-wage compensation.

(San Francisco) Contacts reported little or no upward pressure on wages. With unemployment rising in most areas, companies have seen an increase in the quantity and quality of applicants for open positions, which limits upward wage pressures. Some contacts also reported that they are implementing or considering wage freezes, which employees appear increasingly willing to accept. Wage gains continued to slow for worker groups that previously had seen rapid growth, notably those skilled in the use of advanced technologies.

This is an interesting development. One of my pet theories (totally undocumented) is that over the last 30+ years we've seen companies pull back on hiring until literally the last possible moment when they need employees. That means that each new employee is that much more important to the company. That makes firing workers more difficult because they are that much more important to the overall scheme of the company.

Again, this is a pet theory based on nothing more than intuition. However, it would explain why some companies are asking employees to take wage cuts and salary freezes.

Posted by bonddad at 1/19/2009 09:30:00 AM

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Labels: employment

Market Monday's
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Note this chart uses EMAs. These moving averages place more emphasis on the more recent prices.

-- Prices have dropped below the lower trend line of the upward sloping channel

-- Volume has been increasing as stocks have fallen

-- All the EMAs are moving lower

-- The shorter EMAs are below the longer EMAs

-- Prices are below all the EMAs

http://2.bp.blogspot.com/_4jIlyJ10uJU/SXR2IkTZMeI/AAAAAAAABBA/QaBbofA25A8/s400/Chart+of+SPYmacd.gif

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-- Note the MACD is giving a sell signal.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SXR2TiuuH-I/AAAAAAAABBI/-VxdF_4RN7A/s400/Chart+of+SPY10.gif

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-- The daily 5 minute chart is showing a possible reversal. Prices crossed over the 200 minute SMA, fell back and then moved higher again. Also note that on Friday volume increased as prices moved higher -- a healthy sign.

The issue that is really concerning me right now is the MACD's position. It is possible for the MACD to remain at high levels and essentially bounce at those levels for some time. But also remember we're at the beginning of earnings season which franklyh looks terrible right now.

Posted by bonddad at 1/19/2009 06:43:00 AM

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hefeiddd 发表于 2009-3-25 15:33

Labels: recovery plan

Forex Fridays
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Notice the following on the weekly chart

-- In the second half of last year prices rallied to technical resistance levels established in 2006, but then ran into selling pressure

-- Prices fell to just below the 20 week SMA and have since rallied to just below the 50 week SMA

-- The RSI is neutral and

-- The MACD looks peaked out

http://4.bp.blogspot.com/_4jIlyJ10uJU/SXB9Lvp7l1I/AAAAAAAABAI/nXHIJ9hQ2fE/s400/dollar+d.png

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Notice the following on the daily chart

-- Prices fell in December but have since risen

-- Price have moved through all three SMAs, although they are just above the 50 day SMA

-- The RSI is rising

-- The MACD is rising

Posted by bonddad at 1/16/2009 06:27:00 AM

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Thursday, January 15, 2009Today's Markets
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Notice there is technical support right around the 84 level. Prices moved through that level today, but bounced back. Also note the increasing volume since the end of December -- the volume was increasing as prices moved lower.

Also note there is technical support at/around the 82 level.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SW-soUfbDxI/AAAAAAAAA_w/bgHXvzFU0OU/s400/Chart+of+SPYd.gif

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Prices dropped hard in the morning, then rallied into the 20 minute SMA. Prices moved to the 81 level and then rallied hard. Note the increased volume on the rally. Prices moved just above the 200 minute SMA and then retreated, but rallied again into the 200 day SMA.

This is what a reversal looks like. Note the intra-day turnaround, the increasing volume on the rally and then the close on higher volume. That's a big move.

Posted by bonddad at 1/15/2009 04:30:00 PM

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Bernanke's Speech
Bernanke made a speech on Tuesday to the London School of Economics. The opening line is especially important.

However, although the subprime debacle triggered the crisis, the developments in the U.S. mortgage market were only one aspect of a much larger and more encompassing credit boom whose impact transcended the mortgage market to affect many other forms of credit. Aspects of this broader credit boom included widespread declines in underwriting standards, breakdowns in lending oversight by investors and rating agencies, increased reliance on complex and opaque credit instruments that proved fragile under stress, and unusually low compensation for risk-taking.

This is an incredibly important point that needs further discussion.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SW933h-3QxI/AAAAAAAAA_Q/-xbnZGnU_vs/s400/income.JPG

Above is a chart or real (inflation adjusted) median household income from the Census Bureau. Note that during this expansion income dropped and then increased but is not higher now than at the start of this expansion. Also note that while there has been an increase over the last 30 years, the increase is (roughly) $8000. In other word, it's not that big an increase.

At the same time, here is a chart of real (inflation adjusted) GDP

http://3.bp.blogspot.com/_4jIlyJ10uJU/SW943uwnwDI/AAAAAAAAA_Y/WCX_W-Q0D9A/s400/real+GDP.png

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Notice that real (inflation adjusted) GDP more than doubled for the years 1980 onward. That leans an interesting question: where did the money for consumer purchases come from to expand GDP?

http://4.bp.blogspot.com/_4jIlyJ10uJU/SW95sFa6Z-I/AAAAAAAAA_g/kkiNLEO1kuI/s400/CMDEBT_Max_630_378.png

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Household debt. The bottom line is people are spending money they don't own. But at the same time, it's understandable. While their family income isn't increasing with the nation's product, people in general want more stuff. So they borrow money to get it.

What we're going through right now is the great unwinding of the giant, 30 year debt acquisition binge we've been going through for the last 30 years. And it isn't pretty.

Posted by bonddad at 1/15/2009 01:30:00 PM

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Beige Book Paints A Dim Picture
The Fed Released the Beige Book a yesterday. I paints a very grim picture of the economy. Here are some highlights:

District reports indicate that retail sales were generally weak, particularly during the holiday season. A majority of Districts noted deep discounting during the holiday sales season. Vehicle sales were also weak or down overall in the Districts reporting on them. Manufacturing activity decreased in most Districts. Declines were noted in a wide range of manufacturing industries, with a few exceptions. Services sector activity generally declined across the Districts, with exceptions in some sectors of the Boston, Richmond, and Chicago Districts. Additionally, several Districts noted weaker conditions in transportation services and slow or decreased demand in tourism activity. Conditions in residential real estate markets continued to worsen in most Districts. Reduced home sales, lower prices, or decreases in construction activity were noted in many Districts. Commercial real estate markets deteriorated in most Districts, with weakening construction noted in several Districts. Overall lending activity declined in several Districts, with tight or tightening lending conditions reported in most Districts. Credit quality remained a concern in several Districts. Agricultural conditions were mixed in response to varying weather conditions across the Districts. Mining and energy production activity generally declined since the previous report.

Read the whole report -- but only if you have a strong stomach.

Posted by bonddad at 1/15/2009 11:30:00 AM

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We're Nowhere Near a Bottom in Housing
From the WSJ:

More than 2.3 million American homeowners faced foreclosure proceedings last year, an 81% increase from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices. Nationwide, more than 860,000 properties were actually repossessed by lenders, more than double the 2007 level, according to RealtyTrac, a foreclosure listing firm based in Irvine, Calif., which compiled the figures.
Moody's Economy.com, a research firm, predicts the number of homes lost to foreclosure is likely to rise by another 18% this year before tapering off slightly through 2011.

There is a bit of good news here:

Foreclosure activity did slow in the fourth quarter overall, declining 4 percent from the third quarter, but jumped nearly 40 percent from the fourth quarter of 2007.

And foreclosure activity last year was up 225 percent from 2006, the year home prices began a deep slump that prevented many homeowners from selling or refinancing.

But....

"State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth-quarter numbers overall, but that effect appears to have worn off by December," Saccacio said. "The recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners."

The bottom line is the economy is creating a ton of stress, which is leading to this problem. And the real problem is underwater mortgages -- mortgages that are worth more than the house. So long as that problem persists the housing market will be in trouble.

Posted by bonddad at 1/15/2009 09:00:00 AM

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Labels: housing

Thursday Oil Market Round-Up
http://3.bp.blogspot.com/_4jIlyJ10uJU/SW8sMv1Tg2I/AAAAAAAAA-4/64hxFKAEwuw/s400/oil+weekly.png

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Notice the following on the weekly chart

-- Prices fell hard after July, but appear to be consolidating

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

-- The RSI is oversold

-- The MACD appears to be turning

http://1.bp.blogspot.com/_4jIlyJ10uJU/SW8sMWlaAlI/AAAAAAAAA-w/pAkBH94Wypk/s400/oil+daily.png
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Notice the following on the daily chart

-- Prices are above the 10 and 20 day SMA

-- The 10 day SMA has crossed above the 20 day SMA

-- From the end of December to early January, prices rallied to just below the 50 day SMA, but backed off

-- The MACD has been rising for the last two and a half months

-- The RSI is neutral

Bottom line: The weekly chart says this market is done selling and maybe wants to rally. The daily chart says maybe.

But consider these two charts from the latest This Week in Petroleum:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SW8t3IMa4nI/AAAAAAAAA_A/aaajgbjGA0c/s400/crstuss.gifhttp://2.bp.blogspot.com/_4jIlyJ10uJU/SW8t3VDD9DI/AAAAAAAAA_I/IssyYthEfqc/s400/gtstuss.gif
Oil and gas stocks are increasing -- and oil stocks are at the top of a historical range. This indicates there is less demand for oil from the market right now.

Posted by bonddad at 1/15/2009 06:29:00 AM

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Wednesday, January 14, 2009Today's Markets
http://1.bp.blogspot.com/_4jIlyJ10uJU/SW5iJoliibI/AAAAAAAAA-o/J4EIVUfX3Eg/s400/Chart+of+SPY6.gif
Click for a larger image

There are some incredibly important points on this graph

1.) Note that 92 (line 1) provided incredibly strong resistance to an upside move. As prices moved higher, the average volume also increased. Granted this was weaker volume because of end of the year trading, but an increase in volume should not be overlooked. But -- prices fell.

2.) Since being rebuffed at 92 prices have continued to move lower on increasing volume. Now prices are approaching line 2, another important technical level

3.) Prices have moved below all the SMAs

4.) The only good thing about this chart is the SMAs are bunched together in a tight range.

Posted by bonddad at 1/14/2009 04:07:00 PM

2 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: market analysis

hefeiddd 发表于 2009-3-25 15:35

Note some of the data points: the loss is twice as much as estimated ... this is the first year over year loss since 1992 when the Census Bureau started keeping records ... November's decline was revised lower ... this is the longest streak of declines .... etc.. There is not once piece of good news in the release.

Let's take a closer look at the retail sector's charts. The charts below are from Prophet.net

http://4.bp.blogspot.com/_4jIlyJ10uJU/SW4ESWQSDTI/AAAAAAAAA-Y/MNPMA-vMvRE/s400/retail+sector.gif

Click for a larger image

Notice the following on the retail sector

-- The index was in a rally until the last quarter of 2007

-- Prices formed a double top in 2006 and 2007

-- Prices moved through key technical support in the last quarter of 2008

-- The 10 and 20 week SMAs are both moving lower

-- The 50 day SMA has a slightly negative trend to it

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

http://2.bp.blogspot.com/_4jIlyJ10uJU/SW4ES_qKMcI/AAAAAAAAA-g/tp23hDr7Cqo/s400/specialty+retail.gif

Click for a larger image

Notice the following on the specialty retail chart

-- Prices were in a rally until the 3Q 2007

-- Prices have continually moved through key technical levels since breaking their rally

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

These are both incredibly bearish charts
Posted by bonddad at 1/14/2009 09:16:00 AM

2 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Wednesday Commodities Round-Up
http://3.bp.blogspot.com/_4jIlyJ10uJU/SW3gZxqsc3I/AAAAAAAAA-A/zthMRsiW8tg/s400/ad+week.png
Click for a larger image

Agricultural prices were in a strong rally from 2006 - 2008. Prices formed a double top in the first half of 2008, and then dropped hard in the third quarter. Now the upward trend line that started in 2006 is providing upside resistance to prices. Also note the following:

-- The SMAs are in a bearish alignment with the shorter SMAs below the longer SMAs, but...

-- The 10 day SMA is now moving higher

-- Prices found strong resistance at the 20 week SMA

-- The weekly SMA has been falling for the entire year as has the MACD, but

-- The MACD may be bottoming right now

http://1.bp.blogspot.com/_4jIlyJ10uJU/SW3httmrTtI/AAAAAAAAA-I/GFiFV2h-3vo/s400/ag+daily.png

Click for a larger image

Notice the following on the daily chart

-- The SMAs are bullishly aligned with the shorter above the longer, but

-- The 10 and 20 day SMAs are both moving sideways

-- All of the SMAs are in a tight price range

-- Prices fell through the 10 and 20 day SMA on Monday

-- The MACD has been rising for the last two months, but

-- the RSI dropped off since the first of the year

--

Posted by bonddad at 1/14/2009 06:53:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Tuesday, January 13, 2009Today's Markets
http://2.bp.blogspot.com/_4jIlyJ10uJU/SW0T7i8wiuI/AAAAAAAAA94/jqvfsfvCI-M/s400/Chart+of+SPY.gif

Click for a larger image

Notice the following on the daily chart

-- The SMAs are bunched together. The 10, 20 and 50 day SMA are less than a point and a half away from each other

-- Prices are below all the SMAs

-- Prices have broken through the uptrend started in late November

-- Prices are below the downward sloping trend line

-- Volume has been increasing as prices have been dropping

Posted by bonddad at 1/13/2009 04:18:00 PM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Why More TARP Money is Needed
The TARP program has been extremely controversial. However, regardless of which side of the controversy you some down on, consider the following charts before you make your final decision. All of these charts are from the FDIC's recent Quarterly Banking Profile:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWzODjlMwoI/AAAAAAAAA9Y/8AKbYCNeO48/s400/chart2.gif

The percent of FDIC insured institutions that were unprofitable was at its highest level in the third quarter.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWzODjXi-NI/AAAAAAAAA9g/oiG4N**TCg/s400/chart3.gif

The biggest issue for banks is the loan loss provisions -- meaning the amount of money banks set aside for losses. These numbers are large -- and they are increasing:

The industry reported year-over-year growth in net charge-offs for the seventh consecutive quarter. Net charge-offs totaled $27.9 billion in the quarter, an increase of $17.0 billion (156.4 percent) from a year earlier. Two-thirds of the increase in charge-offs consisted of loans secured by real estate. Charge-offs of closed-end first and second lien mortgage loans were $4.6 billion (423 percent) higher than in the third quarter of 2007, while charged-off real estate construction and development (C&D) loans were up by $3.9 billion (744 percent). Charge-offs of home equity lines of credit were $2.1 billion (306 percent) higher. Charge-offs of loans to commercial and industrial (C&I) borrowers increased by $2.3 billion (139 percent), credit card loan charge-offs rose by $1.5 billion (37.4 percent), and charge-offs of other loans to individuals were $1.7 billion (76.4 percent) higher. The quarterly net charge-off rate in the third quarter was 1.42 percent, up from 1.32 percent in the second quarter and 0.57 percent in the third quarter of 2007. This is the highest quarterly net charge-off rate for the industry since 1991. The failure of Washington Mutual on September 25 meant that a significant amount of charge-off activity was not reflected in the reported industry totals for the quarter.In addition, http://4.bp.blogspot.com/_4jIlyJ10uJU/SWzOD3x-pgI/AAAAAAAAA9o/sImKzCSA1-g/s400/chart5.gif
The amount of troubled loans is still very high. And finally:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWzOD62H9gI/AAAAAAAAA9w/QjGlZ9jXRd8/s400/chart8.gif

Posted by bonddad at 1/13/2009 01:30:00 PM

1 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Bonddad on the Economy
I am a member of a Facebook group called Speaking of Taxes. I gave a presentation to the group last week. Here is a link. It lasts about half an hour.

Posted by bonddad at 1/13/2009 11:15:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Treasury Tuesdays
http://4.bp.blogspot.com/_4jIlyJ10uJU/SWytJIBtjyI/AAAAAAAAA84/0366cW4Mvag/s400/Chart+of+IEF1.gif

Click for a larger image

Notice the 7-10 year part of the curve is still very high. And....

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWytZTgdugI/AAAAAAAAA9A/lB6scm9HfBo/s400/Chart+of+IEF10.gif

Prices are really high relative to the last 5 years.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWythaGXgxI/AAAAAAAAA9I/smvfy3UVqhA/s400/Chart+of+IEF.gif

Click for a larger image

Let's take a closer look at the three month chart.

-- The 20, 50 and 200 day SMA are all moving higher

-- The 10 day SMA has moved lower and crossed below the 20 day SMA

-- Prices have run into upside resistance at the 20 day SMA

-- Prices are still above the 38.2% Fibonacci retracement level from the rally that started in early November

There is a bid in the Treasury market caused by concerns about stock earnings. Considering we're at the beginning of earnings season and that earnings season is probably going to be pretty bad I would think this bid will be in the market going forward for a bit.

Posted by bonddad at 1/13/2009 08:58:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Today's Market
Actually, it's yesterday's market. And this is important so I'm going to keep this up and run the Treasury market charts in a few hours.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWyNsPGZVSI/AAAAAAAAA8w/nx3e1Jk04-0/s400/spy.png

Click for a larger image

Some very important technical developments occurred yesterday.

1.) Since the end of November, the SPYs have been in an upward sloping trend channel. Yesterday prices fell through the lower support line of that channel.

2.) Starting in early October, there was a downward sloping trend line that acted like the top of a triangle consolidation pattern. Prices broke through this trend line a little over a week ago. Prices broke back through this line yesterday.

3.) While the RSI has been trending higher for the last few months, it is now at a technically important level

4.) Prices have fallen through all the SMAs over the last few trading days.

It looks as though prices want to test the lower 80s levels again. Considering Alcoa's announcement yesterday to kick off the earnings season along with the announcement that banks will announce their first quarterly loss since 1990 a retesting of lows makes sense right now.

Posted by bonddad at 1/13/2009 06:47:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: market analysis

Monday, January 12, 2009Today's Market
I am flying back to Houston today, so when the market closes I will be 30,000 feet above the ground. I will post this in the morning. See you then.

Posted by bonddad at 1/12/2009 05:00:00 PM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

hefeiddd 发表于 2009-3-25 15:39

Note some of the data points: the loss is twice as much as estimated ... this is the first year over year loss since 1992 when the Census Bureau started keeping records ... November's decline was revised lower ... this is the longest streak of declines .... etc.. There is not once piece of good news in the release.

Let's take a closer look at the retail sector's charts. The charts below are from Prophet.net

http://4.bp.blogspot.com/_4jIlyJ10uJU/SW4ESWQSDTI/AAAAAAAAA-Y/MNPMA-vMvRE/s400/retail+sector.gif

Click for a larger image

Notice the following on the retail sector

-- The index was in a rally until the last quarter of 2007

-- Prices formed a double top in 2006 and 2007

-- Prices moved through key technical support in the last quarter of 2008

-- The 10 and 20 week SMAs are both moving lower

-- The 50 day SMA has a slightly negative trend to it

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

http://2.bp.blogspot.com/_4jIlyJ10uJU/SW4ES_qKMcI/AAAAAAAAA-g/tp23hDr7Cqo/s400/specialty+retail.gif

Click for a larger image

Notice the following on the specialty retail chart

-- Prices were in a rally until the 3Q 2007

-- Prices have continually moved through key technical levels since breaking their rally

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

These are both incredibly bearish charts
Posted by bonddad at 1/14/2009 09:16:00 AM

2 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Wednesday Commodities Round-Up
http://3.bp.blogspot.com/_4jIlyJ10uJU/SW3gZxqsc3I/AAAAAAAAA-A/zthMRsiW8tg/s400/ad+week.png
Click for a larger image

Agricultural prices were in a strong rally from 2006 - 2008. Prices formed a double top in the first half of 2008, and then dropped hard in the third quarter. Now the upward trend line that started in 2006 is providing upside resistance to prices. Also note the following:

-- The SMAs are in a bearish alignment with the shorter SMAs below the longer SMAs, but...

-- The 10 day SMA is now moving higher

-- Prices found strong resistance at the 20 week SMA

-- The weekly SMA has been falling for the entire year as has the MACD, but

-- The MACD may be bottoming right now

http://1.bp.blogspot.com/_4jIlyJ10uJU/SW3httmrTtI/AAAAAAAAA-I/GFiFV2h-3vo/s400/ag+daily.png

Click for a larger image

Notice the following on the daily chart

-- The SMAs are bullishly aligned with the shorter above the longer, but

-- The 10 and 20 day SMAs are both moving sideways

-- All of the SMAs are in a tight price range

-- Prices fell through the 10 and 20 day SMA on Monday

-- The MACD has been rising for the last two months, but

-- the RSI dropped off since the first of the year

--

Posted by bonddad at 1/14/2009 06:53:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Tuesday, January 13, 2009Today's Markets
http://2.bp.blogspot.com/_4jIlyJ10uJU/SW0T7i8wiuI/AAAAAAAAA94/jqvfsfvCI-M/s400/Chart+of+SPY.gif

Click for a larger image

Notice the following on the daily chart

-- The SMAs are bunched together. The 10, 20 and 50 day SMA are less than a point and a half away from each other

-- Prices are below all the SMAs

-- Prices have broken through the uptrend started in late November

-- Prices are below the downward sloping trend line

-- Volume has been increasing as prices have been dropping

Posted by bonddad at 1/13/2009 04:18:00 PM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Why More TARP Money is Needed
The TARP program has been extremely controversial. However, regardless of which side of the controversy you some down on, consider the following charts before you make your final decision. All of these charts are from the FDIC's
http://1.bp.blogspot.com/_4jIlyJ10uJU/SWzODjlMwoI/AAAAAAAAA9Y/8AKbYCNeO48/s400/chart2.gif

The percent of FDIC insured institutions that were unprofitable was at its highest level in the third quarter.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWzODjXi-NI/AAAAAAAAA9g/oiG4N**TCg/s400/chart3.gif

The industry reported year-over-year growth in net charge-offs for the seventh consecutive quarter. Net charge-offs totaled $27.9 billion in the quarter, an increase of $17.0 billion (156.4 percent) from a year earlier. Two-thirds of the increase in charge-offs consisted of loans secured by real estate. Charge-offs of closed-end first and second lien mortgage loans were $4.6 billion (423 percent) higher than in the third quarter of 2007, while charged-off real estate construction and development (C&D) loans were up by $3.9 billion (744 percent). Charge-offs of home equity lines of credit were $2.1 billion (306 percent) higher. Charge-offs of loans to commercial and industrial (C&I) borrowers increased by $2.3 billion (139 percent), credit card loan charge-offs rose by $1.5 billion (37.4 percent), and charge-offs of other loans to individuals were $1.7 billion (76.4 percent) higher. The quarterly net charge-off rate in the third quarter was 1.42 percent, up from 1.32 percent in the second quarter and 0.57 percent in the third quarter of 2007. This is the highest quarterly net charge-off rate for the industry since 1991. The failure of Washington Mutual on September 25 meant that a significant amount of charge-off activity was not reflected in the reported industry totals for the quarter.In addition, http://4.bp.blogspot.com/_4jIlyJ10uJU/SWzOD3x-pgI/AAAAAAAAA9o/sImKzCSA1-g/s400/chart5.gif
The amount of troubled loans is still very high. And finally:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWzOD62H9gI/AAAAAAAAA9w/QjGlZ9jXRd8/s400/chart8.gif

Posted by bonddad at 1/13/2009 01:30:00 PM

1 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Bonddad on the Economy
I am a member of a Facebook group called Speaking of Taxes. I gave a presentation to the group last week. Here is a link. It lasts about half an hour.

Posted by bonddad at 1/13/2009 11:15:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Treasury Tuesdays
http://4.bp.blogspot.com/_4jIlyJ10uJU/SWytJIBtjyI/AAAAAAAAA84/0366cW4Mvag/s400/Chart+of+IEF1.gif

Click for a larger image

Notice the 7-10 year part of the curve is still very high. And....

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWytZTgdugI/AAAAAAAAA9A/lB6scm9HfBo/s400/Chart+of+IEF10.gif

Prices are really high relative to the last 5 years.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWythaGXgxI/AAAAAAAAA9I/smvfy3UVqhA/s400/Chart+of+IEF.gif

Click for a larger image

Let's take a closer look at the three month chart.

-- The 20, 50 and 200 day SMA are all moving higher

-- The 10 day SMA has moved lower and crossed below the 20 day SMA

-- Prices have run into upside resistance at the 20 day SMA

-- Prices are still above the 38.2% Fibonacci retracement level from the rally that started in early November

There is a bid in the Treasury market caused by concerns about stock earnings. Considering we're at the beginning of earnings season and that earnings season is probably going to be pretty bad I would think this bid will be in the market going forward for a bit.

Posted by bonddad at 1/13/2009 08:58:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Today's Market
Actually, it's yesterday's market. And this is important so I'm going to keep this up and run the Treasury market charts in a few hours.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWyNsPGZVSI/AAAAAAAAA8w/nx3e1Jk04-0/s400/spy.png

Click for a larger image

Some very important technical developments occurred yesterday.

1.) Since the end of November, the SPYs have been in an upward sloping trend channel. Yesterday prices fell through the lower support line of that channel.

2.) Starting in early October, there was a downward sloping trend line that acted like the top of a triangle consolidation pattern. Prices broke through this trend line a little over a week ago. Prices broke back through this line yesterday.

3.) While the RSI has been trending higher for the last few months, it is now at a technically important level

4.) Prices have fallen through all the SMAs over the last few trading days.

It looks as though prices want to test the lower 80s levels retesting of lows makes sense right now.

Posted by bonddad at 1/13/2009 06:47:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: market analysis

hefeiddd 发表于 2009-3-25 15:40

hefeiddd 发表于 2009-3-25 15:41

hefeiddd 发表于 2009-3-25 15:42

Notice the following on the specialty retail chart

-- Prices were in a rally until the 3Q 2007

-- Prices have continually moved through key technical levels since breaking their rally

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

These are both incredibly bearish charts
Posted by bonddad at 1/14/2009 09:16:00 AM

2 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Wednesday Commodities Round-Up
http://3.bp.blogspot.com/_4jIlyJ10uJU/SW3gZxqsc3I/AAAAAAAAA-A/zthMRsiW8tg/s400/ad+week.png
Click for a larger image

Agricultural prices were in a strong rally from 2006 - 2008. Prices formed a double top in the first half of 2008, and then dropped hard in the third quarter. Now the upward trend line that started in 2006 is providing upside resistance to prices. Also note the following:

-- The SMAs are in a bearish alignment with the shorter SMAs below the longer SMAs, but...

-- The 10 day SMA is now moving higher

-- Prices found strong resistance at the 20 week SMA

-- The weekly SMA has been falling for the entire year as has the MACD, but

-- The MACD may be bottoming right now

http://1.bp.blogspot.com/_4jIlyJ10uJU/SW3httmrTtI/AAAAAAAAA-I/GFiFV2h-3vo/s400/ag+daily.png

Click for a larger image

Notice the following on the daily chart

-- The SMAs are bullishly aligned with the shorter above the longer, but

-- The 10 and 20 day SMAs are both moving sideways

-- All of the SMAs are in a tight price range

-- Prices fell through the 10 and 20 day SMA on Monday

-- The MACD has been rising for the last two months, but

-- the RSI dropped off since the first of the year

--

Posted by bonddad at 1/14/2009 06:53:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Tuesday, January 13, 2009Today's Markets
http://2.bp.blogspot.com/_4jIlyJ10uJU/SW0T7i8wiuI/AAAAAAAAA94/jqvfsfvCI-M/s400/Chart+of+SPY.gif

Click for a larger image

Notice the following on the daily chart

-- The SMAs are bunched together. The 10, 20 and 50 day SMA are less than a point and a half away from each other

-- Prices are below all the SMAs

-- Prices have broken through the uptrend started in late November

-- Prices are below the downward sloping trend line

-- Volume has been increasing as prices have been dropping

Posted by bonddad at 1/13/2009 04:18:00 PM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Why More TARP Money is Needed
The TARP program has been extremely controversial. However, regardless of which side of the controversy you some down on, consider the following charts before you make your final decision. All of these charts are from the FDIC's recent Quarterly Banking Profile:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWzODjlMwoI/AAAAAAAAA9Y/8AKbYCNeO48/s400/chart2.gif

The percent of FDIC insured institutions that were unprofitable was at its highest level in the third quarter.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWzODjXi-NI/AAAAAAAAA9g/oiG4N**TCg/s400/chart3.gif

The biggest issue for banks is the loan loss provisions -- meaning the amount of money banks set aside for losses. These numbers are large -- and they are increasing:

The industry reported year-over-year growth in net charge-offs for the seventh consecutive quarter. Net charge-offs totaled $27.9 billion in the quarter, an increase of $17.0 billion (156.4 percent) from a year earlier. Two-thirds of the increase in charge-offs consisted of loans secured by real estate. Charge-offs of closed-end first and second lien mortgage loans were $4.6 billion (423 percent) higher than in the third quarter of 2007, while charged-off real estate construction and development (C&D) loans were up by $3.9 billion (744 percent). Charge-offs of home equity lines of credit were $2.1 billion (306 percent) higher. Charge-offs of loans to commercial and industrial (C&I) borrowers increased by $2.3 billion (139 percent), credit card loan charge-offs rose by $1.5 billion (37.4 percent), and charge-offs of other loans to individuals were $1.7 billion (76.4 percent) higher. The quarterly net charge-off rate in the third quarter was 1.42 percent, up from 1.32 percent in the second quarter and 0.57 percent in the third quarter of 2007. This is the highest quarterly net charge-off rate for the industry since 1991. The failure of Washington Mutual on September 25 meant that a significant amount of charge-off activity was not reflected in the reported industry totals for the quarter.In addition, http://4.bp.blogspot.com/_4jIlyJ10uJU/SWzOD3x-pgI/AAAAAAAAA9o/sImKzCSA1-g/s400/chart5.gif
The amount of troubled loans is still very high. And finally:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWzOD62H9gI/AAAAAAAAA9w/QjGlZ9jXRd8/s400/chart8.gif

Posted by bonddad at 1/13/2009 01:30:00 PM

1 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Bonddad on the Economy
I am a member of a Facebook group called Speaking of Taxes. I gave a presentation to the group last week. Here is a link. It lasts about half an hour.

Posted by bonddad at 1/13/2009 11:15:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Treasury Tuesdays
http://4.bp.blogspot.com/_4jIlyJ10uJU/SWytJIBtjyI/AAAAAAAAA84/0366cW4Mvag/s400/Chart+of+IEF1.gif

Click for a larger image

Notice the 7-10 year part of the curve is still very high. And....

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWytZTgdugI/AAAAAAAAA9A/lB6scm9HfBo/s400/Chart+of+IEF10.gif

Prices are really high relative to the last 5 years.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWythaGXgxI/AAAAAAAAA9I/smvfy3UVqhA/s400/Chart+of+IEF.gif

Click for a larger image

Let's take a closer look at the three month chart.

-- The 20, 50 and 200 day SMA are all moving higher

-- The 10 day SMA has moved lower and crossed below the 20 day SMA

-- Prices have run into upside resistance at the 20 day SMA

-- Prices are still above the 38.2% Fibonacci retracement level from the rally that started in early November

There is a bid in the Treasury market caused by concerns about stock earnings. Considering we're at the beginning of earnings season and that earnings season is probably going to be pretty bad I would think this bid will be in the market going forward for a bit.

Posted by bonddad at 1/13/2009 08:58:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Today's Market
Actually, it's yesterday's market. And this is important so I'm going to keep this up and run the Treasury market charts in a few hours.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWyNsPGZVSI/AAAAAAAAA8w/nx3e1Jk04-0/s400/spy.png

Click for a larger image

Some very important technical developments occurred yesterday.

1.) Since the end of November, the SPYs have been in an upward sloping trend channel. Yesterday prices fell through the lower support line of that channel.

2.) Starting in early October, there was a downward sloping trend line that acted like the top of a triangle consolidation pattern. Prices broke through this trend line a little over a week ago. Prices broke back through this line yesterday.

3.) While the RSI has been trending higher for the last few months, it is now at a technically important level

4.) Prices have fallen through all the SMAs over the last few trading days.

It looks as though prices want to test the lower 80s levels again. Considering Alcoa's announcement yesterday to kick off the earnings season along with the announcement that banks will announce their first quarterly loss since 1990 a retesting of lows makes sense right now.

Posted by bonddad at 1/13/2009 06:47:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: market analysis

hefeiddd 发表于 2009-3-25 15:43

http://4.bp.blogspot.com/_4jIlyJ10uJU/SW4ESWQSDTI/AAAAAAAAA-Y/MNPMA-vMvRE/s400/retail+sector.gif

http://2.bp.blogspot.com/_4jIlyJ10uJU/SW4ES_qKMcI/AAAAAAAAA-g/tp23hDr7Cqo/s400/specialty+retail.gif

hefeiddd 发表于 2009-3-25 15:44

Labels: housing

Market Monday's
http://1.bp.blogspot.com/_4jIlyJ10uJU/SWnlNpiXVhI/AAAAAAAAA7Y/WcyfIQOKz2c/s400/spy+week.png

Click for a larger image

Notice the following on the weekly chart:

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below the 20 and 50 day SMA, but have risen above the 10 day SMA and are currently using the 10 day SMA as technical support

-- The RSI is rising

-- The MACD is turning around

-- The OBV is terrible

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWnlv_aa7bI/AAAAAAAAA7g/NSKiQG1C1_I/s400/spy+day.png

Click for a larger image

Notice the following on the daily chart

-- Prices and the SMA are bundled together in a tight range, indicating indecision

-- The 10 day SMA is rising through the other SMAs

-- The MACD is increasing

-- The RSI is increasing

-- The OBV is neutral

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWnmUJO5V9I/AAAAAAAAA7o/1JBupSGuwG8/s400/spy+pf.png

Click for a larger image

Notice the triple top break-out failed miserably. That is not a good sign for the future. In addition, look at the lack of volume in the second half of the chart relative to the first half of the chart. There is just not a lot of excitement.

Posted by bonddad at 1/12/2009 05:00:00 AM

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Labels: market analysis

Friday, January 9, 2009Weekend Weimer and Beagle
For reasons unknown to me as of this writing, I am unable to upload pictures of the kids to the Google blog account. And that really bugs me because I've got some great photos. My $i$ter in law made some incredibly cute blankets for the kids -- she even put a "Bonddog" in the corner of each blanket with each dogs name. So basically, I'm whetting your appetite for these pictures as soon as I can figure out why they're not uploading.

So until Monday, have a good and safe weekend.

Posted by bonddad at 1/09/2009 02:30:00 PM

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Second Half Recovery?
From CNBC

"As a result, this recession looks to be longer and more severe than originally forecast. Still, there are indications that the second half of the year will show improvement," he said.

Lower energy prices and concerted monetary and fiscal policy efforts should set the stage for a recovery later in 2009, he said.

"Energy prices have fallen dramatically, making it much less expensive to drive cars or heat homes," he said, "Fiscal stimulus packages being discussed in Washington could provide an economic boost. And monetary policy is also contributing," he added.

The Federal Reserve last month cut its benchmark fed funds rate to a range of zero to 0.25 percent after an aggressive rate cutting cycle and has rolled out a raft of unprecedented liquidity programs to support key credit markets in its effort to battle the worst financial crisis in 80 years.

"While all these developments will take time to fully impact the economy, they should be sowing the seeds of a recovery later in 2009," he said.

A lot of us are banking on the fiscal program to really help ameliorate the damage in the second half of next year. The Fed president also makes a strong case about lower energy prices having a net positive effect. Then there is the issue of monetary policy. In general it takes 12-18 months for interest rates to move through the economy. Assuming we are still in a time when that is an appropriate analysis (and we may not be), the impact of lower rates will be hitting the economy all next year. Assuming all of this to be accurate and the second half of next year will be OK but not great. This is the scenario that I think is most likely, but there are a lot of ifs that have to happen for that work.

Posted by bonddad at 1/09/2009 01:00:00 PM

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Job Losses, Well, Suck
From the BLS:

Nonfarm payroll employment declined sharply in December, and the unemployment rate rose from 6.8 to 7.2 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment fell by 524,000 over the month and by 1.9 million over the last 4 months of 2008. In December, job losses were large and widespread across most major industry sectors.

In December, the number of unemployed persons increased by 632,000 to 11.1 million and the unemployment rate rose to 7.2 percent. Since the start of the recession in December 2007, the number of unemployed persons has grown by 3.6 million, and the unemployment rate has risen by 2.3 percentage points. (See table A-1.)

About 1.9 million persons (not seasonally adjusted) were marginally attached to the
labor force in December, 564,000 more than 12 months earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 642,000 discouraged workers in December, up by 279,000 from a year earlier. Discouraged workers are persons not currently looking for work specifically because they believe no jobs are available for them. The other 1.3 million persons marginally attached to the labor force in December had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-13.)

There is no good news in this report; it is uniformly bad across all sectors and areas.

In addition, consider this executive summary from a new BLS report:

Another important indicator of labor market difficulty, the number of persons working part time for economic reasons, has suggested a softening in the demand for labor since about mid-2006. Sometimes referred to as involuntary part-time workers and viewed as underemployed, these individuals wanted full-time jobs but worked less than 35 hours during the survey reference week primarily due to slack work (a reduction in hours in response to unfavorable business conditions) or the inability to find full-time work. In November 2008, 7.3 million persons were employed part time for economic reasons, up by 3.4 million from a recent low of 3.9 million in April 2006.

And in one of the greatest ironies of all, the BLS added 72,000 jobs to this report thanks to the birth death model.

Posted by bonddad at 1/09/2009 11:30:00 AM

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About the TARP Criticism
From the WSJ:

The U.S. Treasury has failed to reveal its strategy for stabilizing the financial system, not answered questions asked by a government watchdog, and has done nothing to help struggling homeowners, a report being released Friday charges.

In the most scathing criticism yet of Treasury's implementation of the $700 billion financial-rescue package, a draft report being issued by the five-member congressional oversight panel said there appear to be "significant gaps" in Treasury's ability to track hundreds of billions of dollars of taxpayer money.

"The panel's initial concerns about the have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury," said the draft report, which found that the department has "not yet explained its strategy" for stabilizing the financial markets.

The report faults Treasury on a variety of fronts: having no ability to ensure banks lend the money they have received from the government; having no standards for measuring the success of the program; and for ignoring or offering incomplete answers to panel questions.

Let's look at this in a few smaller pieces:

1.)The U.S. Treasury has failed to reveal its strategy for stabilizing the financial system: True, but there's a reason for that: the Treasury's rationale has been changing. First they were going to buy troubled assets, then they injected capital into the banks. The bottom line is the second option -- injecting capital -- was a far better idea. But it was the Treasury's second choice. And don't be surprised if a third option emerges and is debated.

2.) not answered questions asked by a government watchdog: Big problem for which there is no defense. If you get taxpayer money, you answer taxpayer questions.

3.) and has done nothing to help struggling homeowners: my understanding was this was not part of the TARP's original plan. I could be wrong (and if I am please let me know), as the initial bill was passed quickly with the usual "shove this in at the last minute" mentality. That's not to say nothing should be done, because this is at the heart of the problem the US economy is facing right now.

4.) having no ability to ensure banks lend the money they have received from the government: news flash: loan issuance drops during a recession. In addition, according to the latest Quarterly Banking Profile from the FDIC banks are really struggling meaning loan issuance isn't a high priority right now.

5.) having no standards for measuring the success of the program: The US financial system is still living and breathing. That makes it a success.

Let me back up a bit. I think what the Treasury was originally trying to do was prevent a systemic meltdown -- like the one that started the Great Depression. Their primary objective was to prevent a wave of failures and collapses that would paralyze the economy and send really painful ripples around the globe. And in that, so far, we've succeeded. I think an emergency room analogy is appropriate. The person came in after a car wreck caused by a DUI. This is not the appropriate time to lecture them on the dangers of what they did. Instead it is the time to stabilize the body and get it into surgery.

And to hope that this would somehow lead to an increase in loans in the middle of a recession where banks are in the process of writing down asset values is a misplaced fantasy. That wasn't going to happen with the money.

The lack of communication with Congress about what is happening is wrong. There is no defense for it.

So -- what should happen with the money? All of the government money received should be placed in a separate account at the bank. It should first be used to stabilize that bank, for example, if the bank has to increase its loan loss reserves or has to write down the value of assets. The bank should be able to use the money to buy a distressed institution so long as the merger will not cause the buying institution to become distressed. In addition, the bank should suspend all dividend payments and bonuses for all employees. This is an emergency -- and in an emergency everybody tightens their belt.

Posted by bonddad at 1/09/2009 06:47:00 AM

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Forex Friday's
http://2.bp.blogspot.com/_4jIlyJ10uJU/SWdEsB-YWqI/AAAAAAAAA7A/B6ie-e5iXT4/s400/dollar+weekly.png
Click for a larger image

Notice the following on the weekly chart

-- Prices have dropped to about the 58.2% Fibonacci retracement level from the late 2007 rally

-- The 10 week SMA is moving lower

-- The 20 week SMA is providing upside technical resistance

-- The MACD has topped out and is now falling

-- The RSI is falling

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWdFh6uvWWI/AAAAAAAAA7I/v5mwwG7jml0/s400/dollar+daily.png

Click for a larger image

-- Prices have been rallying since mid-December, but

-- Prices have run into upside resistance at the longer-term trend line

-- The 50 day SMA is moving lower, but at a slight angle

-- The 20 day SMA is moving lower but

-- The 10 day SMA is moving higher

-- Prices and the 10 and 20 day SMA are in a tight configuration

-- The RSI is rising and

-- The MACD is bottoming out and is looking to move higher

Bottom line: there is a lot of conflicting information on this chart.

Posted by bonddad at 1/09/2009 06:35:00 AM

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Labels: dollar

Thursday, January 8, 2009Today's Markets
http://2.bp.blogspot.com/_4jIlyJ10uJU/SWaDZ1LSaWI/AAAAAAAAA64/3cLnvbF_cTw/s400/Chart+of+SPY.gif

Click for larger image

Notice the following on the chart

-- Prices are right at the 10 day SMA. They have sold-off are a nice rally.

-- The volume today was lighter than the previous day

-- The 10 day SMA has crossed over the 20 and 50 day SMA

-- The 20 day SMA is above the 50 day SMA, but the SMA is now moving sideways.

-- The upward trend line is still in place

Bottom line: we're still in a rally

Posted by bonddad at 1/08/2009 04:47:00 PM

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Labels: market analysis

Jobless Claims At 26 Year High
From Bloomberg:

The number of Americans collecting unemployment benefits surged to a 26-year high as the labor market worsened in a yearlong recession.

Initial jobless claims unexpectedly fell by 24,000 to 467,000 in the week that ended Jan. 3, the lowest level in almost three months, the Labor Department said today in Washington. The total number of people getting benefits rose a week earlier to 4.6 million, the most since 1982.

While the government projects a surge in firings in late December and early January, job cuts may have come earlier last year as sinking sales and the worst credit conditions in seven decades forced companies such as General Motors Corp. and Chrysler LLC to pare costs. The claims report came as President- elect Barack Obama warned the U.S. risks sinking deeper into an economic crisis without a stimulus package of about $775 billion.

“The labor market is just hemorrhaging here,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, who correctly forecast claims would fall. “Just look at the continuing claims numbers, they give you a better idea of what is going on. Nobody can find work once they’re fired.”

This is not looking good.

However, I still think (maybe it's a wild hope) that we're in the absolute worst part of the storm right now. I am hoping it will get better by the end of the second quarter.

Posted by bonddad at 1/08/2009 12:27:00 PM

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Retail Takes It On the Chin
From the WSJ:

Retailers' sales slumped in December, with even Wal-Mart Stores Inc. bending to economic realities by cutting its earnings expectations for the current quarter.

Other U.S. retailers also cut their outlooks, including Gap Inc., Pacific Sunwear of California Inc., Macy's Inc. and Ulta Salon, Cosmetics & Fragrance Inc.

Retailers' November results were terrible, made worse by the fact that the timing of Thanksgiving last year pushed some post-holiday sales into December. But the spillover did little to bolster December's numbers.

Wal-Mart, which has benefited from bargain-hunting in a weak economy, reported that for its US. stores open at least a year sales, excluding gasoline, grew 1.7% last month amid a 1.9% increase at its namesake chain and 0.1% rise at Sam's Club.

This shouldn't be surprising; retail sales in particular and personal consumption expenditures in general have been terrible. Consider this from the latest Fed minutes:

Real personal consumption expenditures (PCE) fell for the fifth straight month in October, with the slowdown evident in nearly all broad spending categories. Sales of light motor vehicles, which slumped in October, fell further in November, but the available information on retail sales suggested a small increase in real outlays for other consumer goods. The annualized three-month change in spending on services in October was just one-third of the rate registered in the first half of 2008. Preliminary data for October and November suggested that overall fourth-quarter real spending would receive a modest boost from recent price declines for gasoline. Real incomes were also boosted by the reversal in energy prices, though the negative wealth effects of continued declines in equity and house prices likely offset this somewhat. Measures of consumer sentiment released in November and December remained low, and available evidence suggested further tightening in consumer credit conditions in recent months.

Posted by bonddad at 1/08/2009 09:55:00 AM

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Thursday Oil Market Round-Up
http://4.bp.blogspot.com/_4jIlyJ10uJU/SWYALvNtdOI/AAAAAAAAA6o/unW5sSfXWls/s400/oil+w.png

Click for a larger image

Notice the following on the weekly chart

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT

-- The MACD is oversold, and

-- The RSI is oversold

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWYAfIBkg-I/AAAAAAAAA6w/mnpf-9Axe2c/s400/oil+daily.png

Click for a larger image

Notice the following on the daily chart

-- Prices are below the 50 day SMA, just moved through the 20 day SMA and are resting on the 10 day SMA. That's a big technical move for one day -- especially with such a large bar.

-- The 10 and 20 day SMAs are starting to move higher

-- The MACD has been rising for the last two months

BUT

-- The RSI is dropping.

Posted by bonddad at 1/08/2009 07:30:00 AM

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hefeiddd 发表于 2009-3-25 15:45

Posted by bonddad at 1/08/2009 07:30:00 AM

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Today's Markets
Or more specifically -- yesterday's markets.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWX4Hak-aRI/AAAAAAAAA6Q/DYr3rFslLi4/s400/Chart+of+SPY.gif

Click for a larger image

On the daily 5 minute chart, note prices have almost fallen to the 50% Fibonacci retracement level.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWX4zRGo8HI/AAAAAAAAA6g/2TWqpAOjp08/s400/Chart+of+SPY1.gif

Click for a larger image

On the three month chart, notice the following:

-- The 10 and 20 day SMA are moving higher

-- The 10 and 20 day SMA have moved through the 50 day SMA

-- The 10 day SMA is about to cross over the 20 day SMA

-- Although prices fell today they are still above the shorter SMAs

Posted by bonddad at 1/08/2009 06:56:00 AM

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Wednesday, January 7, 2009Today's Market
I'm writing this from my IPhone and obviously can't get to a computer. I'll post the market recap in the morning.

Posted by bonddad at 1/07/2009 05:59:00 PM

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It's A Small World After All
From the Fed's latest Minutes:

Economic activity in most advanced foreign economies contracted in the third quarter, driven by sharp declines in investment and by significant negative contributions of net exports, as the global recession took hold more strongly. Incoming data pointed to an even weaker pace of activity in the fourth quarter. In Canada, however, real gross domestic product (GDP) increased at a faster-than-expected pace in the third quarter, though consumption and investment continued to soften. In the euro area and the United Kingdom, purchasing managers indexes fell in November to levels associated with severe contractions in economic activity. Labor market conditions in the advanced economies deteriorated further, with most countries experiencing rising unemployment rates. In Japan, real GDP fell in the third quarter as domestic demand declined and private investment fell for the second consecutive quarter. After peaking in the third quarter, consumer price inflation moderated in all advanced foreign economies, primarily as a result of falling energy and food prices. Economic activity in most emerging market economies decelerated sharply in the third quarter, though a surge in agricultural output helped to support activity in Mexico, and the Brazilian economy continued to expand rapidly. In Asia, output decelerated significantly, as the pace of real activity moderated in China and several other economies saw declines in real GDP. Recent readings on production, sales, and exports suggest that emerging market economies weakened further in the current quarter. Headline inflation generally declined across emerging market economies, primarily because of lower food and energy prices and, in some cases, weaker economic activity.

Posted by bonddad at 1/07/2009 02:30:00 PM

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Alcoa's Job Cuts
From the WSJ:

Alcoa Inc. announced the elimination of about 15,000 jobs, more plant closures, plans to sell assets and a 50% cut in capital expenditures to contend with the sustained recession.

The moves raise the question of whether other companies that have cut costs also will feel the need to dig deeper. Alcoa, the world's largest aluminum producer, announced a round of cost cutting in October when demand for commodities and the availability of credit began to fall.

The combined restructuring will result in a fourth-quarter charge of $900 million to $950 million, or $1.13 to $1.19 a share. The company expects to report fourth-quarter earnings next week. Alcoa earned $632 million, or 75 cents a share, in the fourth quarter of 2007.

"Many of these things are painful and many of these things are drastic," Alcoa Chief Executive Klaus Kleinfeld said in an interview Tuesday. "We will continue to monitor the dynamic market situation to ensure that we adjust capacity to meet any future changes in demand and seize new opportunities.

My theory right now is that companies are getting the pain out of the way now after a terrible year. Note this will cause a 4th quarter charge -- a charge at the end of a long and painful fiscal year.

However, a contrary view would be, "isn't there a big stimulus bill coming down the pike? Shouldn't that help a company that works with raw materials?"

Posted by bonddad at 1/07/2009 01:00:00 PM

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Translating Fed Speak
Yesterday the Fed released the minutes of their latest meeting. These provide an excellent overview of the US economy. Let's coordinate the Minutes with some charts and graphs:

The labor market continued to worsen. According to the November employment report, payroll employment fell at a rapid pace over the preceding three months, with substantial losses across a wide range of industry groups, including manufacturing, construction, retail, financial activities, and business services. Indicators of hiring plans also dropped steeply in November, and other labor market indicators suggested that jobs remained in short supply. The unemployment rate climbed to 6.7 percent in November, while the labor force participation rate fell after remaining steady for much of the year. New claims for unemployment insurance rose sharply through early December.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWPWKwMygXI/AAAAAAAAA44/Isd0G-UJdAU/s400/total+payrolls.png

The establishment's year over year survey has been dropping for a few years and

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWPWLMUAMVI/AAAAAAAAA5A/rMcogpIF09M/s400/unemploy.png

the unemployment rate has been increasing for about two years.

Industrial production, excluding special hurricane- and strike-related effects, fell markedly in November after sizable declines in the preceding two months. The recent contraction in industrial output was broadly based. The steep pace of decline in the production of consumer goods reflected not only cutbacks in motor vehicle assemblies but also drops in the output of other goods, such as appliances, furniture, and products related to home improvement. The production of business equipment was held down by declines in the output of both industrial and high-tech equipment. The output of construction supplies extended its decline after a brief pause in the middle of the year, and the contraction in the production of materials intensified. In particular, steel production plummeted, and the output of organic chemicals contracted noticeably. For most major industry groups, factory utilization rates declined relative to their levels in July and remained below their long-run averages. Available forward-looking indicators pointed to a significant downturn in manufacturing output in coming months.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWPXZ6Q2tLI/AAAAAAAAA5I/4-CbEa-DBVU/s400/indus.png

Industrial production has been dropping for most of the year and is currently "cliff diving".

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWPXaMYLoXI/AAAAAAAAA5Q/iBsLIoryQSo/s400/cap+ut.png

Capacity utilization is also dropping. This means that when the economy starts back-up there will be a dearth of investment as companies seek to first utilize capacity that lay idle.

Real personal consumption expenditures (PCE) fell for the fifth straight month in October, with the slowdown evident in nearly all broad spending categories. Sales of light motor vehicles, which slumped in October, fell further in November, but the available information on retail sales suggested a small increase in real outlays for other consumer goods. The annualized three-month change in spending on services in October was just one-third of the rate registered in the first half of 2008. Preliminary data for October and November suggested that overall fourth-quarter real spending would receive a modest boost from recent price declines for gasoline. Real incomes were also boosted by the reversal in energy prices, though the negative wealth effects of continued declines in equity and house prices likely offset this somewhat. Measures of consumer sentiment released in November and December remained low, and available evidence suggested further tightening in consumer credit conditions in recent months.

Consumers are closing their wallets big time.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWSfstwFpiI/AAAAAAAAA5o/ajCi8Fkyv78/s400/retail+sales.png

Click for a larger image

Retail sales (inflation adjusted) are falling hard and fast, and on a year over year level

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWSfswrFafI/AAAAAAAAA5w/pouZpnafFbY/s400/real+retail+percent+change.png

Click for a larger image

Retail sales are falling off a cliff

Broader consumer spending is also dropping.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWSfsXlNjxI/AAAAAAAAA5Y/KwqjXk39bSo/s400/PCE+1.png

Click for a larger image

Personal consumption expenditures are also dropping for the first time in 10 years, and on a year over year basis

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWSfsqVqSMI/AAAAAAAAA5g/PTHuzzg1RzA/s400/PCE+percent+change.png

Click for a larger image

They are falling off a cliff

Housing demand remained weak, and although the number of unsold new single-family homes continued to move lower, inventories remained elevated relative to the current pace of sales. Sales of existing single-family homes changed little, although a drop in pending home sales in October pointed to further declines in the near term.

Housing has been a mess for a few years and there is no indication that will change soon.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWShsclY28I/AAAAAAAAA6I/LLYRqrlLnWI/s400/EHSNov2008Sales.jpg

Click for a larger image

Sales evened out for most of 2008 but took a big drop last month.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWShrxPs7RI/AAAAAAAAA54/PkeDyrf5dd8/s400/EHSNov2008Inventory.jpg

Click for a larger image

The absolute inventory of existing homes has been fluctuating between 4 and 4.5 million for a year and a half now, and

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWShsfavyyI/AAAAAAAAA6A/CqsnVdE5frs/s400/EHSNov2008Months.jpg

The number of months it would take to clear existing inventories at the current sales pace has been between 10 and 11 months for the last 6 months.

As a result:

Home prices in 20 major U.S. cities declined at the fastest rate on record, depressed by mounting foreclosures and slumping sales.

The S&P/Case-Shiller index declined 18 percent in the 12 months to October, more than forecast, after dropping 17.4 percent in the year through September. The gauge has fallen every month since January 2007. Year-over-year records began in 2001.

The financial market meltdown that’s reverberated around the globe has prompted banks to curb lending, signaling the housing slump will persist for a fourth year in 2009. Falling property values have eroded household wealth, causing consumers to pare spending and deepening what is projected to be the longest recession in the postwar period.
The bottom line is clear.

1.) Consumers have stopped spending in a big way. The drops in PCE's and real retail sales are sharp and strong. As a result:

2.) Home sales will continue to drop, and

3.) Industrial production will remain at depressed levels.

Posted by bonddad at 1/07/2009 09:30:00 AM

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Wednesday Commodity Round-Up
http://3.bp.blogspot.com/_4jIlyJ10uJU/SWPTRyN-9bI/AAAAAAAAA4o/cFAflMWVha0/s400/crb+w.png

Click for a larger image

Notice the following on the weekly chart

-- Prices have crossed over the 10 day SMA

-- The MACD is now reversing

-- The RSI is rising

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWPTwYkNweI/AAAAAAAAA4w/VVm_ywK9Dvs/s400/CRB+d.png

Click for a larger image

Notice the following on the daily chart

-- Prices are now above the 50 day SMA

-- The 10 day SMA has crossed over the 20 day SMA\

-- The RSI is rising

-- The MACD has been rising for the last two months

Bottom line: this chart looks like it is turning around.

Posted by bonddad at 1/07/2009 05:00:00 AM

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Labels: commodities

Tuesday, January 6, 2009Today's Markets
http://3.bp.blogspot.com/_4jIlyJ10uJU/SWPOlGVFdyI/AAAAAAAAA4g/xATbSVFW5ls/s400/Chart+of+SPY.gif

Click for a larger image

Notice the following:

-- After rising through downside resistance, prices have been mellow for the last few days.

-- Prices are above the 10, 20 and 50 day SMA

-- The 10 and 20 day SMA are both moving higher

-- The 10 and 20 day SMA have crossed the 50 day SMA

Posted by bonddad at 1/06/2009 04:30:00 PM

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Labels: market analysis

Retail Sales Drop
From Bloomberg:

Purchases at U.S. retailers declined last week as post-Christmas markdowns failed to overcome what may have been the worst holiday shopping season in four decades.

Sales at stores open at least a year dropped 0.8 percent in the seven days through Jan. 3, the International Council of Shopping Centers and Goldman Sachs Group Inc. said today in a statement. ICSC Chief Economist Michael Niemira said November- December sales declined as much as 2 percent.

Macy’s Inc., Talbots Inc., Aeropostale Inc. and other retailers offered discounts of 65 percent or more on some sweaters, jewelry and pants to clear out merchandise after Christmas. Higher markdowns may put more pressure on earnings.

“December was relatively chaotic in price, with more discounts than retailers planned, especially in department stores,” Richard Hastings, a consumer strategist at Global Hunter Securities LLC of Newport Beach, California, said in a telephone interview. “Consumers have discovered that the industry is responding with lower and lower and lower prices.”

This shouldn't be a surprise to anyone; the economy is in a recession after all.

But the charts of the actual sales data are downright scary.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWOeAXFTRmI/AAAAAAAAA4A/iPP5fL-oLe0/s400/real+retail+sales.png

Click for a larger image

Above is a graph of real retail sales. Note the cliff diving that is now occurring.

And then there is the year over year change in retail sales:

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWOeOWlPmVI/AAAAAAAAA4I/pBqnBhf0lrU/s400/real+sales.png

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWOeY-0PLlI/AAAAAAAAA4Q/9ge4ZnfgAZo/s400/retail.gif

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWOehOgXMtI/AAAAAAAAA4Y/iCyMHY5Znpc/s400/specialty+retail.gif

How Long Can Non-Residential Spending Hold-Up?
From the WSJ:

Residential spending fell at a 4.1% rate in November to $336.3 billion, 22.8% lower than November 2007. Despite the credit crunch and worsening economy, nonresidential spending showed surprising resilience, rising 1% during the month to $742.1 billion, up 9.2% from the previous year.

Here is the accompanying chart:

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWNR0rQDXTI/AAAAAAAAA34/YXLnfFmzyiA/s400/NA-AV093A_ECONO_NS_20090105190821.gif

Click for a larger image

Notice that non-residential spending has remained strong as residential spending has dropped. However, note this:

Vacancy rates in office buildings exceed 10 percent in virtually every major city in the country and are rising rapidly, a sign of economic distress that could lead to yet another wave of problems for troubled lenders.

That does not bode well for the coming year.

Posted by bonddad at 1/06/2009 11:45:00 AM

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Labels: construction spending., housing

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hefeiddd 发表于 2009-3-25 15:48

There's been a lot of talk lately about a treasury bubble. All of that talk seems to be getting investors' attention:

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWM5EGrse2I/AAAAAAAAA24/cnEMvYp7194/s400/Chart+of+TLT.gif

On the longer end of the curve, notice how prices have moved through both the 10 and 20 day SMA. Also note the strength of the bars and the higher volume on the sell-off. Also note the 10 day SMA has turned lower.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWM5btMWFZI/AAAAAAAAA3A/kQAJkKrG_lA/s400/Chart+of+IEF.gif

Click for a larger image

On the IEFs note the same technical developments as the TLTs -- prices moved through the 10 and 20 day SMA on higher volume. Also note the 10 day SMA has turned lower.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWM5xgMtTnI/AAAAAAAAA3I/leWwTyhze5I/s400/Chart+of+SHY.gif

Click for a larger image

Note the strength of the sell-off with the high volume mark. Also note prices have moved through the 10 and 20 day SMAs and that the 10 day SMA has moved through the 10 day SMA

So -- what's the reason for the sell-off?

Investors may be glad to see 2008 in the rearview mirror, but in the Treasury market, they already are worrying about 2009.

A chief concern is the amount of issuance on tap. Goldman Sachs Group Inc. puts the amount the U.S. government needs to raise at about $2 trillion, including new issuance and rolled-over securities. Goldman said it could be more, depending on the size of the incoming Obama administration's stimulus package.

The worry: Just as this onslaught of debt hits, investors could turn their noses at the Treasury market's historic low yields and venture instead into riskier assets. That likely would be even more the case once government programs to kick-start financial markets and the economy gain traction.

And as Barron's noted in this week's issue:

THE BIGGEST INVESTMENT BUBBLE TODAY may involve one of the safest asset classes: U.S. Treasuries. Yields have plunged to some of the lowest levels since the 1940s as investors, fearful of a sustained global economic downturn and potential deflation, have rushed to purchase government-issued debt.

The market also has been supported by comments from the Federal Reserve that it, too, may buy long-term Treasuries. - As a result, the benchmark 10-year Treasury note yields just 2.40%, down from 3.85% as recently as mid-November. The 30-year T-bond stands at 2.82%, and three-month Treasury bills were sold last week for a yield of just 0.05%. - Many investors argue it's dangerous to buy Treasuries with such low yields. While a holder can expect to get repaid in

full at maturity, the price of longer-term Treasuries could fall sharply in the interim if yields rise. The 30-year T-bond, for instance, would drop 25% in price if its yield rose to 4.35%, where it stood as recently as Nov. 13. The bear market may have begun Wednesday, when prices of 30-year Treasuries fell 3%. They lost another 3% Friday. - "Get out of Treasuries. They are very, very expensive," Mohamed El-Erian, chief investment officer of Pacific Investment Management Co., warned recently. Pimco runs the country's largest bond fund, Pimco Total Return (ticker: PTTPX). - Treasuries offer little or no margin of safety if the economy unexpectedly strengthens in 2009, or the dollar weakens significantly, or inflation shows signs of reaccelerating. Yields on 30-year Treasuries easily could top 4% by year end.
Posted by bonddad at 1/06/2009 04:56:00 AM

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Labels: Treasury Market

Monday, January 5, 2009Today's Markets
http://1.bp.blogspot.com/_4jIlyJ10uJU/SWJ9IxYxS0I/AAAAAAAAA2w/j3rWY75G1Oo/s400/Chart+of+SPY.gif

Click for larger image

Notice the following on the daily chart:

-- Prices are still above the downward sloping upper resistance level

-- The 20 day SMA is now above the 50 day SMA

-- The 10 day SMA has moved higher, although it is a preliminary move

Bottom line: the market wants to rally, but it needs a fundamental reason to do so. I think the markets are waiting for a better read on Washington's policy response.

Posted by bonddad at 1/05/2009 03:35:00 PM

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Janet Yellen Calls For Fiscal Stimulus
From the Federal Reserve of San Francisco:

For all of these reasons, I support Marty's conclusion that there is an exceptionally strong case for substantial fiscal stimulus over the next few years. In ordinary circumstances, there are good reasons why monetary, rather than fiscal policy, should be used for stabilization purposes. But these are exceptional circumstances, and fiscal policy can help get the economy going.

.....

If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now. Although our economy is resilient and has bounced back quickly from downturns in the past, the financial and economic firestorm we face today poses a serious risk of an extended period of stagnation—a very grim outcome. Such stagnation would intensify financial market strains, exacerbating the problems that triggered the downturn. It's worth pulling out all the stops to ensure those outcomes don't occur.

Posted by bonddad at 1/05/2009 01:30:00 PM

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More on Manufacturing
In the post below, we learned that global manufacturing activity is dropping like a stone. However, according to manufacturing industry stock charts, traders are anticipating a rebound in this sector. The charts below are from Prophet.net.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWIpDpl0cNI/AAAAAAAAA14/M6ql2quO_PA/s400/manufac.gif

Notice that on the overall manufacturing index prices sold-off hard at the end of last year but have since rallied through resistance.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWIpXks7ZdI/AAAAAAAAA2A/yAPwfsBxX5g/s400/farm+construc.gif

Farm and construction is rebounding and is approaching the 50 week SMA.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWIpmim5niI/AAAAAAAAA2I/YEyJYKUCFh4/s400/div+mach.gif

Diversified machinery has also broken through resistance levels.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWIpx-oWYWI/AAAAAAAAA2Q/nvzcKejZAV8/s400/machine+tools.gif

Machine tools are already bouncing back.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWIp9Z0ZopI/AAAAAAAAA2Y/uvbJPf56JTI/s400/metals+fabrication.gif

Metal fabrication formed a reverse head and shoulders pattern and appears ready to move through the pattern's neckline.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWIqSaYO3wI/AAAAAAAAA2g/AJHvlFLeFbk/s400/popll.gif

Pollution treatment machinery has moved through key resistance levels as well.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWIqgxbUX2I/AAAAAAAAA2o/bKIqRe02z2M/s400/small+tools.gif

Small tools stocks have moved through key resistance levels as well.

Traders are speculating there will be a big stimulus bill that will help all of these stocks -- at least that's my assumption.

Posted by bonddad at 1/05/2009 11:30:00 AM

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hefeiddd 发表于 2009-3-25 15:49

There's been a lot of talk lately about a treasury bubble. All of that talk seems to be getting investors' attention:

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWM5EGrse2I/AAAAAAAAA24/cnEMvYp7194/s400/Chart+of+TLT.gif

On the longer end of the curve, notice how prices have moved through both the 10 and 20 day SMA. Also note the strength of the bars and the higher volume on the sell-off. Also note the 10 day SMA has turned lower.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWM5btMWFZI/AAAAAAAAA3A/kQAJkKrG_lA/s400/Chart+of+IEF.gif

Click for a larger image

On the IEFs note the same technical developments as the TLTs -- prices moved through the 10 and 20 day SMA on higher volume. Also note the 10 day SMA has turned lower.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SWM5xgMtTnI/AAAAAAAAA3I/leWwTyhze5I/s400/Chart+of+SHY.gif

Click for a larger image

Note the strength of the sell-off with the high volume mark. Also note prices have moved through the 10 and 20 day SMAs and that the 10 day SMA has moved through the 10 day SMA

Investors may be glad to see 2008 in the rearview mirror, but in the Treasury market, they already are worrying about 2009.

A chief concern is the amount of issuance on tap. Goldman Sachs Group Inc. puts the amount the U.S. government needs to raise at about $2 trillion, including new issuance and rolled-over securities. Goldman said it could be more, depending on the size of the incoming Obama administration's stimulus package.

The worry: Just as this onslaught of debt hits, investors could turn their noses at the Treasury market's historic low yields and venture instead into riskier assets. That likely would be even more the case once government programs to kick-start financial markets and the economy gain traction.

THE BIGGEST INVESTMENT BUBBLE TODAY may involve one of the safest asset classes: U.S. Treasuries. Yields have plunged to some of the lowest levels since the 1940s as investors, fearful of a sustained global economic downturn and potential deflation, have rushed to purchase government-issued debt.

The market also has been supported by comments from the Federal Reserve that it, too, may buy long-term Treasuries. - As a result, the benchmark 10-year Treasury note yields just 2.40%, down from 3.85% as recently as mid-November. The 30-year T-bond stands at 2.82%, and three-month Treasury bills were sold last week for a yield of just 0.05%. - Many investors argue it's dangerous to buy Treasuries with such low yields. While a holder can expect to get repaid in

full at maturity, the price of longer-term Treasuries could fall sharply in the interim if yields rise. The 30-year T-bond, for instance, would drop 25% in price if its yield rose to 4.35%, where it stood as recently as Nov. 13. The bear market may have begun Wednesday, when prices of 30-year Treasuries fell 3%. They lost another 3% Friday. - "Get out of Treasuries. They are very, very expensive," Mohamed El-Erian, chief investment officer of Pacific Investment Management Co., warned recently. Pimco runs the country's largest bond fund, Pimco Total Return (ticker: PTTPX). - Treasuries offer little or no margin of safety if the economy unexpectedly strengthens in 2009, or the dollar weakens significantly, or inflation shows signs of reaccelerating. Yields on 30-year Treasuries easily could top 4% by year end.
Posted by bonddad at 1/06/2009 04:56:00 AM

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Labels: Treasury Market

Monday, January 5, 2009Today's Markets
http://1.bp.blogspot.com/_4jIlyJ10uJU/SWJ9IxYxS0I/AAAAAAAAA2w/j3rWY75G1Oo/s400/Chart+of+SPY.gif

Click for larger image

Notice the following on the daily chart:

-- Prices are still above the downward sloping upper resistance level

-- The 20 day SMA is now above the 50 day SMA

-- The 10 day SMA has moved higher, although it is a preliminary move

Bottom line: the market wants to rally, but it needs a fundamental reason to do so. I think the markets are waiting for a better read on Washington's policy response.

Posted by bonddad at 1/05/2009 03:35:00 PM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Janet Yellen Calls For Fiscal Stimulus

For all of these reasons, I support Marty's conclusion that there is an exceptionally strong case for substantial fiscal stimulus over the next few years. In ordinary circumstances, there are good reasons why monetary, rather than fiscal policy, should be used for stabilization purposes. But these are exceptional circumstances, and fiscal policy can help get the economy going.

.....

If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now. Although our economy is resilient and has bounced back quickly from downturns in the past, the financial and economic firestorm we face today poses a serious risk of an extended period of stagnation—a very grim outcome. Such stagnation would intensify financial market strains, exacerbating the problems that triggered the downturn. It's worth pulling out all the stops to ensure those outcomes don't occur.

Posted by bonddad at 1/05/2009 01:30:00 PM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWIpDpl0cNI/AAAAAAAAA14/M6ql2quO_PA/s400/manufac.gif

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWIpXks7ZdI/AAAAAAAAA2A/yAPwfsBxX5g/s400/farm+construc.gif

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWIpmim5niI/AAAAAAAAA2I/YEyJYKUCFh4/s400/div+mach.gif

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWIpx-oWYWI/AAAAAAAAA2Q/nvzcKejZAV8/s400/machine+tools.gif

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWIp9Z0ZopI/AAAAAAAAA2Y/uvbJPf56JTI/s400/metals+fabrication.gif

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWIqSaYO3wI/AAAAAAAAA2g/AJHvlFLeFbk/s400/popll.gif

http://4.bp.blogspot.com/_4jIlyJ10uJU/SWIqgxbUX2I/AAAAAAAAA2o/bKIqRe02z2M/s400/small+tools.gif

Posted by bonddad at 1/05/2009 11:30:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

hefeiddd 发表于 2009-3-25 15:49

Posted by bonddad at 1/05/2009 06:58:00 AM

1 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Market Monday's
Welcome back to the first full week of the new year. I hope everybody had a happy and safe holiday season. Let's jump right into the fray because there are some good things happening in the market.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SWDHdXBr3BI/AAAAAAAAA1g/7Klk_BIGMJA/s400/Chart+of+SPY3.gif

Click for a larger image

Notice the following on the three month daily chart:

-- Prices have broken through the downward sloping trend line that started in early October.

-- Prices are above all the SMAs

BUT:

-- The SMAS are bunched together, indicating a lack of overall direction, and

-- The break-through happened on low volume (which is to be expected in end-of-the-year trading.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SWDJMhzpCMI/AAAAAAAAA1o/BWBSiAQLTvA/s400/SPY+PF.png

Click for a larger image

-- On the P&F chart, note the market formed a triple top at the end of the year and has now broken out of that top.

Also consider the following points from this week's Barron's:

Stocks kicked off 2009 with a sprightly rally, but the longevity of that start will ultimately depend on stocks' ability to attract that record dry powder.

And it's quite a cache of capital. The amount of money stashed in money-market mutual funds had surpassed that in stock mutual funds as of the end of November, according to the Investment Company Institute, a national association of investment companies. In contrast, money-market funds were just 48% of stock funds when 2008 began. "If all the money currently sitting in U.S. money-market funds left and went into buying shares of the Standard & Poor's 500 index, it would absorb 42%" of that benchmark's market value -- the highest in at least 25 years, says Jason Goepfert of sentimentrader.com.

That's not all. Stocks' 38.5% pummeling in 2008, their third worst year ever and the biggest annual loss since the Great Depression, had sent investors scurrying. Today, Americans are setting aside just 42% of their investment money for stocks, says the American Association of Individual Investors. At the same time, 42% of their portfolio is in cash, the highest ever. "Never before have these investors allocated as much or more to cash as they have to stocks," Goepfert says.

Individuals aren't alone, and even professional money managers are hiding in short-term Treasuries that yield next to nothing. A time will come when earning zero interest starts to get old.

And consider the following points from an interview with Laszlo Birinyi:

An indicator that we developed is the number of stocks that are down 50% from their highs. At the market bottom recently, 322 of the S&P 500 stocks were down 50% from a year ago; that's an extremely oversold condition. The previous record, which was set in July of 2002, was 130 stocks. To us, that's a very useful measure of whether the market is oversold or overbought.

.....

You published a note last month titled "S&P 750: The Bottom." What led to that conclusion?

A few things caught our eye. One was that we started to have some very bad days in November but the market still recovered. On Dec. 5, the unemployment news was really terrible and yet the market recovered that day, with the S&P closing up 3.7%. To us, those are signs of a positive market where people are starting to look beyond the bad news.

It seems traders are looking at current economic news as occurring at or near the absolute bottom in the economic cycle. Assuming that to be the case, people are trying to get in early on a perceived rally that will occur in the first half of the year.

What else caught your eye in calling a market bottom?

We did an analysis that came out of our cycle study, and it showed that the greatest amount of decline in a bear market is always at the very end of the bear market. As we saw it, if indeed the market did bottom in November, as we suggested, a total of 70% of the decline occurred in the last quartile of the bear market. We also noticed that financial stocks were starting to show some stability, as well as large-cap stocks.

Consider the from September to mid-October the market (the SPYs) fell from 120 to 84, or a drop of 30%. That's a big drop and could easily fall into the point made above.

Bottom line: there are a lot of bullish elements lining up for the year. Whether they play out is a different story.

Posted by bonddad at 1/05/2009 05:00:00 AM

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Labels: market analysis

Wednesday, December 31, 2008Happy New Year
It's new years eve. Being a self-employed person I have learned I have an incredibly understanding boss who is giving me the rest of the week off (actually, practically the whole world is treating this week as a vacation week). To that end, I am signing off until next Monday -- the first full trading week of the year.

Below is a picture of three dogs. You may not be able to see them, but they are there. On cold nights, Mr$s. Bonddad and I cover the pups with a blanket because, well, we're dog nuts.

So have a happy -- and safe -- holiday and I will see everybody bright and early on Monday morning.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SVuXO8AjBfI/AAAAAAAAA1Y/QC5ZwZWyS-I/s400/Picture1+644.jpg

Posted by bonddad at 12/31/2008 09:44:00 AM

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Wednesday Commodity Round-Up
http://2.bp.blogspot.com/_4jIlyJ10uJU/SVtug0-JxFI/AAAAAAAAA04/uP1CZjs_umY/s400/CRB+D.png

Click for a larger image

Notice the following on the weekly chart:

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT

-- The MACD is oversold

-- The RSI is oversold

-- Prices are forming a triangle consolidation pattern

http://3.bp.blogspot.com/_4jIlyJ10uJU/SVtvAk4jcuI/AAAAAAAAA1A/YBrsApeQcbU/s400/CRB+W.png

Click for a larger image

Notice the following on the daily chart:

-- Prices have been dropping for the last 6 months

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT

-- The MACD has been rising for the last two months

Bottom line: technically, this chart wants to rally. But there are no fundamental reasons to commit to the commodities market right now.

Posted by bonddad at 12/31/2008 07:01:00 AM

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Labels: commodities

Tuesday, December 30, 2008Today's Markets
http://1.bp.blogspot.com/_4jIlyJ10uJU/SVqXPGBsW7I/AAAAAAAAA0w/_nT-HR6YcXQ/s400/Chart+of+SPY.gif

Click for a larger image

The SPYs are still in a questionable position.

-- Prices are below the downward sloping trend line

-- The SMAs and prices are in a very tight range with little indication about where to go.

My guess is the markets are waiting for the beginning of the year before they make a move in any direction.

Posted by bonddad at 12/30/2008 03:48:00 PM

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We're Nowhere Near a Bottom in Housing
From Bloomberg:

Home prices in 20 U.S. cities declined at the fastest rate on record, depressed by mounting foreclosures and slumping sales.

The S&P/Case-Shiller index declined 18 percent in the 12 months to October, more than forecast, after dropping 17.4 percent in September. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.

The financial market meltdown that’s reverberated around the globe has prompted banks to curb lending, signaling the housing slump will persist for a fourth year in 2009. Falling property values have eroded household wealth, causing consumers to pare spending and deepening what is projected to be the longest recession in the postwar period.

“As 2008 comes to an end, the housing market is left in a weaker state than at the beginning of the year,” Michelle Meyer, an economist at Barclays Capital Inc. in New York, said before the report. “Uncertainty remains high given the unprecedented nature of the recession.”

The central issue with the housing market now is price. As long as we see these massive drops in home prices we can say supply and demand are way out of sync.

Posted by bonddad at 12/30/2008 01:00:00 PM

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Labels: housing

Employment is Looking Grim
Wherein I argue with myself ....

One of my central ideas of the current downturn is employment will experience about 6-9 months of terrible news and then get better -- or at least be less bad than before. There are several reasons for this theory:

1.) The worse rate of job losses over the last 60 years occurred in a recession in the 1950s when the economy lost 50% of the jobs it created in the previous expansion.

2.) Over the last few months we have seen an acceleration of job losses. I think what is happening is companies are "ripping the bank-aid off" -- getting the pain out at the end of a terrible year. Essentially, management is sitting in a board room and saying, "this year already sucks, let's just get the pain over with."

Here is something else to consider. Starting with the expansion of the 1980s the total number of establishment jobs created has decreased with each expansion. In other words, the expansion of the 1990s created fewer jobs than the expansion of the 198os and the expansion of the 2000s created fewer jobs than the expansion of the 1990s. I think what is happening is companies have learned to cope with less -- that it, they have continually whittled down their employment needs, hiring people only when absolutely necessary. A big boost to this theory is the mammoth increase in productivity we've seen over the same time, largely as a result of technology. People can simply do a whole lot more work; companies don't need armies of employees to perform a host of jobs. All this means that each person companies hire are that much more valuable to the company, making lay-offs that much harder. So when we do have lay-offs, times are really bad.

If both of these are true we have at most 6 months left of horrible employment/job market related news to go through.

However, the economy likes to make an ass out of economists whenever possible. So let's argue the contrary position.

The official jobless rate climbed to a 15-year high of 6.7% in November from 4.7% a year earlier. But that doesn't include people who have given up looking for work or those forced to work fewer hours as business conditions soured.

By adding underemployed and disaffected workers to the total, the so-called alternative unemployment rate stood at 12.5% in November, the highest since the Labor Department began tracking the series in January 1994. That's up from 11.8% in October and 8.4% a year earlier.

"We have obviously seen a very rapid deterioration in the employment situation," said Sophia Koropeckyj, an economist at Moody's Economy.com. "There are fewer people working and the people who are working are working fewer hours."

She said the alternative jobless rate could eventually hit 15%. The U.S. will release its December employment report on Jan. 9.

"Our expectation is that the recession could go on for another year and the unemployment rate will not reach a peak until 2010," she said.

Here is the accompanying graphic:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVoggkQalmI/AAAAAAAAA0A/SgK58z6zBTU/s400/feature123008.gif

Click for a larger image

There are several indicators from the BLS that confirm the difficulty in the labor market. Here is a chart of the number of people who are working part-time for economic reasons:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVoiFfO_suI/AAAAAAAAA0I/Nw6DQCQIJR8/s400/part+time+for+economic+reasons.gif

Click for a larger image

The BLS defines these people thusly:

Over the month, the number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) continued to increase, reaching 7.3 million. The number of such workers rose by 2.8 million over the past 12 months. This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs.
This number has been climbing sharply over the last year and is looking to get worse. This number tells us the jobs just aren't out there.

Here is a chart of people who aren't in the labor force although they searched for work and are available to work:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVoju-ihCjI/AAAAAAAAA0Q/at_e4aUHyJU/s400/not+in+force,+searched+and+couldn%27t.gif

Click for a larger image

Again - this number is spiking and is near its highest level in 15 years.

And the length of time people are unemployed is increasing. Here is a chart for the number of people who were unemployed for 5-14 weeks:

http://2.bp.blogspot.com/_4jIlyJ10uJU/SVokbJ-pjmI/AAAAAAAAA0g/5YczBftHXrI/s400/5+to+14+weeks.gif

Here is a chart for people who were unemployed for 15 weeks and longer:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SVokQAF3ZcI/AAAAAAAAA0Y/HlOaLD3EEvM/s400/15+weeks+and+over.gif

And here is the chart for people who are unemployed for 27 weeks and longer:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SVokpl51L3I/AAAAAAAAA0o/uW6rA7a6gzg/s400/27+weeks+and+over.gif

All three of the above charts are near multi0decade highs.

So, on my side I have history and a theory about employment trends in my lifetime. The graphs above indicate times are already bad and could get worse.

Frankly -- who the hell knows what is going to happen at this point.

Posted by bonddad at 12/30/2008 09:45:00 AM

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Labels: employment

Treasury Tuesdays
http://4.bp.blogspot.com/_4jIlyJ10uJU/SVoWnHNDZWI/AAAAAAAAAzg/t4pjnQR_rl8/s400/Chart+of+TLT.gif

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Let's start with the long end of the curve. From September through December, the TLTs were trading in a slightly compressing triangle. Then they went parabolic, rising from 98 to 120 -- a gain of 22.44%. That type of gain is literally unheard of in the fixed income world and indicates the Treasury market is in a bubble.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SVoXKkjfLbI/AAAAAAAAAzo/m7_cr0pYa6Q/s400/Chart+of+IEF.gif

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The IEF (7-10 years) also rose through important technical resistance right around the 92.50 level and is now 7.5% above the high points of its 9 month trading range.

With both of these charts, notice the extremely sharp increase in prices that's happening right now; these are large jumps for a fixed income security. Also note the SMAs -- they are all sharply up indicating traders are bidding these securities up sharply.

http://3.bp.blogspot.com/_4jIlyJ10uJU/SVoYFaYZxFI/AAAAAAAAAzw/ysr4MhGUH7I/s400/Chart+of+SHY.gif

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On the short end of the curve, first notice the rise since the end of June. The rally has been strong and continuous.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVoYcBY4ZwI/AAAAAAAAAz4/enz6QMjPhcg/s400/Chart+of+SHY1.gif

On the three month chart notice the following:

-- Prices used the 10 and 20 day SMAs as technical support for the last three months. Now prices have moved below that level.

-- The 10 day SMA is about to cross below the 20 day SMA

These are all initial moves, and could easily be reversed with a week or so on contrary action, so don't bet the farm on these moves. However, they do indicate times might be gearing up for a change.

Posted by bonddad at 12/30/2008 06:39:00 AM

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Monday, December 29, 2008Today's Markets
http://4.bp.blogspot.com/_4jIlyJ10uJU/SVlBjMqIoSI/AAAAAAAAAzY/4H2p6XbixAg/s400/Chart+of+SPY.gif

Click for a larger image

Notice the following:

-- Prices have not moved above the downward sloping trend line that started in October

-- The SMA picture is still very cloudy. The SMAs are bunched together in a very tight range and aren't showing strong direction either way

-- Prices are slightly below the SMAs, but that's just not saying much right now.

Bottom line: this is a very indecisive picture.

Posted by bonddad at 12/29/2008 03:30:00 PM

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Retail Will Get Worse Before it Gets Better
From Bloomberg:

U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.

Retailers will close 12,000 stores in 2009, according to Howard Davidowitz, chairman of retail consulting and investment- banking firm Davidowitz & Associates Inc. in New York. AnnTaylor Stores Corp., Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. Investors will start seeing a wide variety of chains seeking bankruptcy protection in February when they file financial reports, said Burt Flickinger.

“You’ll see department stores, specialty stores, discount stores, grocery stores, drugstores, major chains either multi- regionally or nationally go out,” Flickinger, managing director of Strategic Resource Group, a retail-industry consulting firm in New York, said today in a Bloomberg Radio interview. “There are a number that are real causes for concern.”

This shouldn't be surprising considering retail sales are off for the holiday season:

Price-slashing failed to rescue a bleak holiday season for beleaguered retailers, as sales plunged across most categories on shrinking consumer spending. Total retail sales, excluding automobiles, fell over the year-earlier period by 5.5% in November and 8% in December through Christmas Eve, according to MasterCard Inc.’s SpendingPulse unit. WSJ

Customer visits to U.S. retailers fell 24 percent last weekend compared with a year earlier, the biggest drop on record, as deepened discounts failed to attract consumers. Foot traffic was hurt by the economy, unfavorable weather and a calendar shift, research firm ShopperTrak RCT Corp. said.

Barron's ran a story on the retailers a few weeks ago. Here are some snippets from the article:

Among cash-rich retailers, Nike and Coach look especially attractive. They sport moderate price/earnings multiples, have little debt and are expected to report higher earnings in fiscal 2009. Bob Drbul, a retail analyst at Barclays Capital, has an Overweight rating on both, and notes that "retailers become more dependent on established brands" in uncertain times.

.....

The equity markets already have sniffed out retailers that could have big problems in coming quarters. Bon-Ton Stores , a regional department-store chain, trades for 1.16 a share, down from a high of 57 in March 2007. Talbots , a women's apparel chain, fetches 2.30; Dillard's , 3.78, and Charming Shoppes , another women's-wear retailer, 2.88. All are expected to report losses this year, and have borrowed heavily relative to their operating performance. Bottom fishing among these stocks looks unwise for now.

.....

THE NATION'S LARGER department stores also face a tough 2009, but they are in better financial shape. J.C. Penney , the mall-based retailer, has $3.5 billion of debt but $1.6 billion of cash. It should have little trouble funding its first debt maturity of $506 million in 2010, and a subsequent payment of $230 million in 2012. Kohl's has a similar customer base and a strong balance sheet. But its shares are cheaper, at 13.9 times 2009 earnings estimates, than Penney's, at 15.1.

Posted by bonddad at 12/29/2008 11:48:00 AM

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We're Nowhere Near a Bottom in Housing
You'd think I'd get tired of writing that headline. But not with the current information we have on the market. Let's start with the charts (courtesy of Calculated Risk)

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVjNUL1mOUI/AAAAAAAAAzA/LRCHkGIb1QI/s400/EHSNov2008Sales.jpg

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Sales were pretty even for most of 2008. But they dropped big time last month. Some of that might be end of the year backing away -- no one wants to buy a house in December unless they absolutely have to. But it's also important to remember there has been no good news for awhile now. The US is formally in a recession; the financial sector is tightening credit standards. The stock market is down 40% for the year. It's a pretty bleak time.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVjN3CGKaQI/AAAAAAAAAzI/d1o4Oq4wAS0/s400/EHSNov2008Inventory.jpg

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Notice total homes available for sale has fluctuated between 4 and 4.5 million for the last year and a half. In other words -- we haven't made a dent in the homes on the market. There are several reasons for this. Sales were dropping for most of 2007, letting inventory build. While sales evened out in 2008 they did so at a much slower pace than 2007, thereby allowing inventory to continue to build. Then you have a rash of foreclosures adding to inventory for 2008 in addition to a credit crunch which is restricting borrowers. Bottom line: this is not an environment where inventory gets cleared.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SVjOvwQAbYI/AAAAAAAAAzQ/kBoi6fgoOYg/s400/EHSNov2008Months.jpg

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The months of inventory available has been floating around 9.5 to 11 months for the last year and a half. Simply put -- inventory isn't moving.

And now it appears people are waiting for lower prices before they commit:

As the ads say, "more than just a privileged few" can call the brand-new Opera Tower home.

Thanks to the tattered housing market, renters are welcome at this marbled luxury condo soaring over Biscayne Bay — billed as the "jewel of Miami's Cultural District."

.....

Lease-to-own programs are also cropping up in other places such as New York — specifically, in some overbuilt parts of Brooklyn.

Homebuilder Toll Bros. (TOL) is pushing rent-to-own units in its new luxury condo tower on the Brooklyn waterfront in the borough's trendy Williamsburg section, an area with a glut of new projects.

.....

In economically hard-hit Lansing, Mich., the Gillespie Group recently offered several lease-to-own units in a new condo it built in the Stadium District.

"In mid-September we seemed to have just hit a wall as far as customers' desire (or ability) to close or buy," said President Pat Gillespie.

But just one person has signed a contract. So Gillespie plans to push straight rentals after the holidays.

Indeed, pure rentals seem to be trumping rent-to-own deals.

"People think prices are going to continue dropping so they're renting and waiting out the market," said Steve Anderson, an agent with Carson Realty Group in Miami Beach.

People are getting smart and builders are getting desperate. Builders are treading water, trying to hold-on the best they can through one of the worst markets in generations. Buyers are getting hip, realizing they can wait for awhile longer before they commit.

Posted by bonddad at 12/29/2008 09:30:00 AM

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Labels: housing

Market Monday's
Like last week, this week is a short week. There is new years eve on Wednesday and New Year's day on Thursday, meaning Friday is all but gone as well.

Let's start the week with a few charts:

http://3.bp.blogspot.com/_4jIlyJ10uJU/SVf1SgGTiqI/AAAAAAAAAyg/XrkbDDTEqQg/s400/Chart+of+SPY1.gif

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The really big dip at the end of November (when prices dropped to the 74-76 range) really crimps the read of this chart. Without that dip I would call this a consolidation triangle. However even with that we have a declining trend line at the top of the formation and a declining average volume count at the bottom.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SVf12po2ixI/AAAAAAAAAyo/S3LSDEB5Ngo/s400/Chart+of+SPY2.gif

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On this chart, simply notice the rally that started in late November is over.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVf2KzNELvI/AAAAAAAAAyw/LuEjSIYRU1Y/s400/Chart+of+SPY3.gif

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On this chart, notice there is a lot of technical support in the 82-84 area.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVf2XjkVc7I/AAAAAAAAAy4/U4ykgFPa2_8/s400/Chart+of+SPY.gif

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Let's look at the SMA picture

-- Notice the 10, 20 and 50 day SMAs are all bunched up. This indicates a lack of conviction from either the bulls or the bears.

-- Prices are below the SMAs, but not by much

-- Volume has been decreasing for most of December

-- There is no firm direction either way from the SMAs

Posted by bonddad at 12/29/2008 05:00:00 AM

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Tuesday, December 23, 2008Merry Christmas
Tomorrow is Christmas Eve. I and Mr$. Bonddad have a ton of work to do before we have our first Christmas dinner with family at our house. Daddy Bonddad is in town along with a lot of other family. Needless to say, my list of honey do's is long. To that end, I am going to sign off the blog until next Monday. On behalf of me, Mr$. Bonndad and our our extended family I want to wish all the readers of this blog a Merry Christmas.

http://2.bp.blogspot.com/_4jIlyJ10uJU/SVERdvuIqJI/AAAAAAAAAyY/EqWAhc2clZw/s400/dollar_face.jpg

Posted by bonddad at 12/23/2008 10:26:00 AM

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Treasury Tuesdays
http://4.bp.blogspot.com/_4jIlyJ10uJU/SVDZ-zg-xsI/AAAAAAAAAyI/dEJSD3IBJrU/s400/Chart+of+IEF1.gif

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Notice the prices are way above the trend channel that lasted for most of nine months. That's a big deal

http://3.bp.blogspot.com/_4jIlyJ10uJU/SVDaU0QdeTI/AAAAAAAAAyQ/UHBA0XwB1Mo/s400/Chart+of+IEF3.gif

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Notice the following on the daily chart:

-- Prices are 7% above the upper trend line of 9 month trend channel mentioned above

-- All the SMAs are moving higher

-- The shorter SMAs are above the longer SMAs

-- Prices are above all the SMAs

The 10-year treasury is currently yielding 2.15%. Who would have thought that was even possible? A county that is about to balloon its existing debt can do so at 2.15%? Go figure.

Posted by bonddad at 12/23/2008 09:00:00 AM

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hefeiddd 发表于 2009-3-25 15:50

Tuesday, December 23, 2008Today's Markets
Actually -- it's yesterday's market, but who's counting?

http://2.bp.blogspot.com/_4jIlyJ10uJU/SVDYVPCzLcI/AAAAAAAAAx4/6fjbWmWxWjQ/s400/Chart+of+SPY+t.gif

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One of the big events yesterday is prices broke through the upward sloping trendline that started at the beginning of November.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SVDYwq20HqI/AAAAAAAAAyA/TxOr7TMxoxM/s400/Chart+of+SPY+triangle.gif

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In addition, there was an upward sloping triangle that prices broke through as well.

The only good news about these trend breaks is they occurred on lower volume.

Posted by bonddad at 12/23/2008 06:17:00 AM

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Monday, December 22, 2008Today's Markets
Mr$ Bonddad here, Bonddad has picked up Daddybonddad up from the airport for holiday festivities. He'll be back in the morning.

Posted by bonddad at 12/22/2008 04:21:00 PM

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Media Appearance
I'll be on KTLK at 2:30 CST to talk about the economy.

Posted by bonddad at 12/22/2008 01:36:00 PM

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Don't Count on the Little Guy
From the WSJ:

Today's investors, too, are surveying a stock-market collapse and a wave of Wall Street failures and scandals. Many have headed for the exits: Investors pulled a record $72 billion from stock funds overall in October alone, according to the Investment Company Institute, a mutual-fund trade group. While more recent figures aren't available, mutual-fund companies say withdrawals have remained heavy.

If history is any guide, they may not return quickly.

......

Individual investors arguably form the bedrock of the market. It's difficult to pinpoint how much stock they hold, because they own shares through mutual funds, retirement accounts and other vehicles. But once retirement accounts are factored in, individuals likely account for half or more of all U.S. stock holdings, according to data from Birinyi Associates in Westport, Conn.

Investors' discomfort with stocks has been growing for years, since just after the 2000 selloff of dotcom shares. From 2002 through 2005, investors put an average of $62 billion a year into U.S. stock mutual funds, less than half the annual level of the previous decade. Since 2006, investors have been pulling money out of U.S. stock funds at a rate of about $40 billion a year.

Such skittishness already promises to put a brake on the stock market's recovery, which could make it harder for companies to raise capital and could squeeze financial firms' profits. That, in turn, could delay the economy's emergence from the severe recession that began last year.

This is a prime reason why the Madoff scandal is so debilitating -- it completely kills confidence in the market.

Posted by bonddad at 12/22/2008 11:26:00 AM

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What About Next Year?

Above is a video from this week's Barron's. Essentially, people are seeing a modest recovery but nothing to write home about. The Fed printing money and the mammoth spending plan coming in will help but the economy is facing incredibly strong headwinds. That being said, consider the following charts of the NYSE and NASDAQ advance/decline and new highs/new lows line with the charts listed below.

http://4.bp.blogspot.com/_4jIlyJ10uJU/SU-z07sTUpI/AAAAAAAAAxo/9qiWPT89bgA/s400/NAHL.png

http://2.bp.blogspot.com/_4jIlyJ10uJU/SU-z0vwui8I/AAAAAAAAAxg/y7M8KPYsekM/s400/NAAD.png

http://3.bp.blogspot.com/_4jIlyJ10uJU/SU-z0dA8okI/AAAAAAAAAxY/vC5yfhWS56k/s400/NYHL.png

http://2.bp.blogspot.com/_4jIlyJ10uJU/SU-zz54tVdI/AAAAAAAAAxQ/T8sNY9JVxIo/s400/NYAD.png

Click on all images for a larger image

With all of these charts, notice the new highs/new lows line is decreasing at a far lower rate and the advance decline line has rebounded somewhat.

Posted by bonddad at 12/22/2008 09:32:00 AM

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Market Monday's
Let's take a look at a few charts to get the ball rolling. I'm going to start with the IWMs. This is the ETF tracking stock for the Russell 2000. Because this index deals with smaller cap stocks it's a good proxy for risk capital.

http://1.bp.blogspot.com/_4jIlyJ10uJU/SU-K3Ov3lzI/AAAAAAAAAxA/FGJoHnRdpPw/s400/Chart+of+IWM.gif

Click for a larger image

Notice the following on the three month chart:

-- The market has been rallying since the end of November

-- Prices have broken through upside resistance from the upper downward sloping trend line

-- Prices are above the 50 day SMA

-- The 10 and 20 day SMA are moving higher

-- The 10 day SMA is above the 20 day SMA

-- Volume has been steady

http://3.bp.blogspot.com/_4jIlyJ10uJU/SU-LkeDkYEI/AAAAAAAAAxI/Z-QV2jnT85g/s400/Chart+of+QQQQ.gif

Click for a larger image

Notice the following on the QQQQs:

-- The market has been rallying since the end of November

-- Volume has been dropping for the duration of the rally

-- Prices have broken through upside resistance from the upper downward sloping trend line

-- Prices have formed a triangle consolidation pattern over the last week or so

-- Prices are right below the 50 day SMA

-- The 10 and 20 day SMA are moving higher

-- The 10 day SMA is above the 20 day SMA

http://3.bp.blogspot.com/_4jIlyJ10uJU/SU-KgoWLpPI/AAAAAAAAAw4/glorTI7CA_M/s400/Chart+of+SPY.gif

Click for a larger image

Notice the following on the three month SPY chart:

-- The market has been rallying since late November

-- Volume has been decreasing for the duration of the rally

-- Prices can't quite get over the upper line of the downward sloping channel

-- The 10 day SMA is above the 20 day SMA

-- The 10 day SMA recently turning down but the general trend is still up

-- The 10, 20, and 50 day SMA are jammed into a small price area

Bottom line: the situation with the Russell 2000 is very positive. That index has been rising on good volume and has broken through key upside resistance. All of these factors indicate early risk capital is getting in. The QQQQs are also in good technical shape save the declining volume over the last rally. However, this could also be a sign of people not wanting to over-commit to a possible rally. The SPYs suffer from two problems: they haven't broken above hey upside levels yet and they have declining volume. Again -- this could be because people want to participate but not too much or there is leglitamte concern.

Still, the positives outweight the negatives on these combined charts. The markets look poised for some early year gains.

Posted by bonddad at 12/22/2008 06:38:00 AM

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hefeiddd 发表于 2009-3-25 15:51

Posted by bonddad at 12/19/2008 09:30:00 AM

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Forex Friday's
http://1.bp.blogspot.com/_4jIlyJ10uJU/SUuYTjJFRSI/AAAAAAAAAwQ/pgZ-8RnxGUo/s400/dollar+w.png

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Notice the following on the weekly chart

-- Prices have moved through the 10 and 20 week SMAs

-- The 10 week SMA has turned lower

-- The RSI was overbought but is now in neutral territory

-- The MACD is overbought

http://2.bp.blogspot.com/_4jIlyJ10uJU/SUuYvBVQ3KI/AAAAAAAAAwY/SqfglkKIqSQ/s400/dollar+d.png

Click for a larger image

Notice the following on the daily chart:

-- Prices have broken through two levels of technical support this week

-- The 10 and 20 day SMA are both moving lower

-- The 10 day SMA has crossed below the 50 day SMA and the 20 day SMA is about to

-- The RSI is now oversold as is the MACD

Posted by bonddad at 12/19/2008 06:48:00 AM

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Thursday, December 18, 2008Today's Market
http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-192.gif

On the SPYs note the following:

-- Prices are right at the top of a downward sloping channel

-- Prices have been increasing since the end of November

-- The 10 day SMA is rising, it has crossed the 20 day SMA and it is about to cross over the 50 day SMA

-- Prices are above the 10, 20 and 50 day SMA

-- The 20 day SMA is now increasing

Let's add a few more charts

http://i17.photobucket.com/albums/b84/bonddad/ChartofQQQQ-68.gif

Notice the following on the QQQQs

-- Prices are above the downward sloping channel

-- Prices are right at the 50 day SMA

-- The 10 day SMA crossed the 20 day SMA

-- The 20 day SMA is heading higher

-- Prices have been rallying since the end of November

http://i17.photobucket.com/albums/b84/bonddad/ChartofIWM-19.gif

Notice the following on the IWMs

-- Prices have been increasing since late November

-- Prices are above the downward sloping channel

-- Prices are over the 50 day SMA

-- The 10 day SMA is increasing, it has crossed over the 20 day SMA and it is about to cross over the 50 day SMA

Bottom line: the markets are lining up for a rally.

Posted by bonddad at 12/18/2008 03:12:00 PM

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Manufacturing Tanking Hard
We've had all the monthly manufacturing data released. The news is terrible.

Let's start with the ISM manufacturing survey. Here is the relevant graph:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUpqv3fMUfI/AAAAAAAAAvo/qBkn97PdgqI/s400/ISM+Man.gif

Click for a larger image

Notice the index as dropped off a cliff over the last two months. Consider the following from the report:

PERFORMANCE BY INDUSTRY

The two industries reporting growth in November — listed in order — are: Apparel, Leather & Allied Products; and Paper Products. The industries reporting contraction in November are: Nonmetallic Mineral Products; Fabricated Metal Products; Textile Mills; Printing & Related Support Activities; Machinery; Electrical Equipment, Appliances & Components; Primary Metals; Transportation Equipment; Furniture & Related Products; Plastics & Rubber Products; Computer & Electronic Products; Chemical Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Wood Products.

WHAT RESPONDENTS ARE SAYING ...

* "The only positive thing of late is that the U.S. dollar has strengthened significantly against other currencies. We import the majority of our materials so this will have the effect of lowering our COGS." (Transportation Equipment)
* "Steel industry is our main customer, and they have had a real slowdown." (Computer & Electronic Products)
* "Criteria for projects is significantly higher with very short ROI periods." (Food, Beverage & Tobacco Products)
* "We have revised downward our top-line sales estimates for CY2009 by 8 percent due to the continued softness we see in the housing sector." (Machinery)
* "Suppliers are trying to hold onto pricing, but petrochemical and commodity prices are dropping like a rock." (Plastics & Rubber Products)

And consider the historic nature of the problem:

The contraction underway in the manufacturing sector is of historic proportions, the results of November's ISM manufacturing report that shows a headline index of 36.2, down nearly 3 points in the month. The reading is the lowest since 1980 recession. Key components in the survey show greater weakness than the headline index including a 31.5 level for the production index that matches the record low in May 1980. New orders at 27.9 is at its lowest since the early 80s while, in perhaps the most stunning reading of all, prices paid is at 25.5, down 11.5 points in the month for the lowest reading since early data in 1949 -- a critical indication that demand is falling and falling very sharply.

Notice that only two industries expanded whereas 16 contracted. Sales reports are being downgraded and the criteria for projects is increasing. Simply put -- things are bad. Also note we are at lows not seen since the 1980s. That is not a comparison anyone wants to make.

Overall industrial production is also down. From the Federal Reserve:

Industrial production decreased 0.6 percent in November with declines widespread across industries. The drop in output in September was revised down, and the rebound in October was revised up, in large part because both the decrease due to the September hurricanes and the subsequent partial recovery in October were larger than previously reported.

Manufacturing production dropped 1.4 percent in November despite the resumption of activity in the commercial aircraft industry after the resolution of a strike early in the month. The output of mines advanced 2.5 percent, primarily as a result of a further post-hurricane recovery in crude oil and natural gas operations in the Gulf of Mexico. Taken together, the rebounds after the strike and the hurricanes added almost 1 percentage point to the change in industrial production. The output of utilities rose 1.6 percent.

At 106.1 percent of its 2002 average, total industrial production in November was 5.5 percent below its level of a year earlier. The capacity utilization rate for total industry fell to 75.4 percent, a level 5.6 percentage points below its average level from 1972 to 2007.

Here are the relevant graphs:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUptbchqLUI/AAAAAAAAAvw/YSI1HtDz-wE/s400/Indus+Pro.gif

http://3.bp.blogspot.com/_4jIlyJ10uJU/SUptbmOo4uI/AAAAAAAAAv4/FTmIrdcdOsQ/s400/Cap+Ut.gif

Click for larger images

The year over year number is a big concern. Also note that capacity utilization is leveling at a lower level than the level we've had for the last few years. The bottom line is we're slowing down.

The New York area's manufacturing index is also in very bad shape:

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in December. The general business conditions index, at -25.8, held near the record low set in November. The new orders and shipments indexes also remained near their recent record lows, and the unfilled orders index dropped to a new low. The indexes for prices paid and prices received fell below zero, and employment indexes remained deep in negative territory. Future indexes remained subdued, with the capital spending and technology spending indexes remaining well below zero.

The graph shows the severity of the slowdown:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUpu8y2MiPI/AAAAAAAAAwA/ecT2LdQH4qQ/s400/Empire.gif

Click for a larger image

Again -- this is a significant decline which happened quickly. In indicates the slowdown is extreme, sharp and very sudden.

Finally there is the Philadelphia survey:

Conditions in the region's manufacturing sector continued to deteriorate this month, according to firms polled for the December Business Outlook Survey. All of the survey's broad indicators remained negative this month and at relatively low levels. Firms reported declines in input prices and the prices for their own manufactured goods this month. Consistent with the weakness in current activity, most of the survey's indicators of future activity slid further into negative territory, suggesting that the region's manufacturing executives expect continued declines over the next six months.

Here is the relevant graph:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUpwDN1jreI/AAAAAAAAAwI/ry-5rvz8fsA/s400/Philly+Fed.gif

There is no good news in any of these releases. Simply put, manufacturing is in terrible shape.

Posted by bonddad at 12/18/2008 11:30:00 AM

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Labels: industrial production, ism manufacturing, NY manufacturing, Philly Fed

Wherein I Pay Up On A Bet
I am a total economics geek. I make bets on what the inflation rate will be at year end.

I bet New Deal Democrat over at the http://www.economicpopulist.org/]Economic Populist that the US inflation rate for the US would be higher in 2008 than 2007. While there is still one month left I feel confident in saying that December will not see a massive jump in inflation. As a result, I have donated $50 to Baghdad Pups.

BTW -- this is an entirely worthy charity run by the SPCA to help service men and women bring home animals they have befriended in Iraq. Being a big dog lover this is right up my alley.

Posted by bonddad at 12/18/2008 09:30:00 AM

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Thursday Oil Market Round-Up
http://4.bp.blogspot.com/_4jIlyJ10uJU/SUpETlppPMI/AAAAAAAAAvY/Jbk9Jm-oCjM/s400/oil+w.png

Click for a larger image

Notice the following on the weekly chart:

-- Prices are near their lowest level in three years

-- All the SMAs are moving lower

-- Prices are below all the SMAs

-- The shorter SMAs are below the longer SMAs

BUT

-- The RSI is oversold and

-- The MACD is oversold

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUpEreEi5mI/AAAAAAAAAvg/EQwtT4P5cqg/s400/Oil+d.png

Click for a larger image

Notice the following on the daily chart:

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices have been bouncing from the 20 day SMA for the last three months

BUT

-- The MACD has been increasing for the last few months.

Bottom line: The market is technically oversold right now. But there are no fundamental events strong enough to move the market higher. Consider the following:

Since September, members of the Organization of the Petroleum Exporting Countries have pledged cuts totaling 4.2 million barrels a day, or nearly 12 percent of their capacity, a record in such a short time.

The bottom line is a lot of capacity is going off line (at least theoretically). If a 10% cut in production isn't strong enough to move prices higher, then it's going to take a lot more. My guess is from here oil will try and form a bottom to rally from.

Posted by bonddad at 12/18/2008 06:38:00 AM

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Wednesday, December 17, 2008Today's Market
http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-190.gif

Let's look at the daily chart to see what the technicals tell us:

-- The longer term trends are still bearish: the 50 and 200 day SMAs are both heading lower

-- Prices are still in a downward sloping channel

BUT

-- Prices are above the 10, 20 and 50 day SMA

-- The 10 day SMA is moving higher

-- The 10 day SMA is above the 20 day SMA

This is a chart in transition; it is a mix of bullish and bearish indicators.

Posted by bonddad at 12/17/2008 03:46:00 PM

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hefeiddd 发表于 2009-3-25 15:52

Posted by bonddad at 12/17/2008 09:30:00 AM

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Wednesday Commodity Round-Up
http://1.bp.blogspot.com/_4jIlyJ10uJU/SUjzWSbNLdI/AAAAAAAAAvA/SZqVmd31KDg/s400/CR+W.pngClick for larger image

Notice the following on the weekly chart:

-- Prices are at or near their lowest point in over three years

-- Prices have taken a nosedive over the last 5 months

-- The shorter SMAs are below the longer SMAs

-- All the SMAs are moving lower

-- Prices are below all the SMAs

BUT

-- The MACD is oversold

-- The RSI is oversold big time

http://2.bp.blogspot.com/_4jIlyJ10uJU/SUjzxc9adgI/AAAAAAAAAvI/jAj9BbmynDk/s400/CRB+D.png

Click for a larger image

Notice the following on the daily chart:

-- Prices have continually moved lower over the last 5 months

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices have continually used the 20 day SMA as upside resistance over the last 4 months and are doing so now.

BUT

-- The MACD has been rising for the last month and a half and

Bottom line: this is an index that wants to rally. The weekly RSI and MACD and the daily MACD are all signaling an oversold condition. But, right now there is no fundamental catalyst. The OPEC announcement might help, but we will have to wait and see.

Posted by bonddad at 12/17/2008 06:40:00 AM

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Tuesday, December 16, 2008Today's Market
WOW -- important technical news today

http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-189.gif

Note the SPYs are now trading above the 50 day SMA. That's very important news -- it indicates the rally is gaining strength.

Posted by bonddad at 12/16/2008 03:24:00 PM

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The Fed's New Strategy: The Kitchen Sink Interest Rate Policy
The Fed announced their policy of establishing "a target range for the federal funds rate of 0 to 1/4 percent."

This brings two points to mind:

1.) The Fed has no interest rate moves left. This is it.

2.) The Fed is terrified about the economy. And they have good reason:

Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

Let's look at the charts:

http://i17.photobucket.com/albums/b84/bonddad/employment-1.png

Employment has taken a nosedive. As a result:

http://i17.photobucket.com/albums/b84/bonddad/PCE-7.png

People have cut way back on their spending. As a result:

http://i17.photobucket.com/albums/b84/bonddad/unduspro.png

Industrial production is dropping and so is:

http://i17.photobucket.com/albums/b84/bonddad/caput-4.png

Capacity Utilization -- the amount we are using of our manufacturing capacity.

More to the point, the Fed will step up their other activities:

The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.

To the point: the Fed is scared right now. I mean really scared. And they will do anything even remotely possible right now.

Posted by bonddad at 12/16/2008 01:31:00 PM

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hefeiddd 发表于 2009-3-25 15:53

Tuesday, December 16, 2008Federal Reserve Lido
http://3.bp.blogspot.com/_4jIlyJ10uJU/SUfw0db8rFI/AAAAAAAAAu4/p67cLnLoA2U/s400/fed+funds.png

Click for a larger image

How low can they go?

Posted by bonddad at 12/16/2008 12:16:00 PM

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So Much for Inflation
From the BLS:

The Producer Price Index for Finished Goods fell 2.2 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decline followed decreases of 2.8 percent in October and 0.4 percent in September. At the earlier stages of processing, prices received by manufacturers of intermediate goods dropped 4.3 percent in November after falling 3.9 percent in the prior month, and the crude goods index declined 12.5 percent subsequent to an 18.6-percent decrease in October.

Here's the relevant YOY PPI chart:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUfK-a7d6kI/AAAAAAAAAuo/L2cHoUithjs/s400/ppi+yoy.gif

Click for a larger image

Also from the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 1.9 percent in November, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The November level of 212.425 (1982-84=100) was 1.1 percent higher than in November 2007.

Here's the relevant year over year chart:

http://3.bp.blogspot.com/_4jIlyJ10uJU/SUfRFtXbMRI/AAAAAAAAAuw/akxkPoxePso/s400/cpi+yoy.gif

Click for a larger image

When looking at these charts it's important to remember the impact of the CRB index which has been crashing hard:

http://1.bp.blogspot.com/_4jIlyJ10uJU/SUfJvMG3_VI/AAAAAAAAAuY/9qC8U_fjaIo/s400/crb+w.png

Click for a larger image

This in turn is caused (at least partially) by the rallying dollar:

http://3.bp.blogspot.com/_4jIlyJ10uJU/SUfKjoD3AkI/AAAAAAAAAug/8RDZx1tNq7k/s400/dollar+w.htm

Click for larger image

Notice how the dollar's rally and the CRB's drop occurred at about the same time.

The bottom line is inflation is no longer an issue. It also means a period of deflation is possible. What fun.

Posted by bonddad at 12/16/2008 10:30:00 AM

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Treasury Tuesdays
Are we in a Treasury market bubble? Some people think so:

In the wake of popped stock, housing and commodity bubbles, some see a fourth bubble building -- in Treasury bonds. Unlike those bubbles, this one doesn't have to end disastrously.

Treasury yields, which move inversely to prices, are at historic lows. Friday, the yield on the 10-year note fell to 2.47%, the lowest in Federal Reserve records going back to 1962 and well below the average of the past decade of about 4.7%.

Treasurys have been rare good investments in this awful year, returning 10% through November, according to Merrill Lynch chief North American economist David Rosenberg, a longtime bond bull. But even he recently told clients that Treasurys were "clearly heading into a bubble phase" and suggested there might be greener pastures in other fixed-income investments, such as debt backed by government-sponsored entities.

Meanwhile, the U.S. government may post a trillion-dollar budget deficit in the fiscal year ending in September and has pounding fiscal headaches looming far beyond that. Some key buyers of its debt, foreign central banks, are launching their own expensive stimulus packages and would seemingly have better uses for their cash.

And while the U.S. government's access to cheap money helps its efforts to stimulate the economy, it also may crowd out other borrowers. Municipalities and companies with good credit histories are paying exorbitant rates to borrow, arguably extending the pain of the credit crunch.

"We have a remarkable situation in which a 30-year loan to the U.S. government with a taxable instrument pays you 3% and a loan to the state of Ohio pays you 5% tax-free," said David Kotok, president of money-management firm Cumberland Advisors in Vineland, N.J.

A few weeks ago I noted that yields would probably provide some upside resistance for bonds. Remember prices and yields move inversely; as bonds prices rise yields fall. At some point, investors just aren't being compensated for the time risk they are taking (as in lending money for a long period of time).

Unfortunately, this did not take into effect the credit crunch. Right now people are not thinking about return on capital; they are thinking about return of capital. As a result government bonds look pretty good. But take a look at the charts:

http://i17.photobucket.com/albums/b84/bonddad/ChartofTLT5-1.gif

Above is a 5-year chart of the TLTs -- the ETF that tracks the long end of the Treasury curve. Prices remained in an 82 - 96 range for three and a half years from 2005 until the 4Q of 2008. Before that they were trading cheaper. Now take a look -- prices are spiking into record high territory.

Here is a chart of the 30-year yield. Remember the 30 year bond was retired for several years at the beginning of this decade:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUeftS154DI/AAAAAAAAAuI/tBkCTfwo30U/s400/DGS30_Max_630_378.png

Click for a larger image

Yields are now the lowest they have been in over 30 years.

http://i17.photobucket.com/albums/b84/bonddad/ChartofIEF-17.gif

Above is a 5-year chart of the IEFS -- the ETF that tracks the 7-10 year Treasury market. Notice that prices are at record highs. Earlier this year I commented that Treasuries (specifically the IEFs) may be forming a double top, which is better illustrated by the following 1-year chart:

http://i17.photobucket.com/albums/b84/bonddad/ChartofIEF1-7.gif

The first top occurred right after the first of March and the second top occurred right at the beginning of September. But notice that prices have moved right through the 92.5 area to make a new top. Here's a chart of the 10-year CMT Treasury's yield -- which moves inversely to price:

http://3.bp.blogspot.com/_4jIlyJ10uJU/SUeguvH_mHI/AAAAAAAAAuQ/qC4v0eb5uFE/s400/DGS10_Max_630_378.png

Click for a larger image

Again, notice that yields are at multi-decade lows.

http://i17.photobucket.com/albums/b84/bonddad/shy5.gif

Above is a chart of the SHYs -- the short end of the Treasury curve. Again, notice the price spikes that have occurred in the latest rally.

All of the charts above are "bubble" charts -- prices have spiked to incredibly high levels largely based on panic and concern. Also consider the fiscal backdrop this is occurring in. There are talks of the new administration implementing a $1 trillion spending program over 2 years. That means record deficits. As a result the Treasury will need to borrow big. Increased supply = lower price = higher yield. At least that's what traditional market thinking would lead to.

Posted by bonddad at 12/16/2008 06:25:00 AM

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Monday, December 15, 2008Today's Market
http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-188.gif

Most of my thoughts on today's market were written in this morning's post. The central issue is technically the market wants to rebound -- the MACD and OBV are increasing and the market has shrugged off some very bad news. But so long as prices remain in a downward sloping channel I will be concerned.

Posted by bonddad at 12/15/2008 03:50:00 PM

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Some Very Interesting Observations
The following is from a Barron's interview with Stephanie Pomboy:

What else do you see happening in the near term?

With the government guaranteeing all manner of private-credit claims, many investors may decide to get long "socialism," for lack of a better term. Or, as some euphemistically put it, this is partnering with the government. So in the short run, we could see a rally in risky assets and a selloff in Treasuries. But the economic deleveraging has barely begun, and that's my longer-term thesis. It all revolves around the idea that U.S. consumers are actually going to do the unthinkable -- they are going to save -- and that we will be more like Japan than anyone believes is possible.

Hence, consumption declines.

Right. Wages have been silently crowded out by benefits as a share of total compensation, as companies look to offset rising health-care costs. The result is that the share of income that consumers can actually spend is at its lowest in the post-war period. It had not been a problem, because consumers would just borrow to fill that gap. But now, they don't have appreciating assets against which to borrow. So while we could get a rally in risk assets -- including high-yield debt -- it's likely to be a short-term rally within a context of a secular bear market.

I have not seen this idea/concept phrased as well. Wages -- the actual dollars that people spend -- have been crowded out by benefits -- as in medical insurance. In other words, the raise that people thought they were getting in their overall compensation in fact went to something they could only spend on one thing -- namely health care. As a result, people have to borrow to buy other stuff. Hence we have seen the following events.

Consumer debt has been increasing:

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUaSFOTPI8I/AAAAAAAAAt4/4XOTDrx4AMY/s400/condebt.gif

Click for a larger image

Savings has been decreasing:

http://3.bp.blogspot.com/_4jIlyJ10uJU/SUaSUpi8FDI/AAAAAAAAAuA/HxD4QFpDzL0/s400/savings.png

Click for a larger image

Posted by bonddad at 12/15/2008 11:14:00 AM

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Retail Sales Drop
http://3.bp.blogspot.com/_4jIlyJ10uJU/SUZ1oeGND1I/AAAAAAAAAtw/c9sTZc-ZKDE/s400/adv11108.gif

Click for a larger image

Above is the chart from the Census Bureau's release. But, it's not as bad as thought:

With gasoline prices plunging and auto sales on life support, U.S. retail sales dropped 1.8% in November for their fifth straight decline, the Commerce Department reported Friday.

Retail sales -- which account for about a third of final demand -- were down 7.4% compared with a year earlier. In the past three months, sales have fallen 4.7% compared with the previous three months.

.....

But the extent of the decline was exaggerated by a historic drop in retail gasoline prices in November. Excluding the record 14.7% fall in sales at gas stations, retail sales fell just 0.2%.

This drop should not be surprising. The US is in a recession, consumer confidence is low and households are taking major hits to both their stock and real estate portfolios. To that end, notice this huge drop in household wealth from the just released Flow of Funds Report

There is also the possibility things aren't that bad when you take out autos and gas station sales:

However, excluding those two sectors and the weak building-materials industry, retail sales would have increased 0.5% for the month. With the economy losing half a million jobs in November, said J.P. Morgan Chase & Co. economist Michael Feroli, "the most plausible explanation for the increase...is that gasoline prices dropped a record 30% in the month, freeing up purchasing power for those lucky enough to keep their jobs."

The short version here is Christmas probably won't be as bad as people think. But that does not mean consumers are going to go all out either. In addition, my guess is that after the first of the year we're going to see big pull backs as people hunker down for the next few months to see what the new administration does and whether or not it helps.

Posted by bonddad at 12/15/2008 09:18:00 AM

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Market Monday's
I'm back. Let's start the week off with a broad look at the markets.

http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY7-6.gif

Let's start with a long-view. Above is a 7-year chart of the SPYs in weekly increments. Notice that all gains from the 2003-2007 rally are now gone. The market is trading at levels from the 2002-2003 consolidation.

http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY1-20.gif

Above is a yearly chart in daily increments. Please note the following:

-- Once prices fell through the 120 level, they dropped hard and fast. They went to 90 (a 25% drop) within a month, and hit the 75 level (a 37.5% drop) wthin two months. Obviously 120 was an incredibly important level for traders

-- There was also a big volume spike on the sell-off indicating a lot of people were simply getting out.

-- The market is 25.84% below the 200 day SMA. In other words, we're clearly in a bear market

http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY3-8.gif

On the 3-month daily chart notice the following:

-- The 50 and 200 day SMA (longer term trends) are both moving lower

-- The 10 day SMA is rising and it has crossed the 20 day SMA

-- The 20 day SMA is neutral (moving sideways)

-- Prices rose to the 50 day SMA but couldn't get over the line. They retreated to the 20 day SMA and bounced higher

-- Prices are still in a downward sloping channel

-- Remember the bearishness of the news over the last few weeks. We've learned the nation as lost over 1 million jobs in the last three months. Retail sales were weak. The auto industry is in deep trouble. If it falls the unemployment situation would worsen fast. And yet, the market has not cratered as bad as possible.

Let's add a few more charts.

http://i17.photobucket.com/albums/b84/bonddad/ChartofSPYMACD-1.gif

The MACD has been rising for the last two months indicating momentum is changing

http://i17.photobucket.com/albums/b84/bonddad/ChartofSPYOBV.gif

As has the On Balance Volume. This tells us that money is flowing into the market

Let's add a few more charts to complete the picture

http://i17.photobucket.com/albums/b84/bonddad/new.png

The NY Advance/Decline line is rising

http://i17.photobucket.com/albums/b84/bonddad/new-1.png

And the downward slope of the NY new high/new low line is lessening

http://i17.photobucket.com/albums/b84/bonddad/NAAD-3.png

The NASDAQ advance/decline line is also rising and

http://i17.photobucket.com/albums/b84/bonddad/NAHL-2.png

The NASDAQ new high/new low line is declining at a slower rate

So -- what does all of this tell us?

The markets have reacted surprisingly well to incredibly bearish economic news. This tells us traders are priced in a fairly downbeat scenario. At the same time, the market internals are improving. This tells us the market wants to pull out of its downward slump.

My personal big concern is the downward sloping trend channel. Until prices move out of that I'm concerned.

Posted by bonddad at 12/15/2008 06:47:00 AM

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Friday, December 12, 2008Weekend Weimer and Beagle
Hey folks -- sorry about the lack of posting today. It has really been, well, crazy -- but is a really good way. I'll be back on Monday.

Posted by bonddad at 12/12/2008 03:20:00 PM

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hefeiddd 发表于 2009-3-25 15:54

Posted by bonddad at 12/12/2008 09:30:00 AM

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Forex Friday's
http://3.bp.blogspot.com/_4jIlyJ10uJU/SUJmcfABE4I/AAAAAAAAAtY/wjKErNTHUkA/s400/dollar+w.png

Click for a larger image

Notice the following on the weekly chart

-- Prices rose 23% over the last 5 months

-- All the SMAs are still moving higher

-- The shorter SMAs are above the longer SMAs

-- Prices have now moved through the 10 week SMA

-- The MACD is overbought

-- The RSI is overbought and declining

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUJnIV1mvuI/AAAAAAAAAto/69-dvJgBv4Q/s400/dollar+d.png

Click for a larger image

Notice the following on the dollar's daily chart:

-- Prices are still in an uptrend,

BUT:

-- During the consolidation the RSI and MACD decreased

-- Prices are now below the 10, 20 and 50 day SMA

Bottom line: technically, this chart wants to go lower. Fundamentally the failure of the Detroit bail-out will help to add downward momentum.

Posted by bonddad at 12/12/2008 07:24:00 AM

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Thursday, December 11, 2008Today's Markets
http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-187.gif

The overall tone of the market remains negative. The general SMA situation is negative. The 200 and 50 day SMA are moving lower. The 20 is moving sideways. The 10 day SMA is rising, but prices retreated from the 50 day SMA. Should prices move below the 10 day SMA they will bring the 10 day SMA lower.

Although prices were fluctuating just below the 50 day SMA, they did so on decreasing volume indicating decreasing buying interest.

Posted by bonddad at 12/11/2008 03:48:00 PM

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We're Nowhere Near a Bottom in Housing
From Bloomberg:

U.S. foreclosure filings climbed 28 percent in November from a year earlier and a brewing “storm” of new defaults and job losses may force 1 million homeowners from their properties next year, RealtyTrac Inc. said.

A total of 259,085 properties got a default notice, were warned of a pending auction or were foreclosed on last month, the seller of default data said in a report today. That’s the fewest since June. Filings fell 7 percent from October as state laws and lender programs designed to delay the foreclosure process allowed delinquent borrowers to stay in their homes.

“We’re going to see a pretty significant storm next year,” Rick Sharga, executive vice president of marketing for Irvine, California-based RealtyTrac, said in an interview. “There are two or three clouds that suggest a pretty heavy downpour.”

Rising unemployment, expiring foreclosure moratoriums and state efforts that “run out of steam” will push monthly filings toward the record of more than 303,000 set in August, Sharga said. The number of homes that revert to lenders, the last stage of foreclosure and known as “real estate owned” or REO properties, will increase to 1 million from as many as 880,000 this year, he said.

This is what started the whole thing rolling. And it won't end until housing stabilizes. The central problem right now is inventory which is still at high levels in both an absolute and months of inventory on the market sense. Foreclosures are continually adding to that total, which in turn is bringing home prices down. And they won't stop falling until the amount of inventory drops -- which won't happen until foreclosures start to drop.

Posted by bonddad at 12/11/2008 11:30:00 AM

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The Clock Ticks Down for GM
From Bloomberg:

General Motors Corp. has been asked for payments in advance by a small number of auto-parts suppliers after saying it would run out of money by month’s end without U.S. loans, people familiar with the matter said.

GM has rejected the requests, which so far come from a fraction of its 3,600 suppliers, said the people, who asked not to be identified because the discussions are private. GM typically pays vendors about 45 days after getting an invoice.

Demands for upfront cash add to the strain on the biggest U.S. automaker as it waits on a short-term industry rescue in Washington and the shift in power to President-elect Barack Obama and a new Congress in January. Obama favors using federal funds to remake the companies and keep them out of bankruptcy.

This just adds more fuel to the fire.

Posted by bonddad at 12/11/2008 09:30:00 AM

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Thursday Oil Market Round-Up
http://4.bp.blogspot.com/_4jIlyJ10uJU/SUETrJHk6aI/AAAAAAAAAtI/V9zmn0bMj-E/s400/Oil+w.png

Click for a larger Image

Notice the following on the weekly chart:

-- Prices are near their lowest level in three years

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT:

-- The MACD is very oversold and

-- The RSI is very oversold

http://3.bp.blogspot.com/_4jIlyJ10uJU/SUEUGOabAFI/AAAAAAAAAtQ/1SXHzN9FtrU/s400/oil+d.png

Click for a larger image

Notice the following on the daily chart:

-- Prices have been dropping for 5 months

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT:

-- The MACD is rising, and

-- The RSI is oversold

Bottom line: A lot of technical indicators have been calling for a turnaround for the last 3-4 weeks. But it hasn't materialized. Why? Technical indicators are signals that the possibility of something happening is increasing. A technical indicator could be oversold for months without something happening. This is where a knowledge of the fundamental market is vitally important. Oil traders have been talking relentlessly about demand destruction and a global economic slowdown for the last few months. That's the primary driving force in the oil market. I also think there is an issue of the role speculation played in the run-up to 145. And don't forget the rising dollar and its effect of commodity prices.

Posted by bonddad at 12/11/2008 07:20:00 AM

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Wednesday, December 10, 2008Today's Market
http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-186.gif

The overall tone of the market is still bearish. Notice all SMAs save the 10 day SMA are moving lower. While the 20 day started moving sideways, it did this at the end of October so this is not a move to thril a trader. Also notice the amount of resistance offered by the 50 day SMA. Prices just do not want to cross that line -- at least not yet.

Posted by bonddad at 12/10/2008 04:07:00 PM

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Labels: market analysis

Stiglitz On the Crisis
From the latest Vanity Fair:

There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history—a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it’s crucial to get the history straight.

What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road—we had what engineers call a “system failure,” when not a single decision but a cascade of decisions produce a tragic result. Let’s look at five key moments.

Read the whole thing. Now.

Posted by bonddad at 12/10/2008 01:30:00 PM

2 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Restaurant Jobs No Longer Safe Haven
From the WSJ:

Restaurant jobs, a reliable fallback for many unemployed and immigrant U.S. workers, are shrinking almost as fast as tips left on tables.

The restaurant industry, one of the largest U.S. employers, is experiencing its longest period of job losses on record. Data released Friday by the Bureau of Labor Statistics show that food-service and drinking establishments shed jobs for five consecutive months through November. That's the biggest stretch since 1990, when the government began tracking such numbers.

Major chains like Starbucks Corp. and Brinker International Inc., parent of Chili's, are shutting many locations as customers cut back on everything from lattes to Saturday night dinners out. Weak consumer spending and high ingredient prices have pushed many independent restaurants out of business.

Remember that one of the biggest drops we have seen at the macro level over the last few months are personal consumption expenditures. This trend started in 2007 so it's been going on for some time:

http://4.bp.blogspot.com/_4jIlyJ10uJU/ST_P9cC5OqI/AAAAAAAAAsY/csJRafEBiXc/s400/PCEs.gif

Click for a larger image

And real (inflation-adjusted) retail and food service sales have fallen off a cliff.

http://4.bp.blogspot.com/_4jIlyJ10uJU/ST_QTMSKShI/AAAAAAAAAsg/5drDz5SjZV4/s400/RRSFS_Max_630_378.png

Click for a larger image

During the last recession these sales went sideways. From an employment perspective this kept the sector viable as a place to work. However in this recession consumers have cut back sharply. In the chart above note that real sales have dropped.

http://3.bp.blogspot.com/_4jIlyJ10uJU/ST_Q2bF87fI/AAAAAAAAAso/SFuDk9BfoNs/s400/research.stlouisfed.org.png

Click for a larger image

As a result, the year over year percentage change in real sales is now in negative numbers.

Let's compare the the job situation from the last recession to this one. We'll use the "leisure and hospitality" job figures from the BLS. This isn't an exact match, but it's close enough to give us an idea.

http://1.bp.blogspot.com/_4jIlyJ10uJU/ST_RKtv9ieI/AAAAAAAAAsw/M2aBRPKIGK4/s400/employment.gif

Click for a larger image

In the last recession, the total number of jobs in this area of the economy peaked in July 2001 with 12,110,000 jobs. The trough came in June 2002 with 11,905,000 jobs for total job losses of 205,000.

This time around the economy had 13,635,000 leisure and hospitality jobs in December of last year and 13,486,000 in November 2008 for total losses of 149,000 so far.

http://1.bp.blogspot.com/_4jIlyJ10uJU/ST_SgjTxaXI/AAAAAAAAAs4/9wNdhv1OyhY/s400/hours+worked.gif

Click for a larger image

We've also seen a decrease in the number of hours worked during the latest recession.

how is this news impacting the restaurant stocks?

http://2.bp.blogspot.com/_4jIlyJ10uJU/ST_WPfNX7II/AAAAAAAAAtA/rARaFRpE3jM/s400/restau.gif

Click for a larger image

As the chart from Prophet.net shows, the industry is holding up relatively well. While it has broken support from the multi-year rally, the sector rallied back to the upward sloping trend line where it ran into resistance. However, the employment numbers indicate this is a laggini sector, so there is probably still some downward pressure left.

Posted by bonddad at 12/10/2008 11:30:00 AM

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Labels: employment

Commodities Related Job Market Dropping
From the Street.com:

Rio Tinto (RTP Quote - Cramer on RTP - Stock Picks), one of the world's biggest mining companies, plans to cut 14,000 jobs and reduce capital expenditures to $4 billion from $9 billion in 2009 as the global economic downturn has caused sharp falls in commodity prices.

The company said its 2008 dividend will remain at the 2007 level of $1.36.

Rio Tinto said in a press release Wednesday it's committed to reduce operating costs by at least $2.5 billion a year in 2010, and has expanded its "scope of assets targeted for divestment."

Natural resource jobs have been consistent performers for the job market for the duration of this expansion:

http://4.bp.blogspot.com/_4jIlyJ10uJU/ST--od3dIzI/AAAAAAAAAsA/gkFoD--Q4z4/s400/total+employees.gif

Click for a larger image

As the chart from the Bureau of Labor Statistics demonstrates natural resource related jobs have increased 41% since 2003, increased from 569,000 in May 2003 to 800,000 in November 2008.

But...

http://1.bp.blogspot.com/_4jIlyJ10uJU/ST-_Z-KUrEI/AAAAAAAAAsQ/BdvhXcXvrnc/s400/average+weekly+hours.gif

Click for a larger image

Companies started cutting back on hours worked/week at the beginning of this year. When the total number of hours/week fell below 45 for the second time this year it should have become obvious problems were developing.

Posted by bonddad at 12/10/2008 09:30:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: employment

Wednesday Commodity Round-Up
http://4.bp.blogspot.com/_4jIlyJ10uJU/ST-65rDo6PI/AAAAAAAAArw/4l75OxvypfI/s400/crb+w.png

Click for a larger image

Notice the following on the weekly chart:

-- Prices are near their lowest level in three years

-- Prices have fallen 54% since their high during the summer

-- Prices are below all the SMAs

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

BUT:

-- The MACD is oversold, and

-- The RSI is oversold

http://2.bp.blogspot.com/_4jIlyJ10uJU/ST-7ajVyUmI/AAAAAAAAAr4/SfSuC09iWM0/s400/crb+d.png

Click for a larger image

Notice the following on the daily chart:

-- Prices have been dropping for 5 months

-- Prices have continually moved through previously established lows

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT

-- The MACD is rising, and

-- The RSI is weak

Bottom line: Three indicators -- the daily MACD, the weekly MACD and the weekly RSI have been signaling a possible reversal for some time. Yet, that reversal has not materialized. Why? First, indicators are not fool-proof; they merely give clues to what might happen. Secondly, there is a fundamental change occurring in the commodities market. Traders are contemplating a prolonged slowdown and the impact of that slowdown on commodity prices. Major commodity companies are reporting layoffs (more on that later today). That is having a pronounced effect on prices that is trumping technical considerations.

Posted by bonddad at 12/10/2008 06:42:00 AM

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Labels: commodities

Tuesday, December 9, 2008Reworked Mortgages Aren't Working
From CNBC

Companies:Citigroup Inc | Bank of America Corp | JPMorgan Chase and Co
Reuters | 08 Dec 2008 | 01:22 PM ET
Text Size

Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

"Put simply, it shows that over half of mortgage modifications seemed not to be working after six months," he said.

In reality, I don't find this that surprising. If someone needs to work their re work their mortgage, it tells us the person was probably in an unaffordable home to begin with.

Posted by bonddad at 12/09/2008 11:30:00 PM

3 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: housing

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hefeiddd 发表于 2009-3-25 15:55

Posted by bonddad at 12/12/2008 09:30:00 AM

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Forex Friday's
http://3.bp.blogspot.com/_4jIlyJ10uJU/SUJmcfABE4I/AAAAAAAAAtY/wjKErNTHUkA/s400/dollar+w.png

Click for a larger image

Notice the following on the weekly chart

-- Prices rose 23% over the last 5 months

-- All the SMAs are still moving higher

-- The shorter SMAs are above the longer SMAs

-- Prices have now moved through the 10 week SMA

-- The MACD is overbought

-- The RSI is overbought and declining

http://4.bp.blogspot.com/_4jIlyJ10uJU/SUJnIV1mvuI/AAAAAAAAAto/69-dvJgBv4Q/s400/dollar+d.png

Click for a larger image

Notice the following on the dollar's daily chart:

-- Prices are still in an uptrend,

BUT:

-- During the consolidation the RSI and MACD decreased

-- Prices are now below the 10, 20 and 50 day SMA

Bottom line: technically, this chart wants to go lower. Fundamentally the failure of the Detroit bail-out will help to add downward momentum.

Posted by bonddad at 12/12/2008 07:24:00 AM

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Labels: dollar

Thursday, December 11, 2008Today's Markets
http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-187.gif

The overall tone of the market remains negative. The general SMA situation is negative. The 200 and 50 day SMA are moving lower. The 20 is moving sideways. The 10 day SMA is rising, but prices retreated from the 50 day SMA. Should prices move below the 10 day SMA they will bring the 10 day SMA lower.

Although prices were fluctuating just below the 50 day SMA, they did so on decreasing volume indicating decreasing buying interest.

Posted by bonddad at 12/11/2008 03:48:00 PM

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Labels: market analysis

We're Nowhere Near a Bottom in Housing
From Bloomberg:

U.S. foreclosure filings climbed 28 percent in November from a year earlier and a brewing “storm” of new defaults and job losses may force 1 million homeowners from their properties next year, RealtyTrac Inc. said.

A total of 259,085 properties got a default notice, were warned of a pending auction or were foreclosed on last month, the seller of default data said in a report today. That’s the fewest since June. Filings fell 7 percent from October as state laws and lender programs designed to delay the foreclosure process allowed delinquent borrowers to stay in their homes.

“We’re going to see a pretty significant storm next year,” Rick Sharga, executive vice president of marketing for Irvine, California-based RealtyTrac, said in an interview. “There are two or three clouds that suggest a pretty heavy downpour.”

Rising unemployment, expiring foreclosure moratoriums and state efforts that “run out of steam” will push monthly filings toward the record of more than 303,000 set in August, Sharga said. The number of homes that revert to lenders, the last stage of foreclosure and known as “real estate owned” or REO properties, will increase to 1 million from as many as 880,000 this year, he said.

This is what started the whole thing rolling. And it won't end until housing stabilizes. The central problem right now is inventory which is still at high levels in both an absolute and months of inventory on the market sense. Foreclosures are continually adding to that total, which in turn is bringing home prices down. And they won't stop falling until the amount of inventory drops -- which won't happen until foreclosures start to drop.

Posted by bonddad at 12/11/2008 11:30:00 AM

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Labels: housing

The Clock Ticks Down for GM
From Bloomberg:

General Motors Corp. has been asked for payments in advance by a small number of auto-parts suppliers after saying it would run out of money by month’s end without U.S. loans, people familiar with the matter said.

GM has rejected the requests, which so far come from a fraction of its 3,600 suppliers, said the people, who asked not to be identified because the discussions are private. GM typically pays vendors about 45 days after getting an invoice.

Demands for upfront cash add to the strain on the biggest U.S. automaker as it waits on a short-term industry rescue in Washington and the shift in power to President-elect Barack Obama and a new Congress in January. Obama favors using federal funds to remake the companies and keep them out of bankruptcy.

This just adds more fuel to the fire.

Posted by bonddad at 12/11/2008 09:30:00 AM

1 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Thursday Oil Market Round-Up
http://4.bp.blogspot.com/_4jIlyJ10uJU/SUETrJHk6aI/AAAAAAAAAtI/V9zmn0bMj-E/s400/Oil+w.png

Click for a larger Image

Notice the following on the weekly chart:

-- Prices are near their lowest level in three years

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT:

-- The MACD is very oversold and

-- The RSI is very oversold

http://3.bp.blogspot.com/_4jIlyJ10uJU/SUEUGOabAFI/AAAAAAAAAtQ/1SXHzN9FtrU/s400/oil+d.png

Click for a larger image

Notice the following on the daily chart:

-- Prices have been dropping for 5 months

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

BUT:

-- The MACD is rising, and

-- The RSI is oversold

Bottom line: A lot of technical indicators have been calling for a turnaround for the last 3-4 weeks. But it hasn't materialized. Why? Technical indicators are signals that the possibility of something happening is increasing. A technical indicator could be oversold for months without something happening. This is where a knowledge of the fundamental market is vitally important. Oil traders have been talking relentlessly about demand destruction and a global economic slowdown for the last few months. That's the primary driving force in the oil market. I also think there is an issue of the role speculation played in the run-up to 145. And don't forget the rising dollar and its effect of commodity prices.

Posted by bonddad at 12/11/2008 07:20:00 AM

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Labels: oil

Wednesday, December 10, 2008Today's Market
http://i17.photobucket.com/albums/b84/bonddad/ChartofSPY-186.gif

The overall tone of the market is still bearish. Notice all SMAs save the 10 day SMA are moving lower. While the 20 day started moving sideways, it did this at the end of October so this is not a move to thril a trader. Also notice the amount of resistance offered by the 50 day SMA. Prices just do not want to cross that line -- at least not yet.

Posted by bonddad at 12/10/2008 04:07:00 PM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: market analysis

Stiglitz On the Crisis
From the latest Vanity Fair:

There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history—a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it’s crucial to get the history straight.

What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road—we had what engineers call a “system failure,” when not a single decision but a cascade of decisions produce a tragic result. Let’s look at five key moments.

Read the whole thing. Now.

Posted by bonddad at 12/10/2008 01:30:00 PM

2 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif

Restaurant Jobs No Longer Safe Haven
From the WSJ:

Restaurant jobs, a reliable fallback for many unemployed and immigrant U.S. workers, are shrinking almost as fast as tips left on tables.

The restaurant industry, one of the largest U.S. employers, is experiencing its longest period of job losses on record. Data released Friday by the Bureau of Labor Statistics show that food-service and drinking establishments shed jobs for five consecutive months through November. That's the biggest stretch since 1990, when the government began tracking such numbers.

Major chains like Starbucks Corp. and Brinker International Inc., parent of Chili's, are shutting many locations as customers cut back on everything from lattes to Saturday night dinners out. Weak consumer spending and high ingredient prices have pushed many independent restaurants out of business.

Remember that one of the biggest drops we have seen at the macro level over the last few months are personal consumption expenditures. This trend started in 2007 so it's been going on for some time:

http://4.bp.blogspot.com/_4jIlyJ10uJU/ST_P9cC5OqI/AAAAAAAAAsY/csJRafEBiXc/s400/PCEs.gif

Click for a larger image

And real (inflation-adjusted) retail and food service sales have fallen off a cliff.

http://4.bp.blogspot.com/_4jIlyJ10uJU/ST_QTMSKShI/AAAAAAAAAsg/5drDz5SjZV4/s400/RRSFS_Max_630_378.png

Click for a larger image

During the last recession these sales went sideways. From an employment perspective this kept the sector viable as a place to work. However in this recession consumers have cut back sharply. In the chart above note that real sales have dropped.

http://3.bp.blogspot.com/_4jIlyJ10uJU/ST_Q2bF87fI/AAAAAAAAAso/SFuDk9BfoNs/s400/research.stlouisfed.org.png

Click for a larger image

As a result, the year over year percentage change in real sales is now in negative numbers.

Let's compare the the job situation from the last recession to this one. We'll use the "leisure and hospitality" job figures from the BLS. This isn't an exact match, but it's close enough to give us an idea.

http://1.bp.blogspot.com/_4jIlyJ10uJU/ST_RKtv9ieI/AAAAAAAAAsw/M2aBRPKIGK4/s400/employment.gif

Click for a larger image

In the last recession, the total number of jobs in this area of the economy peaked in July 2001 with 12,110,000 jobs. The trough came in June 2002 with 11,905,000 jobs for total job losses of 205,000.

This time around the economy had 13,635,000 leisure and hospitality jobs in December of last year and 13,486,000 in November 2008 for total losses of 149,000 so far.

http://1.bp.blogspot.com/_4jIlyJ10uJU/ST_SgjTxaXI/AAAAAAAAAs4/9wNdhv1OyhY/s400/hours+worked.gif

http://2.bp.blogspot.com/_4jIlyJ10uJU/ST_WPfNX7II/AAAAAAAAAtA/rARaFRpE3jM/s400/restau.gif

Rio Tinto (RTP Quote - Cramer on RTP - Stock Picks), one of the world's biggest mining companies, plans to cut 14,000 jobs and reduce capital expenditures to $4 billion from $9 billion in 2009 as the global economic downturn has caused sharp falls in commodity prices.

The company said its 2008 dividend will remain at the 2007 level of $1.36.

Rio Tinto said in a press release Wednesday it's committed to reduce operating costs by at least $2.5 billion a year in 2010, and has expanded its "scope of assets targeted for divestment."

Natural resource jobs have been consistent performers for the job market for the duration of this expansion:

http://4.bp.blogspot.com/_4jIlyJ10uJU/ST--od3dIzI/AAAAAAAAAsA/gkFoD--Q4z4/s400/total+employees.gif

Click for a larger image

As the chart from the Bureau of Labor Statistics demonstrates natural resource related jobs have increased 41% since 2003, increased from 569,000 in May 2003 to 800,000 in November 2008.

But...

http://1.bp.blogspot.com/_4jIlyJ10uJU/ST-_Z-KUrEI/AAAAAAAAAsQ/BdvhXcXvrnc/s400/average+weekly+hours.gif

Click for a larger image

Companies started cutting back on hours worked/week at the beginning of this year. When the total number of hours/week fell below 45 for the second time this year it should have become obvious problems were developing.

Posted by bonddad at 12/10/2008 09:30:00 AM

0 comments Links to this post http://www.blogger.com/img/icon18_edit_allbkg.gif
Labels: employment

Wednesday Commodity Round-Up
http://4.bp.blogspot.com/_4jIlyJ10uJU/ST-65rDo6PI/AAAAAAAAArw/4l75OxvypfI/s400/crb+w.png

Click for a larger image

Notice the following on the weekly chart:

-- Prices are near their lowest level in three years

-- Prices have fallen 54% since their high during the summer

-- Prices are below all the SMAs

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

BUT:

-- The MACD is oversold, and

-- The RSI is oversold

http://2.bp.blogspot.com/_4jIlyJ10uJU/ST-7ajVyUmI/AAAAAAAAAr4/SfSuC09iWM0/s400/crb+d.png

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