一个笨蛋的股指交易记录-------地狱级炒手

hefeiddd

Tuesday, February 17, 2009Today's Markets
It's days like this that make me think the market just doesn't like me.


No matter which lower trend line you are using prices today went through all of them on solid volume. That means the probability of testing the lows from the end of last year just increased in a big way.



On the daily chart, notice that prices just died at the opening and stayed there all day long. Prices also closed at or near their low point of the day on solid volume. so much for the market moving higher with the mortgage plan, huh?

Posted by bonddad at 2/17/2009 03:30:00 PM

0 comments Links to this post
Labels: market analysis




Empire State Still Terrible
From the NY Fed:

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February. The general business conditions index fell to a new low of -34.7. The new orders index also fell to a new low, the unfilled orders index stayed close to its recent record low, and the shipments index—despite a slight improvement—remained negative. The indexes for both prices paid and prices received held below zero, with the latter dropping sharply. Employment indexes remained deep in negative territory; the average workweek index slipped to a record low. The future general business conditions index was negative for a second consecutive month as many of the forward-looking indexes remained close to recent lows. The future index for number of employees fell particularly sharply, eclipsing last month’s record low.

Let's break this down.

General business conditions: new low

New orders index: new low

Unfilled orders index: close to its record low

Prices received: dropped sharply (as in deflation)

Here is a relevant chart of the overall conditions:



Click for a larger image. The Gray lines are from the Empire State Survey.

Here are some more charts from the report:




Let's take a look at some charts from prophet.net to see what various sectors are looking like right now:


Overall manufacturing is in a terrible way. Prices are below all the SMAs, the shorter SMAs have crossed below the longer SMAs and prices have run into upside resistance at the SMAs. Also note the heavy volume sell-off that started in the third quarter of last year.


Again, note that prices are near five year lows with the 10 and 20 month SMAs moving lower. Also note the heavy volume that started at the end of the second quarter/beginning of the third quarter.



In the industrial equipment sector, prices are below all the SMAs and the 10 and 20 week SMA are dropping. Also note the heavy sell-off volume at the beginning of the third quarter.


On the industrial equipment/component sector, all the SMAs are moving lower while the 10 month SMA is acting as upside resistance.



On the farm equiment chart note the extremely heavy selling that has been occurring over the last two quarters. Also note the 10 month SMA privided upside resistance to a recent rally


Diversified machinery is in the same boat as all the other sectors -- low prices, heavy volume and upside resistance from the SMAs.

Posted by bonddad at 2/17/2009 12:30:00 PM

1 comments Links to this post




What Got Us Into This Mess
The following is from a Barron's interview with Robert Albertson

Barron's: In 2006, you wrote that the consensus economic view was way too optimistic. What concerned you?

Albertson: There were three key trends that had been growing over the years. The first was that there was a complete reversal of global monetary flows. We had never had the emerging markets running the show on liquidity, and it became huge.

Do you mean in terms of emerging-market governments buying Treasuries and basically funding a lot of borrowing in the U.S?

That is right, essentially. So it dawned on me that the Fed[eral Reserve] no longer really had control. But more importantly, the money flows were distorting interest rates to the low side -- ridiculously so. Then, starting in 2003, the Fed compounded the problems by driving rates even lower.

What were the other themes that alarmed you?

The assumptions on home prices in the United States and elsewhere were clearly decoupling from any kind of reality. And third -- and I didn't notice this until about 2004 -- the consumer in America didn't go through a recession in 2000; we had a half-recession, if you will. So [consumers] continued to spend.

I looked at those three themes together, and I thought there was too much liquidity in the system, and that it was going to come back to haunt us.

Let's take these one at a time.

The first is what Ben Bernanke calls the Global Savings Glut. Essentially, less developed countries became net exporters while the industrialized world (the US and Europe) became net importers. When this happened -- especially from the US perspective -- dollars flowed outwards to the developing countries. This is how China and the Middle East were able to develop sovereign wealth funds. This money has to go somewhere. As a result, there was a lot of money sloshing around the world. Excess supply = decreased price = cheap money for an extended period of time. Add easy Al Greenspan on top of that and you have a world of trouble.

As for home prices, consider these charts from the blog Risk and Return





Click for a larger image

Remember -- markets eventually seek equilibrium. In other words, US home prices were way out of whack. This also implies we're nowhere near a bottom in housing.

And finally there is the US consumer.


Click for a large image

The US never stopped shopping. That means the US consumer needed to continually find new sources of money which means two things:


Household debt exploded and


Savings decreased.

Now we get to retrench. That means we don't spend as much and save more. Which is great in the long run. But now we need a vibrant consumer willing to open his wallet -- and he's not going to be there like before. Notice the big bump up in the savings rate. People are now savings more than before.

In short, the US has to rethink it's economy right now. We're probably going to move from a high consumption model to a lower consumption more production model. That also means the transition will take longer during which our overall growth rate will be lower.

Posted by bonddad at 2/17/2009 09:30:00 AM

3 comments Links to this post

hefeiddd

Tuesday, February 17, 2009Today's Markets
It's days like this that make me think the market just doesn't like me.


No matter which lower trend line you are using prices today went through all of them on solid volume. That means the probability of testing the lows from the end of last year just increased in a big way.



On the daily chart, notice that prices just died at the opening and stayed there all day long. Prices also closed at or near their low point of the day on solid volume. so much for the market moving higher with the mortgage plan, huh?

Posted by bonddad at 2/17/2009 03:30:00 PM

0 comments Links to this post
Labels: market analysis




Empire State Still Terrible
From the NY Fed:

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February. The general business conditions index fell to a new low of -34.7. The new orders index also fell to a new low, the unfilled orders index stayed close to its recent record low, and the shipments index—despite a slight improvement—remained negative. The indexes for both prices paid and prices received held below zero, with the latter dropping sharply. Employment indexes remained deep in negative territory; the average workweek index slipped to a record low. The future general business conditions index was negative for a second consecutive month as many of the forward-looking indexes remained close to recent lows. The future index for number of employees fell particularly sharply, eclipsing last month’s record low.

Let's break this down.

General business conditions: new low

New orders index: new low

Unfilled orders index: close to its record low

Prices received: dropped sharply (as in deflation)

Here is a relevant chart of the overall conditions:



Click for a larger image. The Gray lines are from the Empire State Survey.

Here are some more charts from the report:




Let's take a look at some charts from prophet.net to see what various sectors are looking like right now:


Overall manufacturing is in a terrible way. Prices are below all the SMAs, the shorter SMAs have crossed below the longer SMAs and prices have run into upside resistance at the SMAs. Also note the heavy volume sell-off that started in the third quarter of last year.


Again, note that prices are near five year lows with the 10 and 20 month SMAs moving lower. Also note the heavy volume that started at the end of the second quarter/beginning of the third quarter.



In the industrial equipment sector, prices are below all the SMAs and the 10 and 20 week SMA are dropping. Also note the heavy sell-off volume at the beginning of the third quarter.


On the industrial equipment/component sector, all the SMAs are moving lower while the 10 month SMA is acting as upside resistance.



On the farm equiment chart note the extremely heavy selling that has been occurring over the last two quarters. Also note the 10 month SMA privided upside resistance to a recent rally


Diversified machinery is in the same boat as all the other sectors -- low prices, heavy volume and upside resistance from the SMAs.

Posted by bonddad at 2/17/2009 12:30:00 PM

1 comments Links to this post




What Got Us Into This Mess
The following is from a Barron's interview with

Barron's: In 2006, you wrote that the consensus economic view was way too optimistic. What concerned you?

Albertson: There were three key trends that had been growing over the years. The first was that there was a complete reversal of global monetary flows. We had never had the emerging markets running the show on liquidity, and it became huge.

Do you mean in terms of emerging-market governments buying Treasuries and basically funding a lot of borrowing in the U.S?

That is right, essentially. So it dawned on me that the Fed[eral Reserve] no longer really had control. But more importantly, the money flows were distorting interest rates to the low side -- ridiculously so. Then, starting in 2003, the Fed compounded the problems by driving rates even lower.

What were the other themes that alarmed you?

The assumptions on home prices in the United States and elsewhere were clearly decoupling from any kind of reality. And third -- and I didn't notice this until about 2004 -- the consumer in America didn't go through a recession in 2000; we had a half-recession, if you will. So [consumers] continued to spend.

I looked at those three themes together, and I thought there was too much liquidity in the system, and that it was going to come back to haunt us.

Let's take these one at a time.

The first is what Ben Bernanke calls the Global Savings Glut. Essentially, less developed countries became net exporters while the industrialized world (the US and Europe) became net importers. When this happened -- especially from the US perspective -- dollars flowed outwards to the developing countries. This is how China and the Middle East were able to develop sovereign wealth funds. This money has to go somewhere. As a result, there was a lot of money sloshing around the world. Excess supply = decreased price = cheap money for an extended period of time. Add easy Al Greenspan on top of that and you have a world of trouble.







Click for a larger image

Remember -- markets eventually seek equilibrium. In other words, US home prices were way out of whack. This also implies we're nowhere near a bottom in housing.

And finally there is the US consumer.


Click for a large image

The US never stopped shopping. That means the US consumer needed to continually find new sources of money which means two things:


Household debt exploded and


Savings decreased.

Now we get to retrench. That means we don't spend as much and save more. Which is great in the long run. But now we need a vibrant consumer willing to open his wallet -- and he's not going to be there like before. Notice the big bump up in the savings rate. People are now savings more than before.

In short, the US has to rethink it's economy right now. We're probably going to move from a high consumption model to a lower consumption more production model. That also means the transition will take longer during which our overall growth rate will be lower.

Posted by bonddad at 2/17/2009 09:30:00 AM

3 comments Links to this post

hefeiddd

Tuesday, February 17, 2009Today's Markets
It's days like this that make me think the market just doesn't like me.


No matter which lower trend line you are using prices today went through all of them on solid volume. That means the probability of testing the lows from the end of last year just increased in a big way.



On the daily chart, notice that prices just died at the opening and stayed there all day long. Prices also closed at or near their low point of the day on solid volume. so much for the market moving higher with the mortgage plan, huh?

Posted by bonddad at 2/17/2009 03:30:00 PM

0 comments Links to this post
Terrible

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February. The general business conditions index fell to a new low of -34.7. The new orders index also fell to a new low, the unfilled orders index stayed close to its recent record low, and the shipments index—despite a slight improvement—remained negative. The indexes for both prices paid and prices received held below zero, with the latter dropping sharply. Employment indexes remained deep in negative territory; the average workweek index slipped to a record low. The future general business conditions index was negative for a second consecutive month as many of the forward-looking indexes remained close to recent lows. The future index for number of employees fell particularly sharply, eclipsing last month’s record low.

Let's break this down.

General business conditions: new low

New orders index: new low

Unfilled orders index: close to its record low

Prices received: dropped sharply (as in deflation)

Here is a relevant chart of the overall conditions:



Click for a larger image. The Gray lines are from the Empire State Survey.

Here are some more charts from the report:




Let's take a look at some charts from prophet.net to see what various sectors are looking like right now:


Overall manufacturing is in a terrible way. Prices are below all the SMAs, the shorter SMAs have crossed below the longer SMAs and prices have run into upside resistance at the SMAs. Also note the heavy volume sell-off that started in the third quarter of last year.


Again, note that prices are near five year lows with the 10 and 20 month SMAs moving lower. Also note the heavy volume that started at the end of the second quarter/beginning of the third quarter.



In the industrial equipment sector, prices are below all the SMAs and the 10 and 20 week SMA are dropping. Also note the heavy sell-off volume at the beginning of the third quarter.


On the industrial equipment/component sector, all the SMAs are moving lower while the 10 month SMA is acting as upside resistance.



On the farm equiment chart note the extremely heavy selling that has been occurring over the last two quarters. Also note the 10 month SMA privided upside resistance to a recent rally


Diversified machinery is in the same boat as all the other sectors -- low prices, heavy volume and upside resistance from the SMAs.

Posted by bonddad at 2/17/2009 12:30:00 PM

1 comments Links to this post




What Got Us Into This Mess
The following is from a

Barron's: In 2006, you wrote that the consensus economic view was way too optimistic. What concerned you?

Albertson: There were three key trends that had been growing over the years. The first was that there was a complete reversal of global monetary flows. We had never had the emerging markets running the show on liquidity, and it became huge.

Do you mean in terms of emerging-market governments buying Treasuries and basically funding a lot of borrowing in the U.S?

That is right, essentially. So it dawned on me that the Fed[eral Reserve] no longer really had control. But more importantly, the money flows were distorting interest rates to the low side -- ridiculously so. Then, starting in 2003, the Fed compounded the problems by driving rates even lower.

What were the other themes that alarmed you?

The assumptions on home prices in the United States and elsewhere were clearly decoupling from any kind of reality. And third -- and I didn't notice this until about 2004 -- the consumer in America didn't go through a recession in 2000; we had a half-recession, if you will. So [consumers] continued to spend.

I looked at those three themes together, and I thought there was too much liquidity in the system, and that it was going to come back to haunt us.

Let's take these one at a time.

The first is what Ben Bernanke calls the Global Savings Glut. Essentially, less developed countries became net exporters while the industrialized world (the US and Europe) became net importers. When this happened -- especially from the US perspective -- dollars flowed outwards to the developing countries. This is how China and the Middle East were able to develop sovereign wealth funds. This money has to go somewhere. As a result, there was a lot of money sloshing around the world. Excess supply = decreased price = cheap money for an extended period of time. Add easy Al Greenspan on top of that and you have a world of trouble.







Click for a larger image

Remember -- markets eventually seek equilibrium. In other words, US home prices were way out of whack. This also implies we're nowhere near a bottom in housing.

And finally there is the US consumer.


Click for a large image

The US never stopped shopping. That means the US consumer needed to continually find new sources of money which means two things:


Household debt exploded and


Savings decreased.

Now we get to retrench. That means we don't spend as much and save more. Which is great in the long run. But now we need a vibrant consumer willing to open his wallet -- and he's not going to be there like before. Notice the big bump up in the savings rate. People are now savings more than before.

In short, the US has to rethink it's economy right now. We're probably going to move from a high consumption model to a lower consumption more production model. That also means the transition will take longer during which our overall growth rate will be lower.

Posted by bonddad at 2/17/2009 09:30:00 AM

3 comments Links to this post

hefeiddd

Tuesday, February 17, 2009Today's Markets
It's days like this that make me think the market just doesn't like me.


No matter which lower trend line you are using prices today went through all of them on solid volume. That means the probability of testing the lows from the end of last year just increased in a big way.



On the daily chart, notice that prices just died at the opening and stayed there all day long. Prices also closed at or near their low point of the day on solid volume. so much for the market moving higher with the mortgage plan, huh?

Posted by bonddad at 2/17/2009 03:30:00 PM

0 comments Links to this post
Labels: market analysis




Empire State Still Terrible
From the NY Fed:

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February. The general business conditions index fell to a new low of -34.7. The new orders index also fell to a new low, the unfilled orders index stayed close to its recent record low, and the shipments index—despite a slight improvement—remained negative. The indexes for both prices paid and prices received held below zero, with the latter dropping sharply. Employment indexes remained deep in negative territory; the average workweek index slipped to a record low. The future general business conditions index was negative for a second consecutive month as many of the forward-looking indexes remained close to recent lows. The future index for number of employees fell particularly sharply, eclipsing last month’s record low.

Let's break this down.

General business conditions: new low

New orders index: new low

Unfilled orders index: close to its record low

Prices received: dropped sharply (as in deflation)

Here is a relevant chart of the overall conditions:



Click for a larger image. The Gray lines are from the Empire State Survey.

Here are some more charts from the report:




Let's take a look at some charts from prophet.net to see what various sectors are looking like right now:


Overall manufacturing is in a terrible way. Prices are below all the SMAs, the shorter SMAs have crossed below the longer SMAs and prices have run into upside resistance at the SMAs. Also note the heavy volume sell-off that started in the third quarter of last year.


Again, note that prices are near five year lows with the 10 and 20 month SMAs moving lower. Also note the heavy volume that started at the end of the second quarter/beginning of the third quarter.



In the industrial equipment sector, prices are below all the SMAs and the 10 and 20 week SMA are dropping. Also note the heavy sell-off volume at the beginning of the third quarter.


On the industrial equipment/component sector, all the SMAs are moving lower while the 10 month SMA is acting as upside resistance.



On the farm equiment chart note the extremely heavy selling that has been occurring over the last two quarters. Also note the 10 month SMA privided upside resistance to a recent rally


Diversified machinery is in the same boat as all the other sectors -- low prices, heavy volume and upside resistance from the SMAs.

Posted by bonddad at 2/17/2009 12:30:00 PM

1 comments Links to this post

hefeiddd

Tuesday, February 17, 2009Today's Markets
It's days like this that make me think the market just doesn't like me.


No matter which lower trend line you are using prices today went through all of them on solid volume. That means the probability of testing the lows from the end of last year just increased in a big way.







Click for a larger image. The Gray lines are from the Empire State Survey.

Here are some more charts from the report:
















On the industrial equipment/component sector, all the SMAs are moving lower while the 10 month SMA is acting as upside resistance.



On the farm equiment chart note the extremely heavy selling that has been occurring over the last two quarters. Also note the 10 month SMA privided upside resistance to a recent rally

hefeiddd

Posted by bonddad at 2/17/2009 09:30:00 AM

3 comments Links to this post



Treasury Tuesdays


Click for a larger image

Notice the following on the IEF (7-10 year Treasury) chart:

-- Prices have been in a clear downtrend since the end of last year

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices have been using the 10 and 20 day SMA as upside resistance for the last two months

-- Price have rallied to two key Fibonacci levels and then fallen back

Then there is the fundamental picture:

Time and again the U.S. Treasurys market has escaped the correction many believe is inevitable for a market that is so buoyant, it could be mistaken for a bubble. This week, it may not be so fortunate.

Prices of government bonds started to fall Friday, ahead of the vote by the House of Representatives that approved the nearly $800 billion stimulus package. This decline could be the beginning of the capitulation the market has been bracing for since the administration of President Barack Obama took over, with promises of a recession-era boom in government spending.

No sooner had lawmakers reached a compromise on this spending program than yet another began to take shape, this time to help homeowners avoid default on their mortgages. Though the dimensions of this package are unclear -- details are expected Wednesday -- the bottom line is unequivocal. Each new rescue plan signals an expansion of government borrowing and more bonds flooding the market, which absorbed a record $67 billion last week.

It may seem a wonder that Treasurys prices have held up so well against this onslaught. Last week's auctions of three-year, 10-year and 30-year paper proved that investor demand for supposedly risk-free U.S. securities remains an easy match for the government's funding needs.

Particularly surprising for some was the frank display of foreign investor appetite. Indirect bids, widely cited as a measure of offshore demand, were well above average for each, ranging from 34% for the 30-year to almost 45% for the short bond.

Those expecting a reversal of bond prices had reckoned without the financial markets' harsh verdict on the latest program to aid banks. Treasury Secretary Timothy Geithner's Financial Stability Plan was too short on detail to convince investors that a recovery for the sector is at hand. Sharp declines on stock indexes contributed to the rush to safer positions in Treasurys.

Friday's trade wiped out those gains in the 30-year bond, which was sold in large volumes by mortgage originators as part of energetic hedging activity ahead of the three-day Presidents Day weekend.

There is a ton of supply coming to market right now.

Posted by bonddad at 2/17/2009 06:27:00 AM

0 comments Links to this post
Labels: Treasury Market




Monday, February 16, 2009Back in the Morning
The markets are closed today so there won't be a market wrap. I'll be back in the morning with Tuesday's Treasury market Round-Up.

Posted by bonddad at 2/16/2009 01:56:00 PM

0 comments Links to this post




Japan's GDP is Crashing
From the NY Times:

Japan's economy contracted at the fastest pace in 35 years in the fourth quarter as a collapse in export demand drained life from the world's second-biggest economy.

Japan's gross domestic product, or the total value of the nation's goods and services, dropped at an annual pace of 12.7 percent in the October-December period, the government said Monday.

That's the steepest drop for Japan since the oil shock of 1974 and far outpaces declines of 3.8 percent in the U.S. and 1.2 percent in the euro zone. A survey of economists by Kyodo news agency had projected an 11.6 percent contraction.

Japan now faces ''the worst economic crisis in the postwar era,'' said Economy Minister Kaoru Yosano, according to Kyodo.

Let's place this number in perspective. There is no "formal" definition of depression. However, consider the following:

There is no widely-agreed-upon definition for a depression, though some have been proposed. In the United States the National Bureau of Economic Research determines contractions and expansions in the business cycle, but does not declare depressions.[1]

A proposed definition for depression is a sustained recessionary period in which the population is forced to dispose of tangible assets to fund every day living, as was seen in the US and in Germany in the 1930s.

Often, in Canada and the United States, the word "depression" is used interchangeably with "recession", often to simply indicate a deeper or more serious recession. Some economists require a fall in GDP of 10 per cent or more before a recession would be referred to as a depression

From a purchasing power parity perspective, Japan is the third largest economy in the world

I have nothing more to add.

Posted by bonddad at 2/16/2009 07:40:00 AM

2 comments Links to this post




Market Monday's
Click on all images for a larger image



On the daily chart, notice that prices dropped last week and are right at the lower end of the recent trading range. Also note that prices are below all the SMAs, but that the SMA picture is extremely cloudy right now.



The 5-minute chart offers a ton of interesting technical information. First, notice trading from Wednesday through Friday created an upside down head and shoulders pattern. In addition, note that each shoulder of the H&S pattern is a triangle and the head is a double bottom.

All of this implies we're moving higher this week. In addition, remember that prices are at the lower end of the trading range. Finally, we're supposed to get a mortgage rescue package sometime this week (Wednesday I believe) which could bolster the markets.

Posted by bonddad at 2/16/2009 06:32:00 AM

0 comments Links to this post
Labels: market analysis

hefeiddd

Posted by bonddad at 2/13/2009 09:30:00 AM

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Forex Fridays

The main issue on the weekly chart is that dollar prices have not risen to previous highs. They still could, but they haven't gotten there yet. The SMAs are sending mixed signals. The 20 and 50 week SMAs are moving higher while the 10 week SMA is moving lower. Also note the 10 day SMA just crossed below the 20 week SMA, although prices are still above all the SMAs


On the daily chart we can see a solid triangle consolidation pattern forming. Also note the 10 and 20 day SMA are moving higher while the 50 day SMA is moving lower. The MACD and RSI aren't much help on this chart as both are pretty stagnant right now.

Posted by bonddad at 2/13/2009 06:36:00 AM

1 comments Links to this post
Labels: dollar




Today's Markets
Click on all images for a larger picture.


The main issue on yesterday's chart was the huge rally at the end that forced a bunch of short covering. There was a rumor running through the markets that the administration was close to announcing its mortgage plan. This led to a lot of excitement etc..., which in turn led to the rally. This was a good thing because.....



Without that rally prices would have closed below key support levels. The situation is much clearer on the Diamonds:



Posted by bonddad at 2/13/2009 06:25:00 AM

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Labels: market analysis




Thursday, February 12, 2009Today's Markets
I'm having trouble uploading images. I'll post this in the morning.

Posted by bonddad at 2/12/2009 06:43:00 PM

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Is the Energy Sector Stabilizing?
Click on all images for a larger image


The oil service holders trust is in the middle of a triangle consolidation pattern and has been for over two months. Note the rising bottom of the triangle. This tells us that traders are setting higher and higher bottoms as buy points. Prices and the SMAs however, are in a tight range. Neither is giving a firm signal either way.





The gas exploration and production ETF has moved around in a 5 point range for the last month. Prices and the SMAs are in a tight range and aren't giving us a big signal one way or the other. The point with this chart is -- so far -- is hasn't moved any lower.



The XLEs have been in a back and forth range for the entire year. Again, this is a sign of consolidation. While there is no news moving the market higher yet (thanks to oil prices being at lows) prices in this sector are clearly stabilizing.

The energy sector is an important part of the economy and the market. All of the charts above indicate consolidation and the possible forming of a base. However, we won't know if this is a base of a consolidation before a move lower until prices move one way or the other.

Posted by bonddad at 2/12/2009 12:30:00 PM

3 comments Links to this post
Labels: market analysis




Are the Markets Thawing? Pt. II
From Bernanke's testimony yesterday:

The Federal Reserve is engaged in an ongoing assessment of the effectiveness of its credit-related tools. Measuring the impact of our programs is complicated by the fact that multiple factors affect market conditions. Nevertheless, we have been encouraged by the responses to these programs, including the reports and evaluations offered by market participants and analysts. Notably, our lending to financial institutions, together with actions taken by other agencies, has helped to relax the severe liquidity strains experienced by many firms and has been associated with considerable improvements in interbank lending markets. For example, we believe that the aggressive liquidity provision by the Fed and other central banks has contributed to the recent declines in Libor and is a principal reason that liquidity pressures around the end of the year--often a period of heightened liquidity strains--were relatively modest. There is widespread agreement that our commercial paper funding facility has helped to stabilize the commercial paper market, lowering rates significantly and allowing firms access to financing at terms longer than a few days. Together with other government programs, our actions to stabilize the money market mutual fund industry have also shown some measure of success, as the sharp withdrawals from funds seen in September have given way to modest inflows. And our purchases of agency debt and MBS seem to have had a significant effect on conforming mortgage rates, with rates on 30-year fixed-rate mortgages falling close to a percentage point since the announcement of the program. All of these improvements have occurred over a period in which the economic news has generally been worse than expected and conditions in many financial markets, including the equity markets, have worsened.

From today's WSJ:

Analysts say rock-bottom official interest rates, promises of massive fiscal-stimulus packages and central banks' other efforts to revive markets have helped ease some tensions in financial markets and may help put a floor under falling business confidence. As the government rescue efforts work their way through the markets, they could lay the groundwork for the global economy to begin escaping the worst of the storm.

.....

A key barometer for financial-sector health -- the London interbank offered rate -- soared in the fall after Lehman Brothers Holdings Inc. filed for bankruptcy, because banks quit lending to one another. On Wednesday, the three-month dollar Libor inched up to 1.23% on disappointment about the Treasury Department's financial-stability plan, but has been easing since the start of the year and is down sharply since its peak of 4.82% on Oct. 10.

Also in financial markets, issuance of high-rated corporate bonds is soaring, signaling that markets could be getting back on track to serving their core purpose -- providing funds to firms that need them.

Short-term corporate credit markets also have shown signs of improvement. Interest rates on short-term commercial-paper financing agreements have come down, and firms have become less reliant on a special Federal Reserve facility serving commercial-paper borrowers.

.....

Since the start of the year, companies world-wide have sold $264.4 billion of investment-grade corporate bonds that aren't guaranteed through a government program, according to research firm Dealogic. That is up from the fourth quarter of last year, when companies sold on average $82.9 billion of non-government-backed debt a month.

That article then notes these readings are coming from very low levels. One analyst notes, "things are simply less bad", which is an incredibly salient point. But as Bernanke notes, things are stabilizing (or at least seem to be).

Posted by bonddad at 2/12/2009 09:30:00 AM

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Thursday Oil Market Roundup
Click for a larger image


Not much has changed since last week's update. The market is still technically oversold, as indicated by the extreme MACD and RSI readings. All the SMAs are still moving lower, and the shorter SMAs are still below the longer SMAs. Prices are caught up with the 10 week SMA. In addition, we can also see the triangle consolidation pattern forming.




The main point with the daily chart is the triangle consolidation pattern and the tight price/SMA picture that is forming. This indicates traders aren't convinced of a move in either direction right now. My guess is we've seen the lowest oil prices we're going to see on this chart, especially considering the underlying supply situation:









Posted by bonddad at 2/12/2009 06:20:00 AM

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Labels: oil

hefeiddd

Tuesday, February 10, 2009Today's Markets
Click for a larger image



Prices are still within the consolidation pattern. However



The daily chart shows a big and nasty drop. Prices tried to rally at the open but quickly fell. Every time they rallied they ran into the 10 or 20 minute SMA. Bottom line -- this was a "get out now" day in the market.

Posted by bonddad at 2/10/2009 05:00:00 PM

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Transports Not Signaling Strength
It's been a long time since I have written anything about Dow Theory. Here is a rough explanation:

A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other.

I use the S&P 500 and the transportation average together. The logic is pretty simple. If the economy is expanding, then people will have to ship more stuff from a to b. If the economy is contracting people will have to ship less stuff from point a to point b. When transportation profits are declining, so are transportation profits. When transportation profits are increasing so are transportation stocks. So -- let's see what the transportation averages say.



Click for a larger image

Notice the following on the transportation average chart

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

-- The MACD is oversold

-- The RSI tells us prices are weak

-- Prices are in a downward sloping triangle pattern.


The railroad sector recently broke a multi-year upward sloping trendline and is now forming a downward sloping triangle. The sector has dropped about 80 points or about 35% since the thrid quarter of last year. Also notice that the small SMAs are below the larger SMAs and all the SMAs are heading lower.





The shipping sector has dropped about 50% (roughly 320 to current level around 150) since the beginning of the third quarter last year. Prices have been forming a triangle consolidation pattern since the beginning of the fourth quarter last year.The SMA picture is bearish, although the 10 week SMA is about to cross over the 20 week SMA which is bullish.



The trucking sector has dropped about 120 points since the beginning of July last year. That's a drop of about 22%. Prices have been in a consolidation pattern since the beginning of Ovtober last year. The SMAs are in a bearish pattern, although it appears the 10 week SMA is about to cross over the 20 week SMA.

Bottom line: none of these charts is signaling a turnaround anytime soon.

Posted by bonddad at 2/10/2009 12:30:00 PM

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Watch This Now
Start about two minutes in



Here's the central point:

I was there when the secretary and the chairman of the Federal Reserve came those days and talked to members of Congress about what was going on... Here's the facts. We don't even talk about these things.

On Thursday, at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to a tune of $550 billion being drawn out in a matter of an hour or two.

The Treasury opened up its window to help. They pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.

They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic and there. And that's what actually happened.

If they had not done that their estimation was that by two o'clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.

Now we talked at that time about what would have happened if that happened. It would have been the end of our economic system and our political system as we know it.

Posted by bonddad at 2/10/2009 09:30:00 AM

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Treasury Tuesdays
Click to get a larger image



On the weekly chart, notice that prices have sold considerably from their peak at the beginning of this year. Also note that prices are near the trend line that they broke through near the end of last year on their way to bubble-land.


Notice the following on the daily chart:

-- Prices are in a clear downtrend

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

-- The 10 and 20 day SMA are moving lower

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

Bottom line: this is a market that is moving lower. I wouldn't be surprised to see a bear market rally to the 10 and 20 day SMA. But that would be a reaction rally. Barring new fundamental developments, this is a market that is moving lower.

Posted by bonddad at 2/10/2009 06:35:00 AM

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Labels: Treasury Market




Monday, February 9, 2009Today's Markets
Click on all images for a larger image



The main story today is there really wasn't a major story. As the chart shows the market has rallied for the last 5 days. There are two uptrends. The first is a slightly upward sloping line that started last Monday. The second shows a steeper run that started last Thursday. Prices broke this trend on Friday and have been moving sideways ever since. My guess is the market is waiting for the stimulus debate to end and for the Treasury to unveil its plan to deal with toxic assets.

Posted by bonddad at 2/09/2009 04:11:00 PM

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Labels: market analysis




Auto Industry is Hurting Badly
Click on all images for a larger image

From Reuters

Nissan Motor Co said it would cut 20,000 jobs and joined a growing list of automakers warning of red ink this year in what would mark its first loss since Chief Executive Carlos Ghosn took the reins a decade ago.
The spreading global recession has put consumers off buying expensive goods and even if they wanted to purchase a car, financing has become difficult due to a dearth of credit.

Saddled with excess capacity and headcount and with sales plummeting in developed markets, Japan's No.3 automaker has already taken a number of steps to cut production and staff, including through 1,200 voluntary buyouts in the United States.

Well -- at least it's not only Detroit, right? Here are some charts from the St. Louis Fed to show the severity of the crisis:






Click for a larger image

Above is a chart of real (inflation adjusted) personal spending on durable goods that goes back to the late 1950s. Notice the drop-off in durable goods purchases is unprecedented. That tells us the severity of the crisis facing the auto markers.



Above is a chart of the percent change in durable goods expenditures from the preceding year. Again, note the severity of the drop-off. This is cliff-diving.



Above is a chart from Martin Capital Advisers of the two largest areas of durable goods purchases: homes and autos. Note that home sales have been falling for three years while auto sales have now tanked hard as well.


The chart above is from Prophet.net and it shows the auto industry's overall chart. Need I say anything more?

Posted by bonddad at 2/09/2009 12:30:00 PM

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hefeiddd

Tuesday, February 10, 2009Today's Markets
Click for a larger image



Prices are still within the consolidation pattern. However



The daily chart shows a big and nasty drop. Prices tried to rally at the open but quickly fell. Every time they rallied they ran into the 10 or 20 minute SMA. Bottom line -- this was a "get out now" day in the market.

Posted by bonddad at 2/10/2009 05:00:00 PM

1 comments Links to this post




Transports Not Signaling Strength
It's been a long time since I have written anything about Dow Theory

A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other.

I use the S&P 500 and the transportation average together. The logic is pretty simple. If the economy is expanding, then people will have to ship more stuff from a to b. If the economy is contracting people will have to ship less stuff from point a to point b. When transportation profits are declining, so are transportation profits. When transportation profits are increasing so are transportation stocks. So -- let's see what the transportation averages say.



Click for a larger image

Notice the following on the transportation average chart

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

-- The MACD is oversold

-- The RSI tells us prices are weak

-- Prices are in a downward sloping triangle pattern.


The railroad sector recently broke a multi-year upward sloping trendline and is now forming a downward sloping triangle. The sector has dropped about 80 points or about 35% since the thrid quarter of last year. Also notice that the small SMAs are below the larger SMAs and all the SMAs are heading lower.





The shipping sector has dropped about 50% (roughly 320 to current level around 150) since the beginning of the third quarter last year. Prices have been forming a triangle consolidation pattern since the beginning of the fourth quarter last year.The SMA picture is bearish, although the 10 week SMA is about to cross over the 20 week SMA which is bullish.



The trucking sector has dropped about 120 points since the beginning of July last year. That's a drop of about 22%. Prices have been in a consolidation pattern since the beginning of Ovtober last year. The SMAs are in a bearish pattern, although it appears the 10 week SMA is about to cross over the 20 week SMA.

Bottom line: none of these charts is signaling a turnaround anytime soon.

Posted by bonddad at 2/10/2009 12:30:00 PM

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Watch This Now
Start about two minutes in



Here's the central point:

I was there when the secretary and the chairman of the Federal Reserve came those days and talked to members of Congress about what was going on... Here's the facts. We don't even talk about these things.

On Thursday, at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to a tune of $550 billion being drawn out in a matter of an hour or two.

The Treasury opened up its window to help. They pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.

They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic and there. And that's what actually happened.

If they had not done that their estimation was that by two o'clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.

Now we talked at that time about what would have happened if that happened. It would have been the end of our economic system and our political system as we know it.

Posted by bonddad at 2/10/2009 09:30:00 AM

11 comments Links to this post




Treasury Tuesdays
Click to get a larger image



On the weekly chart, notice that prices have sold considerably from their peak at the beginning of this year. Also note that prices are near the trend line that they broke through near the end of last year on their way to bubble-land.


Notice the following on the daily chart:

-- Prices are in a clear downtrend

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

-- The 10 and 20 day SMA are moving lower

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

Bottom line: this is a market that is moving lower. I wouldn't be surprised to see a bear market rally to the 10 and 20 day SMA. But that would be a reaction rally. Barring new fundamental developments, this is a market that is moving lower.

Posted by bonddad at 2/10/2009 06:35:00 AM

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Labels: Treasury Market




Monday, February 9, 2009Today's Markets
Click on all images for a larger image



The main story today is there really wasn't a major story. As the chart shows the market has rallied for the last 5 days. There are two uptrends. The first is a slightly upward sloping line that started last Monday. The second shows a steeper run that started last Thursday. Prices broke this trend on Friday and have been moving sideways ever since. My guess is the market is waiting for the stimulus debate to end and for the Treasury to unveil its plan to deal with toxic assets.

Posted by bonddad at 2/09/2009 04:11:00 PM

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Labels: market analysis




Auto Industry is Hurting Badly
Click on all images for a larger image

Nissan Motor Co said it would cut 20,000 jobs and joined a growing list of automakers warning of red ink this year in what would mark its first loss since Chief Executive Carlos Ghosn took the reins a decade ago.
The spreading global recession has put consumers off buying expensive goods and even if they wanted to purchase a car, financing has become difficult due to a dearth of credit.

Saddled with excess capacity and headcount and with sales plummeting in developed markets, Japan's No.3 automaker has already taken a number of steps to cut production and staff, including through 1,200 voluntary buyouts in the United States.

Well -- at least it's not only Detroit, right? Here are some charts from the St. Louis Fed to show the severity of the crisis:






Click for a larger image

Above is a chart of real (inflation adjusted) personal spending on durable goods that goes back to the late 1950s. Notice the drop-off in durable goods purchases is unprecedented. That tells us the severity of the crisis facing the auto markers.



Above is a chart of the percent change in durable goods expenditures from the preceding year. Again, note the severity of the drop-off. This is cliff-diving.



Above is a chart from of the two largest areas of durable goods purchases: homes and autos. Note that home sales have been falling for three years while auto sales have now tanked hard as well.




Posted by bonddad at 2/09/2009 12:30:00 PM

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hefeiddd

Posted by bonddad at 2/09/2009 09:30:00 AM

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Market Monday's
I'm back. Let's take a look at the markets to see what the charts say. As always, you can click on a chart to get a larger image.



This is the best looking chart of all the big indexes.

-- The index has been moving higher since the beginning of February, printing some strong bars in the process

-- The SMAs are bunched together which is never a good sign. However, the 10 and 50 day SMA are both moving higher which is a good thing.

-- Prices are above all the SMAs




The IWMs (Russell 2000) is forming a consolidation pattern (as are the other three ETFs). Regarding the price SMA relationship notice he SMAs are in an extremely tight pattern with no discernable trend one way or the other. Also notice that prices have moved through all the SMAs, but (again) prices are in a consolidation pattern.


After gapping lower in mid-Jamuary, the market moved into a broadening consolidation pattern. Like the other two averages the price/SMA picture is extrememly cloudy. Remember -- we want prices above all the SMAs, with the shorter SMAs above the longer SMAs and all the SMAs moving higher. That's the most bullish alignment possible. Here it's just a jumbled mess.


Finally we come to the SPYs. There is an issue on this chart. The extreme candle of two days ago changes the pattern from a consolidation pattern to a broadening pattern. The issue I have with this analysis is that price is a statistical outlier; we didn't see a ton of price action in that area. Instead we have just one price point. However, either way we have an index in consolidation mode.

Bottom line: these charts aren't going anywhere.

Posted by bonddad at 2/09/2009 06:31:00 AM

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Labels:




Labels: employment


Forex Fridays


Notice the following on the weekly dollar chart:

-- In the second rally prices have not gotten as high as the previous rally

-- The recent rally is printing incredibly weak candle bars for the last three weeks

-- The MACD and RSI are weakening


Click on all for a larger image

Notice the following on the daily chart:

-- Prices are having a hard time getting about the (roughly) 87 level

-- The uptrend that started in mid-December is still in place

-- The SMA picture is very cloudy. All the SMAs are bunched together in a tight range. While the 10 and 20 week SMA just rallied through the 50 week SMA, the 50 week SMA is moving lower indicating a deteriorating trend

-- The MACD is still moving higher

bottom line: The weekly chart says the rally is losing steam. The daily chart's inability to move through 87 is also a concern. But no major selling pressure seems to have emerged yet.

Posted by bonddad at 2/06/2009 06:48:00 AM

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Labels: dollar




Thursday, February 5, 2009Today's Markets


Click for a larger image

The main issue with this chart is prices have not gotten through the 61.8% level from the January 28 to February 2 sell-off.

Tomorrow is what everybody is waiting for -- especially the employment report. That's the main issue right now.

Posted by bonddad at 2/05/2009 04:06:00 PM

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More on the Financial Stocks
In the post below I discussed the fundamental situation in the financial sector. Now let's take a look at the technical situation to see what the charts say.


The regional banks weekly chart shows a long, continual decline. Prices have continually moved through previously established lows to make new lows. All of the SMAs are moving lower, the shorter SMAs are below the longer SMAs and prices are below all the SMAs. This is a very bearish formation.

The financial services weekly chart shows a long, continual decline. Prices have continually moved through previously established lows to make new lows. All of the SMAs are moving lower, the shorter SMAs are below the longer SMAs and prices are below all the SMAs. This is a very bearish formation.


The financial services weekly chart shows a long, continual decline. Prices have continually moved through previously established lows to make new lows. The 20 and 50 week SMA are moving lower, while the 10 week SMA is moving sideways. Prices are below all the SMAs



The financials weekly chart shows a long, continual decline. Prices have continually moved through previously established lows to make new lows. All of the SMAs are moving lower, the shorter SMAs are below the longer SMAs and prices are below all the SMAs. This is a very bearish formation.

Bottom line: all of these charts show a sector in an incredibly bearish alignment. It doesn't get much worse.

Posted by bonddad at 2/05/2009 01:30:00 PM

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hefeiddd

propane market:









Click on all images for a larger image
Posted by bonddad at 2/05/2009 09:30:00 AM

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Labels: oil



Thursday Oil Market Round-Up


Notice the following on the weekly chart:

-- Prices are forming a triangle consolidation pattern

-- All the SMAs are moving lower

-- Prices are below the 20 and 50 week SMA

-- Prices are tied in with the 10 week SMA

-- The MACD is oversold

-- The RSI is oversold




Notice the following on the daily chart

-- Prices have been in a tight range (roughly 10 points) for the last month

-- Prices and the SMAs are all tied together in a very tight range

-- The MACD has been increasing for the last three months

Posted by bonddad at 2/05/2009 05:00:00 AM

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Wednesday, February 4, 2009Today's Markets
Click for a larger image



The prices/indexes are still within the upward sloping channel. However,



Looking at the daily 5-minute chart, we've got some issues.

-- First, prices broke a two day upward-sloping trendline.

-- Prices are now hugging the 200 minute SMA.

-- Prices also look like they are forming a bear market flag pattern

Also remember we're moving forward to Friday's job report which is not looking good.

Posted by bonddad at 2/04/2009 04:30:00 PM

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Labels: market analysis




Markopolos on Capital Hill
From Bloomberg:

Harry Markopolos, a former money manager who sought to convince regulators for nine years that Bernard Madoff was a fraud, said the U.S. Securities and Exchange Commission suffers from “investigative ineptitude.”

Markopolos told Congress today that he contacted the SEC in 2000 after examining Madoff’s investment strategy and determining in four hours that returns exceeding 10 percent weren’t possible. Markopolos, in almost a decade of communication, said only one SEC staff member understood Madoff’s scheme and “the threat it posed to the public.”

“My experiences with other SEC officials proved to be a systemic disappointment and lead me to conclude that the SEC securities lawyers, if only through their investigative ineptitude and financial illiteracy, colluded to maintain large frauds such as the one to which Madoff later confessed,” Markopolos said. Madoff “had a lot of help,” Markopolos said.

I caught his opening remarks this morning. They were a devastating indictment of the SEC's lack of doing anything constructive.

Posted by bonddad at 2/04/2009 01:10:00 PM

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ADP Reports Big Job Loss
From Bloomberg:

Companies in the U.S. cut an estimated 522,000 jobs in January as the economy weakened at the start of the year, a private report based on payroll data showed today.

The drop in the ADP Employer Services gauge was less than economists forecast and followed a revised cut of 659,000 for the prior month.

Employers are slashing workers as clogged credit markets and slumps from housing to manufacturing threaten to extend the longest recession in a quarter of a century. Persistent job losses will probably further curb consumer spending, which represents about 70 percent of the economy.

“We’re in for several more months of bleeding on the jobs front,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, said on a conference call with reporters.

Friday will be a big day with the employment coming out at 7:30 CST.

Posted by bonddad at 2/04/2009 11:30:00 AM

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Labels: employment




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Labels: employment


Wednesday Commodities Round-Up
Click on all images for a larger image


Above is a chart of platinum. Notice that prices have literally fallen off a cliff starting in July of last year. Prices have moved through key support levels at several points.




Above is a chart for palladium. Notice the incredible speed at which prices crashed. This is a monthly chart, yet in the circled area there are huge gaps down. Selling pressure was incredible during this time.



Above is a weekly chart of palladium, which gives us a bit more detail of the previous chart. Note the incredible speed of the price decline. The gaps are several and large. Simply put, it was time to get out.




The main point on the cattle chart is that although prices have been increasing for some time they are currently at the long-term trend line. A move below would signal a reversal of the long-term trend. Should this happen then prices will go the way of other agricultural commodities.

Posted by bonddad at 2/04/2009 06:56:00 AM

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Tuesday, February 3, 2009Today's Markets

On the daily chart, simply notice that prices are still within their trend channel.






On the 5-minute chart, notice the following:

-- Prices bottomed on Monday, then formed an upward sloping trend channel

-- Prices broke through the downward sloping trend line that started last Wednesday

-- Prices broke out of the trend channel today and rallied to the 38.2% Fibonacci level from the sell-off.

Posted by bonddad at 2/03/2009 04:36:00 PM

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Labels: market analysis




Auto Sales Down
From Bloomberg:

Ford Motor Co. said U.S. sales fell 40 percent in January, and Toyota Motor Corp. posted a 32 percent drop as the recession ravaged demand in the world’s biggest auto market. The declines were the 14th and ninth in a row for the two automakers, and pointed toward further contraction for U.S. industrywide sales that haven’t increased since October 2007. Honda Motor Co. said U.S. sales were down 28 percent.

Consider this information along with the ISM info from below.



Posted by bonddad at 2/03/2009 01:45:00 PM

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Wow, just Wow
From Bloomberg:

The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth as the economy went into recession, Zillow.com said.

.....

About $6.1 trillion of value has been lost since the housing market peaked in the second quarter of 2006 and last year’s decline was almost triple the $1.3 trillion lost in 2007, Zillow said.

Values have dropped for eight straight quarters. They fell in Manhattan for the first time since Zillow began including the New York City borough in its records two years ago.

A few points.

1.) I've noticed there has been a diminished use of household net worth as an econometric measure. Now you know why. Households are getting clobbered from the real estate and equity side of the equation.

2.) The possibility of an increase in personal consumption expenditures in the current environment is wishful thinking, nothing more. People are going to pay down debt and save for the foreseeable future.

3.) 16% of all US homeowners are underwater. That's huge.

Posted by bonddad at 2/03/2009 11:30:00 AM

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Manufacturing Still Contracting
From the ISM:

The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "January marked 12 months of contraction in the manufacturing sector. However, the rate of decline as measured by the PMI was slower than experienced in December. The January New Orders Index is at 33.2 percent, up from the seasonally adjusted 23.1 percent recorded in December. While this is a significant month-over-month improvement, it is still a sign of continuing weakness in the sector. Comments from our respondents indicate that it will take a recovery in automobiles and housing for the manufacturing sector to once again prosper. On a positive note, the Prices Index continues to indicate significant deflation in the prices that manufacturers have to pay for their inputs, and this should ultimately be good for the consumer."

There are several key points in the preceding paragraph:

1.) The index has shown a decline for 12 months. This is not a temporary slowdown caused by a market hiccup; it is a serious downward move that shows a fundamental weakness in the economy.

2.) Housing and autos must recover in order for manufacturing to recover. I've been harping on housing for, well, forever. The bottom line is so long as we are seeing home prices drop at fast year over year levels we aren't anywhere near a bottom in housing. And considering this chart:



Click for a larger image

We're nowhere near a bottom. When we see the y/o/y price declines slow -- that is, we see the y/o/y declines in the 3% - 5% range then we'll know that a bottom is approaching. But we're not there yet.

As for autos, consider the following chart from the BEA:



This chart shows the percentage change in real consumer spending on durable goods for the last 8 quarters. It has consistently moved lower. That means people are really pulling back on spending in a big way. Add to and you have real problems for the US auto sector.

Posted by bonddad at 2/03/2009 09:30:00 AM

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Labels: ism manufacturing

hefeiddd

Labels: ism manufacturing


Treasury Tuesdays


Click for a larger image

Notice the following:

-- Since the late December peak the 7-10 year Treasury market has been in a clear downward trajectory, making lower lows and lower highs.

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

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

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

Posted by bonddad at 2/03/2009 06:30:00 AM

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Monday, February 2, 2009Today's Markets


Click for a larger image:

The main issue with today's market is prices closed right near the lower trading band. That tells us the next few days of actions that much more important.

We still have a bearish SMA/price picture

Posted by bonddad at 2/02/2009 05:02:00 PM

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Personal Spending Drops
From Marketwatch:

U.S. real consumer spending fell in December for the sixth time in seven months as consumers saved what they gained from falling energy prices, the Commerce Department reported Monday.

Nominal spending fell 1% in December, marking the sixth straight decline. This was in line with expectations of economists surveyed by MarketWatch. See Economic Calendar.
After adjusting for a 0.5% decline in prices, real consumer spending fell 0.5% in

December, a reversal following a 0.3% increase in November, the government said. It was the sixth decline in real spending in the past seven months. Read the full government report.

Here is a chart of the year over year change in PCEs.



Notice this figure has been in decline for over a year now on the above chart. That indicates there is a trend in place regarding consumer spending -- it is slowing in a big way. This is the worse trend in PCEs since 1961:

Consumer spending in the U.S. fell in December for a record sixth consecutive month, capping the worst year since 1961, a slump that is likely to persist as companies slash payrolls.

Posted by bonddad at 2/02/2009 11:30:00 AM

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The Inventory Story
From IBD:

Inventories unexpectedly rose by $6.2 billion, adding 1.3 percentage points to GDP, after falling in the prior four quarters. Yet that "really is not a positive in an economy where demand is falling rapidly," Dye said. Slashing stockpiles could be a big negative in early 2009.

In other words, business was not as swift acting as they wanted to be. Instead of cutting back on purchases and creating a leaner inventory picture for themselves they added goods they probably didn't need. That does not bode well for the first quarter numbers that feed into inventory -- numbers like industrial production, durable goods orders and the regional manufacturing surveys.

And that's not all the bad news in the report:

Final sales, which exclude inventories, fell at a 5.1% pace in the fourth quarter amid broad and deep weakness.

Consumer spending on durable goods such as cars and TVs dived at a 22.4% annual rate in the fourth quarter, the biggest drop in more than two decades. Residential investment plummeted 23.6%, and investment in equipment and software dropped at a 28% pace.

There is literally noting to be happy about in the latest GDP report. It shows an economy in deep, deep trouble.

Posted by bonddad at 2/02/2009 09:30:00 AM

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Market Monday's


Click on all pictures for a larger image



My main issue with the yearly chart is the conclusion that prices have formed a triangle consolidation pattern. I am not a fan of triangles that have such extreme price movements. Notice the big drop in late November. The price established at that level is a statistical outlier. I am personally not comfortable with using that as the basis for a triangle pattern. However, it is a price established on the chart so some may want to use it

The second issue I have with it is the fundamental background right now. I'm not sure the news is such that a final consolidation is in order. Fourth quarter earnings are a mess, the financial sector is as well, Washington is, well a mess ... you get the idea. I don't see an news that indicates we're near a bottom right now. I should add that I expect the economy to be at neutral (0% growth) by the end of the year. But I don't see any fundamental events that indicate we're at that point yet.




Notice the following on the EMA charts

-- Since the beginning of the year prices have moved lower and then higher. Combine this with the direction of all the EMAs and we have a market that is going lower

-- All the EMAs are moving lower

-- The shorter EMAs are below the longer EMAs

-- Prices moved through the lower two EMAs in the last two trading days of last week. Volume was higher on Friday than Thursday






Notice the following on the SMA chart

-- All the SMAs are moving lower

-- The 20 day SMA just moved below the 50 day SMA

-- Prices are below all the SMAs


On the MACD chart, notice the MACD is at high levels. However, the signal line may be moving into a buy signal.

Posted by bonddad at 2/02/2009 06:31:00 AM

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Labels: market analysis

hefeiddd

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

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Forex Fridays

Notice the following on the weekly chart:

-- The dollar rallied strongly last yeat, moving from 71 to 88

-- The dollar has sold off and again rallied, but not to previous levels

-- The previous uptrend line first provided resistance and then support

-- The 20 and 50 week SMA are still moving higher

-- The 10 week SMA is moving lower and is about to cross over the 20 week SMA

-- The MACD is moving lower

-- The RSI is in a moderate position



Notice the following on the daily chart:

-- This chart shows the second rally in a far clearer way.

-- Regarding the second rally, notice the 10 and 20 day SMA are both moving higher but the 50 day SMA is moving slightly lower

-- The SMA picture is a lot more cloudy during the second rally. Notice that all the SMA are bunched together within a point or two of each other.

-- The MACD is still rising

-- The RSI is rising

Posted by bonddad at 1/30/2009 06:41:00 AM

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Thursday, January 29, 2009


Click for a larger image

The main point on today's chart is prices fell through the 10 and 20 day SMA on devent volume. Prices are still above the 10 day SMA which is good, but the move through 2 SMAs is bearish.

All eyes are now on the GDP report tomorrow.

Posted by bonddad at 1/29/2009 04:38:00 PM

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Durable Goods Orders Drop


Click for a larger image

Consider the following from the Census Bureau Report:

New Orders

New orders for manufactured durable goods in December decreased $4.7 billion or 2.6 percent to $176.8 billion, the U.S. Census Bureau announced today. This was the fifth consecutive monthly decrease and followed a 3.7 percent November decrease. Excluding transportation, new orders decreased 3.6 percent. Excluding defense, new orders decreased 4.9 percent.

Shipments

Shipments of manufactured durable goods in December, down five consecutive months, decreased $1.4 billion or 0.7 percent to $191.3 billion. This followed a 4.2 percent November decrease.

Unfilled Orders

Unfilled orders for manufactured durable goods in December, down three consecutive months, decreased $10.3 billion or 1.3 percent to $803.2 billion. This followed a 0.9 percent November decrease.

There is no good news in this report. Orders were down sharply and they have been dropping for several months. Consider this in light of the manufacturing information from the IMF in the post below. Then consider this chart of the manufacturing sector from Prophet.net:



Click for a larger image

The only good news on that chart is volume has been decreasing for the last few months indicating the selling frenzy that sent the sector down by nearly 50% from its 2007 peak may have dried up.

Posted by bonddad at 1/29/2009 01:28:00 PM

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Posted by bonddad at 1/29/2009 09:30:00 AM

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Click on all images for a larger image:



Notice the following on the weekly chart:

-- Prices are forming a triangle consolidation pattern

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are still below all the SMAs, although prices are running into resistance at the 10 week SMA level

-- The MACD is oversold

-- The RSI is oversold



Notice the following on the daily chart:

-- Prices have been running into upside resistance from the SMAs for the last 6 months

-- The 10 and 20 day SMAs are moving sideways but are still below the 50 day SMA

-- The 50 day SMA is still moving down

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

-- The RSI is OK but not great

Bottom line: the monthly chart is lining up for a rally. The daily chart's SMA/price picture is good, but the MACD is a concern at current levels. In addition, the fundamentals for oil are weak right now -- demand is low because of the recession and stockpiles are high.

Posted by bonddad at 1/29/2009 06:58:00 AM

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Posted by bonddad at 1/29/2009 09:30:00 AM

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Click on all images for a larger image:



Notice the following on the weekly chart:

-- Prices are forming a triangle consolidation pattern

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are still below all the SMAs, although prices are running into resistance at the 10 week SMA level

-- The MACD is oversold

-- The RSI is oversold



Notice the following on the daily chart:

-- Prices have been running into upside resistance from the SMAs for the last 6 months

-- The 10 and 20 day SMAs are moving sideways but are still below the 50 day SMA

-- The 50 day SMA is still moving down

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

-- The RSI is OK but not great

Bottom line: the monthly chart is lining up for a rally. The daily chart's SMA/price picture is good, but the MACD is a concern at current levels. In addition, the fundamentals for oil are weak right now -- demand is low because of the recession and stockpiles are high.

Posted by bonddad at 1/29/2009 06:58:00 AM

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

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Forex Fridays

Notice the following on the weekly chart:

-- The dollar rallied strongly last yeat, moving from 71 to 88

-- The dollar has sold off and again rallied, but not to previous levels

-- The previous uptrend line first provided resistance and then support

-- The 20 and 50 week SMA are still moving higher

-- The 10 week SMA is moving lower and is about to cross over the 20 week SMA

-- The MACD is moving lower

-- The RSI is in a moderate position



Notice the following on the daily chart:

-- This chart shows the second rally in a far clearer way.

-- Regarding the second rally, notice the 10 and 20 day SMA are both moving higher but the 50 day SMA is moving slightly lower

-- The SMA picture is a lot more cloudy during the second rally. Notice that all the SMA are bunched together within a point or two of each other.

-- The MACD is still rising

-- The RSI is rising

Posted by bonddad at 1/30/2009 06:41:00 AM

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Thursday, January 29, 2009


Click for a larger image

The main point on today's chart is prices fell through the 10 and 20 day SMA on devent volume. Prices are still above the 10 day SMA which is good, but the move through 2 SMAs is bearish.

All eyes are now on the GDP report tomorrow.

Posted by bonddad at 1/29/2009 04:38:00 PM

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Durable Goods Orders Drop


Click for a larger image

Consider the following from the

New Orders

New orders for manufactured durable goods in December decreased $4.7 billion or 2.6 percent to $176.8 billion, the U.S. Census Bureau announced today. This was the fifth consecutive monthly decrease and followed a 3.7 percent November decrease. Excluding transportation, new orders decreased 3.6 percent. Excluding defense, new orders decreased 4.9 percent.

Shipments

Shipments of manufactured durable goods in December, down five consecutive months, decreased $1.4 billion or 0.7 percent to $191.3 billion. This followed a 4.2 percent November decrease.

Unfilled Orders

Unfilled orders for manufactured durable goods in December, down three consecutive months, decreased $10.3 billion or 1.3 percent to $803.2 billion. This followed a 0.9 percent November decrease.

There is no good news in this report. Orders were down sharply and they have been dropping for several months. Consider this in light of the manufacturing information from the IMF in the post below. Then consider this chart of the manufacturing sector



Click for a larger image

The only good news on that chart is volume has been decreasing for the last few months indicating the selling frenzy that sent the sector down by nearly 50% from its 2007 peak may have dried up.

Posted by bonddad at 1/29/2009 01:28:00 PM

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Wednesday, January 28, 2009Today's Markets
Click for a larger image



The good news is the market moved through key resistance areas today -- prices moved through the 20 and 50 day SMAs. In addition, prices moved higher with a gap up. This is usually a sign of increased demand. Also note the volume picked-up a bit.

But, I'm with Chart Swing Trader on this:

Technically, the Nasdaq and S&P both closed above some important resistance today (although just barely for the S&P) which is good for the bulls. It would be nice however for the market to be able to hold a rally/breakout like this just once without the government (or should I say taxpayers) getting involved and sponsoring it. That's one reason I still doubt this move and don't plan on playing it. We are also definitely overbought now on some short-term indicators and the others I watch like the McClellan are getting there very quickly as well. Maybe this time will be different - maybe this will be the rally that sticks. But everytime we have had one of these rallies where we get overbought with very little leadership, they have quickly failed, and that's still what I expect to happen here.

There is no good fundamental news right now -- that is, the employment picture still stinks, people are spending less, manufacturing is cratering, housing is in a hole...you get the idea. There is no fundamental reason for the rally. That leads me to think this just isn't sustainable.

Let's also remember an important rule: the market will make an ass out of you whenever possible.

Posted by bonddad at 1/28/2009 04:50:00 PM

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We're Nowhere Near A Bottom In Housing
Click for a larger image

Consider the following chart from the latest CBO Congressional testimony:



Posted by bonddad at 1/28/2009 01:19:00 PM

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We're Only Halfway Through the Writedown Process
From Bloomberg:

The global economy will slow close to a halt this year as more than $2 trillion of bad assets from the U.S. help sink economies from Russia to the U.K., the International Monetary Fund said. Bank losses worldwide from toxic U.S.-originated assets may reach $2.2 trillion, the IMF said in a report released today, more than the $1.4 trillion that the fund predicted in October. World growth will be 0.5 percent this year, the weakest postwar pace, the fund said in a separate report.
The reports signal that writedowns and losses at banks totaling $1.1 trillion so far are only half of what’s to come and that contractions may deepen. Losses on that scale would leave banks needing at least $500 billion in fresh capital to restore confidence in their balance sheets, the IMF said.

Not much to say on top of that, is there?



Posted by bonddad at 1/28/2009 11:30:00 AM

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A Note On Home Prices
Click for a larger image. Graph is from Calculated Risk



Note the following:

1.) Prices increased for 15 years.

2.) Prices have been in negative year over year territory for two years now -- and the rate of decline is increasing.

Let's say it again -- we're nowhere near a bottom in housing.

Posted by bonddad at 1/28/2009 09:30:00 AM

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Labels: housing




Wednesday Commodities Round-Up
Click on all images for a larger image



Simply note that lumber -- a key commodity for housing -- is at multi-year lows. This does not bode well for the future.


Notice the following on corn's chart:

-- After peaking last summer, prices have come down almost 50%.

-- Prices are now in the range of the 2007 prices (which composed a bull market pennant pattern)

-- Prices fell to 2007 lows but used these levels as technical support for a move higher

-- Prices are now above the 10 week SMA

-- The 20 and 50 week SMAs are both moving lower and will probably provide upward resistance.



Notice the following on soybeans:

-- Prices spiked earlier this year but have since fallen almost 50%.

-- Prices have fallen through technical levels established in 2004 and have rallied from levels established in 1996/1997

-- Prices are below the 10 and 20 week SMA, but are above the 50 week SMA

-- The 10 week SMA is still above the other two SMAs, but the 10 week SMA is also falling lower

Posted by bonddad at 1/28/2009 06:34:00 AM

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Tuesday, January 27, 2009Today's Markets


Click for a larger image

The main point on today's chart is prices broke through the 10 day SMA. However, all the SMAs are still headed lower with the shorter SMAs below the longer SMAs. Also note today's move higher was on decreasing volume, indicating a lack of excitement in the move.

Posted by bonddad at 1/27/2009 05:11:00 PM

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hefeiddd

Labels: housing


Treasury Tuesdays
Click on all images for a larger images



Notice the following on the IEF chart:

-- Prices are moving lower, albeit at a slow pace. Prices have moved into a lower low and lower high pattern

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

-- The 10 day SMA has moved below the 20 day SMA

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

Posted by bonddad at 1/27/2009 05:00:00 AM

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Monday, January 26, 2009Today's Markets
Click on all images for a larger image



The SPYs are at the bottom of a decline. They have formed a triangle consolidation. Prices moved higher through the upper trend line, but have since moved back through the line.



On the daily chart notice that prices couldn't get through the 10 day SMA.

Posted by bonddad at 1/26/2009 04:55:00 PM

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74,000 Job Cuts Announced
You know it's a Monday when...

Caterpillar Inc., Sprint Nextel Corp. and Home Depot Inc. led companies today announcing at least 72,500 job cuts as sales withered and construction slowed amid a global economic recession that may persist through 2009.

The biggest layoffs were at Peoria, Illinois-based Caterpillar. The world’s largest maker of construction equipment said it’s cutting 20,000 jobs after fourth-quarter profit fell by almost a third.

Pfizer Inc., the New York-based drugmaker that’s acquiring competitor Wyeth for $68 billion, said it will close five factories and eliminate 19,000 jobs, or 15 percent, of the combined company’s workforce.

The firings came as American jobless claims hit a 26-year high, reaching 589,000 in the week ended Jan. 17, as shrinking demand for products and services forced companies to lower costs.

Employers “are each cutting thousands of jobs. These are not just numbers on a page,” U.S. President Barack Obama said today at the White House. “We cannot afford delays” in passing the economic stimulus program now before Congress.

Sprint Nextel Corp., the U.S. wireless carrier, will eliminate 8,000 jobs, or 14 percent of its workforce, in order to reduce expenses by $1.2 billion a year.

Home Depot Inc., the world’s largest home-improvement retailer, said it will cut 7,000 jobs, or 2 percent of its workforce, and exit its Expo home-décor business.

My theory is we're seeing the worst of the job losses right now. As companies report their fourth quarter earnings they are getting these cuts out of the way to simply get it over with.

My hope is this bleeding will stop by mid-way through the second quarter.

Posted by bonddad at 1/26/2009 01:52:00 PM

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Labels: employment




Credit is Contracting
From today's WSJ:

Lending at many of the nation's largest banks fell in recent months, even after they received $148 billion in taxpayer capital that was intended to help the economy by making loans more readily available.

Ten of the 13 big beneficiaries of the Treasury Department's Troubled Asset Relief Program, or TARP, saw their outstanding loan balances decline by a total of about $46 billion, or 1.4%, between the third and fourth quarters of 2008, according to a Wall Street Journal analysis of banks that recently announced their quarterly results.

Those 13 banks have collected the lion's share of the roughly $200 billion the government has doled out since TARP was launched last October to stabilize financial institutions. Banks reporting declines in outstanding loans range from giants Bank of America Corp. and Citigroup Inc., each of which got $45 billion from the government; to smaller, regional institutions. Just three of the banks reported growth in their loan portfolios: U.S. Bancorp, SunTrust Banks Inc. and BB&T Corp.

.....

Bankers say it is unfair to expect them to funnel a large portion of their government capital into loans so soon after receiving it. They say it takes time to make prudent loans and to attract new deposits that will allow them to lend out their new capital efficiently.

Demand for low-risk loans is also ebbing as consumers and businesses rein in their spending and try to conserve cash, according to bank executives. Even though mortgage rates are down, for example, applications in the week ended Jan. 16 declined about 10% from the previous week, according to the latest data from the Mortgage Bankers Association.

Meanwhile, federal regulators have been pushing many banks to set aside extra capital to cushion against losses. Bankers say that is at odds with the government's encouragement to make more loans.

I've written pretty extensively about the current credit environment. Consider the following:

It's not about lending

A Closer Look At Lending

About This Whole Making Banks Lend Thing

The bottom line is we're in a credit contraction environment; loan issuance is going to decrease. It's really that simple. And anyone who is saying TARP funds should go to loans is full of shit. TARP is about stabilizing the bank.

Posted by bonddad at 1/26/2009 11:30:00 AM

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Consider the Following:
The following information comes from the balance sheet's of the Federal Reserve's Flow of Funds Report

1.) Since the 4th quarter of 2007, US households have lost $7.09 trillion in net worth. The big categories are:

-- $2.9 trillion from real estate
-- $2.4 trillion from corporate equities
-- $.990 trillion from mutual funds
-- $1.8 trillion from life insurance

That's a ton of losses, isn't it?

Posted by bonddad at 1/26/2009 09:30:00 AM

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Market Monday's
Click on all images for a larger image



While I usually don't use line graphs, this one helps to quiet the noise on the candle charts. Let's break this chart down into three areas.

1.) The initial big collapse in prices. Notice that before this drop prices moved slightly lower, but didn't simply drop; at point 1 on the graph, prices dropped like a stone. Also notice the volume moved higher on the downward move, indicating people were getting out of the market in a big way.

2.) Price continually moved lower, essentially trying to find a bottom price. here prices were continually moving lower.

3.) The upward sloping channel where prices rebounded from from their move lower. Prices have broken through the lower band of this upward sloping formation.

Note that prices have not reached the previous lows established on the three moves lower in stage number 2.


Notice this chart uses exponential moving averages, meaning the more recent prices are more important. Notice the following:

-- Prices are below all the EMAs

-- The shorter EMAs are below the longer EMAs

-- All the EMAs are moving lower

All of these points indicate the market is in a bearish orientation

Also note the following chart



The MACD has hit a peak and is moving lower

Posted by bonddad at 1/26/2009 05:00:00 AM

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Labels: market analysis




Friday, January 23, 2009Sweden's Fix
There is a great story in today's NY Times on how Sweden dealt with their banking mess.

Here is an excerpt:

Sweden placed its banks with troubled assets into a so-called bad bank, where they could be held and then sold over time when market and economic conditions improved. In the meantime, it used taxpayer money to provide enough capital to allow banks to resume normal lending.

In the process, Sweden wiped out existing shareholders.

.....

To be sure, the United States has a much larger economy than Sweden’s, with a vast and international banking system. The toxic assets Sweden took from its banks improved when the economy improved, but Sweden wasnot confronted with a global recession.

Still, many analysts believe that Stockholm has lessons for Washington.

In effect, the Swedish state took on all the assets that were worthless or impossible to value at the time, and then managed them or sold them with the aim of getting as good a deal as possible for the taxpayer.

“We hired real estate people,” said Lars H. Thunell, the former chief executive of Securum, the institution that became Sweden’s repository of all the underwater assets. “We hired industrial M.& A. people. We needed to manage real assets.”

I've come out against nationalization, but that doesn't mean I don't find the above reading very interesting.

Posted by bonddad at 1/23/2009 01:30:00 PM

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hefeiddd

Posted by bonddad at 1/23/2009 09:30:00 AM

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Forex Fridays
Click on all pictures for a larger image



Notice the following on the weekly chart:

-- Prices rallied from a low of 71 at the end of last summer to 87 near the end of last year. Prices have fallen from the level and subsequently rallied again but have not gotten back to the 87 level. In other words, the rally petered out.

-- The upward sloping trend line has now below resistance: notice how prices edged up against the line, but didn't cross it until recently. And then the post crossing candle pattern is a shooting star -- a weak formation.

-- The 50 and 20 week SMAs are moving higher

-- The 10 week SMA is moving lower

-- Prices are above all the SMAs

-- The RSI broke its upward moving trend

-- The MACD is moving lower




Notice the following on the daily chart:

-- Prices have been increasing since mid-December

-- Prices are above all the SMAs

-- The 10 day SMA is about to cross over the 50 day SMA

-- The MACD is rising

-- The RSI is rising

Bottom line: the weekly chart says prices have peaked. However, the daily chart says prices can move higher. I would split the difference by saying prices have some upside to the previous peak.

Posted by bonddad at 1/23/2009 06:35:00 AM

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Labels: dollar




Thursday, January 22, 2009Today's Markets


Click for a larger image

-- All the EMAs are heading lower

-- The shorter EMAs are below the longer EMAs

-- Prices are below all the EMAs




Click for a larger image

Notice the following on the 10-day 5-minute chart

-- There are two upper trend lines that are sloping lower. Prices have moved through 1 but are still below another

-- Prices are currently in a triangle consolidation pattern

Posted by bonddad at 1/22/2009 04:32:00 PM

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Labels: housing


Asia Taking It Hard
From the WSJ:

South Korea's economy shrank a more-than-forceast 5.6% in the fourth quarter, its worst performance in a decade, showing how hard the global downturn is hammering Asia's exporters. "It's far worse than expected," said Standard Chartered economist Chun Chong-woo. "Today's data will spur the central bank to move to cut (interest) rates further to 1.5% by the end of the first half."
The seasonally adjusted gross domestic product figure for the October-December period compares to 0.5% growth in the third quarter, according to preliminary data issued by the Bank of Korea on Thursday.

And Singapore is not looking so hot:

Singapore, a bellwether for Asia's export industry, sharply reduced its economic outlook for 2009, prompting concerns that the region's slowdown is intensifying and putting additional scrutiny on a slew of economic figures expected in coming days.
The city-state said Wednesday it expects its economy to shrink by 2% to 5% this year. The forecast marks a downward revision from just three weeks ago, when officials at Singapore's Ministry of Trade and Industry predicted a worst-case decline of 2% and possible growth of 1%. The ministry blamed increasingly pessimistic signals of weakening global demand for key products such as electronics and chemicals.

Let's take a look at the respective indexes via ETFs. As always, click on each image for a larger image:



Notice the following on the South Korean ETF
-- Like the US, prices plunged in the second half of last year; the market lost about 50% of it's value
-- The 20 and 50 week SMA are both moving lower
-- The 10 week SMA is moving sideways
-- Prices have rallied from lows into the 20 week SMA only to fall back to the 10 week SMA which is currently a support level
-- The RIS is rising
-- The MACD is oversold



Notice the following on Singapore's chart:
-- Prices dropped hard in the second half of last year, losing about half their value
-- The 20 and 50 week SMA are both moving lower
-- The 10 week SMA is moving sideways
-- Prices are gravitating abound the 10 week SMA
-- The MACD is oversold
-- The RSI is rising



Posted by bonddad at 1/22/2009 12:30:00 PM

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More Bad Employment News
From the WSJ:

Intel Corp. said it will close several older factories, displacing 5,000 to 6,000 workers, as the company reacts to a sharp drop in demand for its computer chips.

The Silicon Valley giant had previously expressed optimism that prior job cuts would be sufficient to cope with the recession's impact on its business. But with a 90% drop in fourth-quarter earnings and a downbeat outlook from computer makers, pressures increased to cut costs further and improve the sagging utilization of its factories.

Intel said not all the affected employees, about 6% to 7% of its work force of 84,000, will lose their jobs. Some may be offered positions at other factories, the company said.

The cuts come on the heels of similar moves across the technology industry. Advanced Micro Devices Inc. last week said it was cutting 1,100 jobs and imposing temporary pay cuts in response to the economic slowdown.

Last week, Intel Chief Executive Paul Otellini told employees in an internal Webcast that profitability in the first quarter was too close to call. Intel hasn't reported a net loss since 1986. An account of Mr. Otellini's remarks was reported by Bloomberg.

And even the mighty IBM is feeling the pain:

International Business Machines Corp. employees have informed Alliance@IBM, an affiliate of the Communication Workers of America, that workers at a number of locations have been told their jobs are being eliminated.

Lee Conrad, national coordinator for Alliance, said that he has received a number of reports of people being informed that they are subject to what IBM calls a "resource action." He said that the reports are coming from people who work for the software group in applications development and marketing, among other functions.

Let's tie this information in with the mass-layoff series from the BLS: Here is a graph of seasonally adjusted mass-layoffs:



Not a pretty picture, is it?

Posted by bonddad at 1/22/2009 10:00:00 AM

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Labels: employment





Click on all images for a larger image




Notice the following on the weekly chart:

-- Prices are consolidating between the 40 and 45 dollar area

-- All the SMAs are moving lower

-- Prices are below all the SMAs

-- The shorter SMAs are below the longer SMAs

-- The RSI is oversold

-- The MACD is oversold


Notice the following on the daily chart:

-- Prices broke through the downward sloping trend line, but haven't been able to maintain the upward momentum.

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

-- The MACD has been rising

-- The RSI is at an OK level but not great

While the weekly chart wants to rally, the daily chart is meandering right now. The main reason is inventories of various oil products are high:

US crude oil inventory is the highest its been in a year

Gasoline stocks have been increasing since the latter part of last year, and



Distillate inventories are also at yearly highs. As a result of all this:



Gas prices have been dropping like a stone, although they have rebounded over the last few weeks.

As a result of oil's malaise, the oil related areas of the market are also treading water:



On the XLE weekly chart, notice the following

-- The 20 and 200 week SMA are falling

-- The 10 week SMA is moving sideways

-- Prices are tied-up with the 10 week SMA

-- Prices are consolidating between the 42 and 50 level

-- The MACD is oversold

-- The RSI is increasing


Notice the following on the oil holder's weekly ETF

-- All the SMAs are moving lower

-- The shorter SMAs are below the longer SMAs

-- Prices are below all the SMAs

-- Prices are consolidating

-- The MACD is oversold

-- the RSI is rising

Posted by bonddad at 1/22/2009 06:32:00 AM

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Labels: oil




Wednesday, January 21, 2009Today's Markets
Click on all pictures for a larger image



One heck of a rally today. Once prices got near yesterday's lows the rally started. After lunch the whole market went long aggressively bidding the market higher. Note that prices moved higher until the close and ended with strong volume. Also note prices regained a fair amount of ground lost yesterday.



Notice that prices have crossed over a downward sloping trend line that started over a week ago.





But on the daily chart, we're still in bearish mode -- prices are below all the SMAs, all the SMAs are moving lower and the shorter SMAs are moving lower.

Posted by bonddad at 1/21/2009 04:10:00 PM

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So -- How Good Was the Bush Economy?
See the results here

Posted by bonddad at 1/21/2009 02:27:00 PM

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The Detroit Death March Continues
From the AP:

General Motors sold fewer cars globally than Toyota last year, as the Japanese automaker passed the Detroit company for the first time.

GM says it sold 8.356 million cars and trucks in 2008, falling about 616,000 vehicles short of Toyota's total of 8.972 million.

General Motors Corp. posted an 11 percent drop for the year, while Toyota's sales fell 4 percent.

Posted by bonddad at 1/21/2009 11:30:00 AM

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Financials Still Collapsing
From IBD:

Financial shares crashed to new lows after top asset management firm State Street and a regional bank reported huge losses, putting pressure on President Obama to come up with quick solutions to a rising tide of red ink.

State Street (STT) said it may need to raise capital following huge unrealized losses in its commercial paper program and investment portfolio. Meanwhile, Regions Financial (RF), a big Southern bank, lost $6.22 billion in the fourth quarter on massive write-downs.

The bad news sent the SPDR Financial ETF tumbling 16.5%, its fourth straight drop and a record low. It's down 35% in 2009 alone.

Bank of America (BAC) lost 29% and Citigroup (C) 20% after both reported big losses last week. JPMorgan Chase (JPM) dived 21% and Wells Fargo (WFC) 24%.

All the banks cited above hit long-time lows.

As we enter earnings season expect more of this to happen. The bottom line is there is still a ton of bad debt out there which is deteriorating in quality. As that happens, banks will continue to take hits.

Here is a chart of the XLF -- the financial sector ETF:



Click for a larger image

Notice the following:

-- Prices have been dropping for a year and a half

-- 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

-- The MACD is moving lower

-- The RSI indicates prices are weak and have been for a long time.

Posted by bonddad at 1/21/2009 09:30:00 AM

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Wednesday Commodities Round-Up
Today I'm going to look at Copper. Copper is used in many different industrial settings, so the price of copper is a good indicator of future economic activity. Please click on all images for a larger image



Notice the following on the monthly chart:

At the end of 2003, prices broke out in a big way, increasing from 1.00 to 1.50 by the end of 2004. By the end of 2005 prices more than doubled, closing near over 2.000. In 2006 prices really took off, but then they consolidated in a triangle pattern until mid-2008. Then prices dropped like a stone -- moving lower by 50% plus in roughly 6 months time.





On the weekly chart, notice the prices had some really big gaps down starting at the end of the second quarter. Also note the prices moved through key technical support levels as well.

This chart shows a massive move out of the copper market over the last 6-9 months. My guess is some of this is speculators getting out. However, I also think there is a great deal of bearishness out there regarding the economy which makes copper unattractive.

Consider the following points from the latest ISM manufacturing report:

"Manufacturing activity continued to decline at a rapid rate during the month of December. The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time. New orders have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948. Order backlogs have fallen to the lowest level since ISM began tracking the Backlog of Orders Index in January 1993. Manufacturers are reducing inventories and shutting down capacity to offset the slower rate of activity." PERFORMANCE BY INDUSTRYIn December, none of the manufacturing industries reported growth. The industries reporting contraction in December — listed in order — are: Nonmetallic Mineral Products; Wood Products; Fabricated Metal Products; Printing & Related Support Activities; Textile Mills; Plastics & Rubber Products; Paper Products; Transportation Equipment; Machinery; Primary Metals; Electrical Equipment, Appliances & Components; Chemical Products; Computer & Electronic Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Furniture & Related Products. Two industries reported no change in activity compared to last month: Apparel, Leather & Allied Products; and Petroleum & Coal Products.

And this is from the latest industrial production numbers from the Federal Reserve:

Industrial production fell 2.0 percent in December, and declines were again widespread. Output was revised up in October, but it was revised down in November; for the fourth quarter as a whole, total industrial production decreased 11.5 percent at an annual rate. At 103.6 percent of its 2002 average, output in December was 7.8 percent below its year-earlier level. In December, manufacturing production dropped 2.3 percent. The output of mines moved down 1.6 percent, and the output of electric and gas utilities was little changed. Capacity utilization for total industry fell to 73.6 percent in December, a level 7.4 percentage points below its average level from 1972 to 2007.

Simply put, this is not an environment where copper is widely used.

Posted by bonddad at 1/21/2009 06:51:00 AM

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