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Tuesday, March 10, 2009. 9:15 a.m.March 10th, 2009 No comments
NOTE: To increase or decrease the size of the fonts in this blog, just hold down the ‘Control’ key on your keyboard, and roll the center wheel on your mouse (forward to zoom in, making the letters larger, backward to zoom out and make the letters smaller).
Yesterday:
In his three-hour interview, Warren Buffett had a mixture of both negative things to say about how the economy got in this mess and about the seriousness of the situation and what is being done, but also positive things about what is being done and the future. But by and large the media headlines saw only the negatives and zeroed in on “Buffett says economy fell off a cliff.”
The market started off to the upside yesterday, with the Dow up more than 1% in the early going, but once again it couldn’t hold the gains and began drifting lower for the rest of the day.
The Dow closed down 80 points, or 1.2%. The S&P 500 closed down 1%, the Nasdaq 2%, and the Transportation Average closed down 2.2%. The biggest loser was the XAU Index of Gold Mining Stocks, which closed down 3.4% on the back of gold bullion’s decline of a $17 an ounce. Bonds also closed down. So there were no safe havens, except downside positions.
Last Night:
Asian & Pacific Markets closed up last night; The DJ Asia-Pacific Index closed up 1.0%
Australia closed up 0.7%. South Korea closed up 1.9%. China closed up 1.9%. Hong Kong closed up 3.1%. India closed down 1.8%. Indonesia closed up 1.1%. Japan closed down 0.4%. Malaysia closed down 1.2%. Singapore closed up 1.3%. Taiwan closed up 0.9%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are up this morning, on average of 1.5%.
Oil is up $.51 a barrel at $47.58 on rumors that OPEC countries will cut oil output.
Gold is down $8 at $913 an ounce at the moment, down $87 since hitting $1,000 a couple of weeks ago.
Bond futures are down in advance of a record auction of new 3-year T’bills.
The U.S. Dollar Index is down 1.1% at the moment against global currencies.
In the U.S.:
Fed Chairman Bernanke is speaking at the moment, and so far the quite positive pre-open indicators have weakened only fractionally as he speaks. Basically, he is saying large banks cannot be allowed to fail, laying out the reasons why, and calling for changes in the future supervision of financial firms deemed to be too big to fail, to prevent them from taking undo risk.
CitiGroup’s CEO Pandit said in a memo that the bank was profitable through January and February and is having its best quarterly performance since the 4th quarter of 2007.
Pre-open indicators are positive, pointing to the the Dow being up 100 points or so in the early going.
Interesting Chart of the Morning: Like most market indexes the Russell 2000 (small stocks) is short-term oversold beneath its key 30-day m.a., to a degree that even in last year’s severe plunge (crash?) brought quick upside reversals into bear market rallies.
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Keep a Journal of These Times!’ Click here.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Monday, March 9, 2009. 9:10 a.m.March 9th, 2009 No comments
Subscribers, as you know, in our Market-Timing Strategy we are now sitting on 70% cash. We are looking toward getting it working with either upside or downside positions, or a combination of the two. But the downside looks risky for new positions from here, given the very oversold condition and extreme investor bearish sentiment, while the upside would obviously be risky given that the market has continued to decline to even more oversold levels. So we wait for now.
Over the Weekend:
On one hand stories about the credit markets seizing up again over new worries about the global financial system, with the market for corporate bonds, which had been doing well earlier this year, now in the crosshairs.
And yet on the other hand, more activity is showing up in the previously frozen merger and acquisition area. Last week it was Pfizer announcing it will acquire Wyeth for $68 billion. And over the weekend Merck announced it will acquire Schering-Plough for $41.1 billion in stock and cash.
Remember the days when a major acquisition announcement was enough to send the market soaring, supposedly an indication that corporations thought stock prices were a bargain? Now such announcements are unable to penetrate the gloom.
Asian & Pacific Markets were down sharply last night; The DJ Asia-Pacific Index closed down 1.9%
Australia closed up 0.3%. South Korea closed up 1.6%. But China closed down 3.8%. Hong Kong closed down 4.8%. India closed down 2.0%. Indonesia closed down 0.1%. Japan closed down 1.2%. Malaysia closed down 1.4%. Singapore closed down 3.3%. Taiwan closed down 0.6%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are down this morning,on average of 1.5% to 2%.
Oil is down $.42 at $45.10 a barrel.
Gold is down $1 at 937 at the moment, still down $63 since hitting $1,000 a couple of weeks ago.
In the U.S.:
As I noted Saturday this week has a very light schedule of economic and earnings reports.
Over the weekend there seemed to be an increasing opinion that some banks and GM should be allowed to fail.
Meanwhile, the plunges in Asia last night, and declines in Europe this morning are weighing on the pre-open indicators this morning.
Pre-open indicators are negative, pointing to the the Dow being down 75 points or so in the early going.
Interesting Charts of the Morning: We’ll take a look at a couple of global markets this morning for a change. Their declines were brutal last year. For instance India was down 60% at its October low. However, unlike the U.S. market, in its pullback in November it did not decline to a lower low, but successfully retested its October low.
However, last week it did break fractionally below its October and November lows, unable to withstand the pressure of the doom and gloom in the rest of global markets.
We have struggled with trying to make a profit for subscribers from the upside in emerging markets via the VanGuard Emerging Markets etf. Twice we bought 10% positions in it since the October and November lows, and twice sold at a small loss. As a whole, the emerging markets have been holding up better than the U.S. and major global markets, most of which have collapsed to new bear market lows well below their November lows. But the etf has declined and is back to testing its October low.
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Keep a Journal of These Times!’ Click here.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Saturday, March 7, 2009. 9:45AMMarch 6th, 2009 No comments
SORRY TO BE SO LATE:
Subscribers: There is an in-depth ‘Gold, Bonds, Dollar, Inflation Report’ on your website from Tuesday; an in-depth ‘Stock Markets, Signals & Recommendations Report’ from Wednesday; and hotline updates from Tuesday, Wednesday, and Thursday evenings.
Non-subscribers: We replaced the free sample issue of our newsletter on the StreetSmartReport.com home page a week ago yesterday with a later issue you might find interesting if you haven’t already read it. Click on ‘Sample Newsletter’ link at right to go to it.
OF POTENTIAL IMPORTANCE:
In talks I have with investors, and e-mails received in response to my newspaper articles, it is obviously happening again. It has not changed in the 200 years of market history and apparently never will.
I researched and wrote about it in some depth in my 1999 book Riding the Bear – How to Prosper in the Coming Bear Market.
In every bull market in history, public investors come to the party late, not getting interested in the market until a year or two after a new bull market has begun, and then piling into it with gusto near its tail end, after it has made most of its gains.
AND, realizing that the market has ‘come back’ once again, they decide with great determination that this time they will be ‘buy & hold investors’.
And so when the market again tops out, their first stage is confidence, telling those who are taking profits and moving aside (we know this from the e-mails we get when we are warning about a top coming), that everything looks great, the bull market will continue for a long time. As the market begins to decline their confidence remains unbroken. They fall for Wall Street’s advice that each pullback is a buying opportunity and buy more. When it becomes clear that dips are no longer buying opportunities, but keep reaching new lows, their confidence remains strong. They are buy and hold investors, the market cannot be timed, it always comes back, etc, etc.
But eventually, and every time, their losses become so huge and debilitating, and surrounding conditions become so dire and frightening that absolutely everyone is predicting there will be no end to the plunge.
And only then do they become market-timers, but with the worst of timing. And at that point, they not only bail out, but as I put it in Riding the Bear, they “swear off the damned market for good, will never invest in a stock or a mutual fund again.”
And so the cycle continues decade after decade. When the next bull market does get underway, they have no interest. If they even notice it they will tell everyone it is only a trap. And once again they will not get over the psychological damage of the previous bear market until the next bull market has been underway for a couple of years and they see how much others are making from it.
In Riding the Bear I provided data and tables showing how investor sentiment was always very bullish as the stock market was topping out into every bear market, that money didn’t begin to be pulled out of mutual funds until very near the bear market bottom, AND THEN continued to be pulled out for one or two years afterwards, even though the next bull market was well underway.
Evidence is quite clear that at least the first part of that scenario is playing out again, with the record amount of money that began to be pulled out of stocks and mutual funds in November, December, January, and February, after the November low, after the market was down 50% from its bull market peak.
I am also seeing it in e-mails from readers saying “I’m just waiting for a rally so I can get out at a better price, and I will never invest in the market again”, or “I’ve gotten out and I will never invest again.”
Several have asked a good question, along the lines of, “If investor sentiment is as bearish as you said in your newspaper column a couple of weeks ago, obviously there can’t be even a bear market rally. Who would do the buying that would get one started?
And the answer to that is interesting. As I also researched and wrote about in Riding the Bear, while public investors don’t get excited about the market until a bull market has been under way for some time, so-called ‘smart money’ (professionals, giant pension plans, insurance companies, corporate insiders, large private investors like George Soros and Warren Buffett), tend to sell heavily into the public strength at the end of a bull market, raising cash.
They then have the cash and are the ones that are buying back the stocks at the bargain basement prices near the next bear market low.
No, they don’t get the exact low, and are sometimes ridiculed for buying too soon. But they are the ones selling high, which gets bull markets topping out when they become overvalued, and buying low which launches the next bull market, or at least the next bear market rally.
So it may be meaningful, as I have been pointing out in recent posts, that public investor sentiment is at record levels of “bailing out, will never invest again, bearish sentiment”. Because on the other side of the fence, there is evidence that corporate insiders are moving to the buy side and that ‘smart money’ may be beginning to accumulate again.
Brian Flanagan, at Thrivent Financial, who tracks insider trading reports, "The sell-to-buy ratio is incredibly low. Most of the buying has been in smaller-cap stocks and the financial companies." Insiderscore.com reported in late February that "The ratio of buying to selling in recent days has been 3-to-1 for insiders, and that’s a high ratio. Over the last 52 weeks, the ratio has been about 1.8 to 1. And Thomson Reuters’ insider report shows buying by insiders at Standard & Poor’s 500 companies tripled in February compared with January.
Now for those who did engage in market-timing and have high cash levels, and/or downside positions, don’t get all excited and think the bear market is over just because of investor sentiment and signs of insider buying picking up. Insiders are usually proven right eventually with their buying and selling, but are always early, selling as the market approaches a top, and buying as it approaches a low.
But the historic cycle of the opposing strategies of public investors and ‘smart money’ when it comes to when to begin buying, and when to begin selling, is information to keep in mind, and work into your own analysis.
For the week;
Yet another ugly week.
| THIS WEEK (Mar. 6) | | DJIA | 6626 | -6.2% | | S&P 500 | 683 | -7.1% | | NYSE | 4284 | -7.2% | | NASDAQ | 1293 | -6.1% | | NASD 100 | 1064 | -4.7% | | Russell 2000 | 351 | -9.8% | | DJ Transports | 2195 | -12% | | DJ Utilities | 296 | -8.6% | | XOIOilstocks | 778 | -5.7% | | Gold bullion | 938 | -0.6% | | Gold Stocks | 119 | unch | | Canada | 7591 | -6.4% | | London | 3530 | -7.8% | | Germany | 3666 | -4.6% | | France | 2534 | -6.2% | | Hong Kong | 11921 | -6.9% | | Japan | 7173 | -5.2% | | Australia | 3111 | -5.6% | | S. Korea | 1055 | -0.7% |
| | LAST WEEK (Feb. 27) | | DJIA | 7062 | - 4.1% | | S&P 500 | 735 | - 4.5% | | NYSE | 4617 | - 3.9% | | NASDAQ | 1377 | - 4.4% | | NASD 100 | 1117 | - 4.7% | | Russell 2000 | 389 | - 5.3% | | TransportAvg | 2499 | - 7.4% | | DJ Utilities | 324 | - 3.6% | | XOIOilstocks | 825 | - 2.4% | | Gold bullion | 944 | - 4.9% | | Gold Stocks | 119 | -10.3% | | Canada | 8114 | +2.1% | | London | 3830 | -1.5% | | Germany | 3843 | -4.2% | | France | 2702 | -1.7% | | Hong Kong | 12811 | +0.9% | | Japan | 7568 | +2.0% | | Australia | 3297 | -1.7% | | S. Korea | 1063 | - 0.3% |
| | WEEK ENDED (Feb. 20) | | DJIA | 7365 | -6.2% | | S&P 500 | 770 | -6.8% | | NYSE | 4804 | -7.7% | | NASDAQ | 1441 | -6.1% | | NASD 100 | 1172 | -5.2% | | Russell 2000 | 411 | -8.3% | | DJ Transports | 2699 | -8.7% | | DJ Utilities | 336 | -7.9% | | XOI Oilstocks | 845 | -9.6% | | Gold bullion | 993 | +5.5% | | Gold Stocks | 132.64 | +1.3% | | Canada | 7950 | -8.4% | | London | 3889 | -7.2% | | Germany | 4014 | -9.0% | | France | 2750 | -8.2% | | Hong Kong | 12699 | -6.3% | | Japan | 7416 | -4.7% | | Australia | 3353 | -4.1% | | S. Korea | 1066 | -10.6% |
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What’s next?
There are no short-term weekly patterns to mention, and the last two, the tendency for options expirations weeks and the ’monthly strength period’ to be positive, did not materialize.
Next week has a very light schedule of potential market-moving economic reports coming out, but the debates and shouting matches over the stimulus and bank rescue plans will continue, and Ben Bernanke will be speaking again on Tuesday. To see the complete schedule of Click here. (Look in the lower left corner of the page it takes you to for the schedule).
Interesting Chart of the Morning: The market has fallen off a cliff since October, 2007. G.E. at $7 a share?
Scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Keep a Journal of These Times’ Click here!
It will be interesting to see how Asian markets react Sunday evening. I’ll be back Monday morning, with the outlook for Monday and for next week.
Subscribers: There is an in-depth ‘Gold, Bonds, Dollar, Inflation Report’ on your website from Tuesday; an in-depth ‘Stock Markets, Signals & Recommendations Report’ from Wednesday; and hotline updates from Tuesday, Wednesday, and Thursday evenings.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Friday, March 6, 2009. 9:15 a.m.March 6th, 2009 No comments
Subscribers: An in-depth ‘Gold, Bonds, Dollar, Inflation Report’ is on your website from Tuesday; an in-depth ‘Stock Markets, Signals, & Recommendations Report’ from Wednesday; and another hotline message from last evening.
Non-Subscribers: We updated the free sample issue of our newsletter last Friday, which might be interesting reading for you if you haven’t already seen it. Just click on the link in the column at right.
Yesterday:
Yet another ugly down day, with no follow through to Wednesday’s 150 point rally. It looked like it was the last straw for a lot of people from the looks of the selling. There were 11 times as many stocks down as up on the NYSE, five times as many stocks down as up on the Nasdaq, as everything including the kitchen sink was thrown out of portfolios.
The Dow closed down 281 points, or 4%, closing at 6,594, its lowest level since 1997. The S&P 500 closed down 4.3%. The Nasdaq 100 closed down 3.2%.
Two things to note that may be of significance:
Current Investor Sentiment:
Public investors have never been so bearish, at least as far back as our investor sentiment data goes, convinced there is only further decline ahead.
For instance, as you know, history shows that any time in the past that the poll of its members by the American Association of Individual Investors showed more than 55% bearish, and fewer than 25% bullish, a significant rally was almost always near. Two weeks ago, the poll reached 56.7% bearish, only 21.6% bullish. Last week it was 55.1% bearish, 24.3% bullish, and this week’s poll, released Wednesday night, showed 70.3% bearish, only 18.9% bullish. That is a record level of bearishness. The previous record was 67% bearish, which was on October 19, 1990, within days of the end of the 1990 bear market.
It’s interesting that in researching previous levels of the poll to make sure the current level of bearishness is a record, we happened to notice that bearishness on October 9, 1987, after the market had already been declining since mid-August that year, and just a week before the October, 1987 crash, AAII poll bearishness was at a record low of 10%.
And that has been the history, sentiment very optimistic near tops (think 1999, and at the top of the 2003-2007 bull market in 2007). And then very pessimistic and bearish at lows.
Employment numbers:
Not only can you not time the stock market by looking out the side window at what current conditions are (since the stock market looks ahead six to nine months), but of all the current conditions that are useless in that regard, the employment picture is one of the most useless.
Employment is a lagging condition in both directions. Remember how employment remained strong right through last summer, which had economists (and the Fed) saying there would be no recession because employment remained strong, even though as we now know, the recession had begun in December, 2007.
In the other direction, the stock market (which always looks ahead six to nine months) will have already recovered significantly before the recession bottoms and the economy begins to recover. And the economy will have already recovered significantly before employment will begin to pick up again.
The employment picture is not the place to look for early signs of the economy bottoming.
But as always, investors and TV analysts worry a lot about the employment numbers, not only legitimately about what they are saying about the economy, but uselessly what the jobs numbers are saying about the stock market going forward.
In addition, comparisons to the number of jobs lost in previous periods, particularly to the 1940’s and 1950’s are misleading because the population and labor force were considerably smaller then, so similar job loss numbers in those decades represented a much larger percentage of the work force.
Meanwhile, let’s go back and see how the stock market fared after the previous terrible monthly job losses to which the current numbers are being compared.
When that horrible report of September, 1945 was that a record 2 million jobs had been lost that month (when servicemen returned from World War II and defense plants had massive layoffs), the stock market had already bottomed in 1944, and was up 35%. After the jobs report it added another 17% over the next five months.
When the terrible report in October, 1949 was that 834,000 jobs had been lost that month, the stock market had already bottomed in June and was up 12% when the report came out, and then added another 22% over the next seven months. When the terrible report came out in December, 1974 that 602,000 jobs had been lost that month, the stock market bottomed three days later, and the Dow gained 53% over the next ten months.
By all means market-timing is going to continue to be important if you are to make, and keep, profits from the market. But the jobs picture has no place in timing the stock market, something the talking heads of TV might want to pause their shouting matches long enough to think about.
Asian & Pacific Markets were down last night; The DJ Asia-Pacific Index closed down 1.2%
Australia closed down 1.2%. China closed down 0.8%. Hong Kong closed down 2.4%. India closed up 1.6%. Indonesia closed down 0.1%. Japan closed down 3.5%. Malaysia closed down 1.4%. South Korea closed down 0.3%. Singapore closed down 0.6%. Taiwan closed up 0.4%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are up this morning, on average of more than 1%.
Oil is up $.99 at $44.60 a barrel.
Gold is up $10 at $937 at the moment, after bouncing $30 yesterday as a sudden safe haven in response to the stock market collapse yesterday, but still down $63 since hitting $1,000 a couple of weeks ago.
In the U.S.:
The Labor Department’s monthly jobs numbers for February were just released, showing that another 651,000 jobs were lost in February, about in line with economists’ forecasts. But the previously released numbers for December and January were revised to show larger declines. The unemployment rate jumped 0.5% to 8.1% from the 7.6% rate reported in January.
We are still expecting unemployment will reach 11% before the recession ends.
A argument made by some is that unemployment is much worse than is being reported, and as bad as in the Great Depression if you factor in the number of people who have given up looking for a job, or are now only working a part-time job. But that is very faulty research. To compare apples to apples you would have to go back to those previous times and apply the same revisions. I would guess that the unemployment rate of 25% in the Great Depression was probably, what 50% or more, if you consider how many had given up looking for jobs, and that probably 50% of those working were working part-time.
So far the pre-open indicators are taking the jobs numbers as mildly positive (because they weren’t even worse?).
Pre-open indicators are somewhat positive this morning, pointing to the the Dow being up 80 points or so in the early going.
Time for an oversold rally?
Interesting Chart of the Morning: The DJ Transportation Avg has a history of leading the rest of the market in both directions. It has done so again in this bear market. Short-term it was also the first index to break below its November low. Is it now short-term oversold enough beneath its 21-day m.a. to lead the way in an oversold rally?
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Consumer and Investor Confidence!’ Click here.
Subscribers: An in-depth ‘Gold, Bonds, Dollar, Inflation Report’ is on your website from Tuesday; an in-depth ‘Stock Markets, Signals, & Recommendations Report’ from Wednesday; and another hotline message from last evening.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Thursday, March 5, 2009. 9:15 a.m.March 5th, 2009 No comments
Subscribers: An in-depth ‘Gold, Bonds, Dollar, Inflation Report’ is on your website from Tuesday; an in-depth ‘Stock Markets, Signals, & Recommendations Report’ from yesterday; and an important hotline message from last evening.
Non-Subscribers: We updated the free sample issue of our newsletter last Friday, which might be interesting reading for you if you haven’t already seen it. Just click on the link in the column at right.
Yesterday:
The market’s action was encouraging yesterday - until the last fifteen minutes of the day.
As everyone knows the stock market leads the economy by six to nine months in both directions. That is, the stock market tops out while everything is looking great and it looks like the good times can just continue for years, but the market is looking out six to nine months and seeing problems.
Similarly the stock market bottoms while everything is looking terrible and it looks like it can only get worse for several more years. But the market is again looking out six to nine months and anticipating improvements. Similarly, bear market rallies take place when the stock market looks out six to nine months and anticipates there may be at least temporary improvements six to nine months out.
Therefore, it follows that when the market begins either the next bull market, or a significant bear market rally, economic conditions will continue to worsen for six to nine months.
Obviously then, the market must be able to rise in spite of continuing bad news.
And that’s where yesterday’s action was encouraging for most of the day. At its high for the day the Dow was up 250 points, in spite of the even worse than expected ADP jobs report for February, and the worries about and big decline in key Dow stock General Electric, which plunged 4.6% for the day.
But let’s keep in mind that a week ago Tuesday the Dow closed up 236 points, but then was back down a big 624 points over the next 5 trading days to yesterday’s close. And it was not encouraging to see the Dow pull back in the final 15 minutes today, from its earlier gain of 250 points, to close up just 149 points.
But get a load of the latest investor sentiment report from the American Association of Individual Investors further down in this post.
Anyway, yesterday the Dow closed up 149 points, or 2.2%. The S&P 500 closed up 2.4%. The Nasdaq closed up 2.5%. The Nasdaq 100 closed up 2.7%. The DJ Transportation Avg closed up 4.8%.
Gold plunged again yesterday, breaking below $900 for a few minutes.
Asian & Pacific Markets were mixed last night; The DJ Asia-Pacific Index closed up 0.9%
Australia closed up 0.7%. China closed up 0.8%. Hong Kong closed down 1.0%. India closed down 3.0%. Indonesia closed down 0.1%. Japan closed up 1.9%. Malaysia closed up 0.2%. South Korea closed down 0.1%. Singapore closed down 0.5%. Taiwan closed up 2.1%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are down sharply, on average of 2% to 3%, giving back their big gains of yesterday.
Oil is down $1.30 at $44.10 a barrel.
Gold is up $10 at $916 at the moment, bouncing back some after another down day yesterday, when it briefly dropped below $900 an ounce, down $100 since it created so much excitement by touching $1,000 an ounce a couple of weeks ago.
In the U.S.:
It was just reported that new unemployment claims fell by 31,000 last week. And WalMart reported its February sales were up 5.1%, double Wall Street’s expectations.
But the big worry today is the report that General Motors’ auditor says there is “substantial doubt about the ability of GM to continue as a going concern”.
And that the worries about G.E. are intensifying in spite of its executives being out on the talk circuit trying to assure investors that it is in good shape.
And given yesterday’s dismal ADP jobs report, there are worries about tomorrow mornings’ government jobs report for February.
But employment is a significantly lagging economic indicator, remaining strong for some time after an economic slowdown has begun, and remaining weak long after a recovery has begun. So employment numbers are not the place to look for signs of the economy improving.
It looks like no follow through to yesterday’s rally – at least in the early going – but . . . .
Pre-open indicators are somewhat negative this morning, pointing to the the Dow being down 60 points or so in the early going.
What would be positive today would be weakness in the morning and strength in the afternoon, and that is a fair possibility given the very oversold market condition and extreme investor bearish sentiment.
Last night’s AAII poll of its members showed 70.3% bearish and only 18.9% bullish. We’ll have to do some research, but I believe that is a record. Over the years it has been that when bearishness exceeds 55% and bullishness drops below 25% a significant rally has almost always been near.
Interesting Chart of the Morning:
Sorry, I’m running late this morning and have a lot of work to do for subscribers today, so don’t have time to give you a chart of the morning.
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Consumer and Investor Confidence!’ Click here.
Subscribers: An in-depth ‘Gold, Bonds, Dollar, Inflation Report’ is on your website from Tuesday; an in-depth ‘Stock Markets, Signals, & Recommendations Report’ from yesterday; and an important hotline from last evening.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Wednesday, March 4, 2009. 9:15 a.m.March 4th, 2009 No comments
Subscribers: An in-depth ‘Gold, Bonds, Dollar, Inflation Report’ is on your website from yesterday, and an in-depth ‘Stock Markets, Signals, & Recommendations Report’ will be on your website later today.
Non-Subscribers: We updated the free sample issue of our newsletter last Friday, which might be interesting reading for you if you haven’t already seen it. Just click on the link in the column at right.
Yesterday:
I noted yesterday morning that Treasury Secretary Geithner would be testifying before Congress yesterday, but didn’t mention that Fed Chairman Bernanke would also be testifying.
Mental block, or wishful thinking that if I didn’t mention him maybe he wouldn’t have his usual effect on the market? It didn’t work. The market was up and rising when he began to speak and reversed to the downside as he spoke to, again close down for the day.
I can’t figure out what Bernanke’s agenda might be. He is spending a ton of government money in trying to get the banking system saved and the economy stimulated. Yet every time he speaks he drones on, repeating for the 500th time everything that has gone wrong over the last several years, everything that was tried and didn’t work, and being pessimistic about whether what the Fed is doing now will work. And surprise, surprise, the market loses any optimism it was beginning to show, and rolls back over to the downside.
It is beginning to be recognized elsewhere that some encouragement can have as big a psychological effect on consumer confidence as the financial stimulus efforts. Bernanke is a smart man and must realize that. In fact last week he proved it for himself, when he dropped a statement into his testimony that the Fed expects the economy to bottom later this year and begin to recover next year. The Dow shot up 236 points for the day.
But yesterday, while the President was out, as a headline in the Washington Post says this morning, “Trying to Halt the Cycle of Fear”, urging Americans “not to obsess over the day-to-day bobbing up and down by the stock market – if you spend all your time obsessing over that you’re probably going to get the long-term strategy wrong.” And the Chairman of the Council of Economic Advisors was saying , “I think it’s possible that fiscal policy will have even more oomph in this situation”. Bernanke was back to his old pessimistic self, offering little to no light at the end of the tunnel.
But the market also had more dismal economic news to digest yesterday, with the huge declines in auto sales in February, and that G.E.’s credit rating may be in for a downgrade.
When all was said and done, the positive beginning to the day, ended with the Dow down 37 points, or 0.6%. The S&P 500 closed down 0.6%, at 696. the DJ Transportation Avg closed down 1.6%. But thanks to some strength in the techs sector, the Nasdaq closed down only 0.1%, and the Nasdaq 100 closed up 0.4%.
Gold plunged again yesterday, now down 3% for the week so far, after losing 5% last week.
Asian & Pacific Markets were mostly up last night;
Australia closed down 1.4%. But China closed up a huge 6.6%. Hong Kong closed up 2.5%. India closed up 0.3%. Indonesia closed up 1.9%. Japan closed up 0.9%. Malaysia closed down 0.3%. South Korea closed up 3.3%. Singapore closed up 0,8%. Taiwan closed up 2.4%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are very positive, up on average of 2% to 3%.
Oil is up $1.98 at $43.66 a barrel.
Gold is unchanged at $917 an ounce at the moment, down $84 in just the week and a half since it created so much excitement by touching $1,000 an ounce.
Treasury Bonds and the U.S. dollar are down some.
In the U.S.:
This week’s heavy schedule of potential market-moving economic reports continues, with the release a few minutes ago of the ADP Employment Report. It showed 697,000 more jobs were lost in the private sector in February, somewhat worse than the forecasts of 640,000.
The ISM non-Mfg Index will be released later this morning. The ISM Mfg Index released a couple of days ago showed a slight improvement.
The current short-term weekly pattern is that the ‘monthly strength period’ was due to begin last Friday and to run through tomorrow. If it is going to wind up positive it sure has its work cut out for it.
The pre-open indicators are somewhat positive again this morning, pointing to the the Dow being up 85 points or so in the early going.
And we expect a positive market today.
Interesting Chart of the Morning: The tech heavy Nasdaq 100 remains above its November low, showing considerable strength relative to the rest of the market.
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Consumer and Investor Confidence!’ Click here.
Subscribers: An in-depth ‘Gold, Bonds, Dollar, Inflation Report’ is on your website from yesterday, and an in-depth ‘Stock Markets, Signals, & Recommendations Report’ will be on your website later today.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Tuesday, March 3, 2009. 9:15 a.m.March 3rd, 2009 No comments
Subscribers: There is an important hotline message for you on the subscriber website from last evening, and an in-depth ‘Gold, Bonds, Dollar, Inflation Report’ and recommendations will be on your website later today.
Non-Subscribers: We updated the free sample issue of our newsletter on Friday, which might be interesting reading for you. Just click on the link in the column at right.
Yesterday:
The dismal news from the weekend, and global worries, debates, and concerns about the recession and collapsing global stock markets brought the market down sharply again yesterday. The Dow closed down 300 points, or 4.3%, breaking below 7,000 for the first time in 12 years, to close at 6,763. The S&P 500 closed down 4.7%, the Nasdaq down 4.0%, the Russell 2000 down 5.5%, and the DJ Transportation Avg down 6.7%.
It should be oversold enough for at least a dead-cat bounce.
Gold plunged again yesterday, and has now lost $75 an ounce (7.5%) in the week or so since it created so much excitement by touching $1,000 an ounce. The XAU Index of Gold Mining Stocks plunged 7.6% yesterday alone, and is now down 18% in less than 2 weeks.
A revisit to the chart on gold we used a couple of weeks ago to show you how gold was dangerously overbought:
Asian & Pacific Markets last night; Mostly followed the U.S. market down, but were not as negative as the U.S. market was yesterday. The DJ Asia-Pacific Index closed down 0.6%.
Australia closed down 1.0%. China closed down 0.7%. Hong Kong closed down 2.0%. India closed down 2.1%. Indonesia closed up 0.7%. Japan closed down 1.2%. Malaysia closed down 1.1%. South Korea closed up 0.7%. Singapore closed down 0.3%. Taiwan closed up 0.2%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are mixed, for instance; London down just over 1%, Germany and France up almost 1%.
Oil is up $1.22 at $41.41 a barrel.
Gold is down again, down $11 an ounce at the moment, at $928.
Bonds are down some, in anticipation that stocks will be up, removing their influence as a safe haven.
In the U.S.:
Perhaps the first glimpses of hope? Yesterday it was reported that Personal Income and Spending rebounded in February, income rising by the biggest monthly rise since last May, and spending by the largest monthly increase since November, 2007 (the month before the current recession is now known to have begun).
And the ISM Mfg Index showed a slight improvement, rising from 35.8 from 35.6 in January, but more important better than gloomy economists’ estimates of a further decline to 34.
Later today will come Auto Sales and the Pending Home Sales Index.
Treasury Secretary Geithner will be testifying before a Congressional Committee today. Don’t know how that might influence the market.
Pre-open indicators are somewhat positive, as is the early tone, pointing to the Dow being up 100 points or so in the early going.
The current short-term weekly pattern is that the ‘monthly strength period’ was due to begin last Friday and to run through Thursday, March 5. So we shall see.
Interesting Chart of the Morning: A revisit to a chart we showed you a couple of weeks ago. As we have often noted over the years, the Transportation Avg frequently leads the market in both directions, and seems to have done so again.
But is it now at least short-term oversold beneath its 21-day m.a. and about to lead the market into at least an oversold bounce?
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Consumer and Investor Confidence!’ Click here.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Monday, March 2, 2009. 9:15 a.m.March 2nd, 2009 No comments
Non-Subscribers: We updated the free sample issue of our newsletter on Friday, which might be interesting reading for you. Just click on the link in the column at right.
Over the Weekend:
Global worries, debates, and concerns continued about the financial sector, the still worsening global recession, and whether the massive stimulus and bank-rescue efforts will work . . . . . and if so, when.
Meanwhile, British-based global bank HSBC announced it will raise $17.9 billion by issuing new shares to existing share-holders, and will scale back its U.S. lending operations by closing down its HSBC Finance Corp, and Beneficial Finance, causing a loss of 6,100 jobs in the U.S.
The Treasury Dept announced it is going to provide $30 billion more in bailout funds to giant insurer AIG.
In his widely read annual letter to his shareholders on Saturday Warren Buffett said that the U.S. economy is liable to remain in shambles this year but he couldn’t predict how the stock market will perform this year.
It was an unusual letter in that Buffett acknowledged that last year was the worst year his investments have ever suffered through, and this year has begun no better. In a rare admission he said, “During 2008 I did some dumb things in investments.” He singled out his investment in Conoco Phillips at the peak of oil prices, and in two Irish banks on which he has losses of 89%. Buffett said he’s not bothered by the losses, that “Indeed we enjoy such price declines if we have funds available to increase our positions. . . . I like buying quality merchandise when it’s marked down.”
Well, so does everyone. But enjoy losses? It must be different in more ways than one to be a multi-billionaire.
The continuing dismal news over the weekend combined to pour more doom and gloom over global stock markets.
Asian & Pacific Markets last night; were down sharply with the exception of China. The DJ Asia-Pacific Index closed down a big 3.1%.
China closed up 1.3%. But Australia closed down 2.8%. Hong Kong closed down 3.9%. India closed down 3.2%. Indonesia closed down 2.3%. Japan closed down 3.8%. Malaysia closed down 1.8%. South Korea closed down 4.2%. Singapore closed down 3.7%. Taiwan closed down 2.9%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are also down sharply, on average of 2% to 3%.
Oil is down $2.15 at $42.60 a barrel.
Gold is up $5 an ounce at the moment, at $950, after its big decline of 5% last week.
In the U.S.:
The downward revision of 4th quarter GDP sent the stock market down on Friday, to end an ugly week, and month.
There is a heavy schedule of potential market-moving economic reports coming out this week to begin the new month. Go to the home page of Street Smart Report Online and look in the lower left corner for the full schedule.
They begin with the consumer Income & Spending report, released a few minutes ago.
And perhaps a ray of light? Both consumer income and spending rebounded in February. Consumer income rose 0.4%, the biggest monthly rise since last May, on pay raises and cost of living increases. And spending rose by 0.6%, its largest monthly increase since November, 2007 (the month before the current recession is now known to have begun).
The important ISM Mfg Index will be released later this morning.
Pre-open indicators are well off earlier sharply lower levels, but are still pointing to the Dow being down 110 points or so in the early going.
The current short-term weekly pattern is that the ‘monthly strength period’ was due to begin last Friday and to run through Thursday, March 5. So we shall see.
Interesting Chart of the Morning: I guess Warren Buffett wasn’t looking at this chart when he made one of his “big mistakes” last year of buying oil stocks near the peak of oil prices last spring and summer.
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Consumer and Investor Confidence!’ Click here.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Saturday, February 28th, 2009. 9:30AMFebruary 27th, 2009 No comments
Non-subscribers: We have replaced the free sample issue of our newsletter on the StreetSmartReport.com home page with a later issue you might find interesting. Click on ‘Sample Newsletter’ link at right to go to it.
Yesterday;
The downward revision of estimated 4th quarter GDP to a –6.2% annual rate cast a pall over the market yesterday. The preliminary estimate, reported in January had been that the economy had slowed at only a 3.8% rate. The GDP number is revised several times over succeeding months as more data regarding 4th quarter economic activity becomes available.
No one expected the - 3.8% number to stand. The consensus of economists was that this estimate would show a decline of 5.5%. So the – 6.2% number is worse than expectations.
That has set off a round of downward revisions among economists for the rest of the year. The previous consensus was that the economy will bottom later this year and begin to recover next year, and indeed that is what Fed Chairman Bernanke forecast in his testimony before Congress on Tuesday. Bernanke’s forecast sent the Dow soaring 236 points on Tuesday, so obviously investors did not expect a recovery that soon.
In response to yesterday’s GDP revision, the market plunged 180 points right out of the gate yesterday. Surprisingly it then spent the middle part of the day climbing back up to being fractionally positive, but then sold off later in the day. The Dow closed down 119 points, or 1.7%, at 7,062 a new bear market low, and back to its level of 1997, 12 years ago. The S&P 500 closed down 2.4%, and closing at 735, broke below its closing November low of 752, and its November intraday closing low of 741. (See “Interesting Chart of the Day” below). The Nasdaq and tech stocks fared somewhat better, the Nasdaq closing down 0.9%.
ON THE ECONOMY:
The numbers have been more negative in the 1st quarter of 2009, but everyone has expected this quarter to be worse than the 4th quarter of last year. And they have not been disappointed. The unemployment rate rose from 7.2% in December to 7.6% in January, and it is expected will take a larger jump in February when the employment numbers for February are released next Friday morning.
The chairwoman for the independent Council of Economic Advisors, speaking at an economics meeting yesterday said, “The first quarter is going to be bad.” But she went on to say the Council is still optimistic about a turnaround later this year as the economic stimulus package works its way through the economy. And the council does has history on its side regarding the positive effect of past stimulus efforts that were much smaller than those $trillion efforts being made this time.
Meanwhile, research firm RDQ Economics in New York forecasts a “Fairly lackluster recovery in 2010, and that the unemployment rate will touch double-digits.
That’s pretty close to my forecast from early 2007 of a severe recession that will last until 2010. My forecast for unemployment has been that it will top out at 11%.
Meanwhile, with the situation still deteriorating there’s no way for the folks on Main Street to see the slide ever ending, which will have it continuing to feed on itself, unless government and some of these think tanks and research firms get the media reporting their forecasts for recovery.
My weekend newspaper column titled ‘CONSUMER AND INVESTOR CONFIDENCE’ talks about that.
ON ECONOMISTS:
I got a kick out of this comment on a news website;
“When did economists ever get the forecasts right? Now that they’re finally forecasting a deepening recession can we expect recovery to begin?”
That reminds me of a column I wrote in December, 2007, which we now know is when the current recession was already underway. This is what I said:
“A poll by the Wall Street Journal in November [2007] showed economists on average believe there is only a 30% chance of a recession in coming months. Former Federal Reserve chairman Alan Greenspan puts the odds of a recession at “less than 50-50”.
But are economists able to warn in advance of recessions anyway?
Probably not. Because they wait for proof in the data. Economic data is old by the time conditions change and the data is collected, compiled, and reported. The result is that recessions are usually already underway, and in some cases have already come and gone, before the available data convinces economists that a recession ‘is coming’.
A number of years ago I wrote a piece in my newsletter making fun of how in the spring and summer of 1991, economists finally became convinced a recession was going to take place. Later data showed that the recession had actually begun in July, 1990 and ended in March, 1991. It had already come and gone.
A recent article in The Economist provides more examples. It begins, "In 1929, after the 1929 crash, the Harvard Economic Society reassured its subscribers that: ‘A severe depression is outside the range of probability.’ [Of course, later data showed the Great Depression of the 1930s, the worst ever, had already begun].
In a survey in March, 2001, 95% of U.S. economists said there would not be a recession, even though [later data showed] the 2001 recession had already begun."
So, I wonder what we should make of the current debate among economists. Are they right in expecting only a slowdown and not a recession, or simply behind the curve?”
And how much should we depend on economists’ forecasts of when this recession will end, given that until last September they (and Fed Chairman Bernanke) were still saying “the economy is slowing but will not worsen into a recession”. Now we know the recession began in December 2007. Will its ending again also take place before they recognize it?
For the week;
Another ugly week to end an ugly month, and the 6th straight month of declines, something that didn’t happen even in the granddaddy of them all 1929-32 bear market.
| THIS WEEK (Feb. 27) | | DJIA | 7062 | - 4.1% | | S&P 500 | 735 | - 4.5% | | NYSE | 4617 | - 3.9% | | NASDAQ | 1377 | - 4.4% | | NASD 100 | 1117 | - 4.7% | | Russell 2000 | 389 | - 5.3% | | TransportAvg | 2499 | - 7.4% | | DJ Utilities | 324 | - 3.6% | | XOIOilstocks | 825 | - 2.4% | | Gold bullion | 944 | - 4.9% | | Gold Stocks | 119 | -10.3% | | Canada | 8114 | +2.1% | | London | 3830 | -1.5% | | Germany | 3843 | -4.2% | | France | 2702 | -1.7% | | Hong Kong | 12811 | +0.9% | | Japan | 7568 | +2.0% | | Australia | 3297 | -1.7% | | S. Korea | 1063 | - 0.3% |
| | LAST WEEK (Feb. 20) | | DJIA | 7365 | -6.2% | | S&P 500 | 770 | -6.8% | | NYSE | 4804 | -7.7% | | NASDAQ | 1441 | -6.1% | | NASD 100 | 1172 | -5.2% | | Russell 2000 | 411 | -8.3% | | DJ Transports | 2699 | -8.7% | | DJ Utilities | 336 | -7.9% | | XOI Oilstocks | 845 | -9.6% | | Gold bullion | 993 | +5.5% | | Gold Stocks | 132.64 | +1.3% | | Canada | 7950 | -8.4% | | London | 3889 | -7.2% | | Germany | 4014 | -9.0% | | France | 2750 | -8.2% | | Hong Kong | 12699 | -6.3% | | Japan | 7416 | -4.7% | | Australia | 3353 | -4.1% | | S. Korea | 1066 | -10.6% |
| | WEEK ENDED (Feb. 13) | | DJIA | 7850 | -5.2% | | S&P 500 | 826 | -4.8% | | NYSE | 5206 | -4.9% | | NASDAQ | 1534 | -3.6% | | NASD 100 | 1236 | -3.2% | | Russell 2000 | 448 | -4.7% | | DJ Transports | 2957 | -7.7% | | DJ Utilities | 365 | -4.9% | | XOI Oilstocks | 935 | -4.1% | | Gold bullion | 941 | +3.3% | | Gold Stocks | 130.88 | +0.9% | | Canada | 8678 | -3.7% | | London | 4189 | -2.4% | | Germany | 4413 | -5.0% | | France | 2997 | -4.0% | | Hong Kong | 13554 | -0.7% | | Japan | 7779 | -3.7% | | Australia | 3496 | -2.6% | | S. Korea | 1192 | -1.5% |
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What’s next?
The short-term indicators remain on sell signals, but the market is oversold after the sharp declines of the last three weeks, and investor sentiment is at extreme levels of bearishness usually seen at correction lows.
Not a time to fall asleep at the switch.
The weekly patterns were very consistent in last year’s big decline, but have not been in February. The next weekly pattern is that the ‘monthly strength period’ was due to begin on Friday and to run through next Thursday. It obviously didn’t.
Next week has a very heavy schedule of potential market-moving economic reports coming out, including the ISM Mfg Index, Challenger Lay-offs Report, Pending Home Sales Index, and ‘the big one’, the Monthly Jobs Numbers and unemployment report for February. To see the complete schedule Click here. (Look in the lower left corner of the page it takes you to for the schedule).
Interesting Chart of the Morning: The S&P 500 did close below its November low yesterday, joining the Dow, Transportation Average and NYSE Composite which had done so in previous days. And short-term MACD remains on a short-term sell signal.
Scroll down to see other recent interesting charts and commentary.
If you didn’t click on it above, to read my weekend newspaper column titled ‘Consumer and Investor Confidence’ click here; Current newspaper column!
I’ll be back Monday morning, with the outlook for Monday and for next week.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
Friday, February 27, 2009. 9.20 a.m.February 27th, 2009 No comments
Subscribers: The mid-week ‘Markets Signals and Updates Report’ is on your website from Wednesday, and a Ramblings commentary from yesterday.
Yesterday:
Worries, debates, and concerns continued about whether the massive stimulus and bank-rescue efforts will work, and if so, when.
So after an initial positive beginning it was back to the downside for the market, with the Dow closing down 88 points, or 1.2%. The S&P 500 closed down 1.6%, the Nasdaq down 1391, and the Transports down 2.7%.
Asian & Pacific Markets last night; were mixed. The DJ Asia-Pacific Index closed up 1.3%.
Australia closed unchanged. China closed down 2.8%. Hong Kong closed down 0.6%. India closed down 0.7%. Indonesia closed down 0.4%. Japan closed up 2.1%. Malaysia closed down 0.1%. South Korea closed up 0.8%. Singapore closed down 1.2%. Taiwan closed up 0.8%.
(Scroll down to Saturday for an interesting look at how individual markets have fared over the last three weeks).
This morning:
European markets are down sharply, on average of more than 3%.
Oil is down $2.39 at $42.83 a barrel.
Gold is up $15 an ounce at the moment but is still down sharply for the week so far.
In the U.S.:
The revision of 4th quarter GDP was just released, and was revised down to an economic decline of 6.2%. That’s worst than economists’ forecast of a 5.5% decline, not entirely unexpected. It was the biggest quarterly decline since the 1982 recession. Also not surprising since there has not been a serious recession since that of 1982.
There is also the news of a plan finalized regarding CitiGroup, in which the government will wind up with a 36% stake, with private capital coming in with a similar percentage. It does create dilution to present stock-holders, but the stock has declined to just $2 anyway so their losses have already been substantial.
Pre-open indicators are fairly negative, pointing to the Dow being down 120 points or so in the early going.
The next short-term weekly pattern is that the ‘monthly strength period’ is due to begin today and to run through March 5. So we shall see.
Interesting Chart of the Morning:
Please scroll down to see other recent interesting charts and commentary.
To read my weekend newspaper column titled ‘Preferring a Depression?!’ Click here.
Although tomorrow is Saturday and the markets will be closed I will be back in the morning with a weekly wrap-up and outlook for Monday and next week.
Subscribers: The mid-week ‘Markets Signals and Updates Report’ is on your website from Wednesday, and a Ramblings commentary from yesterday.
Non-subscribers: While it’s helpful to look at daily and short-term expectations, it is the intermediate and longer-term market moves that are most important to investors. So, if your New Year’s resolution is to improve your investment performance in 2009, you might begin with a subscription to our independent research. The cost is equivalent to the cost of two cups of coffee per week. Can you afford not to subscribe?
Street Smart Report Online provides our intermediate-term signals, outlook, and recommended holdings. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 22nd year. In-depth weekly reports, newsletter, hotline, and much more! As a bonus for a one-year subscription you will also receive my new book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.
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