Too many "ifs", "theoreticals", "possibles" for meQuote:
Originally Posted by 4matic
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Too many "ifs", "theoreticals", "possibles" for meQuote:
Originally Posted by 4matic
Wall Street is looking for ~$56 in earnings for the S&P 500 in 2009. So forward p/e is ~16x. That seems a bit rich if Meredith Whitney's call for 13-15% unemployment is to be believed.
I didn't write that.. :tongue:Quote:
Originally Posted by Brock Landers
Overall, I'm optimistic for a 50% retracement of the entire move down sometime this year.
Quote:
Originally Posted by Stu Gotz
I don't think high unemployment is a deterent to the stock makerket. On the contrary. Cost cutting will help the bottom line for earnings.
Where do you think money is made in a 70% consumer economy? Besides, we're probably at an effective 15% unemployment with all the underemployment out there, which has been going on since the eighties. There's some MBAs making lattes in every town.Quote:
Originally Posted by 4matic
http://www.nytimes.com/2009/07/15/bu...1&ref=business
"In California and a handful of other states, one out of every five people who would like to be working full time is not now doing so.
It is a startling sign of the pain that the Great Recession is inflicting, and it is largely missed by the official, oft-repeated statistics on unemployment. The national unemployment rate has risen to 9.5 percent, the highest level in more than a quarter-century. Yet it still excludes all those who have given up looking for a job and those part-time workers who want to be working full time."
I think it's almost obscene that everyone is so excited about the banks. Has anybody learned anything, or are we just going to go head to head with the rest of the world's banks to see who will control the world's capital in ten years, damn the torpedoes?
Island gap on the Q's. Very bullish:
http://www.marketwatch.com/investing...&optstyle=1013
I'd rather not see it fill that gap. It should accelerate higher and I suspsect 930 SP00 before it slows down.
Such a strange thing. Dell spits the bit. Intel's quarter is full of holes. Efficient market my ass.
WSJ
OPINIONJULY 16, 2009
The Bernanke Market
We won't get real growth until Congress and Treasury get policy right.
By ANDY KESSLER
I remember once buying the stock of a small company and I couldn't believe my luck. Every time my fund bought more shares the stock would go up. So we bought even more and the stock kept climbing. When we finally built our full position and stopped buying the stock started dropping, ending up at a price below where we started buying it. We were the market.
Just about every policy move to right the U.S. economy after the subprime sinking of the banking system has been a bust. We saved Bear Stearns. We let Lehman Brothers go. We forced Merrill Lynch, Wachovia and Washington Mutual into the hands of others. We took control of Fannie and Freddie and AIG and even own a few car companies, pumping them with high-test transfusions. None of this really helped.
We have a zero interest-rate policy. We guaranteed bank debt. We set up the Troubled Asset Relief Program (TARP) to buy toxic mortgage assets off bank balance sheets. But when banks refused to sell at fire sale prices, we just gave them the money instead. Dumb move. So we set up the Public-Private Investment Program to get private investors to buy these same toxic assets with government leverage, and still there are few sellers. Meanwhile, the $1 trillion federal deficit is crowding out private investment and the porky $787 billion stimulus hasn't translated into growth.
At the end of the day, only one thing has worked -- flooding the market with dollars. By buying U.S. Treasuries and mortgages to increase the monetary base by $1 trillion, Fed Chairman Ben Bernanke didn't put money directly into the stock market but he didn't have to. With nowhere else to go, except maybe commodities, inflows into the stock market have been on a tear. Stock and bond funds saw net inflows of close to $150 billion since January. The dollars he cranked out didn't go into the hard economy, but instead into tradable assets. In other words, Ben Bernanke has been the market.
The good news is that Mr. Bernanke got the major banks, except for Citigroup, recapitalized and with public money. June retail sales rose 0.6%. Housing starts jumped 17% month to month in May and will likely be flat for June. Second quarter GDP may be slightly up. And he was successful in spreading a "green shoots" psychology throughout the media. But the real question is, now what? Government interventions are only meant to light a fire under the real economy and unleash what John Maynard Keynes called our "animal spirits." But government dollars can't sustain growth.
Like it or not, the stock market is bigger than the Federal Reserve and the U.S. Treasury. The stock market anticipates only future profits and prosperity, not government-funded starter fluid. You can only fool it for so long. Unless there are real corporate profits from sustainable economic growth, the stock market is not going to play along. It's the ultimate Enforcer.
In mid-May, Mr. Bernanke's outlook seemed to change. Maybe he didn't approve of the sharp housing rebound -- like we need more houses! Maybe he saw inflation in commodity prices -- oil popping to $72 from $35. Or, more likely, he finally realized that he was the market and took his foot off the money accelerator, as evidenced in the contracting monetary base (see nearby chart). Sure enough, things rolled over -- the market dropped 7.5% from its peak, oil prices dropped almost 17%, and even gold has lost some of its luster. But in July, the Fed started buying again and the market rallied.
Can the U.S. economy stand on its own two feet without Mr. Bernanke's magic dollar dust? Eventually, but apparently not yet. Unemployment stubbornly hit 9.5% in June, according to the Bureau of Labor Statistics. Housing prices are still dropping, albeit at a slower pace, and foreclosures are still rampant.
But I think what really bothers the market is that the structural problems that got us into trouble in the first place still exist. We took the easy way out and, with the help of Treasury Secretary Tim Geithner's loose "stress tests," swept banking problems under the carpet. We waved off mark-to-market accounting and juiced bank stock prices to help them recapitalize, but all those toxic mortgage assets on bank balance sheets are still there as anchors on lending. All the pump priming and stock market flows didn't get rid of them.
Hats off to Mr. Bernanke for getting the worst behind us. He'll be pressured politically to keep pumping out dollars, but he should resist the urge. The stock market will ignore his dollars if it doesn't believe they'll turn into real profits. Green jobs and government health-care clerks do not make a productive, sustainable economy. That can only come from innovative companies with access to growth capital. The stock market won't turn bullish until it sees that type of economy.
Again, when it's clear that you are the market you have to stop buying and begin tackling the hard stuff. By not restructuring banks, by not getting bad loans off bank balance sheets, by not standing up to the massive increases in government debt crowding out private capital, the Fed and Treasury are holding back real economic growth.
Mr. Kessler, a former hedge-fund manager, is the author of "How We Got Here" (Collins, 2005).
New closing recovery highs: COMPQ, Nasdaq 100, S&P 500. Roubini turns sanguine, IBM beats and Google meets. Monthly expiration tomorrow. If Google breaks $450 we'll get another leg up but GOOG is very weak in the aftermarket.
Nice call on the technicals, 4matic.
I'm having trouble understanding the wisdom of that comment. Can you help?Quote:
Originally Posted by tronacate
I'll bite. He meant that the fundamentals of the economy are so bad, led by unemployment, that Intel making a nice quarter doesn't do squat for a long term investor.Quote:
Originally Posted by woodstocksez
Maybe the fundamentals are bad. Obviously, good results from Intel are interpreted as indicative of improving economic health far beyond Intel. Whether that's correct or not is certainly debatable, but dismissing that point of view simply by observing that unemployment is high seems empty to me, and a facade of insight, rather than the actual thing. Doesn't unemployment follow bad economic fundamentals, rather than lead them? Things go bad, then people get laid off, not vice versa. Similarly, things get better and people are hired, not vice versa.Quote:
Originally Posted by Benny Profane
And if we're concerned with investors, I expect you probably already know this, but reductions in unemployment historically lag improvement in equity prices. According to my understanding of historical norms, improvement in corporate results is a leading indicator of a stock market upturn, while improvement in employment numbers is a lagging one.
Quote:
Originally Posted by woodstocksez
Well, you're painting a big picture with one brush there. I'm not privy to the conference call from Intel, but one quarter up results could be almost anything, including some slick accounting. My guess is that they have their production dialed well, and shut it down nicely, while getting some orders from some other direction (servers?) to fill the void. But, wtf do I know. Well, I know that we're descending back down to at least 1997 or so.
No, I'm not. At all. Though I did identify some general relationships that historically have commonly occurred.Quote:
Originally Posted by Benny Profane
I didn't argue that Intel's improved quarterly results (and I don't know the details either, just the cursory stuff I saw in the headlines and maybe a news story or two) mean the overall economy is improving. I have no idea what the significance of their results is. In fact, that's just my point about almost all of the economic (or financial market, for that matter) analysis that you see here or in the news: people consider one or two or several parameters and extrapolate meaning to the overall economy based on that. A system like the U.S. or world economy is a big, complicated machine with a lot of moving parts that interact with each other in lots of different ways, known and unknown. Analyzing cause and effect in a system like that is difficult and imprecise, at best, even for those with a lot of relevant knowledge and understanding. I don't think most "analysis" here or in the media even comes close to being meaningful.Quote:
Originally Posted by Benny Profane
Oh, it is for the liars and scoundrels on all levels that play the public like a seasoned poker player in a Reno casino. It's an insider's game, especially today. The only way for you to profit is to know what the results are ahead of time for a fee, or guess well. As far as the latter, the house always wins in the end.Quote:
Originally Posted by woodstocksez
In the past, I haven't been inclined to be overly cynical or pessimistic about financial markets: people have always cheated, but I assumed the system mostly operated with an acceptable level of integrity. I don't think that any more. I expect I'm far from alone in my changed view.Quote:
Originally Posted by Benny Profane
Thanks. Really. Even a blind squirel finds a nut now and then! I rode it through the Google earnings hoping for a breakaway gap (never a wise idea). We'll see now.. My time frame is shorter now and we need to see breadth ratios get better even if the market moves sideways/down. A bullish surprise from GE or some help from the Nikkei would also be nice. The Dow components need to to confirm also. Expiration tomorrow..Quote:
Originally Posted by Moeghoul
Speak a de Engrish.
that's why the charts never lie.Quote:
Originally Posted by Benny Profane
More specifically, investment grade bond spreads are the tangible evidence of this arbitrary "improvement" termQuote:
Originally Posted by woodstocksez
Questionable results from GOOG, GE, and BAC yet the market shows decent resiliance...it's early but impressive nonetheless.
USDX broke support overnite. under 79. Gold's up another $16. :)
Guys, any good reads on technical analysis I can understand, that won't put me to sleep 10 minutes into reading it out there?
Thanks
You mean reference books? No, all dull as a butter knife..Quote:
Originally Posted by liv2ski
My take is TS is art as much as science and you have to keep it simple. Experience is the best teacher.
The reference bible is John Murphy:
[ame="http://www.amazon.com/Technical-Analysis-Financial-Markets-Comprehensive/dp/0735200661"]Amazon.com: Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance): John J. Murphy: Books[/ame]
http://stockcharts.com/school/doku.p...phy_s_ten_laws
My favorite market book of all time which has a lot of technical analysis references is The New Market Wizards. I've read it three times. Get the hardback:
[ame="http://www.amazon.com/New-Market-Wizards-Conversations-Americas/dp/0887306675"]Amazon.com: The New Market Wizards: Conversations with America's Top Traders: Jack D. Schwager: Books[/ame]
Quote:
Originally Posted by liv2ski
Check out McHugh's Technical Indicator Index They give a free 30 day subscription, no cc up front required.
http://www.technicalindicatorindex.com
This past weekend's report is required reading.
I'd start with reminiscence of a stock operator, see if this is something you really can get interested in....then if you want to learn the basics of TA (Support/Resistance) take a look at this thread and save every picture the main guy posts, then everyday go back through the collections of pictures until it clicks one day.Quote:
Originally Posted by liv2ski
[ame="http://www.forexfactory.com/showthread.php?t=2331"]james16 Chart Thread @ Forex Factory[/ame]
...
Tomorrow will be an interesting day, we should hit 8875 ( high of the recent bull rally) no problem, good thing in it's favor is breaking the 200 moving average today. I'd like to see us hit 9000 and show up a daily reversal bar. Bearish divergence is set up, but the momentum of this recent move up makes me weary. We'll see how it breaks...
Agree except with regards to the importance relative to the entire rally.Quote:
Originally Posted by ICEHOCEY77
The Nikkei kicked in last night; closed right on its high. The political changes there may finally support a sustainable rally. Europe strong.
Apple earnings are the 800lb. gorilla today.
technically we are at a slight crossroad. We did take out the previous recovery high on the SP today by a few cents. A failure here is too easy for the bears but possible. A pullback to SP00 930 is normal and healthy.
IF Apple earnings (or something else) trigger a gap above todays high then we have a breakaway gap after an island gap. This would be one of the most reliable indicators of an extension rally. Also, a move up from here puts us in position to attempt a test of the breakdown at 1050-1100 SP00
Also, a move higher will attract sideline money and short covering.
The range is 870-950 SP00:
Breakaway Gap - Breakaway Gap Stock
The breakaway gap is a significant development and has strong implications in the direction of the gap for the stock. Breakaway gaps occur when prices jump outside of a recent trading range or consolidation area. This may happen when a stock opens well above any high made recently or well below any low made recently, as a result of sudden extreme optimism or pessimism. Breakaway gaps are not filled quickly, and leave a blank space on the stock chart. Breakaway gaps often occur as resolutions to common chart patterns, as traders identify a pattern and rush to be the first into the trade. Identifying breakaway gaps properly can lead to very reliable trading signals, particularly when they occur on high volume
http://www.thestockbandit.com/Breakaway-gap.htm
does not compute.
S&P solidly above 960 and the DOW with the potential to crack 9000 today. I am flat and confused.
Consider it cracked.
That's why it is going higher. No one believes it. Busy trade today. Busiest in a while.Quote:
Originally Posted by gtdrew
FWIW: I sold 1/2 my longs yesterday and I slept well :p
Still 1/2 long looking for QQQQ $40, 1050 SP00
The Shanghai index fell 5.8% today, its seventh loss in the last nine sessions. It has fallen 17% since Aug. 4. That's a correction. A few more down days, and the index will be down 20%, the popular definition of a bear market.
The Bear Market is coming and that is the tip of the iceberg once this shit hits the fan: http://articles.moneycentral.msn.com...ming-fast.aspx
Good luck on Health care reform when Social Security is ready to go down for the count. What the fuck are the politicians thinking? We are so far in debt we are a year or two from junk bond status. No country will buy our debt in the near future, rates will be out of sight, economy in the tank. Fuck dudes, I think the USA is going down.
From that article:Quote:
Originally Posted by liv2ski
"As I've already noted, there is no money in the Social Security Trust Fund -- just IOUs from the government to itself."
If you consider US Treasury Bonds an "IOU"? Government has always had a printing press so to dumb down Treasury Bonds as an IUO is playing the fear card.
Fact is, SS might be on stronger footing than anyone expected but not for a good reason.. Older Americans will have to work longer because they don't have enough money to retire, therefore, tax receipts will remain above expectations from that demographic.
I like Candlestick Charting myself for TA. This is a decent primer [ame="http://www.amazon.ca/Japanese-Candle-Stick-Charting-Steve/dp/0735201811"]Japanese Candle Stick Charting: Amazon.ca: Steve Nison: Books[/ame]
but I use TA only for entry/exit points and strictly as a backup for fundamentals. As always YMMV
Now, this is no where near true. Many european countries and japan carry debtloads that swamp the US as related to thier GDP.Quote:
Originally Posted by liv2ski
YEs, more debt is going to slow any recovery to a crawl; but the US isnt about to fall off the cliff.
Although, if they dont change debt levels, tax rates, etc, etc, China will pass the US up in 10 to 20 years. we'll see. the US is going to have to decide if it wants to stay capitalist or go european socialist and let China go on by.
Quote:
Originally Posted by SkiCougar
I predict China will have to meet rising social demands from its new founded middle class. My Chinese g/f maintains PRIVATE health insurance in China that she pays for. China will face the same pressures that US capitalism faced and still faces. It will take civil war or political revolution to address the demands of the proletariat in China in decades to come.
Panic much?Quote:
Originally Posted by liv2ski
Try this one:
WE'RE ALL GONNA DIE!!!!!!!
Funny, I won't be dying as I have a Canukistan passport and nothing would make me happier than bugging out to BC:DQuote:
Originally Posted by iceman
I just want to sell all my US based assets prior to the meltdown and getting my wife to sign off on selling the real estate is a tough sell. So fuck it, we will see what happens over the next 10 years, but I think the odds are stacked against the USA returning to it's hay days.
On a separate but more immediate note, the market has been treading water for awhile here and it is not uncommon for the stock market to tank in October, so it will be interesting to see what happens between now and years end.
I think it was Frontline that did a very indepth story about China after Tianamen square. How the Chinese people entered into an unwritten deal with the devil (Chinese gov't) - One party rule for economic capitalism. The downside is that there are a lot of people getting hosed by the capitalist. Poor working conditions, as in lots of people dying or committing suicide because the work conditions are so bad. If you aren't on the money side of things, you get 3 squares, a cot and a few dollars a day. (Sadly, our company used to mfg in Shenzen province, and that's pretty much the way things were at the plant. Eat, sleep, and work at the plant.) The avg spend for health care is just a few dollars a month per capita. They would rather have people dying, than try to deal with the over population. China is going to have some very serious socio-economic problems in a decade. You could very easily see another Tianamen incident that doesn't stop there but spreads.Quote:
Originally Posted by 4matic
I saw that Frontline, and, what sticks with me is the thing at the end when they showed the iconic picture of that fellow standing in front of the tank with his shopping bags dangling to a few bright and privileged students from a university in Shanghai (I think), and they had no clue what they were looking at. Possibly the most famous piece of photojournalism in the last 25 years, and they had never seen it. I can't see how a country can take the reigns of 21st century world capitalism with that level of mind control going on, but, I may be wrong.