The end of the week always seems to provide some perspective, even if it occurs as an afterthought. I've been saying right along that the markets were shaky and Friday's figures indicate that I've been very much on the right track, so pay attention!
Head for the hills. Today was another in a continuing series of ugly trading sessions.
Dow 13,181.91 -281.42; NASDAQ 2,511.25 -64.73; S&P 500 1,433.06 -39.14; NYSE Composite 9,370.60 -248.73
Prior to the market opening, the Labor Dept. announced that July payrolls came in well below expectations of 135,000 new jobs, with the addition of just 92,000. According to some people's fudgy math, this translates into a 0.8% annual rate of growth which, by some accounts, would be sufficient to keep real GDP growth at the expected rate of 2.75% for the second half of the year. Dream on. The labor figures have been cooked, fried, refried, baked, grilled and fricasied to a point at which they are scarcely believable.
The day dawdled on until about 2:00 pm, when the floodgates opened and sellers spilled blood into the streets.
Market internals took a turn from nearly OK to horrific. Declining issues overwhelmed advancing ones at a 5-1 clip. New lows were once again beyond reason, with 792 issues (that's a whopping 13% of the whole market) hitting the skids. There were just 126 new highs.
Once again, the spreading contagion from the credit markets made it sensible to leave stocks alone. The US financial system, already under stress from years of government spending waste and an enormous trade deficit, is in tatters from the largely-unregulated mortgage business that is forcing people into foreclosure at record numbers.
While the big wigs in Washington - people like Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke - continue to spread the word that risks from the sub-prime mortgage mess are "contained" and "not serious", investors are taking whatever profits they have and leaving town.
The credit crunch even has people in the oil pits worried. Seriously, if there's going to be a recession - and it looks like it could be a long and serious one - there's no way oil will be able to maintain its current pricing structure. At some point, the demand side of the equation will send oil and gas prices tumbling. Crude for September delivery lost $1.38, closing at $75.48.
The precious metals finally made headway, as the future looks all the more certain - gloomy - which is good for gold bugs. Gold rose $7.80 to $684.40, while silver added 16 cents to $13.16. A good hedge would be to buy as much silver as possible as soon as you can.
Happy hunting.
Friday, August 3, 2007
Thursday, August 2, 2007
The PPT Plans to Save the Nation
They did it again.
It wasn't as dramatic as yesterday's 200-point move in 35 minutes, but there it was again, our guardians of the economy, the guiding hand of the Treasury, Federal Reserve, SEC and the Commodity Futures Trading Commission, acting in concert, pumped the Dow Jones Industrial Average another 120 points between 3:00 and 3:30 pm. They then allowed the market to readjust and close with another 100-point gain.
This time they took the NASDAQ along for the ride and left the S&P and the poor sister NYSE Composite behind; up, but by a lesser percentage than their favored 30 Dow stocks. The tally today was 25 gainers and just five losers within the Dow component stocks. Nice. Healthy. Bullscoot.
Dow 13,463.33 +100.96; NASDAQ 2,575.98 +22.11; S&P 500 1,472.20 +6.39; NYSE Composite 9,619.33 +46.28
The market internals were somewhat improved today, with advancers actually outdoing decliners by better than a 3-2 margin. New lows continued to lead new highs, however, 417-133. The markets are coming back toward equilibrium, but it's not going to last - the underlying forces of the sub-prime meltdown are simply too powerful.
Oil traded 33 cents to the upside, closing at $76.86. Gold and silver were up marginally, with silver right at $13.00 per ounce.
There are compelling reasons to buy into the metals, though those markets seem to be as manipulated - lower - as the Dow Jones. With Rupert Murdoch set to take the reins at the Wall Street Journal - a sad day for us all - the FOX is actually going to be in the hen house.
Make no mistake, the powers that be are in no mood to allow the Dow and other indices to drift lower. That said, it needs to be pointed out that the chances of making new highs are also quite remote. The credit markets are busting and the worst is still to come, right about time for a nice little election in the US, so the blame can be laid at the feet of the party soon to be (or already) in charge. History will be rewritten. It is every day, and it's all absolutely rubbish.
It wasn't as dramatic as yesterday's 200-point move in 35 minutes, but there it was again, our guardians of the economy, the guiding hand of the Treasury, Federal Reserve, SEC and the Commodity Futures Trading Commission, acting in concert, pumped the Dow Jones Industrial Average another 120 points between 3:00 and 3:30 pm. They then allowed the market to readjust and close with another 100-point gain.
This time they took the NASDAQ along for the ride and left the S&P and the poor sister NYSE Composite behind; up, but by a lesser percentage than their favored 30 Dow stocks. The tally today was 25 gainers and just five losers within the Dow component stocks. Nice. Healthy. Bullscoot.
Dow 13,463.33 +100.96; NASDAQ 2,575.98 +22.11; S&P 500 1,472.20 +6.39; NYSE Composite 9,619.33 +46.28
The market internals were somewhat improved today, with advancers actually outdoing decliners by better than a 3-2 margin. New lows continued to lead new highs, however, 417-133. The markets are coming back toward equilibrium, but it's not going to last - the underlying forces of the sub-prime meltdown are simply too powerful.
Oil traded 33 cents to the upside, closing at $76.86. Gold and silver were up marginally, with silver right at $13.00 per ounce.
There are compelling reasons to buy into the metals, though those markets seem to be as manipulated - lower - as the Dow Jones. With Rupert Murdoch set to take the reins at the Wall Street Journal - a sad day for us all - the FOX is actually going to be in the hen house.
Make no mistake, the powers that be are in no mood to allow the Dow and other indices to drift lower. That said, it needs to be pointed out that the chances of making new highs are also quite remote. The credit markets are busting and the worst is still to come, right about time for a nice little election in the US, so the blame can be laid at the feet of the party soon to be (or already) in charge. History will be rewritten. It is every day, and it's all absolutely rubbish.
Wednesday, August 1, 2007
Dow Funny Business
Realistically, a 152-point rise on the Dow will divert most people's attention away from the systemic economic problems faced by the US economy and the cynical pumping of selected stocks by the PPT (Plunge Protection Team, Working Group on Financial Markets).
Anyone paying a little closer attention (like me) would notice that the Dow outperformed the NASDAQ and NYSE Composite by nearly a full percentage point on the day and dragged the S&P 500 up 0.72% due to the overlap between the indices.
Dow 13,362.37 +150.38 (1.14%); NASDAQ 2,553.87 +7.60 (0.30%); S&P 500 1,465.81 +10.54 (0.72%); NYSE Composite 9,572.87 +18.37 (0.19%)
Also, only two of the 30 Dow stocks finished in the red. Contrast that to the broader market, where declining issues led the way over advancers, 3748-2602, or roughly 3-2. Hmmm... a 28-2 upside trouncing by Dow stocks, but a 3-2 downside whipping for the overall market? Somebody's toying with us.
Surely. Absolutely. Without a doubt.
There were 861 new lows to just 95 new highs. So, where's the happy pill? The US equity market is about as phony as a Tennessee 3-dollar-bill. Maybe worse. A quick study of the Dow chart for Wednesday, August 1, tells the real story.
The Dow zig-zagged across the flatline until about 3:30, when the Dow was down about 50 points. Since the manipulators could not stomach another down day (make that 5 up and 6 down since the most recent record-high close), they pumped it a full 200 points in the final 35 minutes of trading. Nice! But not really. There are serious problems, as evidenced by the numbers just presented and the late day rally was designed to keep the stock market and our failing economy off the evening news and front pages of newspapers.
Speaking of newspapers, one should begin to be vary wary of anything emanating from the Dow Jones newswire, now that mogul Murdoch has his claws firmly entrenched. The deal was supposedly struck yesterday - or the day before - and it's just another knife into the already-exposed hide of American journalistic integrity. Forget that. You now simply cannot believe anything you read, anywhere. It's all subject to spin and headline writers, wrappers and margin noters. US media is a near-total sham. (Trust me. I at least try to give your the truth.)
While the markets were toying with our psyches, pressure on oil prices eased, losing $1.68 on the day, to close at $76.53. Thank goodness. And you can call off the gold rush. It was down $3.40 to $675.90. Silver dipped 6 cents to $12.96. Those minimal drops may be just small enough to pique some buying interest. Considering the coming banking fiasco, I'd be buying the metals here. A year from now, it could look like a very prudent move. Besides, there really isn't much downside risk in either gold or silver at these levels. You may not make a killing, but you shouldn't lose any value to inflation either.
Anyone paying a little closer attention (like me) would notice that the Dow outperformed the NASDAQ and NYSE Composite by nearly a full percentage point on the day and dragged the S&P 500 up 0.72% due to the overlap between the indices.
Dow 13,362.37 +150.38 (1.14%); NASDAQ 2,553.87 +7.60 (0.30%); S&P 500 1,465.81 +10.54 (0.72%); NYSE Composite 9,572.87 +18.37 (0.19%)
Also, only two of the 30 Dow stocks finished in the red. Contrast that to the broader market, where declining issues led the way over advancers, 3748-2602, or roughly 3-2. Hmmm... a 28-2 upside trouncing by Dow stocks, but a 3-2 downside whipping for the overall market? Somebody's toying with us.
Surely. Absolutely. Without a doubt.
There were 861 new lows to just 95 new highs. So, where's the happy pill? The US equity market is about as phony as a Tennessee 3-dollar-bill. Maybe worse. A quick study of the Dow chart for Wednesday, August 1, tells the real story.
The Dow zig-zagged across the flatline until about 3:30, when the Dow was down about 50 points. Since the manipulators could not stomach another down day (make that 5 up and 6 down since the most recent record-high close), they pumped it a full 200 points in the final 35 minutes of trading. Nice! But not really. There are serious problems, as evidenced by the numbers just presented and the late day rally was designed to keep the stock market and our failing economy off the evening news and front pages of newspapers.
Speaking of newspapers, one should begin to be vary wary of anything emanating from the Dow Jones newswire, now that mogul Murdoch has his claws firmly entrenched. The deal was supposedly struck yesterday - or the day before - and it's just another knife into the already-exposed hide of American journalistic integrity. Forget that. You now simply cannot believe anything you read, anywhere. It's all subject to spin and headline writers, wrappers and margin noters. US media is a near-total sham. (Trust me. I at least try to give your the truth.)
While the markets were toying with our psyches, pressure on oil prices eased, losing $1.68 on the day, to close at $76.53. Thank goodness. And you can call off the gold rush. It was down $3.40 to $675.90. Silver dipped 6 cents to $12.96. Those minimal drops may be just small enough to pique some buying interest. Considering the coming banking fiasco, I'd be buying the metals here. A year from now, it could look like a very prudent move. Besides, there really isn't much downside risk in either gold or silver at these levels. You may not make a killing, but you shouldn't lose any value to inflation either.
Tuesday, July 31, 2007
Credit Crunch
The continuing downfall of Wall Street's fanatical credit ponzi scheme is unmistakable. The housing sector implosion is spreading like wildfire, into corporate junk bonds, credit cards (have you gotten your "notice" yet? The one that says your interest rate is going up?), and mainstream mortgage lending.
The plain fact is that we're on the verge of a complete economic meltdown - caused by loose credit and regulatory policies - that not even the Secretary of the Treasury and his cohorts in the Working Group on Financial Markets (aka, the PPT, Plunge Protection Team) are powerless to stop it.
Dow 13,211.99 -146.32; NASDAQ 2,546.27 -37.01; S&P 500 1,455.27 -18.64; NYSE Composite 9,554.50 -68.68
Add to that over-arching concern the idea that the United States has been under the control of a gang of half-cocked thugs who have raided the Treasury, destroyed our military (to say nothing of the irreparable damage done to the nation of Iraq) and broken laws with impunity. The Congress has been unwilling to take the necessary action to remove these treasonous criminals from office and the media has been complicit in undermining the will of the people by simple avoidance of real news.
We're in one heck of a mess and even the titans of Wall Street are afraid. Well they should be. They stood by, taking profits and looking the other way for the past 6 years.
With the markets down another day - make that 6 of the last 10 - the unwinding has only begun. Anyone with any smarts is already 50-60% in cash or other liquid assets (a case of booze does count) or short or buying puts on the CBOE. Playing the downside is the only reasonable way to make money right now.
The damage was evident in our two key metrics: Decliners led advancers, 7-5 and new lows checked in at 657 to 133 new highs.
On top of all of this, oil futures for September delivery were up $1.38 to $78.21, an all-time high. Like salt in the wound, you have to pay more to get nowhere at any speed.
Gold was up $2.30 to $679.30; silver rose 11 cents to $13.02. From the looks of things, it might be the absolute right time to invest in the metals. The markets are a wreck and the books have been cooked.
Impeach or die.
The plain fact is that we're on the verge of a complete economic meltdown - caused by loose credit and regulatory policies - that not even the Secretary of the Treasury and his cohorts in the Working Group on Financial Markets (aka, the PPT, Plunge Protection Team) are powerless to stop it.
Dow 13,211.99 -146.32; NASDAQ 2,546.27 -37.01; S&P 500 1,455.27 -18.64; NYSE Composite 9,554.50 -68.68
Add to that over-arching concern the idea that the United States has been under the control of a gang of half-cocked thugs who have raided the Treasury, destroyed our military (to say nothing of the irreparable damage done to the nation of Iraq) and broken laws with impunity. The Congress has been unwilling to take the necessary action to remove these treasonous criminals from office and the media has been complicit in undermining the will of the people by simple avoidance of real news.
We're in one heck of a mess and even the titans of Wall Street are afraid. Well they should be. They stood by, taking profits and looking the other way for the past 6 years.
With the markets down another day - make that 6 of the last 10 - the unwinding has only begun. Anyone with any smarts is already 50-60% in cash or other liquid assets (a case of booze does count) or short or buying puts on the CBOE. Playing the downside is the only reasonable way to make money right now.
The damage was evident in our two key metrics: Decliners led advancers, 7-5 and new lows checked in at 657 to 133 new highs.
On top of all of this, oil futures for September delivery were up $1.38 to $78.21, an all-time high. Like salt in the wound, you have to pay more to get nowhere at any speed.
Gold was up $2.30 to $679.30; silver rose 11 cents to $13.02. From the looks of things, it might be the absolute right time to invest in the metals. The markets are a wreck and the books have been cooked.
Impeach or die.
Monday, July 30, 2007
Dead Cat Bounce
Investors shook off last week's monumental declines and searched for bargains amid the wreckage on Monday. All the major indices showed decent gains on relatively strong buying. There was certainly some resolve to Monday's rally, but whether or not it will last is another question altogether.
Dow 13,358.31 +92.84; NASDAQ 2,583.28 +21.04; S&P 500 1,473.91 +14.96; NYSE Composite 9,623.18 +114.95
Make no doubt about it, there's a big, big problem inside the sub-prime mortgage mess and it's leaking over into corporate borrowing and mainstream mortgage lending. The simplistic reassurances of people like Ben Bernanke and Hank Paulson are masking a problem that goes to the heart of the world banking systems.
Money and credit has expanded worldwide at an astonishing rate and there's payback on the way. For a clue, watch merger and acquisition (M&A) activity over the next few weeks and months. It's already slowed down after a rash of big deals earlier in the year. Private capital has gone soft and conservative, and these people know what they're doing - it's their money, after all. CNN Money has a particularly propitious story on stalled funding for some big buyouts.
Over the next month and a half, expect more fallout, because drops like we witnessed last week do not occur in a vacuum. There's more to the story and it's a good bet that the invisible hand of the Plunge protection Team (PPT) was again at work today. Shortly after the markets opened, they took an unhealthy dip, but quickly bounced back to the positive. All of the indices hugged the flatline until just after noon, when all of them took off into positive territory for the remainder of the session, trademark market manipulation by the usual suspects.
As is the fashion of the market manipulators of the secretive Working Group on Financial Markets, they prefer small losses over long periods of time rather than big, spectacular, headline-grabbing declines.
Their unseen actions in the markets cause a sheep-like follow-along response, as evidenced today. Advancing issues gained the upper hand over decliners by a 3-2 ratio, though the new lows were still holding sway in a rather ponderous manner, with 746 bottom-outers to just 93 new highs. That's still out of balance and augurs ill for stocks going forward.
One-day rallies are not a cure-all, and the same conditions that contributed to last week's sell-off still exist. Without the PPT, the markets may very well have finished lower again today. The stated goals of the so-called PPT are:
Keep an open mind and an open eye on how the markets - and, to a lesser degree, individual stocks - move in relation to events and non-events.
Since most companies have now already reported 2nd quarter earnings, the next six weeks will be a function more of emotion than fact and since the overall mood is still rather dubious about the future, sharp sell-offs may occur out of thin air. More likely are days of small double-digit-Dow losses, followed by some recovery, then the pattern repeating again. As it is, the Dow has traded lower 5 of the last 9 sessions and that measure bears close scrutiny. Should we actually be in a new bear market - which some analysts have suggested - the ratio of up days to down, in addition to the volume and point movements, will be a key divining tool.
Oil priced lower on the NY Mercantile Exchange, losing 19 cents to $76.83. Gold and silver both edged higher and continue to herald a breakout, though that's happened so many times in the past 18 months, nobody's giving it much credence.
Dow 13,358.31 +92.84; NASDAQ 2,583.28 +21.04; S&P 500 1,473.91 +14.96; NYSE Composite 9,623.18 +114.95
Make no doubt about it, there's a big, big problem inside the sub-prime mortgage mess and it's leaking over into corporate borrowing and mainstream mortgage lending. The simplistic reassurances of people like Ben Bernanke and Hank Paulson are masking a problem that goes to the heart of the world banking systems.
Money and credit has expanded worldwide at an astonishing rate and there's payback on the way. For a clue, watch merger and acquisition (M&A) activity over the next few weeks and months. It's already slowed down after a rash of big deals earlier in the year. Private capital has gone soft and conservative, and these people know what they're doing - it's their money, after all. CNN Money has a particularly propitious story on stalled funding for some big buyouts.
Over the next month and a half, expect more fallout, because drops like we witnessed last week do not occur in a vacuum. There's more to the story and it's a good bet that the invisible hand of the Plunge protection Team (PPT) was again at work today. Shortly after the markets opened, they took an unhealthy dip, but quickly bounced back to the positive. All of the indices hugged the flatline until just after noon, when all of them took off into positive territory for the remainder of the session, trademark market manipulation by the usual suspects.
As is the fashion of the market manipulators of the secretive Working Group on Financial Markets, they prefer small losses over long periods of time rather than big, spectacular, headline-grabbing declines.
Their unseen actions in the markets cause a sheep-like follow-along response, as evidenced today. Advancing issues gained the upper hand over decliners by a 3-2 ratio, though the new lows were still holding sway in a rather ponderous manner, with 746 bottom-outers to just 93 new highs. That's still out of balance and augurs ill for stocks going forward.
One-day rallies are not a cure-all, and the same conditions that contributed to last week's sell-off still exist. Without the PPT, the markets may very well have finished lower again today. The stated goals of the so-called PPT are:
Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence
Keep an open mind and an open eye on how the markets - and, to a lesser degree, individual stocks - move in relation to events and non-events.
Since most companies have now already reported 2nd quarter earnings, the next six weeks will be a function more of emotion than fact and since the overall mood is still rather dubious about the future, sharp sell-offs may occur out of thin air. More likely are days of small double-digit-Dow losses, followed by some recovery, then the pattern repeating again. As it is, the Dow has traded lower 5 of the last 9 sessions and that measure bears close scrutiny. Should we actually be in a new bear market - which some analysts have suggested - the ratio of up days to down, in addition to the volume and point movements, will be a key divining tool.
Oil priced lower on the NY Mercantile Exchange, losing 19 cents to $76.83. Gold and silver both edged higher and continue to herald a breakout, though that's happened so many times in the past 18 months, nobody's giving it much credence.
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