Advice for the wicked: Sell stocks now.
This week marked the slowest level of trading activity of the year and probably much longer. The unprecedented level of indecision in equity markets is due to a wide variety of factors, not the least of which being the dead cold economies of the major industrialized nations. Europe is a basket case, and, while India and China are still in growth phases, the lifeblood for both of them - the United States - is being sucked dry as Americans try to make the best of a bad situation.
Personal spending has all but dried up despite promises from the Fed that they are willing to do anything in their power to keep the US from falling deeper into recession. That the economy continues to deteriorate is the main fear among investors, which has put a temporary lid on stocks. Despite that, the Dow Jones Industrials ended the week at its highest level since January 9, though the gains were all made in the final twenty minutes of trading, as usual.
If the rally doesn't end today, then it must shortly. Stocks are at levels unsustainable in relation to the overall outlook.
Dow 8,799.26, +28.34 (0.32%)
NASDAQ 1,858.80, -3.57 (0.19%)
S&P 500 946.21, +1.32 (0.14%)
NYSE Composite 6,148.61, -14.52 (0.24%)
On the day, decliners held sway over advancers, 3509-2903, but, more importantly, new lows exceeded new highs for the first time in the past six sessions, 99-83, signaling that the day's gains were manufactured on the backs of multiple losers. Volume returned to extremely pathetic levels. For the week, they might as well have just closed the exchanges and saved the effort for more productive pursuits. Maybe its time for people to realize that 21st century stock investing is more challenging than its worth, and highly subject to the whims of powerful monied interests.
NYSE Volume 2,066,007,000
NASDAQ Volume 858,232,000
Volatility has shifted away from stocks to commodities. Even crude oil, which had been a stalwart gainer over the past two weeks, took a bit of a tumble, off 64 cents, to $72.04. Gold took the largest hit, down $21.30 to $940.70. Silver also fell, off 62 cents, to $14.88. The losses in gold compels one to ask whether another liquidity crisis is looming, though the tightest analysis would be to assign the losses to temporary dollar strength, which is likely the case.
After a week like this, with subdued trading in tight ranges, investors are either relieved or even more worried than before. The latter case is probably the most prudent attitude at this particular juncture as the approaching second quarter earnings season may be a real stinker. We got through the last quarter with "not as bad as predicted" figures which met or exceeded watered-down expectations. Traders may not be as forgiving this time around.
With little wiggle room from a chartist's point of view, stocks have been poised for a downturn for quite some time, at least two to three weeks. We are still waiting.
Friday, June 12, 2009
Thursday, June 11, 2009
More Stocks Making New Highs
For the fifth consecutive day, new highs have exceeded new lows, today, by 91-69.
To some, that may sound like fairly mundane news, but to readers of this blog, it's an important turning point. Daily new lows have outnumbered new highs every day for some 21 months (with the exception of about 6 days) until last week.
So, has the spell been broken? Is the economy on the verge of recovery? Are we headed for a new bull market?
The answers, in order, are: YES, NO, and PROBABLY NOT.
Until the economy begins showing real signs of strength, such as, home prices increasing instead of declining, month-over-month; new jobs being created; corporate profits showing real improvement, not just "beat the (watered-down) street numbers"; and maybe getting the national debt under control, the US economy is in for a rough ride. While the solitary new lows-new highs indicator may be turning green, it's more likely because the new highs set in 2008, much like earnings forecasts, are of the low-bar variety. The new highs in '09 are likely well below the previous highs in '07 or '06. and, since the market was hammered so badly both in the fall of '08 and the first quarter of '09, there aren't many more new lows to be had. Some of the real losers have been delisted (see GM, etc.), while others are resting comfortably in the single digits.
As for a new bull market, well, such is the stuff of dreams and fairies. It would be more in the realm of Harry Potter to conger up a new bull market than for the economic conditions to present such a scenario. Stocks are currently overvalued, as will be seen some time later this summer or into the fall. Some selling would indeed be healthy right about now, though there is a general push-back from Wall Street, the federal government and mainstream media against any show of weakness. It's very odd, but much akin to the Japanese (or is it Chinese?) concept of "losing face," wherein one puts on the best show possible in order to appear wholesome, vibrant and strong.
Naturally, that's not what investing in equities is supposed to be about. It's supposed to consist of discounting future value, dividends and solid profitability, product lines and market share. Fundamentals of business and economy, dear Watson.
Dow 8,770.92, +31.90 (0.37%)
NASDAQ 1,862.37, +9.29 (0.50%)
S&P 500 944.89, +5.74 (0.61%)
NYSE Composite 6,163.13, +65.07 (1.07%)
As far as this week is concerned, the movement of the stock market has been kind of like a bad joke, or, watching paint dry. It's been a near-total waste of time. The big winner has been the NYSE Composite, up a whopping 80 points. The NASDAQ has put on 13 points; the S&P almost 5, and the Dow a miraculous 7 whole points!
Index traders are falling asleep at their desks, the excitement is so rare.
On the day, advancing issues outnumbered decliners, 4164-1405, though, while the disparity was large, the actual movement was tiny. You already know the score on the new highs vs. new lows, and volume was a little better than Wednesday's, which really doesn't say much. Investors worldwide are still awaiting some kind of pull-back, though it may be a long time in coming, if at all.
NYSE Volume 1,223,187,000
NASDAQ Volume 2,501,569,000
Oil hit a new high for the year, to nobody's surprise, rising $1.35, to $72.68. Gold was up as well, gaining $6.80, to $961.50, and silver added 27 cents, to $15.49. Commodity prices, outside of crude oil, have been trading up and down without much direction for the past three to four weeks, much like the stock market. The entire globe has been engulfed by an acute condition of indecisiveness, worse than any H1N1 Pandemic.
Tomorrow, we're hoping the market will be up, or down. Something to hang one's hat on would be welcome after a week of dullness.
To some, that may sound like fairly mundane news, but to readers of this blog, it's an important turning point. Daily new lows have outnumbered new highs every day for some 21 months (with the exception of about 6 days) until last week.
So, has the spell been broken? Is the economy on the verge of recovery? Are we headed for a new bull market?
The answers, in order, are: YES, NO, and PROBABLY NOT.
Until the economy begins showing real signs of strength, such as, home prices increasing instead of declining, month-over-month; new jobs being created; corporate profits showing real improvement, not just "beat the (watered-down) street numbers"; and maybe getting the national debt under control, the US economy is in for a rough ride. While the solitary new lows-new highs indicator may be turning green, it's more likely because the new highs set in 2008, much like earnings forecasts, are of the low-bar variety. The new highs in '09 are likely well below the previous highs in '07 or '06. and, since the market was hammered so badly both in the fall of '08 and the first quarter of '09, there aren't many more new lows to be had. Some of the real losers have been delisted (see GM, etc.), while others are resting comfortably in the single digits.
As for a new bull market, well, such is the stuff of dreams and fairies. It would be more in the realm of Harry Potter to conger up a new bull market than for the economic conditions to present such a scenario. Stocks are currently overvalued, as will be seen some time later this summer or into the fall. Some selling would indeed be healthy right about now, though there is a general push-back from Wall Street, the federal government and mainstream media against any show of weakness. It's very odd, but much akin to the Japanese (or is it Chinese?) concept of "losing face," wherein one puts on the best show possible in order to appear wholesome, vibrant and strong.
Naturally, that's not what investing in equities is supposed to be about. It's supposed to consist of discounting future value, dividends and solid profitability, product lines and market share. Fundamentals of business and economy, dear Watson.
Dow 8,770.92, +31.90 (0.37%)
NASDAQ 1,862.37, +9.29 (0.50%)
S&P 500 944.89, +5.74 (0.61%)
NYSE Composite 6,163.13, +65.07 (1.07%)
As far as this week is concerned, the movement of the stock market has been kind of like a bad joke, or, watching paint dry. It's been a near-total waste of time. The big winner has been the NYSE Composite, up a whopping 80 points. The NASDAQ has put on 13 points; the S&P almost 5, and the Dow a miraculous 7 whole points!
Index traders are falling asleep at their desks, the excitement is so rare.
On the day, advancing issues outnumbered decliners, 4164-1405, though, while the disparity was large, the actual movement was tiny. You already know the score on the new highs vs. new lows, and volume was a little better than Wednesday's, which really doesn't say much. Investors worldwide are still awaiting some kind of pull-back, though it may be a long time in coming, if at all.
NYSE Volume 1,223,187,000
NASDAQ Volume 2,501,569,000
Oil hit a new high for the year, to nobody's surprise, rising $1.35, to $72.68. Gold was up as well, gaining $6.80, to $961.50, and silver added 27 cents, to $15.49. Commodity prices, outside of crude oil, have been trading up and down without much direction for the past three to four weeks, much like the stock market. The entire globe has been engulfed by an acute condition of indecisiveness, worse than any H1N1 Pandemic.
Tomorrow, we're hoping the market will be up, or down. Something to hang one's hat on would be welcome after a week of dullness.
Wednesday, June 10, 2009
Stocks Fall; America In Ruins
Not much in the way of gains or losses with the final numbers, but the range was more significant than yesterday's tired session. The Dow covered nearly 200 points from start to finish, with the requisite last-half-hour rally knocking 75 points off the loss.
There's now little doubt that stocks are in a distribution pattern (meaning they are being distributed from the hands of those who bought them low to the hands of those stupid enough to buy them now. Also telling is the pattern of trade, which for the second time in the past four days, showed upticks in the morning and concerted selling later, an obvious sign of a market ready to capitulate.
Of course, such capitulation may take weeks or even months to play out, as investors, a sometimes stubborn bunch, on the one hand may not be willing to part with some stocks, while others may not be so easily induced to buy into a rally that has persisted for so long, so the process could be tiresome, to say the least. More on this point below.
Dow 8,739.02, -24.04 (0.27%)
Nasdaq 1,853.08, -7.05 (0.38%)
S&P 500 939.15, -3.28 (0.35%)
NYSE Composite 6,098.06, -3.51 (0.06
Advancing issues were overwhelmed by decliners, 3648-2713, but new highs bested new lows for the fourth straight day, 87-72. This is a landmark worthy of note, being the first four-day run of more new highs than new lows in 21 months. The caveat is that stocks were already being taken down during this same period of 2008, so many new highs weren't very high, though quite a few new lows were being made. It may be best to put away notions about that one indicator being significant for the time being, or, at least until the end of summer, or until it rolls back over again. We should actually be expecting more new highs than lows, considering the size of the recent rally. Additionally, the period between June and September 2008 was one of the least volatile of recent vintage. Once the dow dipped below 12,000 on June 20, they remained in the range of 10,962 to 11,842 until September 17.
Volume was better than it had been the first two days of the week, and that is significant, especially in light of the hard selling off the morning rise.
NYSE Volume 1,220,393,000
Nasdaq Volume 2,375,555,000
Oil made another new high, spiking another $1.32, to $71.33. Gold was unchanged at $954.70, while silver added 9 cents, to $15.23.
Fiat's deal with Chrysler was finalized today, as the Supreme Court refused to hear arguments by a number of Indiana pension funds and lifted their stay. Thus, the highest court in the land can now be counted upon to deliver decisions wholly unconstitutional or not hear arguments in which they would have to uphold long-standing precedents. Clearly, our entire system of government is completely off the rails and cannot be trusted to do anything in the public interest.
The United States used to be a nice country where the rule of law was sacrosanct. Kiss those days good-bye. Those in power over the past 40 years have abused it to the point at which the future of the nation looks dismal and ruined. Best advice for now is to just pack up and leave.
There's now little doubt that stocks are in a distribution pattern (meaning they are being distributed from the hands of those who bought them low to the hands of those stupid enough to buy them now. Also telling is the pattern of trade, which for the second time in the past four days, showed upticks in the morning and concerted selling later, an obvious sign of a market ready to capitulate.
Of course, such capitulation may take weeks or even months to play out, as investors, a sometimes stubborn bunch, on the one hand may not be willing to part with some stocks, while others may not be so easily induced to buy into a rally that has persisted for so long, so the process could be tiresome, to say the least. More on this point below.
Dow 8,739.02, -24.04 (0.27%)
Nasdaq 1,853.08, -7.05 (0.38%)
S&P 500 939.15, -3.28 (0.35%)
NYSE Composite 6,098.06, -3.51 (0.06
Advancing issues were overwhelmed by decliners, 3648-2713, but new highs bested new lows for the fourth straight day, 87-72. This is a landmark worthy of note, being the first four-day run of more new highs than new lows in 21 months. The caveat is that stocks were already being taken down during this same period of 2008, so many new highs weren't very high, though quite a few new lows were being made. It may be best to put away notions about that one indicator being significant for the time being, or, at least until the end of summer, or until it rolls back over again. We should actually be expecting more new highs than lows, considering the size of the recent rally. Additionally, the period between June and September 2008 was one of the least volatile of recent vintage. Once the dow dipped below 12,000 on June 20, they remained in the range of 10,962 to 11,842 until September 17.
Volume was better than it had been the first two days of the week, and that is significant, especially in light of the hard selling off the morning rise.
NYSE Volume 1,220,393,000
Nasdaq Volume 2,375,555,000
Oil made another new high, spiking another $1.32, to $71.33. Gold was unchanged at $954.70, while silver added 9 cents, to $15.23.
Fiat's deal with Chrysler was finalized today, as the Supreme Court refused to hear arguments by a number of Indiana pension funds and lifted their stay. Thus, the highest court in the land can now be counted upon to deliver decisions wholly unconstitutional or not hear arguments in which they would have to uphold long-standing precedents. Clearly, our entire system of government is completely off the rails and cannot be trusted to do anything in the public interest.
The United States used to be a nice country where the rule of law was sacrosanct. Kiss those days good-bye. Those in power over the past 40 years have abused it to the point at which the future of the nation looks dismal and ruined. Best advice for now is to just pack up and leave.
Tuesday, June 9, 2009
Seriously Stupid
Over the past three sessions, the Dow Jones Industrial Average has gained 13 points. It's hardly worth watching, much the less actually investing in anything. Now that the economy is officially flat-lining, market moves are going to actually require some kind of impetus and the Obama administration, the Fed and the Treasury have made sure that everything is buttoned-down, nice and neat. Further, the big money has pushed stocks to a level at which there are no bargains.
Therefore, welcome to the summer of '09. Blah. Boring. Stupid.
Dow 8,763.06, -1.43 (0.02%)
NASDAQ 1,860.13, +17.73 (0.96%)
S&P 500 942.43, +3.29 (0.35%)
NYSE Composite 6,101.57, +33.01 (0.54%)
Winners beat losers, 3905-2464. New highs finished slightly better than new lows for the 4th straight session, 73-63. Volume was well below average. No surprise there. Did somebody mention that stocks weren't cheap?
NYSE Volume 1,060,306,000
NASDAQ Volume 2,161,562,000
As though there were some compelling reason, like outsized demand, oil gained another $1.92, to $70.01. This is the result of still-unregulated speculation in the commodity markets. There's no good reason by crude oil should be more than $35 per barrel, much less $50, or $60. If there's anything that will put a lid on the economy and bury it for good, it's high energy prices. Good for those greedy bastard oil companies. Bad for everyone else.
Gold gained $2.20, to $954.70. Silver was up 19 cents, to $15.14.
It was a really dull day.
I need a nap.
Therefore, welcome to the summer of '09. Blah. Boring. Stupid.
Dow 8,763.06, -1.43 (0.02%)
NASDAQ 1,860.13, +17.73 (0.96%)
S&P 500 942.43, +3.29 (0.35%)
NYSE Composite 6,101.57, +33.01 (0.54%)
Winners beat losers, 3905-2464. New highs finished slightly better than new lows for the 4th straight session, 73-63. Volume was well below average. No surprise there. Did somebody mention that stocks weren't cheap?
NYSE Volume 1,060,306,000
NASDAQ Volume 2,161,562,000
As though there were some compelling reason, like outsized demand, oil gained another $1.92, to $70.01. This is the result of still-unregulated speculation in the commodity markets. There's no good reason by crude oil should be more than $35 per barrel, much less $50, or $60. If there's anything that will put a lid on the economy and bury it for good, it's high energy prices. Good for those greedy bastard oil companies. Bad for everyone else.
Gold gained $2.20, to $954.70. Silver was up 19 cents, to $15.14.
It was a really dull day.
I need a nap.
Monday, June 8, 2009
A Market You Cannot Take Seriously
Foreign investors must look at the US stock markets as a major joke. Of course, theirs may or may not be any better, but the abnormal late-day trading patterns in US equity indices really should be held up for ridicule and scorn.
Today was just another in a series of predetermined outcomes. Stocks were down all day, until 3:15 pm, with the Dow index down as much as 130 points during the session. Naturally, the crooks and thieves controlling the trading have to keep up appearances - that America is still OK - so all of the losses were erased in the final 45 minutes.
That's become standard operating procedure on the Street. Whether or not anyone actually believes stocks should be levitating around their recent highs is another matter altogether. For most chartists and analysts, the evidence of manipulation is pretty clear, and has been for some time. Valuation means little anymore. It's all perception and innuendo, with the hope that people will forget that stocks are up some 35-40% since early March, haven't taken even a slight correction and may move even higher.
The feeling is that the insiders wish that everyone would just close their eyes for the next few weeks and wait for the inevitable push higher, which will, no doubt, be accompanied by some cockamamie economic report that purports to show the US economy on the mend. Should stocks take another step forward, one would be well advised to take profits, invest in oil, gold or silver and move out of stocks completely, because some day, sooner or later, there will be a hellish crash, something akin to the pounding stocks took last fall.
In the current case, it sure looks like the heavy hitters are firmly in control, taking profits as they please, bolstering their bottom lines with blatant disregard for retail investors, client money or anything even remotely resembling morals.
Dow 8,764.49, +1.36 (0.02%)
NASDAQ 1,842.40, -7.02 (0.38%)
S&P 500 939.14, -0.95 (0.10%)
NYSE Composite 6,068.56, -14.08 (0.23%)
Despite the narrowly mixed results in the headline numbers, decliners finished far ahead of advancing issues, 4013-2391. New highs finished just ahead of new lows, 59-58, but most telling was the light volume, far below even the reduced levels of the previous two weeks. The word best descriptive of this session's volume would be "feeble," though "feckless" also comes to mind.
NYSE Volume 1,077,228,000
NASDAQ Volume 1,993,720,000
Commodity prices were down nearly across the board, though the favored position of oil and energy-related raw materials was evident. Crude fell by a mere 35 cents, to $68.09, as though $68.00 is the magical fixed price for the slippery stuff. The metals took a more serious hit, with gold down $10.10, to $952.50, and silver off 43 cents, to $14.96.
Meanwhile, the crafty Chrysler bankruptcy, engineered by Washington bureaucrats, may be falling apart, as the Supreme Court issued a stay while justices mull over the appeal of a group of Indiana pension and construction funds who say their secured interests were unduly ignored in the original filing. Justice Ruth Bader Ginsburg issued the terse notice today, putting the entire matter on hold until Monday.
The American public is about to learn just who holds power in Washington. If the deal isn't done by Monday, June 15, Fiat, the purchaser of most of Chrysler's assets, has the right to walk away. Meanwhile, the court must take seriously the claims by the pension funds, which stand in stark opposition to the plan laid out by the Obama administration.
With the stock market and federal government appearing to be more "theatre of the absurd" than substantial operating mechanisms of capitalism and democracy, the recovery picture becomes more fuzzy and less believable every day. It should, because in more than just general terms, but specifically in instances ranging from the TARP "loans", to the bank stress tests to the pre-packaged bankruptcies of GM and Chrysler, the process has been deceptive, shady and unfair to the parties being harmed the most: the US taxpayers.
Today was just another in a series of predetermined outcomes. Stocks were down all day, until 3:15 pm, with the Dow index down as much as 130 points during the session. Naturally, the crooks and thieves controlling the trading have to keep up appearances - that America is still OK - so all of the losses were erased in the final 45 minutes.
That's become standard operating procedure on the Street. Whether or not anyone actually believes stocks should be levitating around their recent highs is another matter altogether. For most chartists and analysts, the evidence of manipulation is pretty clear, and has been for some time. Valuation means little anymore. It's all perception and innuendo, with the hope that people will forget that stocks are up some 35-40% since early March, haven't taken even a slight correction and may move even higher.
The feeling is that the insiders wish that everyone would just close their eyes for the next few weeks and wait for the inevitable push higher, which will, no doubt, be accompanied by some cockamamie economic report that purports to show the US economy on the mend. Should stocks take another step forward, one would be well advised to take profits, invest in oil, gold or silver and move out of stocks completely, because some day, sooner or later, there will be a hellish crash, something akin to the pounding stocks took last fall.
In the current case, it sure looks like the heavy hitters are firmly in control, taking profits as they please, bolstering their bottom lines with blatant disregard for retail investors, client money or anything even remotely resembling morals.
Dow 8,764.49, +1.36 (0.02%)
NASDAQ 1,842.40, -7.02 (0.38%)
S&P 500 939.14, -0.95 (0.10%)
NYSE Composite 6,068.56, -14.08 (0.23%)
Despite the narrowly mixed results in the headline numbers, decliners finished far ahead of advancing issues, 4013-2391. New highs finished just ahead of new lows, 59-58, but most telling was the light volume, far below even the reduced levels of the previous two weeks. The word best descriptive of this session's volume would be "feeble," though "feckless" also comes to mind.
NYSE Volume 1,077,228,000
NASDAQ Volume 1,993,720,000
Commodity prices were down nearly across the board, though the favored position of oil and energy-related raw materials was evident. Crude fell by a mere 35 cents, to $68.09, as though $68.00 is the magical fixed price for the slippery stuff. The metals took a more serious hit, with gold down $10.10, to $952.50, and silver off 43 cents, to $14.96.
Meanwhile, the crafty Chrysler bankruptcy, engineered by Washington bureaucrats, may be falling apart, as the Supreme Court issued a stay while justices mull over the appeal of a group of Indiana pension and construction funds who say their secured interests were unduly ignored in the original filing. Justice Ruth Bader Ginsburg issued the terse notice today, putting the entire matter on hold until Monday.
The American public is about to learn just who holds power in Washington. If the deal isn't done by Monday, June 15, Fiat, the purchaser of most of Chrysler's assets, has the right to walk away. Meanwhile, the court must take seriously the claims by the pension funds, which stand in stark opposition to the plan laid out by the Obama administration.
With the stock market and federal government appearing to be more "theatre of the absurd" than substantial operating mechanisms of capitalism and democracy, the recovery picture becomes more fuzzy and less believable every day. It should, because in more than just general terms, but specifically in instances ranging from the TARP "loans", to the bank stress tests to the pre-packaged bankruptcies of GM and Chrysler, the process has been deceptive, shady and unfair to the parties being harmed the most: the US taxpayers.
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