by phil - October 27th, 2014 7:35 am
Strap yourselves in – it's going to be a wild one!
After closing out the best week in the market since 2012 (right after the worst week since 2011) it looks like we're in for more craziness as Draghi's happy talk fades into a distant memory (it was Friday afternoon) to be replaced by fear of the Fed on Wednesday (2pm) as well as an almost certain drop in our GDP from Q2s shocking 4.6% to probably 2.5% in Q3's first guesstimate.
Speaking of guesstimates – did you catch that downward revision to New Home Sales on Friday? On September 24th, the WSJ ran a headline proclaiming: "U.S. New-Home Sales Surge 18% in August - Highest Level Since 2008; Signals Higher Consumer Demand That Could Boost Housing Market" and the S&P popped 18 points (1%) and IYR began a 6% rally that day everyone was happy.
Only it was a lie. As it turns out, new home sales were actually only 466,000 and this month (Sept data) they are 467,000 yet, at the time, no one (except us) thought to question the validity of a sudden 18% jump in home sales when mortgages were still in decline.
Even after the fact, people don't seem to think it's a big deal when major market-moving data has a fudge-factor of +/- 10%. It's bad enough that "THEY" control the markets – do they HAVE to fake the data as well? As Dave Fry notes regarding Friday's low-volume action:
So why did stocks rally?
In the midst of all this crummy data, CNBC rolled-out some commentary from one of the chief QE talking head proponents, the ECB’s Mario Draghi. His comments lit a fire under bulls and algos where terms like “more
by SWW - October 26th, 2014 1:36 am
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by phil - October 24th, 2014 7:58 am
Already the monsters are coming out with two of NY's three papers already maxing out their headline fonts to scream EBOLA!!! to people on their way to work. As I noted to our Member in this morning's Alert (tweeted out too!) that made for easy shorts on the Futures:
Based on Ebola and the upcoming stress tests, I'd have to guess a sell-off is coming today. Shorting /ES at 1,940 (tight stops, of course) and the Dow (/YM) at 16,600 are a lot safer than shorting /TF at 1,100 but all good lines to use and watch. /NQ already failed 4,000.
It's 7:54 and already the Egg McMuffins are paid for on nice drops off those levels and we'll take quick profits and run and hopefully get a chance to re-enter as I don't see this day going well.
We're back to short in our Short-Term Porfolio but less aggressively so than last weekend as we can't ignore the underlying 3.5% gains our indexes have put up this week.
As usual, the Dollar is being knocked down to support the Futures but it's not helping oil much ($81.24) so far. Gold, however, bounced back to $1,233 and silver (/SI) went over our long line at $17.25 (very tight stops below). Gasoline (/RB) was rejected at $2.20 – another sign that the underlying economy is much weaker than these indexes would have you believe.
In fact, GS reports today that China has shut 20% of it's Iron Ore production in the face of an inventory glus and prices dropping 40% this year. The market is in the midst of a transition without precedent in recent commodity history as supply jumps and higher-cost mines shut, according to Macquarie Group Ltd. HSBC Holdings Plc, which cut its price forecasts this week, sees a 30 percent slump in Chinese output next year.
“The market currently looks like a game of chicken where no player has blinked,” HSBC said. “The major producers are likely to compete heavily on production and costs, with little regard for
by phil - October 23rd, 2014 7:56 am
We decided to give yesterday a pass.
Though the indexes failed to hold our strong bounce lines (well, 3 of 5 did), we can blame Canada for that one as a gunman shot up Parliament yesterday afternoon and the "terrorist attack" news sent our markets lower. Other than that (and these things are unavoidable when you sell 500M guns to 400M people in North America), it wasn't a bad day for the markets, so we're going to wait and see what actually sticks. Our watch levels remain:
So the Dow fell almost exactly from it's strong bounce to it's weak bounce yesterday. Aside from confirming the 5% Rule™ is firmly in charge, holding the weak bounce line is bullish – IF it holds. The S&P and Nasdaq held their strong bounce lines (thanks to AAPL) while the NYSE stayed in it's range but the Russell was a big disappointment and failed the weak bounce – a very bad sign if they can't take it back today.
by Greg - October 22nd, 2014 5:40 pm
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