They say you can't keep a good market down but it remains to be seen whether or not we have a good market with almost all of August and September's BS gains (see any of my posts for warnings and hedge ideas) erased just 3 days into October.
/TF/Jasu – Just a bit oversold and, as noted yesterday (and above) it's completing a 10% drop from 1,200 at 1,080, so that's a very firm line for a bounce and that's 20% of a 120-point drop, so we're looking for 25-point bounces to 1,105 (weak) and 1,130 (strong) now. Anything less than 1,105 today is a failure and, if not tomorrow, then expect more downside next week.
/TF is the Futures on the Russell 2000 index and already this morning we're back to 1,097, which is up $1,700 per contract (see how easy this is?) from our 1,080 entry and just a little shy of our expected weak bounce.
We do expect resistance at 1,100 so this is a good time to take profits off the table and we can go long again over that line or flip to the S&P Futures (/ES) over 1,950 or Nasdaq (/NQ) over 4,000 or the Dow (/YM) over 16,800. As long as they are all performing, we can be confident on the long side.
As we discussed with our Members earlier this morning, there's no particular reason to get bullish – this is just a technical bounce we expect off our 5% lines per our 5% Rule™ and, if they trun out to be weak bounces, then we can expect another 2.5-5% of downside next week. That means we can use those same index lines to go short if they fail as we would to go long if they succeed this morning – that will be all up to the Non-Farm Payroll Report at…
That’s how many people became Millionaires in the past 12 months (ending in June). According to a new survey from Phoenix Marketing International’s Affluent Market Practice, the number of American households with investible assets of $1 million or more rose 8% in the 12 months ended in June. The survey says there now are 5.55 million U.S. households with investible assets of $1 million or more. That follows two years of declines and brings the Millionaire count back to 2006 levels. Of course, that is still below the peak of 5.97 million in 2007 and the current growth rate is well below pre-financial crisis levels, when the Millionaire population increased as much as 35% a year.
Still, the numbers offer further evidence that the wealthy may have decoupled from the rest of the economy, as we expected would happen in "A Tale of Two Economies," my 2010 outlook. The study’s authors say high salary growth, rather than investments, are the main drivers of the Millionaire expansion. As we who play the markets are painfully aware, $1M in assets doesn’t leave a lot of room for investments. The very wealthy, on the other hand, had a much better year than the mere Millionaires. The population of American households with $5 million or more in investible assets surged 16%. The population of those with $10 million to invest increased 17%. The rich have never been getting richer than they have been in 2010!
Of course, in order for someone to get rich, someone has to get poor and, this year it took 4M Americans falling below the poverty line ($22,000 for a family of 4) to provide the cash for our 440,000 winners. That’s pretty much right in line with the numbers I’ve been citing over and over again – it takes 1,000 poor people to make one rich one!
The Census Bureau found that the fraction of Americans living in poverty rose sharply to 14.3% in 2009, up from 13.2% previously. This is the highest level since 1994. In total, 43.6 million Americans were living in poverty last year. Even the median family is getting the shaft in America with 2010 inflation-adjusted salaries barely keeping pace with 1980 inflation-adjusted salaries – making 3 full decades without improvement for the average American family. According to the WSJ, the bottom 40% (120M people) have dropped from having 14.5% of the nation’s income in 1980 to having 12% in…
The US used to point the finger at Japan’s "Lost Decade" saying "It won’t happen here." But it did. Median wages are nearly 5% lower in real terms than in 2000, the poverty rate is at a 15 year high, and the S&P 500 is about 20% lower than it was a decade ago.
The downturn that some have dubbed the "Great Recession" has trimmed the typical household’s income significantly, new Census data show, following years of stagnant wage growth that made the past decade the worst for American families in at least half a century.
The bureau’s annual snapshot of American living standards also found that the fraction of Americans living in poverty rose sharply to 14.3% from 13.2% in 2008—the highest since 1994. Some 43.6 million Americans were living below the official poverty threshold, but the measure doesn’t fully capture the panoply of government antipoverty measures.
The inflation-adjusted income of the median household—smack in the middle of the populace—fell 4.8% between 2000 and 2009, even worse than the 1970s, when median income rose 1.9% despite high unemployment and inflation. Between 2007 and 2009, incomes fell 4.2%.
Lost Decade Lowlights
Americans living in poverty rose sharply to 14.3% from 13.2% in 2008
Poverty level is the highest since 1994
43.6 million Americans are living below the official poverty threshold
Inflation-adjusted income of the median household fell 4.8% between 2000 and 2009
The number of 25-to-34-year-olds living with their parents rose 8.4% to 5.5 million in 2010 from 2008
Child poverty rose to 23.8% for kids under six in 2009, compared to 21.3% a year earlier
In general, the chart shows the "War on Poverty" was a failure regardless of what political party was in office. The odd pair of Clinton and Nixon did the best, while Carter and George W. Bush the worst. Reagan and George H. Bush both had roller coasters ending about where they started, while Ford essentially experienced a flatline.
For most Americans, the economic collapse is something that is happening to someone else. Most of us have become so isolated from each other and so self-involved that unless something is directly affecting us or a close family member than we really don’t feel it. But even though most of us enjoy a much closer relationship with our television sets than we do with our neighbors at this point, it is quickly becoming undeniable that a fundamental shift is taking place in society. Perhaps you noticed it when two or three foreclosure signs went up on your street. Or perhaps it got your attention when that nice fellow down the street lost his job, and he and his family seemingly just disappeared from the neighborhood one day. The Census Bureau made front page headlines all over the nation this week when they announced that one out of every seven Americans was living in poverty in 2009. Every single day more Americans are getting sucked out of the middle class and into soul-crushing poverty.
Unfortunately, most Americans don’t really care because it has not affected them yet.
But this year, millions more Americans will discover that the music has stopped playing and they are left without a seat at the table.
Meanwhile, neither political party has a workable solution. They just like to point fingers and blame each other.
The Democrats blame Bush for all the poverty and advocate expanding programs for the poor. Not that there is anything wrong with a safety net. But the "safety net" was never meant to hold 50 million people on Medicaid and 40 million people on food stamps. The number of Americans on food stamps has more than…
It is not unusual for members of the diminishing upper middle class to drop $20,000 or $30,000 on a big wedding. But for celebrities this large sum wouldn’t cover the wedding dress or the flowers.
When country music star Keith Urban married actress Nicole Kidman in 2006, their wedding cost $250,000. This large sum hardly counts as a celebrity wedding. When mega-millionaire real estate mogul Donald Trump married model Melania Knauss, the wedding bill was $1,000,000.
The marriages of Madonna and film director Guy Ritchie, Tiger Woods and Elin Nordegren, and Michael Douglas and Catherine Zeta-Jones pushed up the cost of celebrity marriages to $1.5 million.
Tom Cruise and Katie Holmes upped the ante to $2,000,000.
Now comes the politicians’s daughter as celebrity. According to news reports, Chelsea Clinton’s wedding to investment banker Mark Mezvinsky on July 31 is costing papa Bill $3,000,000. According to the London Daily Mail, the total price tag will be about $5,000,000. The additional $2,000,000 apparently is being laid off on US Taxpayers as Secret Service costs for protecting former president Clinton and foreign heads of state, such as the presidents of France and Italy and former British Prime Minister Tony Blair, who are among the 500 invited guests along with Barbara Streisand, Steven Spielberg, Oprah Winfrey, Ted Turner, and Clinton friend and donor Denise Rich, wife of the Clinton-pardoned felon.
Before we attend to the poor political judgment of such an extravagant affair during times of economic distress, let us wonder aloud where a poor boy who became governor of Arkansas and president of the United States got such a fortune that he can blow $3,000,000 on a wedding.
The American people did not take up a collection to reward him for his service to them.
Where did the money come from? Who was he really serving during his eight years in office?
How did Tony Blair and his wife, Cherrie, end up with an annual income of ten million pounds (approximately $15 million dollars) as soon as he left office? Who was Blair really serving?
These are not polite questions, and they are infrequently asked.
While Chelsea’s wedding guests eat a $11,000 wedding cake and admire $250,000 floral displays, Lisa Roberts in Ohio is struggling to raise contributions for her food pantry in order to feed…
Nowadays a newspaper cannot be opened — or a TV turned on — without one being subjected to anti-teacher misinformation. The anti-teacher hysteria looks diverse on the surface, but underneath, this public controversy seeks to dislodge teachers unions: the right-wing trashes teachers’ unions outright, while the “liberal” media takes a more subtle, sophisticated approach, blaming the state of public education on “bad teachers” who must be fired and replaced. Both styles are the same in essence.
The bi-partisan goal is to undermine and dismember public education, so that public funds may be instead channeled into paying debts racked up by multiple wars and corporate bailouts. Also, as public education is gutted, rich investors parasitically benefit from it by opening for-profit “charter schools,” curriculum corporations, or the bevy of new companies that "certify" teachers for a fraction of the cost or time of universities, ready to serve at the new corporate McEducation institutes.
Obama’s Race to the Top campaign enshrines these odious goals into governmental policy, picking up where Bush’s anti-teacher union policies left off, and racing frantically in the same direction, to the bottom.
The schools that Bush’s No Child Left Behind labeled as “failures” are to be shut down under Obama’s Race to the Top. These schools are almost entirely in poor neighborhoods, where the social disease of poverty is an easy predictor of a child’s poor test scores.
But Obama ignores this obvious fact and blames poor grades and test scores on the teachers, exclusively.
Thus, Obama cheered when every teacher at a Rhode Island “failing” high school was fired. He praised the past closures of dozens of public schools in both Chicago and New Orleans as examples for others to follow. Indeed, Detroit and Kansas City each have plans to close dozens of schools, while California is set to fire thousands of teachers. Under Obama’s plan, federal money is awarded to states that fire the most "bad" teachers and close the most “failing” public schools.
The topic of what is happening with hunger is nothing new to regular readers of FMMF; we’ve been harping on it for over 2 years as mirage like stories of the "strength" of the US economy, based on government reports (2007, early 2008) and measures such as GDP dominate our ideas of how to measure prosperity. But judging from the "comments" section in the web version of this weekend’s story in the New York Times, a lot of Americans are getting their first education on what is truly happening under the surface. I assume many foreign readers must also be shocked as they read about the dirty underbelly of the world’s "richest"* country.
When I began the blog in summer 2007, 1 in 11 Americans were on food stamps. In just a few years that had jumped to 1 in 9. [Jun 8, 2009: 1 in 9 Americans on Food Stamps] Now, the New York Times report says the figure has unfortunately hit new thresholds….increasing to 1 in 8 Americans, including 1 in 4 children. Let us be clear, there is certainly fraud in the system, and people taking advantage of the largesse of the government – that cannot be disputed and if there is one place to increase government spending, it is auditing of these type of programs.. But there is no way that rate of increase happens due to just fraud… it’s an indictment of the hollowing out of our economy and the increasing bifurcation of the economic fortunes in the country. Not everyone can be a business owner or investment banker – jobs that used to fulfill the needs of the "middle" of America are disappearing and no one asks the questions of why. Meanwhile, the cost of living remains high, in fact our central bank is trying to increase it by the minute rather than letting the market decrease them (AS IS NEEDED), while wage have been pressured for over a decade. The house ATM filled the gap for many in the middle part of the decade but people are now out of options…
We’ve warned / predicted in 2007 this was going to be a long term trend, but frankly even I am shocked…
The typical American household made less money last year than the typical household made a full decade ago.
To me, that’s the big news from the Census Bureau’s annual report on income, poverty and health insurance, which was released this morning. Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.
In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data [Historical Income Tables] suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s.
Here’s something to think about: If the housing boom from 2000 to 2007 produced no sustainable wage increases (if indeed any wage increases at all) what will? After pondering that, think about where home prices are going with poor wage potential and tightened lending standards.
Indeed what does this trend say about price pressures in general?
Whether the problem is with low interest rates themselves or the fact that rates still aren’t low enough to ignite a new credit boom is not clear. What is clear is that the world’s money center banks are facing a brutal downsizing. From today’s Wall Street Journal:
Hot on the heels of Deutsche Bank's admission that all is not well, Credit Suisse's announcement last night of a major capital raise was greeted by buying pressure from investors. However, reality punched them in the face this morning as CS releasaed its investor day details and, as Bloomberg reports, is looking to raise up to CHF8 billion (almost 50% larger than Goldman Sachs investor survey suggested). Clearly, CS' has a much more massive capital shortfall than expected.
U.S. stock-index futures were little changed, after disappointing results from Alcoa Inc. offset optimism from a winning streak that’s put the Standard & Poor’s 500 Index on track for its best week of the year.
1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:
The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
I think this is the beginning of the end for the company.
My price target for the stock a year from now is $3, so I shorted more yes...
Bulls can be happy with today's progress. What weakness emerged today was reversed by the close, a change on yesterday's action where sellers dumped in the last few minutes of trading. Volume climbed to register an accumulation day.
The S&P finished at the 50-day MA, but beyond that there is plenty of room beyond that to run to the next level of resistance at 2,045. Technicals are net bullish.
The Nasdaq pushed off its 20-day MA and has another 50 points of maneuver before it gets to its 50-day MA. Technicals are not yet net bullish, but they are close.
Uncertainty about the health of the global economy led investors to flee U.S. equities during Q3, primarily driven by worries about China's growth prospects and the Federal Reserve’s decision to not raise rates. Sure, there are plenty of real and perceived headwinds, but on balance it seems that a recession here at home is not in the cards. And when you consider sentiment and the technical picture, it appears that a continuation of Friday’s bounce is in store. The question remains as to whether the seasonally strong Q4 will be able to propel the bulls through levels of resistance that have built up.
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Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).
Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself.
Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene
The replay is now available on BNN's website. For the three part series, click on the links below.
Part 1 is here (discussing the macro outlook for the markets)
Part 2 is here. (discussing our main trading strategies)
Part 3 is here. (reviewing our pick of th...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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