Posts Tagged ‘Transports’

Durables Goods – Oops

Durables Goods – Oops

Courtesy of Karl Denninger at The Market Ticker 

Girl suspended horizontally in air, side view

Oops…..

New orders for manufactured durable goods in January increased $5.2 billion or 3.0 percent to $175.7 billion, the U.S. Census Bureau announced today. This was the second consecutive monthly increase and followed a 1.9 percent December increase. Excluding transportation, new orders decreased 0.6 percent. Excluding defense, new orders increased 1.6 percent.

Uh huh.

Ex-transports it’s down.

Internals are not all that good either.  Inventory on computers and electronics are being rapidly depleted – manufacturers (despite the BS claims of the media) are NOT replenishing stock.  Take the so-called "pumping" and stuff it.

Not-seasonally-adjusted new orders and shipments are down significantly.  Since most Christmas "stuff" is ordered and shipped in advance of December, this isn’t very positive at all.

Most important in the "new orders" column is the decrease in computers and electronic components.  Remember, we keep hearing how wonderful it has been in earnings reports.  Well, if that’s so, then explain the decrease from 31,577 to 23,146 in new orders month/over/month – that is almost a THIRTY PERCENT decrease!

Someone’s been lying.

It’s across the board too – not just computers, but also the subindex for communications equipment.  NOT GOOD.

This is a leading indicator for hiring activity folks.  I’ve harped on it before and will keep doing so.  New employees = more computers and cell phones.  If you’re not seeing it there (and you’re not) then the entire premise of "a recovering employment picture" is absolute crap.

Best-a-luck with that "recovery" thesis folks. 


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Global Chart Reveiw Shows Key Inflection Point

Chart Review by Michael Clark

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

    -- John Maynard Keynes

SO, IS THIS FINALLY THE 'REAL' CORRECTION?

What a week it was.  The Bears gave the Bulls some payback.  Obama got a wake-up call.  And the banks got a well-deserved scare (and we hope they will get a well-deserved hair cut).

The markets reacted, as one might expect, with selling.  Actually, the selling began before the Massachusetts election and before Obama sent a shot across the Goldman Sach's bow.  Last week Intel announced surprisingly strong earnings; and the stock started up and then sank.  For the past half-year investor behavior had been the reverse: a buying spree for any stock that did not lose as much as it might have — beating 'Street expectations' that had been dumbed down over and over again during a quarter so that the company could report 'surprising' strength.  Suddenly, now, even good earnings are being greeted with selling.  Then came Massachusetts — wasn't that a Bee Gees' song?
 

All the lights went out in Massachusetts

Anyway, readers want to know where the markets stand today, after the sell-off this week.  My view of it — my 'view', not my gut-feeling — is that we are, so far, merely correcting from an over-extended rally.  This rally has been bizarre, to say the least.  This has been a 'fear rally' — usually the 'fear' side of the equation is when selling comes in, 'greed' driving the expansion.  But fear of systemic failure has driven this rally; and Ben Bernannke has been the captain sailing the 'Boat of Fear',   Ben's logic — that more debt will solve the insolvency crisis — has a shadow side, the logic that a collapse in stock prices will result in systemic failure, international chaos, revolution, repression…made him believe that preservation of the status quo was requiired, at any price.  A 'make-believe' recovery could be jump-started, perhaps, if the Fed could just stimulate (and simulate) another asset-bubble.  After all – that is how his mentor and predecessor, Alan Greenspan, had become the darling of the coctail party crowd, leading member of Time Magazine's 'Committee to Save the World';
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TRANSPORTS CONFIRM THE ECONOMY IS WEAK

TRANSPORTS CONFIRM THE ECONOMY IS WEAK

Courtesy of The Pragmatic Capitalist

Nothing has been more confounding during this equity rally than the weakness in the underlying fundamentals of the transports.  Without fail, the data from the transports has been an excellent leading indicator in past recessions.  Warren Buffett has even admitted that the rail data is his single favorite indicator to watch.  But as equity market have ripped higher, the rails and other transports have lagged.

Of course, as time has passed we have witnessed the enormous influence of government stimulus on the economy and the incredible impact of money printing on asset prices.  As we begin to see signs that government stimulus is failing to generate jobs and a sustainable recovery, the transports continue to forecast a very weak recovery.  Have the transports been right this whole time or is the Fed’s liquidity induced rally a more accurate reflection of the economy?

Late last week, Union Pacific CEO Jim Young said the economy had stabilized, but was not recovering just yet:

“So, it looks like the economy has bottomed out, but unfortunately we’re not seeing an upturn yet.

The weekly rails data we report has shown certain signs of stability and even a slight uptick of late, but whether this warrants the extreme recovery optimism we hear about on a daily basis is highly suspect:

rails5

Of course, the weakness in the transports isn’t just in the rails.  The Air Transports reported a 13% year over year decline in cargo just last week and the latest truck tonnage data shows that the recovery in trucking is also very weak:

ATA

In terms of market implications, Richard Russell is now growing very concerned about the action in the Transports:

“From a Dow Theory standpoint, the Transports are now worth watching. They’re sort of sinking out of sight on higher volume. And look at MACD which has now turned bearish. Transports could be a problem. And note today’s plunge of over 100 points.”

From a trading perspective, we saw heavy put action in the Transports late last month as they were beginning to top out.   Since then, traders have become very concerned about a potential double top leading to further weakness in the transports sector.

transports

The fundamentals seems to rhyme with the technicals.   Some traders couldn’t ask for a better set-up….

 


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Banks, Transports Foreshadow Equities Decline

Banks, Transports Foreshadow Equities Decline

Former Westpac bankCourtesy of Ben, the Financial Ninja

FN: I’ve pointed out some of the divergences over the last few weeks that are mentioned in this Bloomberg article.

Banks Falling 23% Since May Foreshadow S&P 500 Slump (Update1): "Declines of more than 20 percent in regional banks and homebuilders and the failure of transportation companies to erase their annual loss may be signs the rally in the Standard & Poor’s 500 Index is about to fizzle.

Smaller lenders in the gauge lost 23 percent since climbing to a four-month peak on May 8, while builders tumbled 26 percent from May 4, when they reached the highest level since October. Concern that mortgage rates, credit losses and foreclosures are increasing spurred retreats in the companies forecast to be among the biggest beneficiaries of $12.8 trillion in government stimulus spending.

Slumps in bank stocks foreshadowed previous declines in the S&P 500 as investors focused on real-estate losses that curbed lending. Regional banks’ 51 percent plunge over 28 days starting Dec. 8 came a month before the S&P 500 began a 28 percent slump to a 12-year low of 676.53. The lenders’ all-time high in February 2007 occurred seven months before the S&P 500’s record.

FN: I pointed out three times that banks had stalled, rolled over and were threatening to break down in: Financials: Charts Say "Decision Time", Update1, Update2.

“If housing and credit led us into all this, they will have to stabilize,” said Mark Demos, a Minneapolis-based money manager at Fifth Third Asset Management, which oversees $18.7 billion. “There’s a growing concern that they’re not out of the woods. Less bad does not equal good.”

Speculation government spending will end the first global recession since World War II helped push up the S&P 500 by 15 percent since March 31, the biggest quarterly increase since 1998. Financial shares gained the most among the S&P 500’s 10 industry groups, rising 35 percent. Futures on the index rose 0.6 percent to 920.60 at 7:12 a.m. in New York today.

Stocks began to decline three weeks ago as economic reports spurred speculation the U.S. economy isn’t recovering fast enough to justify the S&P 500’s 36 percent advance since March 9. The Federal Reserve said in its


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Dow Theory Nonconfirmation in Transports and Industrials

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Dow Theory Nonconfirmation in Transports and Industrials

Courtesy of Corey Rosenbloom of Afraid to Trade

There’s interesting chatter in the “Dow Theory” community as to whether we’re experiencing a non-confirmation in the Industrials and Transports currently – namely, the Industrials are at a new high for 2009 and are above the 200 day SMA while the Transports are not.  Let’s take a look at both.

Dow Jones Industrial Index:

One may also ask the question “Is there a ‘Three Push’ Reversal pattern forming in the Dow Jones?”  It would appear so, with three consolidating ‘pushes’ or impulses up that have formed on three lower highs in the 3/10 Momentum Oscillator.  That alone is a serious non-confirmation of higher prices.

We also see a volume divergence setting in underneath price, with volume in the Dow Jones Index (1.1 Billion today) reaching a level that is clearly below the recent average – more importantly is the “trailing off.”

One can also see the multitude of ‘dojis’ (often known for their ‘reversal’ signal) that have formed over the last two weeks – that is showing signs of serious indecision.

In terms of Dow Theory, the Industrials have made a new high and have risen above their 200 day Simple Moving Average which is classically bullish… but the Transports Index has not.

Dow Jones Transportation Index:

Again, while the Dow recently formed new highs for 2009, the Transports could neither break above their May highs nor its 200 day simple moving average.

A negative momentum divergence has also formed as well as a negative volume divergence.

I could have easily titled this post “Major Sell Signal in the Dow Jones Index” but I dare not be so bold, given the ability of the market to rise against a negative fundamental and technical backdrop.

From a chart (technical) standpoint, the chart is literally screaming “sell signal,” but still we operate in a world of probabilities and stranger things have happened, so do continue to guard your risk and do your own analysis for additional insights.

Corey Rosenbloom, CMT
Afraid to Trade.com

 

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ARE TRANSPORTS FLASHING A FALSE BUY SIGNAL?

ARE TRANSPORTS FLASHING A FALSE BUY SIGNAL?

Courtesy of The Pragmatic Capitalist

transports, trucks, railsInteresting read in yesterdays Journal on the Transports.  Readers know that I am fond of following the REAL economy – consumer trends and blue collar jobs such as trucking score high on my scale of economic importance.  Lately, we’ve been seeing an odd trend.  The transport stocks and the general market tend to be trending higher despite little to no signs of strength in actual consumer spending or real economy industries like trucking and rails.   The Journal writes:

A new high for transports would “confirm,” in technical lingo, a similar peak for the Dow industrials this week. According to the school of market analysis called Dow Theory, which arises from the ruminations of Wall Street Journal co-founder Charles Dow, having the Dow industrials and the Dow transports in such harmony is strong evidence a bull market is cooking.

But this indicator can send false signals. It was bullish in the spring of 2008, just before the transports and industrials tumbled together.

And reading these charts is a subjective art. Ryan Detrick, technical strategist at Schaeffer’s Investment Research, notes that one could take the view that transports have lagged behind the industrials all year, often a warning sign for stocks. And transports have a good reason for lagging behind: Transportation hasn’t caught up to other recent signs of economic recovery.

One measure of this is the number of railroad cars being loaded with coal, auto parts and other stuff at the nation’s major railroads. Car loadings this year are down nearly 20% from the same period in 2008, putting this on pace to be the worst year since 1982, according to the Association of American Railroads.

The AAR on Thursday reported that loadings jumped last week to their highest levels in nine weeks. But loadings have zigzagged up and down within a downward trend since March, even as transport stocks have risen. Ordinarily, transport stocks and car loadings are more closely correlated, said Ed Yardeni, chief investment strategist at Yardeni Research.

“The plunge in rail-car loadings,” Mr. Yardeni recently told clients, “is one of the most glaring nonconfirmation signals for those of us rooting for an economic recovery and a sustainable bull market.”

The King of Dow Theory sounds equally pessimistic, despite near confirmation in the


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Chart School

Narrow Trading Ranges Set Up New Breakout Opportunities

Courtesy of Declan.

The past few days have seen markets shape narrow mini-trading ranges, each following breakouts from larger consolidations. Large Caps show this best

The S&P cleared a dual 4-month and 6-week consolidation before shaping the past 8-day 'flag'. Look for a break of 2,740 and a push to challenge the next swing high at 2,800 - although a test of this should be enough to go on and challenge all-time highs.


The Dow Jones Index could be considered to have broken from its mini-consolidation. Volume was...

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Phil's Favorites

Impeachment Fantasies

 

Impeachment Fantasies

Courtesy of 

The stock market seems to have gotten very good at ignoring the coming constitutional crisis. It may one day start to care again but I think it’s fairly clear that at this point, it cares not at all. I think the market is smarter than many pundits give it credit for.

New all-time highs in the Russell 2000 small cap index this week make it clear that investors expect consumers and businesses to go on with their lives regardless of what happens in Washington D.C. – and that they’ll continue to benefit from the improved economy and drastically lower tax environment.

The Mue...



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Zero Hedge

Elon Musk's Great Model 3 Bait and Switch

Courtesy of ZeroHedge. View original post here.

The Tesla Model 3 was supposed to be the "entry-level" electric vehicle for the middle class, that "made it up in volume": leading up to the release of the Model 3, it was positioned as the people's EV that everybody could afford and that, once mass produced, would help Tesla generate cash and profits consistently. The car's relatively modest $35,000 price tag was heralded as one of its key selling points, low enough that Tesla could generate the volume needed to gain operating leverage from selling it to the masses. 

But as Elon Musk himself admitted this weekend on Twitte...



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Biotech

Could this be the year for a Canadian Breakthrough Prize in Life Sciences?

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Could this be the year for a Canadian Breakthrough Prize in Life Sciences?

Courtesy of John Bergeron, McGill University

In 2013, Kyoto University’s Shinya Yamanaka was awarded one of the first Breakthrough Prizes in Life Sciences for his discovery of “induced” stem cells that enabled researchers to convert adult cells back into stem cells.

The Breakthrough Prize is not to be sneezed at. Founded in 2013, the prize “honours transformative advances toward understanding living systems and extending human life.” It’s also the most financially attractive aw...



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Insider Scoop

8 Stocks Moving In Monday's After-Hours Session

Courtesy of Benzinga.

Related PTX Benzinga's Daily Biotech Pulse: FDA Panel Nod For Akcea, Synergy's Revenue Miss, FDA Warns E-Liquid Makers Again 18 Stocks Moving In Friday's Pre-Market Session Related 36 Biggest Movers From Friday ...

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Digital Currencies

5 Factors That Drive Bitcoin's Ups & Downs

Courtesy of ZeroHedge. View original post here.

By Kayla Matthews via Hackernoon.com

The price of Bitcoin has been wildly volatile. From November to December 2017, it increased by 223 percent. It fell by 59 percent between January and February 2018, increased by 64 percent from February to March and then dropped again during March by 40 percent.

While this isn&r...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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