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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Phil's Favorites

Staggering

 

Staggering

Courtesy of 

We now have data for last week’s initial jobless claims. The number is staggering. 6.6 million filed for unemployment insurance for the first time last week. During the prior week it was 3.28 million. These numbers take your breath away.

Chart via WSJ

Here’s the even worse news – this only records the people who have successfully filed. Many, many more have been locked out of the system so far due to the overwhelmi...



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Biotech/COVID-19

Antibodies in the blood of COVID-19 survivors know how to beat coronavirus - and researchers are already testing new treatments that harness them

 

Antibodies in the blood of COVID-19 survivors know how to beat coronavirus – and researchers are already testing new treatments that harness them

A person who has recovered from COVID-19 donates plasma in Shandong, China. STR/AFP via Getty Images

Ann Sheehy, College of the Holy Cross

Amid the chaos of an epidemic, those who survive a disease like COVID-19 carry within their bodies the secrets of an effective immune response. Virologists like me...



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Zero Hedge

Instead Of Firing Everyone, Boeing Offers "Voluntary Buyouts" To Its Entire Workforce Of 161,000

Courtesy of ZeroHedge View original post here.

When Boeing requested a $60 billion bailout from the US government a few weeks ago, the implicit assumption was that the company may get some of this funding as long as the chronic buyer back of its own stock did not engage in layoffs. That, however, did not stop the brilliant financial engineers at the aerospace giant who for the past 7 years learned how to turn debt lead into buyback gold, and instead of issuing a record amount of pink slips, Boeing instead offered voluntary buyouts to its entire staff of 161,000, in a bid to shed costs and adapt ...



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The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

...

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ValueWalk

Paycheck Protection Program: Not Enough To Help Restaurant Industry

By Jacob Wolinsky. Originally published at ValueWalk.

Below is a statement from the Independent Restaurant Coalition on the start of the Paycheck Protection Program, which comes a day after the Department of Labor announced a historic surge in unemployment claims. In the last week, over 6.6 million Americans filed for unemployment bringing the total people out of work to over 10 million.

“The short-term relief made available through the Paycheck Protection Program in the CARES ...



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Kimble Charting Solutions

S&P 500 Price Pattern Similar to 2008 Market Crash?

Courtesy of Chris Kimble

Last week’s sharp rally off the lows, gave bulls some relief.

But if the bulls are going to have reason to cheer, they will need to see another move higher… and fast!

Why? Just look at today’s “weekly” price chart of the S&P 500 Index. 

This key broad-based index broke a 10-year bull market trend line in March. And it’s now kissing the underside of the trend line at (2).

The last stock market crash saw a similar pattern in 2008. And after a failed “...



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Insider Scoop

Nestle CEO Says Snack Foods 'Just As Important As Essential Nutrients'

Courtesy of Benzinga

Global food behemoth Nestle (OTC: NSRGY) is "scrambling to meet demand" to keep the world fed, but doesn't want to take much credit, as "this is our main purpose at this hour," CEO Mark Schneider said Wednesday during a "Mad Money" interview with Jim Cramer.

Nestle...

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Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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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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