10/21/06 99 44/100%
John Mauldin: "Much of the recent rise in the Dow 30 has been from less than ten of the components. Caterpillar has counted for 500 points by itself since the low. Richard Russell notes that the Dow Transports are not confirming a new bull.
Where are the new highs on the other indexes? Given the inverted yield curve, the continued problems in the critical housing markets and the rest of the forward looking themes I have discussed over the past few months, I still believe we are going to get to buy this market at much lower prices and better valuations."
Friday was not a prosperous day for Caterpillar shareowners. The 15% earnings increase was overwhelmed by the lowered management forecast going forward. You'd think the company had been in a terrible accident as the stock got creamed and closed at $59, a sharp drop from $70. It didn't help that it was option expiration day.
Barron's: "The Republicans will keep control of Congress, though just barely. So says our highly reliable seat-by-seat analysis of local political funding." Hopefully this forecast is as accurate as Alan Abelson's on-going forecasts that the market is coming to an end. In other words, 99 44/100 pure (BS).
A great deal was made of crude closing at $56.82. One should note that this price was for the November contract that ceased trading at the end of trading Friday. The December contract is trading about $2 a barrel higher and will be the contract for trading on Monday.
Not much was said about Schlumberger's 85% increase in earnings for the third quarter on a sales gain of 34%. The reason might be that the company is not named Google and investors have shunned the oil service stocks over the past 4 months. It was not too long ago that Schlumberger was trading at an all-time high. Now the all-time highs belong to the Dow Jones Utility Average.
Natural gas rose 28% in price this past week. In addition, zinc prices hit a record high.
In 2007 53 million Americans on Social Security will receive benefits with an increase of 3.3%, down from a rise of 4.1% in 2006. That means inflation was tamer in 2006. Sure it was!
Year to date the Dow has risen 12%, China 54%, Russia 44%, India 35%, and Mexico 30%.
The 10-year U.S. treasury bond is yielding 4.79%. Mexico's 10-year government bond has a yield of 5.79%. Pretty soon we can merge the governments and not miss a beat.
Did you notice the 6.5 earthquake offshore Peru?
How many more deaths will it take for Americans to acknowledge that there is a civil war in Iraq? When will there be a bumper sticker saying "a vote for Republicans is a vote for Iraqi civil war?"
Doug Noland: "With Global Credit conditions underpinning employment and income - while stoking systemwide liquidity over-abundance – I’ll continue to approach the unfolding housing bust with analytical caution. The housing grizzly goes on a rampage with the breakdown of the Mortgage Finance and Credit Bubbles. In the meantime, I am willing to predict escalating Monetary Disorder and resulting wild marketplace instability and divergences in housing, securities, and commodities prices – a backdrop poised to confound the Fed and limit their flexibility for responding to deepening housing troubles."
OPEC's plan to cut crude production by 1.2 million barrels a day won't affect the services industry, Schlumberger Ltd. Chief Executive Andrew Gould said Friday.
"OPEC is defending the price, but I don't think there is a huge danger of a price collapse," he said. "We don't need $65 oil for our customers' spending plans to be maintained," he said. "They will maintain them at a much lower price."
Gould said the task of replenishing reserves in the face of soaring demand will keep services companies busy. And demand shows no sign of slowing. The CEO of BJ Services has told me the same thing. I believe BJ Services offers the best risk/reward of any S&P 500 company.
New York-based Ripplewood Holdings LLC is preparing a likely bid for Delphi Corp., according to a published report in Saturday's Wall Street Journal. Ripplewood, a buyout firm, has looked at the possibility of taking over all or part of the bankrupt auto-parts maker, the Journal reported.
President Bush: "Another reason for the recent increase in attacks is that the
terrorists are trying to influence public opinion here in the United
States. They have a sophisticated propaganda strategy. They know they
cannot defeat us in the battle, so they conduct high-profile attacks,
hoping that the images of violence will demoralize our country and force us
to retreat." Tell that to the families whose loved ones come home in body bags.
Saturday, October 21, 2006
Thursday, October 19, 2006
Another Option Expiration Day
10/20/06 Another Option Expiration Day
Google reported it nearly doubled its net income in the third quarter to $733.4 million, or $2.36 a share, compared with $381.2 million, or $1.32 a share in the year-ago period. Revenue rose 70 percent to $2.69 billion from $1.58 billion last year. Not including payments Google makes to acquire Internet traffic, sales rose 79 percent to $1.86 billion. Outside the U.S., sales made up 44 percent of the company's total revenue, compared with 39 percent last year. In addition, Google said, it added 1,436 employees during the period to bring its work force to 9,378 full time employees.
Excluding items, Google said, it would have had income of $812 million, or $2.62 a share. Analysts had expected the company to show a profit of $760.1 million, excluding items, or $2.41 a share.
Median weekly earnings of the nation’s 108.2 million full-time wage and
salary workers were $675 in the third quarter of 2006, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. This was 4.0
percent higher than a year earlier, compared with a gain of 3.3 percent in
the Consumer Price Index for All Urban Consumers (CPI-U) over the same
period. Women who usually worked full time had median earnings of $599 per
week, or 80.0 percent of the $749 median for men. The female-to-male earnings ratios were higher among Hispanics or Latinos (87.3 percent), Asians (84.9 percent), and blacks (83.8 percent) than among whites (79.6 percent).
Real average weekly earnings rose by 1.0 percent from August to September
after seasonal adjustment, according to preliminary data released by the
Bureau of Labor Statistics of the U.S. Department of Labor. This increase
stemmed from a 0.2 percent rise in average hourly earnings and a 0.7 percent
decline in the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W). Average weekly hours were unchanged. Average weekly earnings rose by 4.0 percent, seasonally adjusted, from September 2005 to September 2006. After deflation by the CPI-W, average weekly earnings increased by 2.2 percent. Before adjustment for seasonal change and inflation, average weekly earnings were $571.89 in September 2006, compared with $549.86 a year earlier.
Cerberus Capital Management LP said on Thursday that former Treasury Secretary John Snow has joined the $16.5 billion hedge fund firm as chairman. I hope Snow does a better job than he did as CEO of a railroad.
Broadcom Corp. late Thursday forecasted a lower sales target for the fourth quarter than it had previously estimated.
Crude for November delivery rose 1.9% to $58.72 a barrel. Natural gas rose 3.6% to $7.06 per million British thermal units.
December gold rose $9.90 to close at $602.50 an ounce in New York. December silver climbed 34 cents, or 2.9%, to end at $12.16 an ounce and December copper tacked on 1.35 cents to close at $3.5095 a pound.
The Philly Fed index fell 0.7 in October, vs. the average economist forecast compiled by MarketWatch of a rise of 7.8%.
NBC Universal to cut 700 jobs and AOL to cut 1300 jobs.
The index of leading economic indicators rose 0.1% in September after falling in July and August. The index has dropped in five of the past eight months, and is down 0.9% in the past six months.
OPEC has decided to cut production by 1.2 million barrels a day, the United Arab Emirates' oil minister said Friday.
Bonner and Wiggin: "The baby born when the empire began in 1913 came into the world with nothing. But he owed nothing. Now, he comes into the world owing his share of 37 trillion; that's about $128,560 with his name on it. Is he richer? Is he better off? What would the dead say? That doesn't include his share of Federal obligations and commitments that he'll have to pay, which could add $100,000 more."
Google reported it nearly doubled its net income in the third quarter to $733.4 million, or $2.36 a share, compared with $381.2 million, or $1.32 a share in the year-ago period. Revenue rose 70 percent to $2.69 billion from $1.58 billion last year. Not including payments Google makes to acquire Internet traffic, sales rose 79 percent to $1.86 billion. Outside the U.S., sales made up 44 percent of the company's total revenue, compared with 39 percent last year. In addition, Google said, it added 1,436 employees during the period to bring its work force to 9,378 full time employees.
Excluding items, Google said, it would have had income of $812 million, or $2.62 a share. Analysts had expected the company to show a profit of $760.1 million, excluding items, or $2.41 a share.
Median weekly earnings of the nation’s 108.2 million full-time wage and
salary workers were $675 in the third quarter of 2006, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. This was 4.0
percent higher than a year earlier, compared with a gain of 3.3 percent in
the Consumer Price Index for All Urban Consumers (CPI-U) over the same
period. Women who usually worked full time had median earnings of $599 per
week, or 80.0 percent of the $749 median for men. The female-to-male earnings ratios were higher among Hispanics or Latinos (87.3 percent), Asians (84.9 percent), and blacks (83.8 percent) than among whites (79.6 percent).
Real average weekly earnings rose by 1.0 percent from August to September
after seasonal adjustment, according to preliminary data released by the
Bureau of Labor Statistics of the U.S. Department of Labor. This increase
stemmed from a 0.2 percent rise in average hourly earnings and a 0.7 percent
decline in the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W). Average weekly hours were unchanged. Average weekly earnings rose by 4.0 percent, seasonally adjusted, from September 2005 to September 2006. After deflation by the CPI-W, average weekly earnings increased by 2.2 percent. Before adjustment for seasonal change and inflation, average weekly earnings were $571.89 in September 2006, compared with $549.86 a year earlier.
Cerberus Capital Management LP said on Thursday that former Treasury Secretary John Snow has joined the $16.5 billion hedge fund firm as chairman. I hope Snow does a better job than he did as CEO of a railroad.
Broadcom Corp. late Thursday forecasted a lower sales target for the fourth quarter than it had previously estimated.
Crude for November delivery rose 1.9% to $58.72 a barrel. Natural gas rose 3.6% to $7.06 per million British thermal units.
December gold rose $9.90 to close at $602.50 an ounce in New York. December silver climbed 34 cents, or 2.9%, to end at $12.16 an ounce and December copper tacked on 1.35 cents to close at $3.5095 a pound.
The Philly Fed index fell 0.7 in October, vs. the average economist forecast compiled by MarketWatch of a rise of 7.8%.
NBC Universal to cut 700 jobs and AOL to cut 1300 jobs.
The index of leading economic indicators rose 0.1% in September after falling in July and August. The index has dropped in five of the past eight months, and is down 0.9% in the past six months.
OPEC has decided to cut production by 1.2 million barrels a day, the United Arab Emirates' oil minister said Friday.
Bonner and Wiggin: "The baby born when the empire began in 1913 came into the world with nothing. But he owed nothing. Now, he comes into the world owing his share of 37 trillion; that's about $128,560 with his name on it. Is he richer? Is he better off? What would the dead say? That doesn't include his share of Federal obligations and commitments that he'll have to pay, which could add $100,000 more."
Wednesday, October 18, 2006
The Real Deal
10/19/06 The Real Deal
Core consumer price inflation was rising at the fastest rate in four years in September, the Cleveland Federal Reserve Bank said Wednesday. The median consumer price index, an alternative way of measuring core inflation that does not automatically exclude food and energy prices, rose 0.3% in September, or a 3.6% annual pace, the Cleveland Fed said. Over the past year, the median CPI is up 3.5%, the biggest gain since the summer of 2002. By contrast, the Labor Department's core CPI, which excludes food and energy prices, is up 2.9% in the past year, the most in 10 years.
I believe the annual rate of 3.6% is understated; however, my opinion is not significant. The Cleveland Fed's is. With that inflation rate the Fed cannot stay on a pause mode.
Rates will need to be increased. Otherwise, the credibility of the Fed is nullified. Rising inflation and rising rates are a high colonic for equities. That combo will flush out complacency and bring back risk. You don't need to believe me. Listen to Cramer. He says fortunes are being made. That maybe so. It's an other thing to keep the fortunes.
Edward Hasbrouck: "The USA Department of Homeland Security (DHS) has proposed that airlines cruise lines, and operators of all other ships and planes -- including charter flights, air taxis, fishing vessels, etc. -- be required to get individual permission (”clearance”) from the DHS for each passenger on all flights or ocean voyages to, from, or via the USA. Unless the answer is “Yes” -- if the answer is “no” or “maybe”, or if the DHS doesn’t answer at all -- the airline wouldn’t be allowed to give you a boarding pass, or let you or your luggage on the plane."
According to DataQuick, existing single-family home prices fell 8.2% in the month of Sept. in Sonoma County, 6.5% in Napa County, and 3.3% in Marin County. When they raid the whorehouse, they take all the girls.
Richard Daughty: "Mogambo sez: I love the way that gold, silver and oil are falling into my trap! If I hadn't spent all my money at Patty's Palace of Pizza and Porn, I'd buy more. I only hope you don't make the same mistake."
November crude fell $1.28 to close at $57.65 a barrel. Meanwhile, November natural gas rallied 36.5 cents to close at a five-week high of $6.807 per million British thermal units. Tomorrow is the OPEC meeting. They will be bring their prayer shawls.
Mark Twain: "Facts are stubborn things, but statistics are more pliable."
Core consumer price inflation was rising at the fastest rate in four years in September, the Cleveland Federal Reserve Bank said Wednesday. The median consumer price index, an alternative way of measuring core inflation that does not automatically exclude food and energy prices, rose 0.3% in September, or a 3.6% annual pace, the Cleveland Fed said. Over the past year, the median CPI is up 3.5%, the biggest gain since the summer of 2002. By contrast, the Labor Department's core CPI, which excludes food and energy prices, is up 2.9% in the past year, the most in 10 years.
I believe the annual rate of 3.6% is understated; however, my opinion is not significant. The Cleveland Fed's is. With that inflation rate the Fed cannot stay on a pause mode.
Rates will need to be increased. Otherwise, the credibility of the Fed is nullified. Rising inflation and rising rates are a high colonic for equities. That combo will flush out complacency and bring back risk. You don't need to believe me. Listen to Cramer. He says fortunes are being made. That maybe so. It's an other thing to keep the fortunes.
Edward Hasbrouck: "The USA Department of Homeland Security (DHS) has proposed that airlines cruise lines, and operators of all other ships and planes -- including charter flights, air taxis, fishing vessels, etc. -- be required to get individual permission (”clearance”) from the DHS for each passenger on all flights or ocean voyages to, from, or via the USA. Unless the answer is “Yes” -- if the answer is “no” or “maybe”, or if the DHS doesn’t answer at all -- the airline wouldn’t be allowed to give you a boarding pass, or let you or your luggage on the plane."
According to DataQuick, existing single-family home prices fell 8.2% in the month of Sept. in Sonoma County, 6.5% in Napa County, and 3.3% in Marin County. When they raid the whorehouse, they take all the girls.
Richard Daughty: "Mogambo sez: I love the way that gold, silver and oil are falling into my trap! If I hadn't spent all my money at Patty's Palace of Pizza and Porn, I'd buy more. I only hope you don't make the same mistake."
November crude fell $1.28 to close at $57.65 a barrel. Meanwhile, November natural gas rallied 36.5 cents to close at a five-week high of $6.807 per million British thermal units. Tomorrow is the OPEC meeting. They will be bring their prayer shawls.
Mark Twain: "Facts are stubborn things, but statistics are more pliable."
Keep Your Eye On The Ball
10/18/06 Keep Your Eye On The Ball
The core producer price index, which excludes food and energy costs, rose 0.6%, the most since January 2005. Producer prices are up 0.9% in the past year, while core prices are up 1.2%.
Chicago Mercantile Holdings Inc. announced an agreement to acquire CBOT Holdings. The deal calls for a swap of 0.3006 shares of Chicago Mercantile Class A common stock for each CBOT Class A common share. CBOT shareholders can also elect to receive the cash equivalent to the value of the exchange ratio based on a ten day average of closing prices for Chicago Mercantile shares at the time of the merger, but the cash portion of the total consideration will be limited to $3 billion. Upon completion of the deal, Chicago Mercantile stockholders will own about 69% of the combined company with CBOT's shareholders owning the remaining 31% stake.
Eli Lilly said it was buying ICOS Corp. for $2.1 billion, or $32 a share, in cash. ICOS is the maker of Cialis, a treatment for ED in men. It was 1 3/4 years ago that I suggested patient investors take a look at Palatin Technologies. Since then the stock has gone from $2 to $4 and back to $2 and is now about $3. Palatin in trials with a treatment for ED in both men and women. It is the first to treat women.
Manufacturing output fell 0.3% in September, utility output sank 4.4% and mining output rose 0.7%. The capacity utilization rate for the industrial sector fell to 81.9% from 82.5%.
In very early trading on Tuesday, gold traded above $600 an ounce and crude oil traded at $60+ a barrel. November natural gas added 31.6 cents to $6.76 per million British thermal units.
Private investors, in August, bought a net $89.4 billion, compared with a net $31.8 billion in July. Official purchases, mostly by central banks increased to $30.1 billion, up from $22.7 billion. Americans bought $2.7 billion worth of securities abroad in August. Purchases of Treasury securities rose a net $46.3 billion, up from $6.6 billion in July. Demand for agency debt rose $31.3 billion from $18.5 billion. Foreign purchases of U.S. stocks rose $4.4 billion in August, down from $10.4 billion in July. Corporate bond buying climbed to $37.5 billion from $19 billion.
Countries should hold oil stocks equivalent to at least 90 days of net imports, according to recommendations by the International Energy Agency. China's demand will increase to 7 million barrels a day, the IEA, an adviser to 26 oil-consuming nations, said in an Oct. 11 forecast, from 3.68 million barrels a day in 1996.
The Labor Dept reported that the Sept. CPI core inflation rate rose 0.2%, the third consecutive monthly increase at that rate.
Housing starts in Sept. rose 6%. It was the first increase since May. However, permits declined for the 8th consecutive month. In Sept. the decline was 6%.
This morning the Dow powered over the 12,000 level- thanks to IBM and Intel.
From here on out please be careful with your words and actions. You don't want to have the label "enemy combatant" on your back. Our 200+ year experiment in democracy has come to an end. You see- your vote really does count. It's your voice- or was.
The core producer price index, which excludes food and energy costs, rose 0.6%, the most since January 2005. Producer prices are up 0.9% in the past year, while core prices are up 1.2%.
Chicago Mercantile Holdings Inc. announced an agreement to acquire CBOT Holdings. The deal calls for a swap of 0.3006 shares of Chicago Mercantile Class A common stock for each CBOT Class A common share. CBOT shareholders can also elect to receive the cash equivalent to the value of the exchange ratio based on a ten day average of closing prices for Chicago Mercantile shares at the time of the merger, but the cash portion of the total consideration will be limited to $3 billion. Upon completion of the deal, Chicago Mercantile stockholders will own about 69% of the combined company with CBOT's shareholders owning the remaining 31% stake.
Eli Lilly said it was buying ICOS Corp. for $2.1 billion, or $32 a share, in cash. ICOS is the maker of Cialis, a treatment for ED in men. It was 1 3/4 years ago that I suggested patient investors take a look at Palatin Technologies. Since then the stock has gone from $2 to $4 and back to $2 and is now about $3. Palatin in trials with a treatment for ED in both men and women. It is the first to treat women.
Manufacturing output fell 0.3% in September, utility output sank 4.4% and mining output rose 0.7%. The capacity utilization rate for the industrial sector fell to 81.9% from 82.5%.
In very early trading on Tuesday, gold traded above $600 an ounce and crude oil traded at $60+ a barrel. November natural gas added 31.6 cents to $6.76 per million British thermal units.
Private investors, in August, bought a net $89.4 billion, compared with a net $31.8 billion in July. Official purchases, mostly by central banks increased to $30.1 billion, up from $22.7 billion. Americans bought $2.7 billion worth of securities abroad in August. Purchases of Treasury securities rose a net $46.3 billion, up from $6.6 billion in July. Demand for agency debt rose $31.3 billion from $18.5 billion. Foreign purchases of U.S. stocks rose $4.4 billion in August, down from $10.4 billion in July. Corporate bond buying climbed to $37.5 billion from $19 billion.
Countries should hold oil stocks equivalent to at least 90 days of net imports, according to recommendations by the International Energy Agency. China's demand will increase to 7 million barrels a day, the IEA, an adviser to 26 oil-consuming nations, said in an Oct. 11 forecast, from 3.68 million barrels a day in 1996.
The Labor Dept reported that the Sept. CPI core inflation rate rose 0.2%, the third consecutive monthly increase at that rate.
Housing starts in Sept. rose 6%. It was the first increase since May. However, permits declined for the 8th consecutive month. In Sept. the decline was 6%.
This morning the Dow powered over the 12,000 level- thanks to IBM and Intel.
From here on out please be careful with your words and actions. You don't want to have the label "enemy combatant" on your back. Our 200+ year experiment in democracy has come to an end. You see- your vote really does count. It's your voice- or was.
Sunday, October 15, 2006
Differing Perspectives
10/16/06 Differing Perspectives
Gary Lammert: "The commodity market with oil, grains, and
gold will likely be competing with the equities for the investment
money during the next 27-28 days. On Friday 13 October 2006 all
future contracts for the CRB had but one level trade - limit up. The
next several day of trading will likely also have a single level of
trading - limit up. The CRB, oil, and gold all reached a selling
driving force comes in the complementary story that grain storage
levels are at 20 year lows. Grains are in a very defined period of
fractal growth. The current fractal growth sequence for the CRB is:
8/6 of 20/13-20 days.
Some of the investment money for the commodities will come from the
bond market, some from the equity markets 'which will become worried
about the ongoing CRB and 'grain -driven inflation' and some will be
borrowed at low interests and on margin for speculation. The best
fractal pattern for the equities is 11/15 of 26/17-18.
Nevertheless money should be exiting bonds and like the during the 2004 presidential election, equities may have some paradoxical growth during a falling bond
market and higher commodity prices..
27.5 days to a final ideal x/2.5x/2.5x commodity/equity high. For
macroeconomists, scientists, and 'economic fractalists' the next
final 28 trading days and what lies thereafter may provide a
fundamental change in the way the macroeconomy is viewed. The next 28
trading days and what lies thereafter may provide the basis for a new
macroeconomic saturation paradigm and macroeconomic science of 'how
things really work."
Beneath the averages you can find some differing perspectives. Last week on the NYSE there were 25 new lows and 558 new highs! Advances were 2 1/2 times the declines. The S&P SmallCap index and the Russell 2000 were both up over 3% for the week. Yet, stock index options told a different story. On the CBOE S&P 100 or OEX the put volume was 1 1/2 times the call volume, and on the S&P 500 put volume ran about 1 1/3 times the call volume. On the other hand, the call volume on the Nasdaq 100 was twice the put volume. The adage is the market climbs a wall of worry. For me, the question is the legitimacy of the worry. Over the last 90 days many segments of the market have had some of their best rallies in years- just look at Microsoft and Cisco. We knew 90 days ago that the Dow and the S&P were long overdue for a 10% or more correction. That still has not happened. My belief is to continually upgrade your holdings and place yourself in the best risk/reward position.
Mike Burk: "Although not as strong as last week, the coming week has had a strong positive bias. The OTC has been up 70% of the time during the 2nd year of the Presidential Cycle. The SPX has been up 62% of the time. Both indices have had average gains and been up over half the time over all periods."
Dominick: "My target, which was issued exactly 2 months ago today, was perfectly hit and The SPX now sits five points above it...this market is not advancing as it was in the past. Prior to the May highs we had leadership, now it seems as the S&P is pushing the old leaders up to achieve new highs. That is not the sign of a healthy market... The leadership would need to come back, for me to think there will be a large continuation from here...
The bottom line is, as Wall Street is getting more bullish by the day, I am seeing reasons to be concerned of any rally above 1360ish. I believe we are at an important price projection, accompanied by weekly Elliott wave counts that that finally can be counted as complete, bullish sentiment and technicals that are starting to diverge.
Just like going long in Aug, it won't look or feel good to try and short this market, but if we get the technical evidence to do so, we will look to take that trade. If we need to wait a while or for some additional gains, we will not be looking to short an advance. If there is a Santa Clause rally in the markets later this year, it will come from the low of that move, not from here."
From the Houston Chronicle: "The recruiting manager for Capital H Group said mechanical and chemical engineers are especially scarce.
The market for geophysicists and geologists is also tight because not many new ones have graduated in the past decade, he said."
From the Tulsa World: "The life of people who work at Air-X-Changers is about designing, bending, cutting, welding and painting.
Their jumbo-sized masterpiece? The air-cooled heat exchanger -- a key component in natural gas compression packages used to recover, process and transport natural gas...Additionally, the labor market is very tight for skilled welders, and the company is on a constant lookout for such workers. There are lots of opportunities at AXC for code welders, he said. The company is still trying to fill 30 to 40 total job openings. "We're going to continue to grow," Jacoby told the port's directors. "We see our business booming for some time."
Gary Lammert: "The commodity market with oil, grains, and
gold will likely be competing with the equities for the investment
money during the next 27-28 days. On Friday 13 October 2006 all
future contracts for the CRB had but one level trade - limit up. The
next several day of trading will likely also have a single level of
trading - limit up. The CRB, oil, and gold all reached a selling
driving force comes in the complementary story that grain storage
levels are at 20 year lows. Grains are in a very defined period of
fractal growth. The current fractal growth sequence for the CRB is:
8/6 of 20/13-20 days.
Some of the investment money for the commodities will come from the
bond market, some from the equity markets 'which will become worried
about the ongoing CRB and 'grain -driven inflation' and some will be
borrowed at low interests and on margin for speculation. The best
fractal pattern for the equities is 11/15 of 26/17-18.
Nevertheless money should be exiting bonds and like the during the 2004 presidential election, equities may have some paradoxical growth during a falling bond
market and higher commodity prices..
27.5 days to a final ideal x/2.5x/2.5x commodity/equity high. For
macroeconomists, scientists, and 'economic fractalists' the next
final 28 trading days and what lies thereafter may provide a
fundamental change in the way the macroeconomy is viewed. The next 28
trading days and what lies thereafter may provide the basis for a new
macroeconomic saturation paradigm and macroeconomic science of 'how
things really work."
Beneath the averages you can find some differing perspectives. Last week on the NYSE there were 25 new lows and 558 new highs! Advances were 2 1/2 times the declines. The S&P SmallCap index and the Russell 2000 were both up over 3% for the week. Yet, stock index options told a different story. On the CBOE S&P 100 or OEX the put volume was 1 1/2 times the call volume, and on the S&P 500 put volume ran about 1 1/3 times the call volume. On the other hand, the call volume on the Nasdaq 100 was twice the put volume. The adage is the market climbs a wall of worry. For me, the question is the legitimacy of the worry. Over the last 90 days many segments of the market have had some of their best rallies in years- just look at Microsoft and Cisco. We knew 90 days ago that the Dow and the S&P were long overdue for a 10% or more correction. That still has not happened. My belief is to continually upgrade your holdings and place yourself in the best risk/reward position.
Mike Burk: "Although not as strong as last week, the coming week has had a strong positive bias. The OTC has been up 70% of the time during the 2nd year of the Presidential Cycle. The SPX has been up 62% of the time. Both indices have had average gains and been up over half the time over all periods."
Dominick: "My target, which was issued exactly 2 months ago today, was perfectly hit and The SPX now sits five points above it...this market is not advancing as it was in the past. Prior to the May highs we had leadership, now it seems as the S&P is pushing the old leaders up to achieve new highs. That is not the sign of a healthy market... The leadership would need to come back, for me to think there will be a large continuation from here...
The bottom line is, as Wall Street is getting more bullish by the day, I am seeing reasons to be concerned of any rally above 1360ish. I believe we are at an important price projection, accompanied by weekly Elliott wave counts that that finally can be counted as complete, bullish sentiment and technicals that are starting to diverge.
Just like going long in Aug, it won't look or feel good to try and short this market, but if we get the technical evidence to do so, we will look to take that trade. If we need to wait a while or for some additional gains, we will not be looking to short an advance. If there is a Santa Clause rally in the markets later this year, it will come from the low of that move, not from here."
From the Houston Chronicle: "The recruiting manager for Capital H Group said mechanical and chemical engineers are especially scarce.
The market for geophysicists and geologists is also tight because not many new ones have graduated in the past decade, he said."
From the Tulsa World: "The life of people who work at Air-X-Changers is about designing, bending, cutting, welding and painting.
Their jumbo-sized masterpiece? The air-cooled heat exchanger -- a key component in natural gas compression packages used to recover, process and transport natural gas...Additionally, the labor market is very tight for skilled welders, and the company is on a constant lookout for such workers. There are lots of opportunities at AXC for code welders, he said. The company is still trying to fill 30 to 40 total job openings. "We're going to continue to grow," Jacoby told the port's directors. "We see our business booming for some time."
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