Very ugly economic news today as initial claims were the bright spot. Despite the decline in weekly claims the 4-week average of 361K is just 1K below the level at the start of the 1990 recession and doesn't suggest a rebound in payrolls after the January decline. The index of leading economic indicators showed a fourth month of decline and a cumulative 6 month decline of -2% -- both exceeding the movement used to signal an oncoming recession. The Philadelphia manufacturing index fell to the lowest level since just before the 2001 recession as expectations were for a partial rebound. Together with the sharp February drop in the NY state manufacturing index they bode poorly for the national ISM index.
Banks are tightening credit in the face of defaulting sub-prime loans, credit card defaults and car loans going bad and the Fed hasn't been able to do much about it. Lowering the interest rate feeds inflation without having any effect on what banks and credit card companies are charging in fees and interest.
Oil futures went to $101 a gallon yesterday, the dollar is falling. Go long on gold stocks and short financial sector on rallies.
Thursday, February 21, 2008
Friday, January 25, 2008
A wild week
The kind of volitility we saw last week is only good for day traders. The CNBC hype is for long term investors to ride it out. That is only true if you expect a long term bull market. If you think the stimulous package is going to work, they are right. If you think we are headed for a depresion with the stimulous package only causing inflation, then prepare for a bear market.
It doesn't make sense to be long in the market in the face of a long term bear trend in the market.
Some of you, most of you, should remember a comment I've made as a way of measuring major shifts on Wall Street. I said one way to know with certainty as to the direction of the market is to monitor hiring/firing at Wall St. firms. They always hire before the end of a recession in anticipation of better times; and they always fire just prior to a recession in anticipation of slower times. Thus, what can we conclude, in spite of mini-rallies, from the following?
These are the headlines.
25-Jan-08 10:28 ET
In Play
Goldman Sachs says plans to cut global workforce by 5% - Reuters (199.75 +0.55) -Update :
25-Jan-08
In Play
Morgan Stanley, Lehman Brother and Bank of America are eliminating about 1160 jobs
If the big boys are preparing for a recession, shouldn't you.
When a ralley reaches resistance I'm buying puts. ...and gold stocks. Precious metals have been taking a hit in the last few weeks. It is because investors expect a slowing of business using gold in there products. Lessening demand means lower cost. Gold and platinum are both commoditiies and investments. The commodity aspect has weakend with slowing of demand for electronics.
It doesn't make sense to be long in the market in the face of a long term bear trend in the market.
Some of you, most of you, should remember a comment I've made as a way of measuring major shifts on Wall Street. I said one way to know with certainty as to the direction of the market is to monitor hiring/firing at Wall St. firms. They always hire before the end of a recession in anticipation of better times; and they always fire just prior to a recession in anticipation of slower times. Thus, what can we conclude, in spite of mini-rallies, from the following?
These are the headlines.
25-Jan-08 10:28 ET
In Play
Goldman Sachs says plans to cut global workforce by 5% - Reuters (199.75 +0.55) -Update :
25-Jan-08
In Play
Morgan Stanley, Lehman Brother and Bank of America are eliminating about 1160 jobs
If the big boys are preparing for a recession, shouldn't you.
When a ralley reaches resistance I'm buying puts. ...and gold stocks. Precious metals have been taking a hit in the last few weeks. It is because investors expect a slowing of business using gold in there products. Lessening demand means lower cost. Gold and platinum are both commoditiies and investments. The commodity aspect has weakend with slowing of demand for electronics.
Friday, January 18, 2008
Bear Market - Look at this transition
A very strong bear market situation is developing.
See http://www.stocktiming.com/Friday-DailyMarketUpdate.htm
See http://www.stocktiming.com/Friday-DailyMarketUpdate.htm
Monday, January 14, 2008
Scams
Have you ever gotten an email touting a penny stock? I get several a week and I always feel that the outfit sending me the emai has probably bought a bunch of stock and is now hyping it so they can sell at a profit after they have driven the price up.
Now we find it is probably common practice amoung the big banking firms as well. As I've said many times, learn to make your own decisions and never trust your broker. Trade by what you see in the charts.
Article from Slate/WSJ follows:
" In the spring of last year, two investment arms of J.P. Morgan Chase & Co. began accumulating shares in Rural Cellular Corp., a small Minnesota provider of mobile-phone service. The bank units, which hadn't previously owned any shares, reported a combined 2.4% stake at the end of June.
The timing turned out to be fortunate for J.P. Morgan. On July 30, Rural Cellular's stock jumped 34% after the company announced it was being acquired by Verizon Wireless. The two sides had been negotiating since at least early May. The investment bank that advised Verizon Wireless in the deal: J.P. Morgan.
Investment banks aren't allowed to trade on their inside information about potential mergers. But sometimes by chance, one arm of a bank will buy a stock without knowing that another arm is advising on a deal. That's what J.P. Morgan says happened with Rural Cellular. "These purchases were made on behalf of our clients and were totally appropriate," says a spokesman.
Regulators are now conducting a broad review of pre-deal trades by investment banks to determine if they were coincidences, or something else. It isn't clear what deals they're looking at.
Their interest was sparked by a new academic study that finds such trading happens much more often than would be expected by chance. The study, which examines statistical patterns, concludes that some banks likely are trading on their inside information about deals.
The Wall Street Journal, by reviewing stock-ownership and deal records, identified dozens of instances in which investment banks appeared to be buying shares in target companies around the same time their bankers were advising the acquirers. The transactions involved most of the major investment banks, including Citigroup Inc., Credit Suisse Group, Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley. The firms either declined to comment or said they found no problems with the trading. "
To see full article go to:
http://online.wsj.com/article/SB120027840975287629.html?mod=todays_us_page_one
Now we find it is probably common practice amoung the big banking firms as well. As I've said many times, learn to make your own decisions and never trust your broker. Trade by what you see in the charts.
Article from Slate/WSJ follows:
" In the spring of last year, two investment arms of J.P. Morgan Chase & Co. began accumulating shares in Rural Cellular Corp., a small Minnesota provider of mobile-phone service. The bank units, which hadn't previously owned any shares, reported a combined 2.4% stake at the end of June.
The timing turned out to be fortunate for J.P. Morgan. On July 30, Rural Cellular's stock jumped 34% after the company announced it was being acquired by Verizon Wireless. The two sides had been negotiating since at least early May. The investment bank that advised Verizon Wireless in the deal: J.P. Morgan.
Investment banks aren't allowed to trade on their inside information about potential mergers. But sometimes by chance, one arm of a bank will buy a stock without knowing that another arm is advising on a deal. That's what J.P. Morgan says happened with Rural Cellular. "These purchases were made on behalf of our clients and were totally appropriate," says a spokesman.
Regulators are now conducting a broad review of pre-deal trades by investment banks to determine if they were coincidences, or something else. It isn't clear what deals they're looking at.
Their interest was sparked by a new academic study that finds such trading happens much more often than would be expected by chance. The study, which examines statistical patterns, concludes that some banks likely are trading on their inside information about deals.
The Wall Street Journal, by reviewing stock-ownership and deal records, identified dozens of instances in which investment banks appeared to be buying shares in target companies around the same time their bankers were advising the acquirers. The transactions involved most of the major investment banks, including Citigroup Inc., Credit Suisse Group, Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley. The firms either declined to comment or said they found no problems with the trading. "
To see full article go to:
http://online.wsj.com/article/SB120027840975287629.html?mod=todays_us_page_one
Learning to Trade
One of the best sources of one-on-one tutoring I know. Even the vast amount of free information this gentlemen provides is well worthwhile.
Bill
**************
Red=My Comments Black=outside source
I trust you received the Trader 2008 results page I sent last night. And as a reminder, those of you signed on for the stock picks must sign on again this week. Please do it here or go to the Fee/Guarantee page on the site.
Starting as always with our Wall of Worry for the week we notice huge important numbers for the market this week. Retail Sales, Wholesale Inflation on Tuesday, Consumer Inflation on Wednesday, and Housing Starts on Thursday. PLUS earnings start pouring in this week. The bigger a company is in relation to its industry the more positive/negative impact it has on the industry and the market. What it all means is more volatility, probably great volatility. The negative sentiment is in the market but positive surprises make for bullish rallies.
Headlines of note:
Dollar Falls to Seven-Week Low on Speculation Fed Will Cut Rate Below ECB
Fed Signals More Aggressive Policy, Favoring `Insurance' Against Recession
Gold, Platinum Rise to Records in London on Declining Dollar; Silver Gains
Wall Street's Latest $35 Billion Writedown Puts Squeeze on Profits in 2008
Bernanke Signals Deeper Rate Cuts, Emphasizes Faltering Economic Growth
Stock Picks for Jan 14, 2008
Stock picks available for active students only.
Regards,
John Robichaud
www.wallstwise.com
Trade what you see, not what you believe.
321-806-4068
Bill
**************
Red=My Comments Black=outside source
I trust you received the Trader 2008 results page I sent last night. And as a reminder, those of you signed on for the stock picks must sign on again this week. Please do it here or go to the Fee/Guarantee page on the site.
Starting as always with our Wall of Worry for the week we notice huge important numbers for the market this week. Retail Sales, Wholesale Inflation on Tuesday, Consumer Inflation on Wednesday, and Housing Starts on Thursday. PLUS earnings start pouring in this week. The bigger a company is in relation to its industry the more positive/negative impact it has on the industry and the market. What it all means is more volatility, probably great volatility. The negative sentiment is in the market but positive surprises make for bullish rallies.
Headlines of note:
Dollar Falls to Seven-Week Low on Speculation Fed Will Cut Rate Below ECB
Fed Signals More Aggressive Policy, Favoring `Insurance' Against Recession
Gold, Platinum Rise to Records in London on Declining Dollar; Silver Gains
Wall Street's Latest $35 Billion Writedown Puts Squeeze on Profits in 2008
Bernanke Signals Deeper Rate Cuts, Emphasizes Faltering Economic Growth
Stock Picks for Jan 14, 2008
Stock picks available for active students only.
Regards,
John Robichaud
www.wallstwise.com
Trade what you see, not what you believe.
321-806-4068
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