Ukraine safe again (or so they say)

First of all, I want to wish everyone a Happy Memorial Day!  This day was not meant as a memory to the great and powerful BBQ, or the Indy 500.  It is a day that we remember and honor those who died in military service in the protection of our country and freedom.  Thanks to all that allow us to live in a free country.

Speaking of free countries, the Ukraine had their elections over the weekend with a resounding win by the confectionery magnate, Petro Poroshenko.  It appeared that there was no interference by Russia in the elections, and that the runner up, Yulia Tymoshenko who had 13% of the vote was due to put in a concession speech as not to cause any political instability.

So there you have it…the world is now fixed.  No further problems can happen.  We know that, because we hit another all time high in the markets.  I’m just so excited to see another all time high in the markets (sarcasm!!!).  The reason it is so exciting is that I get to deal with another margin call on Tuesday.  Hooray!

I have to be the only remaining bear.  The others have all died and been buried.  The bears are extinct.  You may have the chance to see one stuffed on some bull’s mantel next to the piles of cash they have that continue to fuel the rally.  It is astounding that after a 5 year plus bull market, we continue to make daily record highs in the broad markets.

To add fuel to my confusion is the fact that the bond market is not crashing.  You would think that if the all clear is still here in the markets, the bond market would fall from people pulling money out of the safe haven area back into risk assets (the stock market).  But that is not happening.  The opposite is true.  The bond market is making a run to the north as well.  We are seeing the yields dropping more on the all the ranges of bond duration.  In addition, we have the volatility indexes dropping further.  More evidence that NO ONE HAS ANY FEAR OF THE MARKETS COLLAPSING!!!!

That is bad news for the last remaining bear.  But if you were a first time investor, and you saw the market at all time highs, would you be a buyer?

In the economic world, Monday we have the markets closed and no reports to consider.  The futures markets were open for a while, pushing the S&P500 futures to 1904, again an all time high.  Even the Dow futures were up over 16,600.  I’m concerned that with a new month approaching, and new money poised to enter the markets, we could see a continuation of the climb to infinity of the markets.

Tuesday brings us the durable goods orders.  With a forecast of -0,8% from a previous gain of 2.5%, I have no idea how that is a positive thing for growth.  We also have the home price indexes coming out.  We shall see if the home prices are still rising at a steady pace, or starting to falter.   Tuesday will be rounded out by the consumer confidence numbers which are actually forecast for a small drop of 0.2% from the previous month.

Wednesday there are no reports to speak of.

Thursday besides our weekly jobless claim numbers, which are due to come out at 322K, we have the GDP revision numbers.  As you might remember that the Q1 GDP numbers were originally set at 2.6% growth, then lowered to 1.2% growth because of the weather factor in the mid-west and north-east…but actually came out at 0.1% growth.  Now the forecast for the revision is looking at a contraction of 0.6%.  Not exactly the amazing economy the market is supporting.

Lastly Thursday we have the pending home sales.  With interest rates falling again due to a strong bond market.  I would imagine we should see some good sales posted.

Friday is the personal income and consumer spending.  These are some of the big drivers of a forward moving economy.  With forecast of 0.3% and 0.0% respectively, that again is not cause for a party of economic growth.

We finish with the University of Michigan Consumer sentiment report.  There are expectations of a higher confidence in this economy.  Well…we shall see.

Happy Trading!

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Back from vacation

With all the insanity that the market has brought, I thought I would take a little vacation away from it all.  A little scuba diving trip to Cabo San Lucas.   What a great time and wonderful diving.  I encountered 5 bull sharks that were all much larger than myself.  They don’t scare me, this market does.

On Monday we had the rally from hell (again!).  Every time it looks as if the bears have their claws in the market, the bulls crap on their parade.  I feel like a broken record and a fool thinking that this market could ever go down.  Even Thursday when we had a decent sell off, nothing major, but decent.  It looked as if it could have some legs.  Then, with less than an hour to go in the markets on Friday, we get another rally out of no where with no apparent news driving it.  The bulls just won’t die.

You would think that being back in nose bleed territory people would be nervous…but noooo!!!   We are back in the low teens on the volatility indexes.  Even the /VX, which is the futures volatility is in the toilet.  Meaning that not only are people not worried about right now, but they feel that nothing is going to be happening in the next month plus.

I’ve heard them (whoever them is) say even a broken clock is right twice a day.  But in my case, I feel the clock is just running slow and is never right.  So…I have a dream.  In my dream there is this beautiful thing called a correction in the markets.  A correction, for those not familiar with the term, and if you have been trading for the last five years you have no idea what I’m talking about….is a 10% drop in the markets.  A bear market is a 20% correction.  While I can only hope for the latter, I would more than welcome the former.

This week in the economic world we have slew of speeches from Fed presidents.  Monday through Wednesday we have five Fed presidents speaking and Janet Yellen to boot.  Every time that woman speaks we get another rally in the markets.  You can almost bank on it.  She is “bear cryptonite” (I’m going to trademark that name).

Wednesday, on top of the Fed speakers, we have the FOMC minutes.  I’m sure they will say the economy is rosy…all is well…and we will print unlimited amounts of money forever.  It’s worked so far for the markets.

To couple along with the thought of the markets relentlessly going up.  Do you all remember the promises by your president on how he is going to bolster the middle class, protect the poor, and go after the 1%ers?   Well, the only thing that has happened while Obama has been in office is that the rich got richer, the poor got poorer, and the middle class were once again screwed.  Thank you Mr. President.  You’re awesome  (that was sarcastic in case you couldn’t figure it out)

Thursday we have the jobless claims.  Last week the numbers dropped below 300K for the first time in years.  It is interesting that this week’s forecast is at 315K.  Do they not have confidence that the jobless claims will keep falling?

Also Thursday, we have existing home sales.  Last week we had exceeded the numbers in housing starts.  Now lets see if the home sales support it.  By the way, have you noticed that the bond market has been rising with the stock market again.  Bonds are up, which means yields (interest rates) are down.  That is good for the housing market, but not for retirees.

Friday we will see the other side of the coin on the housing market and that is the New Home sales.  With rates down, I would imagine the inflated forecast may get trumped with a surprise to the upside.

Happy Trading!

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Abysmal GDP report

This past week was a week of big numbers.  One of the big ones was the GDP report for Q1 2014.  The estimate was at 1.2% growth for the 1st quarter.  This estimate was downgraded due to all the inclement weather earlier this year.  Everyone expected that the number would be poor, and the 1.2% estimate had shown that.  Then the actual number came out.  0.1%, yes you are reading that right.  not 1%…just missing the lowered estimate, but barely any growth whatsoever.  One tenth of one percent.

You would think that with such a poor number that the markets would crater.  But noooooo…  Then Janet Yellen came flying in with her cape wafting in the wind showing how the Fed is there and the economy is growing, and they cut the monetary stimulus another $10billion.   Now the Fed is only throwing away $45billion per month on an economy that is anemic at best.

Thursday’s jobless claim report pretty much echoed the 1st quarter GDP showing a higher than expected claims numbers outpacing the expectation by 24K claims.  The good news on Thursday was that consumers were still spending.  Exceeding the estimate by 0.2% for a growth of 0.9% in consumer spending.  Motor vehicle sales were lower, and construction spending was lower.  Hardly an economy screaming to the upside.

Friday’s big numbers were, on the surface, a big boon to the markets.  With the non farm payroll numbers blowing away expectations by 68K, and the unemployment rated dropping from 6.6% to 6.3%.  Both numbers would have made you think that the markets would take off to the great white north, but in fact made the market pause for a slight down day (hallelujah a down day).  Because if you look beneath those numbers you will see the real wizard is not that great.  The reason being, is that we need to have 350K jobs growth to keep up with the population.  Secondly the only reason the unemployment rate is dropping so drastically is that people are leaving the workforce, and therefore are no longer counted.  I still feel the “real” unemployment number is well into the double digits, especially if you include the underemployed.  One other note regarding the non farm payrolls is that the jobs that were created were not of the desirable type. They were lower paying jobs in the service industry.

Earnings season is winding down, and the economic calendar is thin this upcoming week.  The market has yet to have any appreciable sell off.  We are back at near record highs once more as the market bulls reassert themselves.  It frustrates me to no end.  I actually had a headache all week from the price action in the markets.  Every time I thought that the bears have a good reason to bring out their claws, the bulls slapped them aside and kept running.  I’m not sure what it will take to get a reasonable correction in the market, but so far bad economic news won’t do it, Global weakness won’t do it, Serious threat of war in the Ukraine won’t do it, and the Fed will do what it can to make you believe all is well and the roads are paved with gold.

Turning to this weeks economic numbers, we have the ISM non manufacturing numbers due out Monday with a 1.2% uptick from the previous month’s numbers.  This is showing growth if the numbers come out as expected or better.

Tuesday we have the trade deficit due out with a drop of $2.5billion in deficit.  That is a good direction to go in.  I’m not sure if the drop is due to more exports, or less imports.  The better one would be more exports.

Wednesday we have productivity numbers which are due to be negative by 1.1%.  I don’t know how that will be good if it is true.

Janet Yellen will also give her testimony.  I wonder how much more sunshine she has in the bank to blow up everyone’s ass?

Thursday’s only report is the jobless claims number.  You know from last week that the number was much higher than estimates, not a good thing.  This weeks estimate is for 330K.

Friday ends with Job openings and wholesale inventories.   Nothing market shattering there.

Happy Trading!

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Still no fear from the bulls

Another big up week for the bulls this past week that was slightly marred by the bears on Friday.  Even as the bulls licked their chops by having a 7 day run, the bears were doing all they could on Friday to rain on their parade.

It amazed me again that the market hasn’t sold off more than the miniscule drop we had Thursday and Friday.  Russia is on the brink of starting an all out war and no one is worried.  How do I know that?  It is reflected in the market volatility.  The VIX (volatility index for the S&P500) is still sitting at 14%.

Other issues that surprise me that we are still in spitting distance of all time highs is that the big market leaders of 2013 are getting a beating like a red headed stepchild, and no one is worried.  Netflix has dropped 120 points in 45 days.  Google, even with the split, has dropped 100 points in the last two months.  Priceline has dropped 220 points in that same time frame.  Amazon has fallen 100 points in the past three months.  And no one is frightened!!!   All the major indexes are still holding up.

Last week home prices slowed their rate of price increases by 5%.  Existing home sales were down from the previous month.  New home sales were were abysmal coming in at 384K, when previous numbers were 449K.  Jobless claims were 24K higher than the previous month.  But don’t you worry you bulls.  The new market savior, Janet Yellen, will save you on Wednesday when the FOMC statement comes out.  You know that the Fed can see the economic data, and knows things are not rosy.  So they are going to throw the kitchen sink again at the markets to keep things propped up.  How many times do you think the Fed can do that, and have positive results before someone wakes up and realizes that there are bigger problems than what the Fed can fix?  Only time will tell.

Next week is a big week for economic news.  Pending home sales will kick off Monday.  If it looks anything like last weeks new home sales numbers, there will be problems for a positive spin.

Tuesday we have the consumer confidence numbers.  The forecast is set to be higher than the previous month, but I will be surprised if they beat estimates.

Wednesday we have the ADP employment numbers.  Last month we had 191K jobs created, which was a lack luster number that the spin doctors somehow turned positive.  The GDP numbers better beat estimates of 1.0% or all hell should break loose.  That is a dismal numbers at best for 1st quarter growth.  Of course it will be blamed on the weather.

As I mentioned before, the FOMC has their moment in the sun to spread bullshit all over the markets to keep them happy.

Thursday is the jobless claim numbers with 322K expected.  Personal income looking to rise by 0.1% over last month.  Consumer spending to double from last month.  Construction spending to be 5X the increase over last month, and motor vehicle sales to be shown as flat from the previous month.

Friday will be the big day of the week.  Nonfarm payrolls will dominate the news, followed closely by the unemployment rate.  Payrolls are looking to expand by 218K, and unemployment to drop back down to 6.6%.

Let the games begin Putin!!!

Happy Trading!

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Another slap to the bears

Just when you think there may be justice in the world after two down days in the market…the bulls come back and slap you in the face.  This resilient market is absolutely amazing to me.  Tuesday we have a 100 point reversal in the Nasdaq that continued on through the end of the week.  Thank goodness that we have Friday off with Good Friday.  Otherwise we could have taken another day of beating by the bears.

One of the further catalysts to the continuation of the bulls was the dovish Janet Yellen.  Who on Wednesday in her speech in New York told the world that even tho the economy is doing better and they expect full employment in the next two years, she is there to print money and keep interest rates low.  Apparently the fuel the market needed to sustain its onslaught of the bears.  One of the pillars Janet Yellen hid behind was that whatever bad economic news was out there was caused by weather related issues.  So, even tho they feel the economy is doing better than the numbers, the Fed is still acting as if we are in a recession.  …and the manipulation goes on…

During the past week, we did see retail sales a bit higher than expected coming in at 1.1% vs the estimate of 0.9%.  Business inventories dropping by 0.1%. Industrial production up 0.7%.  Capacity utilization up to 79.2%.  The Philly Fed rating at 16.6….and jobless claims down to 304K from 315K.  But the consumer price index is ticking up.  Which means that the costs to consumers is increasing.  Somehow that sounds like inflation.  Apparently this is inflation that the Fed chooses to ignore.

The weak sector still seems to be the housing market.  Now the powers at be can no longer hide behind weather as a factor for the housing market slumping.  We will see what the upcoming economic reports for the next couple weeks show in regards to direction of the economy.

This coming week we have a very light economic calendar, but that will be eclipsed by earnings season, which is now in full swing.  Last week we had Google miss earnings on the top and bottom line and only lose half of the anticipated move.  IBM missed as well.  Chipotle was a mystery.  By the initial market reaction and the stock up $30 in early morning trading Thursday, you would have thought the numbers were awesome.  But by the end of the day the stock was down over $32.  That was over a $60 point swing from top to bottom.

Overall earnings have been pretty good, especially with the financial stocks.  But even during the better numbers early last week, we saw the market declining.  This is a jittery market and we can expect some big swings in both directions.  Lets hope for the bears we can see a little more in our direction.

Monday we have our leading indicators numbers.  I did not see a forecast on those numbers.

Tuesday we have the FHFA home prices due out.  Along with that we have the existing home sales which look to be coming in short at 4.54 million vs the previous months’ 4.60million.

Wednesday we have our flash PMI numbers, again without a forecast.  While the new home sales numbers are estimated to be higher at 455K vs the previous months’ 440K.  Interesting how you can have such a difference between existing home sales and new home sales, both going in different directions.  You would think that if the economy were doing better, with interest rates at near all time lows, that both would be doing well.  Yet we find this is not the case.

Thursday we have our jobless claims numbers.  Last weeks’ 304K is one of the lowest numbers we have seen in a while.  This should be the case in a growing economy.  But the Fed acts as if they know something they are not telling us about.  When you say the economy is doing better, and you are doing everything you can to keep the market propped up, something has to give either in the actual economy, or in people figuring out the Fed is full of bull (no pun intended).

To couple along with that, I read last night about a “secret” meeting Obama had with top fund managers to inform them that the US is going to put on further economic sanctions on Russia.  Please tell me how that is not inside information and manipulation?  You are giving people with very influential forces in the markets inside information that was not available to the public that could seriously effect the financial markets.

Durable goods are also due out Thursday with a drop of 0.3% vs the previous month.  I wonder if they will pawn that one off on weather?

Friday rounds us off with the consumer sentiment numbers by the University of Michigan with a flat forecast vs the previous month.

For those that celebrate the resurrection of Christ, I offer to you on Sunday “Christ has risen”.

Happy Trading!

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God does exist

It appears that God does exist and He shows (occasionally) He loves me.  No one saw this coming, with a good punch to the stomach of the bulls.  Everyone was probably thinking after the market drubbing on Thursday that we would get our normal snap back in the markets (including me).   When the markets were sharply lower on the open Friday, I thought that life was getting better.  Until the markets gained footing and clawed their way back to positive territory.  Then the bears found a little intestinal fortitude and held strong to give us the worst (or best…depending on what side of the market you are on…we all know the side I have aligned myself) two consecutive day loss that recent memory has allowed.

Unfortunately, even with a couple down days we are still only down a couple percent from the all time highs.  The bulls are not even nervous as of yet.  We will have to keep our eyes open for sharp upswings in the markets as I’m sure the bulls will not go down easily with the massive power they have shown for the last 18 months.

Last weeks economic news was on the mixed side.  With consumer credit debt rising to $16.5Billion.  The NFIB small business index up.  More job openings to the tune of 4.2million.  Inventories dropping by 0.1%.  Jobless claims down to 300K.  Import prices on the rise.  Producer prices rising much higher than anticipated.  And University of Michigan consumer sentiment high.  It was an up/down which way should we look at things type week.

This is a shortened week with Friday being Good Friday.  Markets will be closed.  Prior to that we do have some big economic reports due out.  Monday we have retail sales for March showing a forecast of 0.8% or nearly 3X the previous month.  That would be welcomed news by the bulls if that number is met or exceeded.  It shows consumers are spending.

Tuesday we have the consumer price index with a flat estimate of 0.1%, equal to last months numbers.  The home builder index is another closely watched number.  They are forecasting expansion with a number of 51 vs the previous month’s 47.

Wednesday we have the housing starts numbers.  With nearly a million starts expected, I’m not sure that will be seen as a big positive with all the Winter weather that slowed building in the past few months.  This could be the home builders trying to get caught up with spring here.

Janet Yellen is also due to give a speech in New York.  No doubt she will do all she can to promise the markets whatever it takes to keep them propped up.  I don’t know about you, but I’m tired of the Fed manipulating the markets.  It would be nice for once to have a Fed chairperson tell the truth and say, this economy is not strong.  On top of that, say that they are not going to print any more liquidity and start raising interest rates.  That would be a good thing for us bears.  But since it is…you know it won’t happen.

Thursday we have jobless claim numbers..  With last weeks 300K number, things seem to be moving in the right direction for jobless claims.  The Philly Fed numbers are also due out with an estimate of 9.8 vs the previous month’s 9.0

Friday with that market closed, we have the leading indicator numbers.

For those that celebrate the resurrection of Christ, I hope you enjoy your Palm Sunday.

Happy Trading!

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Can “Reality” be realized?

I’ve been pondering over the market and its unrelenting meteoric run as of late.  I have considered the possibility of manipulation.  My consideration being, are the “big boys” setting up all the small guys again?  Meaning, are they making it appear that the markets will never go down in order to make the small investor feel that if they don’t invest they will miss the boat.  Or, is the manipulation being done behind the scenes with the government to do everything it can to prop up the markets to make the economy seem better than it really is?  Whichever is true, there is some manipulation to keep the bull running.

I know that markets do have extremes.  This one is pushing beyond extremes.  After last year’s amazing run with the major indexes up beyond the 30% mark, you would think that a pullback in the markets would be healthy.  (and it would) But the continuation of the onslaught of buying doesn’t cease.

Even this past week, it looked as if we might have some pullback by Monday’s actions in the market.  But then again the bulls came roaring back.  Friday’s “sell off” gave us a bit of relief.  Even with the sell off (if you can call 5 points on the S&P500 and 28 points on the DOW a sell off) the markets closed up for the week by 1.38% on the S&P, and 1.48% on the DOW.

It pissed me off when my mom tells me she was upset about the sell off in the markets.  I asked her, what sell off?   The S&P is less than 1% off of its ALL TIME HIGHS!!!  The DOW is only down 1.65% from its ALL TIME HIGH!!!  When the average investor (which I consider my mom and her husband) are at this type of expectation…the expectation that the market should only go up, there is a problem.

I read in the paper this weekend that some traders are taking “some chips off the table”.  Really?  I would like to see where they are selling…because at this point…no one is selling and the bears are all but dead.

An interesting correlation is in the numbers behind the markets.   Namely the P/E ratio’s (Price to earnings).  The current P/E ratio of the S&P500 is 16.5 times the earnings.  The forward looking number for next year is 15.4 times.   The 10 year average is 14.7 for the current period and 13.9 for the following year.  By these standards people are realizing that maybe stocks are finally starting to look expensive (not that the can’t get more expensive).   Here is the best part about these facts.  Back in October of 2007, before all the stuff hit the fan, the P/E ratios were the same as they are now.  It makes one say “hmmmm”.   Could it be that the markets are starting to recognize that there may be trouble in paradise?   I sure hope so.

Coming up this week in the economic world…  Monday we have the Market flash PMI numbers.

Tuesday the Case Shiller and FHFA home price numbers will be out.  I heard an advertisement that home prices in the last two years here in Southern California have risen 20%.  Someone on my street sold their home last week for a price fairly close to the highs in 2007.  These numbers in themselves are pretty lofty too.  So let’s see if that trend is continuing in the home price numbers, or are we peaking out on home prices.  I still think there will be a drop in home prices in the next year or so just due to people not being able to afford the surprisingly quick rise back to bubble prices of homes.

We also have the Consumer confidence numbers due out Tuesday with a lower number than the previous month.  I don’t know how that can be good news for the markets, but we will see how the bulls spin it.

Wednesday we have the durable goods orders numbers.  They are expecting a negative number as was the previous month.  Again, not a big confidence builder on a growing economy.

Thursday we have our weekly jobless claim numbers.  Last week we did see a drop off in the numbers down to 320K, which is an encouraging sign for the economic recovery bulls.

The GDP revised numbers will be coming out on Thursday as well.  The number is for an upward revision of 3% vs the original number of 2.4%.

Friday will bring us the consumer spending numbers.  Which, as we all know, is the basis for our economy.  If we’re not buying, companies are not making bank.  The numbers expected are for a growth of 0.2%, vs the previous month of 0.4% growth, that does not inspire confidence in economic growth either.

Look out to see if the Russian/Ukraine situation escalates.  As of Saturday, Russian troops took over the last Ukrainian military base in Crimea.  To avoid bloodshed, the commander of the base with Ukraine troops had their soldiers come out with sticks instead of weapons.  I want to see how the US will back its ally in the Ukraine against another Ally…the Russians?

Happy Trading!

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Postman’s creed revised

People should remember the postman’s creed.  You know…Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.  There is an easy adaptation to this to incorporate the markets.

For the market version it should read.  Neither threat of war nor bad economic data nor weak recovery nor skyrocketing healthcare costs shall stall the markets from their appointed task of making constant daily highs.  Yeah!…that sounds about right.

After all, last Monday it looked like we could get a slight move on the downside with the threat of war and invasion of the Ukraine.  Even tho the small sell off was all news related.  And you can’t even consider that a sell off.  The market roared back double what it sold off the following day and made new highs every day since.  There was another attempt at a sell off on Friday that again was met with unrelenting buying.  The bears are now all dead and appear to have capitulated to the power of the super bull.

Every attempted sell off is a buying opportunity from all appearances.  I guess you can no longer fight it.  All equity buyers know that if there is a sell off, the markets will be brought back by the Fed.  So why should there be fear?  Obviously there is no reason for it.  And it shows in the massive strength of this market.  No fear and get the dart board out.  Because whatever stock that dart hits, the stock will rise without fear.  Even with the uptick in the unemployment rate from 6.6% to 6.7%, when the markets were expecting it to drop to 6.5% couldn’t take the market down.  Why?  Because the non farm payroll numbers were higher than expectations even with the weather related issues.   The bulls are saying the 175K number of new jobs would have been in the 250K range if it weren’t for the weather.  Again, no matter what the number is, the bulls will put their bullish spin on it.

So, I sit on my hands waiting for the hibernation of the bears to end.  Hopefully Winter will end soon for the bears and reawaken them.  But for now, they are in a deep slumber crushed by the weight of the snow and a lot of BULL sitting on them!

With more rumblings on about what will happen to Crimea and the Ukraine this week could be in for a bit of volatility.  But there is nothing on the horizon that can tip this market in the opposite direction.

Coming up in the economic world for this week, there are no reports for Monday.

Tuesday we have the small business index numbers.  Generally these are not earth shattering.  So don’t look for any big market moves on this news

Wednesday only shows us the Federal budget.  With last months numbers at a rousing -$204B…what good news can be shown with the upcoming numbers?  Doubtful anything.

Thursday we have our jobless claims numbers.  With last week’s small surprise downward of claims by 12K, any further drop in that number will be even more fuel for the bulls.  Retail sales will be a closely watched number too.  But, will the bulls hang their hats on even a bad number in retail sales citing weather problems?  That remains to be seen.

Friday we have the final numbers for the producer price index for February to see if inflation is creeping into the markets.  You would think that some inflation would have to be starting.  Especially since coffee futures have skyrocketed (I got out of that position too early when I bought it for $109, and sold at $146 thinking I was a genius) to $200.  That was since January.  Wouldn’t you think that if coffee nearly doubled in three months it would put some pressure on the Starbucks of the world?

Well, at the least, the week should be interesting.

One other quick quip…I watched the movie “I, Frankenstein” this weekend.  It gave me thoughts of any was to reanimate a dead bear.  ;-)

Happy Trading!

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Beaten, Bloodied, and Dying

I know I sound like a broken record regarding the market making new highs every day, but seriously, I can’t take it anymore.  I would love to jump on the band wagon, but since February 4, 2014 the markets are up 9%.  That is an astounding run in any respect.  Especially if you look at the point of the S&P500 was up 27% last year.

Of course the media will focus on the point of the “huge” sell off we had at the end of January.  A mere 7%, which is not even in correction mode.  10% is a correction, 20% is a bear market.

So many of my friends an colleagues are baffled by this meteoric run of the markets.  It has left them, as with I, beaten, bloodied, and dying.

I was reading this weekend about the insider trading, and the people that had been prosecuted.  People like Raj Rajaratnam.  How they used inside knowledge to benefit in the markets.  You always hear about these things.  Yet you never hear about market manipulation.  This is what is going on right now.  It is market manipulation, but not the “illegal” kind.  This is market manipulation on the highest order.  This is the Fed, and its new chief (Janet Yellen) artificially keeping interest rates buried at near zero, propping up the bond market, and keeping equities flying higher.  No one can fight the legal onslaught that the Fed has thrown at the markets.  But the Fed is not bigger than the markets.  One day, the lights will come on, people will wake up to see that things are not rosy.

The economic picture is still weak.  The only good news that came out last week was that new home sales were higher than expected by 15%.  Outside of that, even the GDP revision number was at best on par with expectations of 2.4% growth.  A huge drop off from the previous quarter of 3.2%.  Jobless claims were higher by nearly 5% than the previous week.  Durable goods orders were down.  Consumer confidence dropped.  All not a good picture being painted.  Yet the market chugs on.

I thought we had a glimmer of hope on Friday to see some type of selling start.  The S&P500 was up over 12 points in early trading, and dropped in the late afternoon, to be down over 10 points, then recovered to a positive for the day.  The mighty Nasdaq was up about 30 points during the same time frame, and dropped to down nearly 40 points, and ended up the day recovering its losses.  There are forces in the market that are manipulating it to not allow it to go down.  The free market is dying.  And as I said last week, we are in a dartboard market.

This week’s economic picture starts us off with February behind us and the beginning of March.  Consumer spending, ISM, and construction spending will be the big focus on Monday.  Consumer spending is shown to decrease its rise to only a positive 0.2%.  Only half of the previous month.  I’m sure it will be spun that this is only a temporary thing due to all the bad weather in the Midwest and East Coast and become a positive for the unrelenting bull market.  ISM numbers are set to rise slightly, and construction spending is set to drop (again, I’m sure, weather related).

Tuesday there are no scheduled reports.

Wednesday we have the ADP employment and ISM non manufacturing numbers.  I did not see a forecast for the employment numbers.  However the employment numbers will be closely watched to see if there is growth.  This is part of the Fed’s focus regarding if they are going to continue the taper or not.  Yellen has said that even tho the Fed has said it was looking for the 6.5% unemployment rate, it will look at more economic data even if the target is reached before it continues its taper.  The ISM numbers are looking to be slightly weaker than the previous month.

Thursday we have jobless claim numbers expected at 338K, slightly lower than last weeks 348K.  Q4 productivity numbers are set to come out at nearly half the previous quarter.  Again it will be blamed on the weather.

Friday is the big day for the week.  This is where we see the non farm payroll numbers and the unemployment rate.  We are looking for 140K jobs created on the non farm payrolls, and the unemployment rate is wrapped at the 6.6% holding steady.  Hold on to your hats if these numbers don’t meet or beat expectations.

Happy Trading!

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The dart board market

We have come to the point where this market is the “dart board” market.  Meaning that take all the stock symbols, place them on a wall, blindfold yourself, and throw a dart.  No matter what you hit, it is going up.

With another incredible day of markets roaring forward (do bulls roar?), I can say nothing.  I have no explanation or energy to fight it anymore.  After Friday’s turn around to the downside, I would have bet (and I did) that we would see a softer market come today (Monday).   But with the markets up over another percent and at all time highs for all the major indexes (Nasdaq is at a 14 year high due to the tech bubble in 2000), I have nothing I can contribute to how much longer this pain will endure.

It is unfathomable that we can continue a meteoric melt up in the markets.  I have seen markets melt down, but this new method of melting up is a new phenomenon.  Stocks like Netflix are up nearly $100 for 2014, and nearly $300 up in the last year.  Pricline is up over $200 in 2014, and up over $650 in the last year.  Green mountain coffee roasters is up over $50 for 2014, and up over $80 for the last year.  WYNN resorts is up over $45 for 2014, and up over $85 in the past year.  Chipotle is up over $35 for 2014, and up $250 for the past year.  Tesla is up over $75 for 2014, and up over $185 in the last year.  Shall I keep going on???  How reminiscent of 2000 this is.

With today’s jump up in the markets I’m even more perplexed.  The two economic reports that came out today (Chicago Fed, and Market flash service PMI) both missed their expectations.

Even the gold market (usually a flight to safety) is rising.  There is obviously no fear anywhere.  The volatility index (a gauge of fear) is sitting just over 14% which is in the lower 1/3 of its range.  Wild abandon has engorged the markets and there is now no end in sight.  When you blow through the all time highs on everything, who knows where the ceiling can be?

I am humbled once again by the strength this market has generated.  I feel like I would have been the perfect market contra indicator for the last year.

In the economic world I have already mentioned that the two reports for Monday came out lower than expectations.

Tuesday we have case shiller home prices.   The last month showed a 13.7% year over year rise.  (this is another area that has gone off the rails).  The FHFA home price index is also due out.  To couple along with that, I received a report on the pricing in houses in my area, and they are all near their all time highs.  So much for a housing crisis.

Consumer confidence is the big one for the day with a slight drop of 0.6% expected.

Wednesday we have the new home sales.  This market has been on fire.

Thursday we have our weekly jobless claims with numbers staying stable in the 330K range.  We will also have Janet Yellen speaking with the Senate Banking committee.  I don’t know how much more she can say to ignite the markets that she hasn’t already.

Friday we have the big GDP revision numbers set to be at 2.4%.  The Chicago PMI numbers are also due out with another lowered expectation.   The University of Michigan consumer sentiment numbers are rounding out the day with 0.6% rise from the previous numbers.

Did I say that I GIVE UP!!!!???

Happy Trading!

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