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Been noticing that. Skilled blue collar are in high demand...for now. I expect that will change during the 2nd half of this year as I think a recession is brewing.
Watch Lumber Futes for a tell on new housing strenth.
Ndx should finish the test of the downside trendline. Then maybe we test the upside again.
Has your momo high been made and any further rally to be the following price high?
A bb gun at a tank. The only answer is alternative fuels and conservation of what we have now. Probably, high energy prices are the only thing that will stimulate consumers into action and we're not there yet...
Xom sitting on a cash hoard but unwilling to beef up capex to drillers says to me...little in the way of viable drilling prospects.
Energy availability and who gets it is likely to be the big international battleground in the future.
Depletion Rates In the North Sea
http://dieoff.org/page180.htm
Oil prices will stay high then. Demand continues to grow... eventually outstripping capacity. Looks like the future have/have nots will be based on availability of affordable energy.
1 year Henry Hub Unleaded Gasoline
1 Day Henry Hub Gasoline
AAII Sentiment... having trouble linking chart.
http://tal.marketgauge.com/dvMGPro/charts/charts.asp?chart=AAIISR
A small sample from Traders Talk board for Monday. High given the selloff Fri.
Market Opinion Poll for Monday, 3/14/5
What is your opinion for Monday?
I'm Bullish [ 15 ] [65.22%]
I'm Neutral [ 3 ] [13.04%]
I'm Bearish [ 5 ] [21.74%]
Total Votes: 23
Investors Intelligence has 70.21% Bulls. Hard to find a bear unless you know where to look.
Risk is on the Rise
http://bigpicture.typepad.com/comments/economy/index.html
Charlie Minter and Marty Weiner have steadfastly maintained that the reinflation of the past 2 1/2 years has been a classic post bubble bounce, destined to fail.
Their latest missive sums up some of the more egregious longer term problems they perceive. Its hard to find much to disagree with here:
"JANUARY 28 – We believe that the economic and financial imbalances caused by the prior bubble have not been corrected, and have actually gotten worse, thereby creating serious problems for the economy and the market.
The expanding US budget deficit is leading to calls for fiscal restraint that will probably be spelled out in the upcoming White House budget proposals.
The Fed is engaged in a round of monetary restraint that is being dismissed by most observers as harmless.
The problem for the Fed is that if the policy is harmless it isn't working, and when it does begin to work some sectors will get hurt and cause the bursting of a number of ongoing bubbles.
American consumers have essentially stopped saving, depending on rising home prices to provide for both their spending and saving. The result is a massive, but unsustainable trade imbalance that leads to foreigners recycling billions of dollars back into the US Treasury markets every day.
The trend toward protectionism is growing as domestic political considerations in each nation begin to drive policy.
At the same time the market remains highly overvalued in terms of price to earnings ratios and other relevant metrics.
Although the vast majority remains bullish, investors should retain some perspective and remember that the crowd is always optimistic at market peaks. After all, by definition it is this very attitude that actually causes the peak.
Some past quotes that follow illustrate this point:
• July 3, 1929 – "Moody's says returns are in line with industrial activity."
• October 16, 1929 – "Fisher sees stocks permanently high"
(The New York Times, note: Irving Fisher was the leading economist of the time)
• November 2, 1968 – "The Boom That won't Stop" (Business Week)
• January 1, 1973 – "Not A Bear Among Them" (Barron's annual roundtable)
• October 26, 1987 – "Why Greenspan Is Bullish" (Fortune-edition issued before Oct. 19 crash)
• September 1999 – "Dow 36,000: The Right Price For Stocks" (Atlantic Monthly)
• April 27, 2000 – "…relax, the over-all market probably won't tank." (Business Week)
These quotes were not isolated, but were merely a small reflection of prevailing opinion at the time.
We were thinking about this when we saw the January 31, 2005 edition of Business Week featuring a prominently placed article titled "Why Greenspan Is Not Worried" and stating that…"as he swings into his final year astride the world's economy, he appears to be as relaxed as any central banker can be."
This may very well turn out to be another historical quote that we will look back on in years to come.
In our view, the market's 27-month upward move is a cyclical bull market within a secular bear market, and it is now giving definitive signs of running out of steam. Although an oversold rally is still possible, we believe the market is extremely risky at this time.
-Charlie Minter and Marty Weiner
Comstock Partners
Being held up for distribution. Commercials and hedge funds building short positions but that doesn't mean their not still too long at the end of this 2 1/2 year cyclical bull. Apparently, they took today off. <ggg>
Unleaded gasoline. Bullish looking no?
If we close under 1505 I have us as under the TL out of Aug.
Feeble bounce inviting another dump.
Follow the post I replied to.
This discussion should have been on the politics thread and we wouldn't have lost a valued poster on real market matters.
Only my opinion which really doesn't matter one hell of a lot.
Nobody believes in U.S. anymore?
Equity funds report net cash inflows totaling $2.959 billion in the week ended 3/9/05 with Non-domestic funds reporting 80% of the Inflows ($2.367 Bil);
Equity funds report net cash inflows totaling $2.842 billion in the week ended 3/2/05 with Non-domestic funds reporting 92% of the inflows ($2.606 Bil); http://www.amgdata.com/
New data point shows continuation of recent trend
Equity funds report net cash inflows totaling $2.959 billion in the week ended 3/9/05 with Non-domestic funds reporting 80% of the Inflows ($2.367 Bil);
http://www.amgdata.com/
Intc may or may not pop AH tomorrow but I think it gets sold Friday regardless... plenty of resistance above the gap.
Spx breakout looks like sh*t. In edit...small chart but takes about 3 seconds to load w/broadband. ?
Nice Welles, shows it very well. Saved for future reference.
Percentage of stocks above 50 and 200d moving averages have not confirmed the rally.
Escalalating raw material costs, no pricing power, and declining productivity growth means lower profits.
"Seasonally, March has little to offer."
http://safehaven.com/article-2706.htm
Hmm... I would guess the commercials and hedge funds are going to be right on this one.
"Commercial interests are holding the biggest net short position in nearly seventeen months. Large traders increased the size of their biggest net short position in almost a year. Small traders increased the size of their record size net long position again."
Triumph of Low Expectations
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
http://www.hussman.net/wmc/wmc050307.htm
It is usually a danger sign when investors extrapolate good economic news by pricing stocks to reflect “new era” valuations. It's even worse for investors to accept “new era” stock valuations when the economic news just isn't that good to begin with.
Friday's employment report was greeted by ebullient commentary that the economy was “firing on all cylinders” and other such nonsense. The reality, however, is that job creation – even February's 262,000 jobs figure – continues to fall dramatically short of even mundane historical norms. The optimism over the February employment report represents little more than a triumph of low expectations over reality.
Since the 1960's, job creation during economic expansions has easily exceeded 0.2% of the labor force on a monthly basis (closer to 0.3% after the first 18 months of an expansion, when the labor market finally gets past the normal post-recession lag in job growth). In today's figures, that would translate into average job creation in excess of 400,000 new jobs per month at this point in an expansion (or any point after the first 18 months, for that matter). Even with the much vaunted expansion of the past year, job creation has averaged less than 200,000 per month - less than half the typical growth rate, and February's figure was so tepid that it didn't even absorb new entry into the labor force, leaving the unemployment rate two-tenths of a percent higher than January.
Meanwhile, investors seem not to recognize that the rapid expansion in corporate profits we've seen during the past two years represents nothing but a typical recovery toward the 6% growth line connecting earnings peaks for most of the past century (the earnings chart from the February 22 comment is reproduced below). While the S&P 500 is again trading at 20 times record earnings (that being a figure seen previously only at major peaks like 1929, 1972 and 1987), one might look at the fact that earnings have not quite reached that 6% long-term growth line, and take comfort in the fact that the S&P 500 is still under 19 times “attainable” earnings from that perspective.
Unfortunately, a multiple of nearly 19 is small comfort when one recognizes that, using those “attainable” earnings on the 6% growth line as a basis for P/E calculations, the S&P 500 has historically traded at just 10 times “attainable” earnings, on average (the median is about 10.5).
An additional problem here is that earnings are presently benefiting from profit margins that are very high in a historical context. To the extent that these profit margins are indefinitely sustainable, it would follow that corporate earnings should grow at about the same rate as nominal GDP in the coming years (6% growth being a somewhat optimistic bogey in the absence of more rapid inflation). More likely, however, profit margins will normalize in the coming years, as they typically have done historically (being among the more reliably mean-reverting economic series). That suggests that prospective earnings for the S&P 500 may fall substantially short of 6% annual growth in the coming years, which would make the current valuation multiples all the more unwarranted.
All of which makes it clear that investors really learned nothing from the 2000-2003 market decline. Though the advance of recent years has not erased the losses since the 2000 peak, and the S&P 500 is still below its level of 6 years ago, the memory of losses has faded enough for investors to once again take leave of their critical faculties. Suffice it to say that the historical record provides very few bases on which investors should expect the current market environment to end well.
As always, nothing in these comments should be taken to suggest that stocks should or must decline over the short-term. Rather, the increasingly defensive tone of these weekly remarks reflects the combination of untenably high valuations and gradual deterioration of market internals (despite continued resilience in the major averages). We're not yet at the point where both valuations and market action are unfavorable enough to justify a fully defensive stance toward market risk. But while we continue to carry a modestly positive exposure to market fluctuations, I am also increasingly convinced that further gains from here in the market will ultimately prove transitory.
If a further deterioration in market internals lies ahead, it would ideally develop in the face of continued strength in the major indices. That often happens during the later stages of bull market advances – breadth, leadership and market internals often weaken even before the major indices do, as investors gradually become more averse to risk. The combination of unfavorable valuations and market action then allows an informed shift to a fully hedged investment position while the major indices are still elevated. Unfortunately, there is not enough precedent to rely on the hope of a timely shift in the Market Climate – certainly not enough to keep a major portion of our investment capital at risk of market fluctuations. So we're already substantially hedged here. Modestly constructive, to be sure, but not enough that an abrupt decline in the market would be of much concern.
In the end, our objective is to achieve strong total returns and risk-adjusted returns over the full market cycle, with smaller periodic losses than a buy-and-hold approach on the major indices. Given current valuations and market conditions, a substantial exposure to market risk would be antithetical to that objective here.
Market Climate
As of last week, the Market Climate for stocks remained characterized by unusually unfavorable valuations and still modestly favorable market action. On a short-term basis, the market appears substantially overbought, which creates additional vulnerabilities.
Probably the two questions that I ask myself most frequently in the day-to-day management of the Funds are ones that come from Chess: “What is the opportunity?” and “What is threatened?” It's useful to remember that overvalued, overbought points in the market often represent very good times to review investment holdings with an eye to those that may be particularly threatened – especially those with substantial volatility that have enjoyed unusually strong recent advances. It's also a point where I typically take opportunities to change the strike prices and expirations of various option positions.
As I've frequently noted, the active management of our option positions (for example, raising strike prices after substantial advances and lowering them after substantial declines) can often offset some or all of the “time decay” of those investments. In general, it is beneficial to hold option premium when the actual volatility of the markets exceeds the implied volatility that is priced into call and put options. That's been the case recently, which continues to support the use of put options to partially hedge the stocks held in the Strategic Growth Fund. Overall, about 70% of the Fund's positions remain hedged using matched long put / short call combinations (which effectively act as interest bearing short sales in the S&P 100 and Russell 2000 indices), while the remaining 30% of the Fund's exposure is hedged with put options only, leaving the Fund with a modest positive exposure to market fluctuations overall.
In the Strategic Total Return Fund, I modestly increased the duration of the Fund's holdings during the recent selloff in bonds. As of last week, the Market Climate for bonds remained characterized by unfavorable valuations and moderately unfavorable market action, so the increase in duration was still limited, currently at about 2.8 years (meaning that a 100 basis point change in interest rates would be expected to impact the Fund by about 2.8% on the basis of bond price fluctuations). The Market Climate for precious metals remains uniformly positive, and the Fund accordingly holds just under 20% of assets in precious metals shares.
Yah...'puter' gremlin
Richard Rhodes Chart
4 year cycle low projects to Oct 2006
Broken wedge on 15 min
I think we retest Thursday low tomorrow
Sheesh...reading that made me dizzy. LOL
Weekly Chart of Ndx. BB width is narrowing suggesting a big move coming. Macd crossed over and turned down. Sitting close to the weekly TL and if thats taken out stick a fork in it cause it's done.
It could be an economy breaking summer for consumer's discretionary dollars. High pump prices kill the Wal-Mart's of the world and other businesses where low end money is spent.
Of course high gas prices have no effect on high end consumer's spending. Hmm?...unless they own the businesses that are being hurt by lower consumer discretionary income.
Variable interest payments are set to take a toll too on those dollars.
I don't think private accounts will happen before Bush's presidential term ends. Secondly, I doubt those temporary tax cuts which helped stimulate the economy are going to be made permanent. In a word...gridlock
If that plays out, your massive rally is only going to set a lower high which signals another bear market IMO.
The Ndx leads and the Dow follows at turning points. My money says a bull market top is in on the Ndx. The Spx should be next to top as the market becomes more bifurcated and the rally narrows to the largest cap safety stocks.
I'm picking up hints of all is not well by reading between the lines of the data releases and news items. The market is choosing to ignore the bad stuff at this time, that's normal until the problems are recognized by more and more participants.
Short the Ndx with a mental stop at the Jan. high. Confirmation for me comes when/if the current trading range is broken at 1480 and all this recent area becomes resistance.
Judging by the bb width the ndx should leave this range soon. I'm emboldened by the weakness of the bounce off the Jan. low and the amount of overhead resistance. My money says down bwdik?
In this tight range da boys are going to determine the next move as it won't take much to get the ball rolling either way...but somehow, my suspicion is the naz is being held in place until the nyse finds it's top.
The key here...
Equity funds report net cash inflows totaling $2.842 billion in the week ended 3/2/05 with Non-domestic funds reporting 92% of the inflows ($2.606 Bil);