Replies to post #1458 on Your Economy (No Politics) (YE1)

[Myself °¿°]

:)

[Bullwinkle]

>>>CYCLE/TREND Update for the week Ahead>>>

Overview:
It's that time once again and as mentioned in my previous update with which this post replies, I stated the following: the Oct 6th Bradley turn appears to be a local top. I am currently waiting on a couple of indicators to confirm whether or not this downturn is of the sticking kind. In the meantime I will be watching earnings news and the price of oil closely. It is my belief that if these worsen, the trend will remain down into the end of the month. So far the earnings news is not too impressive, very few companies being rewarded for beating estimates and others continue to miss. The price of oil is nearing $55bbl which I expect to be taken out in short order. Before going any further, let's review the past weeks Econ #'s...

Economic #'s:
Again not a very good week, but the market has remained somewhat resilient in the face of these troubling numbers and ever increasing oil prices. Import & Export Prices sagged and the initial Jobless Claims rose by 12K to 352K. Trade Balance came in at record lows or an additional -$2.2 billion in the red for -$54 billion Trade Imbalance. Business Inventories and Core PPI nudged higher while PPI remained flat, the NY Empire State Index fell off a cliff, but was buoyed by higher Retail Sales. Capacity Utilization and Industrial Production came in lower and Michigan Sentiment followed suit falling by approximately 7 points. Next week we will get Building Permits, CPI & Core CPI, Housing Starts, Initial Claims, LEI and the Philly Fed.

As a side note and as mentioned earlier, we got little by way of earnings reports. Probably the most impressive to date being YHOO and while some others have had relatively good results beating by .02c to .03c such as JNPR or CREE, the forward guidance and continuing outlook has weakened. Those that have disappointed like NFLX or SNDK have taken 10-15% losses in a day. Most sectors are under fire and even those classified as safe havens are taking hits. We now have more scandals where the insurance sector is concerned, Fannie Mae and drug companies are under scrutiny, Oil is at an all time high yet the market has been reluctant to tank. A stealth activity seems to be at hand. I say this because I see so many weakening areas and very few happy feeling areas, but market reaction does not seem to fit the news. Maybe I am just getting impatient for an absolute break to the downside, a resolution of sorts...

What can we expect now?:
While there appears to be some odd divergences between indices (such as the INDU & OEX leading strongly to the downside while the COMP and others seem to be holding their ground relatively well by comparison) the overall market has continued to stay in a downtrend since the last Bradley turn on/around Oct 6th. We have another turn coming up on/around Oct 22nd-25th. One of the two indicators that I have been watching has yet to confirm that this downtrend will stick. It is the leading indicator of the two that will not confirm and this gives me reason to be somewhat skeptical of the strength of the current downtrend. We have a P/C ratio that seems to hover between 1.2 and .80, no extremes one way or the other, just an eery oscillation of sorts. Then the $NASI and $BP Indices are slightly bearish, but mostly inconclusive. At this time I basically expect us to continue in an awkward state of flux with a downward bias until after the election. From there we could very easily break one way or the other although one must take into account that we may have a repeat of the Y2K elections where we do not get a decisive election victor. If the results are not clear we will most definitely see a sell off.

NOTE: I continue to hold a USPIX position

Disclaimer: This disclosure is not a recommendation to buy or sell or to do as I do. It is to let people know what I think about current market conditions, what it is that I am doing and for no other purpose than to create a track record.