Friday, February 29, 2008

Miserable sellings in light volume until last 30mins





Markets were trading in very low volume not until last 30min as shown on the Qs 1m chart as example.

ARM crisis: a big regulatory failure

ARM crisis: It's a big regulatory - policies and procedures - failure.

Then, being greedy, not taking the responsibility of "regulatory and policy failure" by the industry in the first place. The "relief plan" is just a small help mitigating the regulatory/policy failure.

Paulson does not show integrity in his words as he was preaching strong USD since he was appointed after John Snow.


Strong Dollar in U.S. Interest

Paulson also touched on currency matters in response to questions from the audience at the Economic Club of Chicago. He said he believed a strong dollar was in the best interest of the United States.

In early Tokyo trading on Friday, the dollar fell below the psychologically important level of 105.00 yen and slid to 104.60 yen, its lowest since May 2005.

Thursday, February 28, 2008

Bernanke is duped by da boyz




Bernanke is blind. Where did TOMO go? da boyz is working against Bernanke hyping commodity.

Looks like big houses/funds are taking money from Bernanke/the Fed/Traders/401k holders.

Bernanke denial of stagflation or recession

DISAPPOINTMENT: The Fed didn't control housing market lending industry so that many lost money and are in financial trouble. Furthermore, Bernanke is not willing to lower LT interest rate to relieve financial pressure which many are facing.

Bernanke is not doing much to help out economy and many who are in need of lower interest rate, as he is denying that we are in stagflation or in recession.

Markets performed poorly with the Fed encouraged commodity hype as example Goldman on oil drillers.

Is Bernanke planning to take money out from the market at the same time when many are already in distress?

Markets formed double peak without making higher/high price action, i.e. SPX 1388 vs 1396.

Weekly price action shows very oversold since market remained in a tight range.

Bernanke is just sitting tight, and does not do much even though, remember, many are already or almost dead because of induced mismanagement of their finances. The Q&A reflects Senate Banking Committee does not want to step over Bernanke's management realm so that they can only ask questions after the facts.

Wednesday, February 27, 2008

Bernanke & Senate Banking Committe

2nd day: Bernanke What is it good to hear "blame-games" while they didn't do anything when it is happening.

Senate Banking Committee is doing nothing but playing blame games.

That many seats in the committee are sitting around doing nothing until big problems blow off. Even after the problems have fallen on their laps, they are still sitting around and doing nothing, except playing blame games.


~~~


Bernanke starts the first of two days of testimony at 10am ET Wednesday before the House Financial Services Committee. On Thursday, he gives the same testimony before the Senate Banking Committee.

Sunday, February 24, 2008

Bernanke Testimony & Eco numbers

What: Federal Reserve Chairman Ben Bernanke delivers semi-annual economic outlook testimony to Congress

When: Wednesday, February 27, at 10 a.m. EST. and Thursday, February 28, at 10 a.m. EST.

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

The ECO numbers will be horrible. God, have mercy.

~~~

The super rich is allowing the commodity bubble as the price is hyped through media and push the price up.

I think that we see price-hype on certain items and expenditures and obviously general costs of living is up, but not as high as we could be faced with.

COT



COT: As usual, large speculators are bearish. Interesting mix of net positions ES vs NQ. NQ shows a visible contrast between commercial vs large speculators.

DIS

DIS is trading at resistance 33.50 +/-, confirmation breaking above 35.

Many stocks are sold into the recent correction as pessimistic market sentiment pulled down many markets.

With the negative news on financial sector is getting less dramatic as we are hearing write-downs and buy-outs, I think that markets will find supports at the IT support as noted on the previous posts. Nevertheless, we have higher risk being in the market.


Barron: DIS is cheap. Lately, we have seen some unreal hyperbola price actions, such as DRYS, and the traditional blue chip companies did not see price-appreciation. Compared to the 2000 PE, we have lower PE now.

New Buzz Word

Since last week after a new wave of Commodity hype, we are hearing the buzz word, stagflation. As noted before, all bubbles and busts are manipulated by the super rich. There is no mania which is out-of-control based on my market analysis.

~~~

I'm not much of a believer in the Phillips Curve, the trade-off between employment and inflation, but with all the stagflation talk, it's worth taking a look.

This data is from 2000 to the present. The X-axis is the unemployment rate and the Y-axis is the trailing 12-month core CPI. The arrow points to the data from January and December.

All the data I used is from the government, so consider it at your own risk. Actually, I'm rather surprised by how well the curve holds up, meaning the dots seem to run diagonally from lower right to upper left. (Well, sort of...the R-squared is 0.3734.) If we're in stagflation, then this relationship should breakdown and the dots would start drifting to the upper right. So far, that isn't happening.

At least, not yet.

http://tinyurl.com/2mjyl6

Saturday, February 23, 2008

Markets trading at LT/IT supports in ST triangles



SPX trading near at LT support TL and 50 monthly ma as it was during 1987 and 1990. As noted before, the % correction is a fractal of 1998.

Weekly price actions are also trading near at IT supports as shown on the weekly chart on the link.



Markets are trading above weekly moving average 200 supports even though markets traded below IT trend supports. Markets are oversold in intermediate term.

The recent correction is not a surprise, as noted going into the recent correction, even though the correction period was short and similar as a bull market correction. Having said that, the market sentiment is pessimistic with commodity price hype, especially during the last week. Instead of being bearish on commodities after the recent bubble, we have a new wave of bullish comments during the last week. The additional mania on commodity does not bode well for markets. Nevertheless, the speculation is based on the global demand, international companies will do well.

Bernanke and the Gov is faced with the art of managing skill to direction the current economy. I think that they will do fairly well even though they are faced with massive pessimists.


IT trendlines shown on the weekly charts on link.
http://investorshub.advfn.com/boards/read_msg.asp?message_id=26527491

Thursday, February 21, 2008

Another day...



Yo, yo bleeding market with the TS Paulson short greedy selling with the morning economic news.

~~~


Appearance is similar, but Not 1970s stagflation even though we see high commodity price hype -- NEED TO PLANT MORE CROPS in China and in India and to invent brilliant alternative energy sources -- because the price speculation on commodity is based on "GLOBAL ECONOMY & DEMAND". Other commodity components are not vital necessities.

I noted "1998 scenario", but not with "1999" beta, but with lower beta.

Remember Bernanke speech on 1970s high inflation anticipation titled with "Price Stability", as we are seeing the similar phenomenon as traders are hyping prices with high inflation anticipation, but the nature of the speculative hype is based on different reasons, i.e. global economy and demand.

~~~


When traders are hyping commodities, its effect is no-brain answers.



Big, scary terms like "recession," "inflation" - and the latest in the hit parade of economic fear - "stagflation," throw intense anxiety into the public heart as harbingers of doom ahead.

For smart investors, though, down times are signals of opportunity, a chance to capitalize on the irrational panic of headline-sensitive chicken-hearts.

Wednesday, February 20, 2008

SPX in a symmetrical triangle formation



SPX traded to 1363.71 near to upper trendline resistance then closed at 1360.03 with a triangle formation. As shown on the ew chart in additions to other previous comments which noted earlier, markets are showing positive divergences after the significant intermediate correction which noted going into the start of the correction. Since then, we have, as the Fed noted today as shown below and as noted earlier financial sector crisis after the R.E. top in 2005; nevertheless, markets and economy is relatively sustaining "Stability" without major crisis as we are seeing in certain sectors.

It is extremely easy to be a bear at this time as most of us are familiar with the fragile market sentiment which is going on since Feb 2007 after real estate market has topped in mid 2005.

Markets have gone through a few heart-attack like situations during the last 12 months; however, emergency, preemptive actions taken by the Fed have stabilized markets being totally dead, breathless after actual heart-attack like situations, a.k.a. market crash.

Redirecting to the excessive pessimism, as noted, it is very easy to be a bear at this juncture; however, markets are still at a point where counting on the last hope that we are not in a bear market as the last support area to keep the upside target to near SPX 1600-1650 area during this year.

It is obvious by now that bearish EW bias is that we are on the way to the completing the wave 5 which could be "A" of a cycle correction; however, considering the factors which noted before I think that we could see SPX 1600 +/- during this year. Of course, this is not the predominant market sentiment, but market level is not dominated my majority opinion, but it often pays off to take positions against crowd sentiment even though there is a trending period when majority opinion will be right. I think that we had bearish sentiment with confirming market price actions during Oct 11, 2007 - Jan 23, 2008 which is a IT correction.

It is obvious that we have some technical damages as we can see on the LT trend lines; however, that is one of the characteristics of Intermediate term correction. In this case, 38% of Oct 2002 rally in 8 year cycle.

Tuesday, February 19, 2008

Strong market, low oil price, low debt... Clinton + Clinton






Clinton had the best management of US resources.

Strong market, strong USD, lower debt, lower oil price...

Clinton + Clinton looks like the best deal which is a mild way to describe the current condition. It is sickening to deal with our bad economic and geopolitical issues with oil price hitting $100.

CME data feed sabotage, then, OIL to 100


Oil trading near 100 after they sabotaged CME data feed, then, jack up oil price closing at 99.70 up 4.5% today.

Goldman recommended oil drillers today.
It is armageddon.




TS Paulson appears on CNBC at 1pm +/-. Paulson is toying with Bernanke.

Based on observation, Goldman must be short since everytime Paulson shows up, markets show blood.

http://www.cnbc.com/id/15840232?video=656163761&play=1

Paulson on the Economy
In an exclusive interview, Treasury Secretary Henry Paulson offers insight on the Treasury Deptartment's 30-day pause in foreclosure proceedings, with CNBC's Steve Liesman.

Friday, February 15, 2008

Thursday, February 14, 2008

Bernanke who is an analyzer became the Paralyzer



re Bernanke, not sure why we call him, "Helicopter Ben", as he is a type of an "Analyzer" becoming the "Paralyzer".

As we can see, Bernanke is paralyzed by bears.... can you hear he is starting to shake.

Furthermore, he looks to be a greenspan go-fer, sandwiched between the TS Paulson bear and greenspan bear -- at the moment as piggy bears.


THE WHINERS

Marc Faber in euro is envying Bernanke as Faber is no body while Bernanke is the Fed Chair. The two are academically smart. Sick of hearing his gloomdoom... just sick of hearing his whining at Bernanke as if Bernanke is the blame. He should have whined at his friend greenspan when he was creating all the problems. As long as I know Marc, he is just a big whiner. Whine, whine, whine.

http://www.gloomboomdoom.com/portalgbd/homegbd.cfm

How we would know the stimulus package is working

Bernanke said that he needs to watch the following three areas:

1. Housing market - consistent numbers
2. Labor market
3. Credit market

as he answered a question, "how we would know the stimulus package is working."


~~~

Federal Reserve chief Ben Bernanke Thursday said the outlook for growth was sluggish at best, even as the government reported record exports trimmed the U.S. trade deficit last year, suggesting the economy at the end of 2007 was not as weak as earlier thought.

http://www.cnbc.com/id/23167378

~~~

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke told Congress on Thursday the central bank will act as needed to help the struggling U.S. economy, but it has to be mindful that growth should pick up later in the year.

The Fed "will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks," Bernanke told the Senate Banking Committee.

He said the outlook for the economy had worsened in recent months and risks to growth had picked up.

However, the central bank chairman also said he expects sluggish growth to give way to a somewhat stronger expansion later this year and the likely effects of fiscal and monetary stimulus now put in place had to be considered in determining the appropriate level of interest rates.

http://news.yahoo.com/s/nm/20080214/bs_nm/usa_economy_bernanke_dc_5

Historically, there has not been too much love on average from Wall Street on Valentine's Day

Historically, there has not been too much love on average from Wall Street on Valentine's Day. On average the major indices have been flat on Feb 14.

* Avg Dow percent move of +.05%
* Avg S&P percent move of -.08%
* Avg Nasdaq percent move of +.07%

Breakout from symmetrical triangles

SPX closed at 1367.21 above 1365 +/- R with a break above upper symmetrical triangle DTL and with a break above a C & H formation.





Breakouts above the recent downtrend lines




Bernanke Preview

I think that rate cut in the future to 2.5 will be helpful to soften the ARM crisis and to rebound our economy.

~~~

The markets are, however, expecting at least one, maybe two, additional rate cuts. The consensus is for a half a point reduction to 2.5 percent at the March meeting.

Economists are divided on whether the Fed boss should signal anything in that area, other than to indicate that policymakers stand ready to act if and when needed.

Jones says Bernanke should “try to disabuse the market of thinking he will cut between meetings, but he could “allude” to the fact that he’s ready to cut again, very likely at the March meeting.

“I don't think he is going to hint that more is in the cards,” counters David Resler, chief economist at Nomura International “No one should conclude the next rate cut either in its magnitude or timing is baked in the cake.”

http://www.cnbc.com/id/23147550

Addition and subtraction

This is a good comment as I was wondering the effect of addition and deletion of DOW components as I haven't done analysis on the subject.

~~~

The Dow Jones Industrial Average was prominently in the news Monday not only because it eked out a small gain of 58 points, thereby overcoming weakness earlier in the session.

A lot of attention was also paid to the announcement that two stocks would be deleted from the 30 that make up the Dow Jones Industrial Average

Since then, the four deleted stocks have gained an average of 27%, while the four stocks that were added have produced an average loss of 40%. The Dow itself over this period has gained 14%. (These calculations do not take dividends into account; the difference between the average addition and deletion would be even greater if dividends were included.)

In other words, the Dow would be higher today if the list of companies making up the Dow had not been changed in 1999.

According to Norman Fosback, editor of Fosback's Fund Forecaster, the Dow would today be more than twice its quoted level had IBM not been removed in 1939.
Are these examples typical of all changes made over the past 110 years? I don't know, since I have not gone back and calculated the returns of all stocks that were added or deleted to the Dow subsequent to its creation in 1896. But I wouldn't be surprised if the average deleted stock has outperformed the average addition.

That's because companies that are added often are coming off a period of dynamic growth. A company that is substantially out of favor typically does not get added. This skews the Dow towards the large-cap growth sector of the market, which historically has underperformed smaller stocks and issues that are closer to the value end of the value-growth spectrum.

There are exceptions, of course. Bank of America, which is one of the stocks that will be added to the Dow later this month, is down significantly from the high it set a year ago. But, notwithstanding the recent turmoil in the sector, the financial industry has dominated the bull market over the last five years. Though there are some who would disagree, I would be hard pressed to classify it as a value stock.

In any case, if it were indeed the case that the Dow's deletions have, on average, been better performers post-deletion than the stocks that replaced them, it would be in good company. The same is most definitely true for the S&P 500 index (SPX:
S&P 500 Index

I can say this confidently, because that is what Wharton University finance professor Jeremy Siegel found upon carefully studying additions and deletions to this index since its creation in March 1957. He calculated the return of a portfolio that bought the original 500 companies in the index and made no other changes over the next 51 years. This portfolio therefore continued to hold each of those stocks, even if Standard & Poor's took it out of the index. In the event any of those original 500 stocks was taken over by another company, the portfolio would have continued to hold whatever compensation received from the acquiring company. And, finally, this portfolio would not have bought any of the additional companies that Standard and Poor's added along the way.

Believe it or not, according to Siegel, by last year this pure buy-and-hold portfolio would have, on an annualized basis, been 88 basis points ahead of the actual S&P 500 index. What this means is that the net effect of all changes to the S&P 500 index over the last 50 years has been to markedly reduce the index's returns.

In an interview Monday afternoon, Siegel cautioned that this pattern that he documented for the S&P 500 could very well be weaker for the Dow, since a company will more automatically get added to the former than the latter by virtue of its market capitalization growing big enough. So the S&P 500 will be even more skewed to the large-cap growth sector than the Dow.
Still, at a minimum, Siegel's findings, coupled with the performance of the stocks added and deleted to the Dow over the last decade, make it clear that you should neither automatically buy the stocks that are being added to this index, nor automatically sell those that are being deleted.
Indeed, given the data presented in this column, a contrarian might consider selling the additions and buying the deletions. End of Story

The Nifty 50: Rebound Stocks

When the economy rebounds, where's your portfolio going to be? UBS says that's a question to answer right now.

It's an update on an old concept. UBS has released what it calls its "'New' Nifty Fifty," a list of 50 companies from around the world that can use today's troubling market conditions to position themselves to thrive when the economy rebounds.

he original UBS "Nifty Fifty" dates back to the 1960s and 1970s. It was a list of 50 securities considered to be solid "buy and hold" stocks, stocks viewed as extremely stable, even over long periods of time.

In compiling its new list, UBS took four key factors into consideration:

  • Large capitalization
  • Global exposure
  • Strong product offering
  • Low operating and financial leverage

UBS says companies that compare favorably to their competitors on these four points should be in good position to gain market share, and to have more to gain when demand picks up again.

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