>
Nice move up in the market today — we are now back over 10,000, by about 250 points (put those hats away).
Was that it? Is the Correction over? Everything now back to normal — or not?
What is on your collective minds — anything got you nervous, excited, concerned, worried?
Its time for a post rally open thread!
What say ye?
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Money is power, & you ought to be reasonably ambitious to have it." —Russell H. Conwell, Temple Univ, 1877
"It's the end of the world as we know it and I feel fine" say the French as consumer confidence in May rose to the highest since Nov '10 as they welcome and get excited about new Pres Hollande. Also, the French 10 yr bond yield touched the lowest on record this morning. June consumer confidence in Germany held at 5.7, just .2 pts off the highest since Mar '11. To the euro bond debate which is now taking on greater rhetoric with those with high bond yields wanting them and those with low ones saying no way, ECB member...
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June 2nd, 2010 at 7:12 pm
The correction, although steep and scary, was actually very typical. We had a big drop, a recovery, another big drop, and a high volume reversal.
So far the rally back has also been very typical. Strong rally, resistance sell-off (@ 200 DMA), and a follow-up rally (that should break the 200 DMA in short order).
I am rip-snorting bullish right now.
June 2nd, 2010 at 7:19 pm
The DOW is stuck in a 10,000 funk. BP’s fiasco is still to play out. Europe is in bad shape. The Chinese bubble has lost it’s bubbly. Airlines are bleeding red ink. Retail is showing serious weakness. The Fed will probably have to raise rates to get anyone to buy our bonds, and we have the Thursday jobs report to deal with tomorrow.
The market has nowhere to go but down.
June 2nd, 2010 at 7:22 pm
@Marcus: I think that was the intelligent response BR was looking for. Without having to put his name on it.
June 2nd, 2010 at 7:23 pm
“Back to normal?”" ??!?! Yawn.
June 2nd, 2010 at 7:24 pm
@Marcus: But don’t discount a blowout jobs number jacking things for a while, however flimsy in reality that number may ultimately be.
June 2nd, 2010 at 7:25 pm
Little volume. As ZH would say, only the SPARC’s know for sure what is going on.
June 2nd, 2010 at 7:25 pm
Personal BK’s are up? What could be more bullish than that? Get that debt off the books and start lighting up those credit cards again! We got an economy to stimulate here.
http://www.calculatedriskblog.com/2010/06/personal-bankruptcy-filings-increase-9.html
June 2nd, 2010 at 7:26 pm
I don’t trust this one, started gapping all over the place at 2:00 PM cst. Expecting a “blowout” jobs report tomorrow, until reality sets back in. Good for a quick long play though. ( 12 hr. ) hold. It’s good to be a fish right now. No pun intended, i live on the gulf coast, this is bad…
June 2nd, 2010 at 7:26 pm
If today’s bounce was based on housing report then it’s a headfake
With the tax credit now gone, “the housing market has to get back on its own feet” said the NAR chief economist but he thinks it will “provided the economy continues to add jobs.” He estimates the tax credit “brought close to 1mm additional buyers into the market” but states one problem and that is closing the purchases by the June 30th deadline to get the credit as short sales approval by banks and ongoing appraisal issues have “brought long delays.” The NAR has thus “asked Congress to provide flexibility on the deadline for closing.”
June 2nd, 2010 at 7:28 pm
Bullish for the next 3 days. Job numbers will show improvement (however doctored those numbers are with the BD adjustment, census etc). EURUSD will not break the 1.2150 level for some time to come (the ECB makes sure of that).
So despite that the end-result is quite clear, we have some ways to go. Still a ton of options to manipulate this market. I suspect volatility will be maintained so the HFT/algos make decent money at the expense of human traders.
June 2nd, 2010 at 7:30 pm
Another regulator compromised?
Has the FCC’s efforts to censor broadcast profanity run amok? Between Jimmy Kimmel Live and Late Late Show’s Craig Ferguson, there sure seems to be a lot of bleeping going on!
Here’s Craig Ferguson’s cute white bunny getting the better of the FCC.
http://www.youtube.com/watch?v=1bZlEpQUCWs
June 2nd, 2010 at 7:32 pm
Dow 25000 baby!
June 2nd, 2010 at 7:34 pm
here you go BR- off topic- so feel free to delete at your discretion-
FHFA Proposed New Rule for Low Income Families
Federal Housing Finance Authority- proposed new rules to serve very low-, low- and moderate-income families in three specified underserved markets — manufactured housing, affordable housing preservation, and rural markets.
“The proposed rule would also establish a method for evaluating and rating Enterprise [GSE's] performance in each underserved market for 2010 and subsequent years and describes the transactions and activities that would be considered for compliance. The Enterprises would be evaluated on four statutory assessment factors- rule # 1 says:
the development of loan products, more flexible underwriting guidelines, and other innovative approaches to providing financing
wow- I thought we just went through this nonsense-
in the end- innovative approaches may get someone in a house- but it doesn’t pay for the furnace that breaks, the roof that needs repaired, the A/C unit when it stops and the appliances when they quit running-
the USA hard had work trying to get people into homes that they can’t afford nor maintain-
because we are an ownership society- right BR?
June 2nd, 2010 at 7:41 pm
We’ll trade up to the 50day sma on the S&P and then back down another 1000 points into July 2010.
June 2nd, 2010 at 7:41 pm
re: jobs…
Two more Census workers blow the whistle
http://www.nypost.com/p/news/business/two_more_census_workers_blow_the_OqY80N3DBTvL17VmxKKR0O
June 2nd, 2010 at 7:44 pm
Great buying opportunity. This is a classic test of the February low. We hand a very bullish hammer or star candle on 5/25 that looks a lot like the sign of a bottom we got on 2/5. Today was outside engulfing, which means the selling pressure is exhausted and the bounce can take off.
I am long term bullish on XLE and OIH. The Democrats can talk clean energy and no mor drilling all they want; but they cash the campaign contributions and life goes on. The fastest way to restrict demand for energy in the US would be to raise taxes on gasoline 25 cents a year for ten years. This would bring us in line with Europe on gas taxes and people would actually want to drive those tiny 40 mpg cars. Show me ten Democrats with the balls to propose raising gas taxes by $2.50/gallon and I will say you are still 50 short in the Senate of passing that bill.
The most bearish sign I can find is that I am buying.
Remember to stay humble or Mr. Market will teach you again about humility.
June 2nd, 2010 at 7:49 pm
Midpoint plateau.
June 2nd, 2010 at 7:55 pm
I have a feeling that some of the rumored monster job number of Friday is already priced into today’s rally…maybe start shorting Thu pm…
June 2nd, 2010 at 7:56 pm
“Everything now back to normal — or not?”
_______________
Yes. Everything is back to “normal.” Today’s market action proves it.
June 2nd, 2010 at 7:57 pm
Oops, I almost forgot:
Oy.
June 2nd, 2010 at 8:01 pm
You have to think the NFP will be as juiced as it gets AND the economy even added a few jobs, this Friday and next month. Obama needs the political cover and the data will bare this out whether it’s real or not. Look for the big EUR/JPY rally on no volume after the resignation fact, the ES will follow. The fix is in. The Sunday news shows have to be redirected away from the GOM. Expect a full-court press from the O-team from now through the 4th of July. We can return to “normal” after that on “light summer holiday” volume when nobody’s looking.
June 2nd, 2010 at 8:02 pm
papered over trumped up BS recovery…..109 months of housing inventory-our only large manufacturing business left(until they figure out how to stick em’ in containers)…HELLO?….back to 6500 in 2 years……at times a traders market til then…..
we are england in1900-don’t you get it?
June 2nd, 2010 at 8:08 pm
Volatility still high. Trend still firmly down even after more than four weeks. Euro intervention keeping trade imbalances from completely blowing out. Hmm I’m still worried. Actually even if the market recovers I don’t expect it to be sustained longer than is required to from a right shoulder. In fact I’m surprise how weak and volatile the market is just now and don’t exclude the potential for another waterfall in the not to distant future.
June 2nd, 2010 at 8:10 pm
I like ZH’s take-
As a result, due to the BLS’ voodoo math and double counting, its is distinctly possible that the Census alone will add up to 507,779 workers (organic hirings of 417k and the plug for the prior period of 90k). Also, recall that the Birth-Death adjustment in April “added” another 188,000 workers. Retaining the same level of statistical adjustment, and the May NFP number will be at 700,000 before even one real full-time person has been added to the economy in the month of May!
hells yeah- good times are here again- who cares if no one real person was added to the economy- irrelevant-
it’s all a confidence game- and the market makers will push it how they can-
but the regular schmoes aren’t buying it- they know there is no recovery from the debt induced bacchanalia of the last thirty years- because they aren’t borrowing and they aren’t buying
June 2nd, 2010 at 8:11 pm
Individual Investor…Very Nervous, here.
Don’t know who to trust for my investments, anymore.
Richard Russell, Dow Jones Theory …scares us. “SELL EVERYTHING” he says.
then there’s Hussman of Hussfunds (the Perma Bear)….Sell, Sell, Sell!
Black Swans…Corrupt Government Reporting (to this long time watcher…it’s been corrupt for so long I gave up believing after Enron and that’s after being skeptical after the Savings and Loan Collapse when we bailed out all that stuff and I’ve seen the SHARKS who profited from it in the HOUSING/RESORT INDUSTRY BUBBLE that followed!
I don’t know who to trust. I’m close enough to retirement I’m forced into a 401-K/IRA that are locking me into very limited investments. I managed to roll over part into an IRA that I can manage….but I can’t deal with the account like a “TRADER” would because it’s too expensive and I had to pick a “Manager” that my “PLAN” would allow.
My individual Investments that I (WE) manage have been good so far for 20 years…but even those investments are starting to look weak in this market again. I (we) did good in Real Estate…we Have NO DEBT…we’ve manage to maintain (at our lowest a steady 7% or more in our “Own Manged Accounts” for 25 years. It wasn’t until we had job changes and were forced into the 401-K/IRA stuff that we suddenly started to LOSE MONEY… (Our Employer forced us into American Accounts in 401-K that put us into American Funds where we lost BIG in the last crash) Our 401-K was limited from our other imployers so we had some choice but not like in our “Personal Portfolio” (the one we managed that’s doing very well)
I don’t know how the average younger person today can deal with the CRAP that’s going on in their Retirement Accounts. But, I believe that Obama is going to go with Wall St. and force the rest of folks into the Stock Market and that will be GOOD for the Market…but if I were in my 20′s, 30′s today…I would fight like hell to keep Social Security WHOLE so that I would know I actually might have something to live off when they get rid of all the Social Programs that Republicans and Palin/McCain Types want to do away with.
I don’t know what to do with my money…we have not been given much alternative. I have CD’s and Money Market accounts /Series E Savings Bonds and am about 2/3rd’s in CASH. But, if the rest of my portfolio in my 401-K and IRA go down…I will take a big hit for my retirement.
I’m SICK OF IT! I wish I’d put the stuff under the mattress when Bush stole the Presidency back in 2000!
June 2nd, 2010 at 8:12 pm
Actually my version of the weekly SP500 chart is looking really very grim. The ten week moving average has firmly crossed below the weighted ten week moving average calculated on the ten week moving average. This cross has been reliably grim in the recent, weekly time frame, past.
June 2nd, 2010 at 8:12 pm
Paul Kedrosky has a good post here:
The World Goes Middle Class, vs. the Case for Less
http://paul.kedrosky.com/archives/2010/06/the_world_goes.html
June 2nd, 2010 at 8:17 pm
@ Takbak04 I’m sure your sentiments are very common. That is one reason why I don’t see good things ahead. Fear is back.
June 2nd, 2010 at 8:25 pm
Second shoulder beginning. EuroTarp gap is going to be pretty heavy resistance, which will be very interesting when the jobs report (expected to be gangbusters) comes out. Will the market be able to close the gap on the upside? Notice how the top of the gap coincides with the first shoulder (this will be the zone i’m watching).
If we don’t have bad news for the rest of this week (expected) or next (keep an eye on retail sales and mortgage applications or more geopolitical/euro news as possible downside catalysts), the market could possibly nullify the head and shoulders, but if we get more bad news (which I expect), then the path of least resistance will begin to be lower.
June 2nd, 2010 at 8:26 pm
The President and Vice President have the employment numbers AND comment… Pump and dump…
Next they’ll leak the Citi earnings…
June 2nd, 2010 at 8:33 pm
Simon Says:
June 2nd, 2010 at 8:17 pm
@ Takbak04 I’m sure your sentiments are very common. That is one reason why I don’t see good things ahead. Fear is back.
————
Yes…I read everything I can about Global Economics…and it’s not looking good from what I’m seeing, either.
It’s just incredible to think that this wasn’t forseen! A Global Meltdown caused by “Investment Banks” that over two years ago in America caused a major meltdown, influenced a Presidential Election and that only NOW is Europe seeing this? And, only NOW is CHINA seeing a Florida/Nevada type melt down in their Real Estate Markets?
Give me a BREAK…. Just like “Who Could Have Known about EVERYTHING!” From “9/11 down through the Gulf Oil GUSHER! And those “Three Stooges” from BP and US Coast Guard” using “Top Hat, Top Kill, Junk Shot, Robot Saw Through” and the rest while they FAIL AND FAIL AND FAIL …and peoples LIVES, HOMES, SAVINGS, LIFESTYLES, and the ENVIRONMENT AND THE NOURISHNG Wildlife and EcoEnviornment of the Gulf Coast of the US go down into a DEAD ZONE for Decades or more.
What kind of HIT to our ECONOMY will the whole Gulf Coast as a DEAD ZONE make?
As long as the Banksters PROP the Market up with our TAX DOLLARS in this SCAM….it could GO ON FOREVER! OR, can it?
I don’t believe it CAN….it is a disaster and anyone telling us it doesn’t matter is an IDIOT trying to get the LAST DOLLAR OUT OF our DEAD COLD HANDS! PROFITEERS!!!
June 2nd, 2010 at 8:33 pm
I’ve been a buyer into this pullback — but its a trade, not an investment
June 2nd, 2010 at 8:45 pm
I’m going to change my name to TheSkepticToTheNthDegree! Corporate America is not laying off massive amounts of people because things are looking rosier out there. As the blind lead the blind in Washington.
June 2nd, 2010 at 8:53 pm
Notice that no one in government talks about “Investors” anymore? They call it “The Market”.
As long as the Fed keeps giving the big banks nearly free money to play the casino, they don’t need “Investors”.
June 2nd, 2010 at 8:55 pm
Auto production up 18% yoy, home sales up 22% in April yoy, airline passenger revenue up 12.5%, construction spending up 2.7% April over March, 550k census workers as of mid-May. Don’t know if it will stick, but Q2 should be a knock out.
June 2nd, 2010 at 9:02 pm
@ TAKBAK04,
I’m a working middle class in late 30′s.
I’m about 70% Gold/silver and 30% (IRA) in Emerging market.
Let me make my case…
US, EU, Japan… pretty much most developed countries are in severe debt. It’s so bad that the only way out for them is money-printing and inducing inflation, which will erase the debt (or make it servicible). All the currencies (Dollar, Euro, Yen etc) are fiat currencies, not back by anything but “faith and full credit” of the state, which means nothing.
Gold is stabilizing at $1200 now, probably off to $2000 in 2010, then off to $5000 and beyond in several years. The prediction is from Mr. Jim Rickards from Omnis inc, the economist that I respect highly… he is the one that negotiated Drexel and LTCM rescue.
Protect yourself. No one can take those (physical) gold coins from your possession. Educate yourself about gold. I always hated gold, but I also hated golf until I took it up!
June 2nd, 2010 at 9:05 pm
FYI, I sold all my stocks, except for some gold/silver mining stocks, and the emerging market vanguard fund that I will depend on in 30-40 years.
I think the developed countries (US, EU, Japan) are very “risky,” while the emerging markets (China, Brazil, India) are “safer” in terms of the investment performance going forward.
June 2nd, 2010 at 9:09 pm
Great point, Tarkus. Hadn’t thought of it that way but you’re right, which is why “the market” is not place for real “investors”.
June 2nd, 2010 at 9:10 pm
4 great iPhone apps
http://money.cnn.com/galleries/2010/technology/1002/gallery.great_iphone_apps.moneymag/index.html
June 2nd, 2010 at 9:11 pm
Lets see:
The negatives
1) Europe’s economy in the toilet. But the US will grow because of exports…
2) “From the American Bankruptcy Institute: May Consumer Bankruptcy Filings up 9 Percent from Last Year ” – Good thing we are recovering!
3) this morning, BofA’s credit loss mitigation executive, Jack Schakett, said the amount of strategic defaulters … are “more than we have ever experienced before.” – But isn’t housing so much better?
4) The seasonally adjusted Purchase Index decreased 4.1 percent from one week earlier. The Purchase Index decreased for the fourth consecutive week and is currently at the lowest level since April 1997. But how is that? Isn’t today the best time to buy a home?
The positives:
Counterfeiter in Chief:
WASHINGTON -(Dow Jones)- President Barack Obama, speaking Wednesday at Carnegie Mellon University on the economy, said he expects strong job growth to be reported Friday.
Conclusion: Dow and S&P will rally all kinds of crap will be done to make sure that the illusion of “recovery” sticks for a while. BTW DOJ launching a criminal investigation against BP. Nothing against the banks. So basically this administration has proven to be own by bankers but not foreign oil companies.
June 2nd, 2010 at 9:12 pm
I’m wondering is there a database of individuals holding > stocks, bonds, pension funds, commodities, cash in the bank > indexed by age group ie generational .. outside the government?
I suppose the database would need a super-computer complex to access net worth of the population for retirement days on any given day of market movement.
June 2nd, 2010 at 9:13 pm
Dave Fry’s NYMO indicator says things could go either way for the next few days [http://www.etfdigest.com/davedaily/article/the-yo-yo-market-continues] …
Calculated Risk has personal bankruptcy filings on a tear (hardly a sign of prosperity, one would think) [http://www.calculatedriskblog.com/2010/06/personal-bankruptcy-filings-increase-9.html] …
and Jesse’s Cafe Americain is roaring about Obama’s drumbeat of “improved” employment numbers demonstrating definitively that we have another “MISSION ACCOMPLISHED” and it can only be onward and upward from this point forward, at least until the clouds dissipate and Wile E Coyote sees how far down it is to the ground [http://jessescrossroadscafe.blogspot.com/2010/06/obama-gives-hint-look-for-hot-jobs.html]
— oh, and Jesse also has a link to the latest Rolling Stone broadside by Matt Taibbi on how financial reform was snuffed — highly recommended [http://www.rollingstone.com/politics/news/;kw=%5b36899,157778%5d?RS_show_page=0] … Matt can certainly write. Can you imagine if the WSJ had the stones to print his stuff?
As for lil’ ol’ me, the smoke/fog is certainly getting pretty thick, and honestly, I’ve been spun so much that I can’t tell whether I’m comin’ or goin’. I do feel that whatever happens over the rest of the week, it can’t last more than another week before plunging back t’other direction (whatever that direction is), and if I don’t wanna get stabbed in the back, I oughta cash in my chips and leave the game for a while. The bets are gettin’ too steep for me to call, and frankly, I’m not all THAT confident of the cards I’ve been dealt. The deck could most definitely, possibly be stacked.
June 2nd, 2010 at 9:13 pm
@ TAKBAK04,
The latest interview from Felix Zulauf, a long-time Barron contributor.
He makes my case elegantly. Just like him, I am expecting a few years of deflation in the US, followed by the currency crisis with hyper-inflation.
In this case, the last thing you want to hold is, cash and bonds.
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/28_Felix_Zulauf.html
June 2nd, 2010 at 9:20 pm
@Tarkus 8:53 pm
I think that the Wall Street cavemen ran the last of the “investors” over the cliff back in ’08, and are now just sucking the marrow from their bones in the pile of carcasses at the bottom of the cliff.
Didja ever wonder how the early human pack hunters got by after they drove the mammoths into extinction? Maybe they had to invent “farming”? (aka “investing”)
Or maybe they invented “war” and turned on each other.
June 2nd, 2010 at 9:21 pm
Unemployment drops in 90 pct. of metro areas
WASHINGTON — Unemployment rates fell in April for more than 90 percent of the nation’s 372 largest metro areas as hiring picked up around the country.
The Labor Department says the jobless rate dropped in 346 areas last month. It rose in only 12 and remained flat in 14.
That’s much better than March, when unemployment fell in 257 areas and rose in 89.
Much of the improvement was seen in Midwestern regions with significant manufacturing operations. Manufacturers, who added 44,000 jobs nationwide in April, are benefiting from increasing overseas sales and efforts by retailers and other U.S. companies to restock their warehouses.
For example, Monroe, Mich., near Detroit, saw its unemployment rate fall to 13.4 percent in April from 16 percent in March. Joblessness in Longview, Washington, which hosts several paper and packaging makers, dropped to 8.5 percent from 10.1 percent. And unemployment in Anderson, S.C., which is home to many auto parts companies, fell to 10.7 percent from 12.3 percent.
Joblessness is still widespread, with 14 metro areas recording unemployment rates of 15 percent or above in April. But that’s down from 28 areas in March.
Unemployment fell below 15 percent in five metro areas in Michigan, the government’s report said. U.S. automakers, after decimating their work forces in 2009, are adding workers as sales grow.
June 2nd, 2010 at 9:21 pm
panchog-
explain m3 then- why down?
why hyper inflation if money supply going down?
you tell me- maybe I am not smart enough to figure it out
June 2nd, 2010 at 9:23 pm
Covered the TBT puts I was short, worked well.
Looking at asymetric setups as I think we’re going to go one way or the other pretty hard before too long – these are not for the faint of heart.
Still like being short TBT / PST puts, think that can work out in either scenario (melt up or melt down, see one of my previous posts).
C also looks interesting for a ‘swing for the fences’ LEAPS position (Jan ’12′s struck above $8). Yes, I know everyone hates C, that’s why I find it so interesting.
-EW
June 2nd, 2010 at 9:38 pm
I don’t know how it is in other regions of the country, but down here in Georgia we’re laying off public school teachers left-and-right due to the eroding property tax base.
700+ in Cobb County.
250+ in DeKalb County.
300+ in Fulton County.
And these are from only three counties of a ten-county metro area.
Most teachers sign annual contracts that extend through the end of summer. If teacher layoffs are as bad in other regions of the country as they are here, these newly unemployed (although still pulling a paycheck until actual contract termination) will not join the ranks of the unemplyed until August or September.
How bad are teacher layoffs in your state, city, or district?
June 2nd, 2010 at 9:41 pm
I say that we’re right where we were TWELVE YEARS AGO which doesn’t account for rotation of good companies INTO the indices and bad companies OUT. Of course dividends aren’t accounted for either but who pays those trivial things anyways.
June 2nd, 2010 at 9:44 pm
I want better consolidated numbers for volume, uvol, dvol, trin and tick.
June 2nd, 2010 at 9:45 pm
I just finished reading “Econned” by Yves Smith. This is THE book about the meltdown. It is less about what happened than why it happened, who’s ox got gored, what the scams were, Magnatar-type obscenities, and all points in-between. This book is NOT for beginners although Ms. Smith does give cursory explanations of complex technical terms and concepts.
I guarantee you won’t listen to the financial news in the same way after you read this book.
June 2nd, 2010 at 9:59 pm
Lots of folks rethinking the back half right now.
A lot of red flags out there
1. S&P broke through the 200 day SMA to the downside
2. The VIX broke through the 200 day SMA to the upside
3. The A/D line broke through the 200 day SMA to the downside
4. The ECRI WLI rolling over.
5. Inventory replenishment cycle ending
6. 1st time home buyers ending
7. Census ending
8. Unemployment still above 9%; 3.5% GDP won’t make a dent; 5% required to bring it down. Not on the horizon
9. Credit constrained consumer and small business.
10. Tighter credit in general
11. LIBOR and TED spread up.
12. Europe far from over.
13. China real estate bubble
14. Rising dollar impact on exports
15. Debt constrained developed world
16. Dropping commodity prices portend reduced demand
17. Unexplained flash crash.
Poor environment for retail investors. Great for traders.
June 2nd, 2010 at 10:12 pm
I am very bearish over the long term, for any number of macroeconomic reasons, listed above.
Right now I think a tradeable low has been established and I am bullish US stocks over the next week or two. Note that 1150 is close to a 61.8% retrace of the fall from 1220 to 1040, and I expect the market to reach that level at least during June. EUR:JPY seems to have put in a bottom for now.
The next decline will be steep.
June 2nd, 2010 at 10:18 pm
Umpire Jim Joyce just cost a kid a perfect game today — with 2 outs in the 9th. Oy!
http://sports.espn.go.com/mlb/recap?gameId=300602106
June 2nd, 2010 at 10:19 pm
Oil continues to spill, govt props in housing are gone, strategic default is front page again.
The trend would seem to dictate another drop.
June 2nd, 2010 at 10:24 pm
Yeah, put me in the bearish/cautious camp. I tend to agree with more of what has been said regarding “utmost” caution! I feel we are destined{buy our combined action/lack thereof}to fall into a deep “cleansing” depression. I think we are already in the early stages, but denial of the term”depression” is still strong. Look at Japan,DEPRESSION for the past 2 decades and no end in sight. All Americans who are civil servant’s are going to be required to break ranks with thier union/progressive politican cronies. If they refuse to “givebacks” in excess of 35 to 50%,the ensuing depression will enact its own cruel verdict. We Americans are being given a “say” in the outcome of this great country for the next twenty years.We will have tough times,no doubt! The system will clear,at some point,with our input or not.
Bush was no angel{his profligacy ensured the progressive congress and ultimately Obama}but this administration is hell bent on turning it up to “ELEVEN”,Props to Spinal Tap….Seriously though, with all the risk out there, do you really think their is much upside left? Really? Nah, not me. Wheres our Ronald Reagan?He has to be out there…
Jerry
June 2nd, 2010 at 10:30 pm
@panchog —
ahab is correct, there is no monetarist basis for concerns about inflation, let alone hyperinflation.
Dave Rosenberg has been beating the deflation drum for quite a while now in a very convincing manner (although he is a big gold bull, I think on a cyclical basis rather than a monetarist basis, and as a hedge against a collapse of the various global fiat currencies).
So if you want to stock up on gold as a hedge against the end of civilization, that’s one thing (although it has a dubious track record in such circumstances), but I think that bottled water and ammo might be more effective hedges there. And looking back at the past history of national financial crashes (ref: Reinhart and Rogoff), there is no evidence for bottled water and ammo being needed either. We’ve been there before. Nations implode and the world moves on.
But there is zero, repeat zero, evidence of a hyperinflationary outcome at this point. Perhaps if Bernanke starts believing in his own fairy tales and starts printing a trillion dollars a day and direct-depositing it into the bank accounts of the sheeple, maybe.
But without some truly extraordinary monetary creation (as if what has been done thus far is not “extraordinary”!), the mountain of negative assets (toxic debt) still in existence will out-weigh the feeble attempts thus far to print it into submission.
Deflation reigns supreme, at least until a few banksters implode and all that toxic debt is zeroed out via bankruptcy, THEN the massive amounts of past printing will become a problem. But neither Bernanke nor anyone in the goobermint shows the slightest inclination of allowing a major bankster to fail.
June 2nd, 2010 at 10:32 pm
Wither goest the markets? What do the chartists scry when they cast the bones, and divine the future from the goat’s entrails?
June 2nd, 2010 at 10:34 pm
a rally, a correction in July or august, a rally, a real correction in September or October then a big rally.
June 2nd, 2010 at 10:37 pm
MARKETS BOTTOMING
The markets are bouncing up and it looks like they have reached bottom for now…
that is, the stock market, energy, resource, the yields and some currencies.
Meanwhile, the gold price remains strong near record highs (see Webchart 1). We
will continue to keep our positions and wait for a rebound rise to develop to sell part
of our positions, depending on how the markets unfold.
The gold price remains very strong near the highs and within a nine week soaring
rise. The gold price is very strong by staying above $1200. If it closes above its May
12 closing high near $1245, it could easily jump to the $1300 level. Meanwhile, the
rise since March is solid above $1155. Silver and gold shares are firm with gold. While
not as strong as gold, both are strong and solid by staying above $17.65 and 435 for
the HUI index. They’d show great strength above their May high at $19.66 for silver
and 492 for HUI. Our gold and silver positions are doing great and have clearly been
the best… keep them.
Platinum and palladium are moving with resource and energy. They are stabilizing at
a bottom area by staying above $1490 and $419, respectively. A renewed rise would
be underway above $1430 and $490.
Crude and copper would look good in a renewed rise above $75 and $3.25,
respectively. Our resource and energy shares are poised to rise with oil and copper.
Interest rates have been rising since last week. They appear to be bottoming in an
oversold area, which means a rebound rise is probably getting started. The first sign
this is happening would be a rise about 4.32% on the 30 year yield. For now, TBT and
RRPIX are also extremely bombed out and poised to rise. So keep your small positions
but don’t buy new ones yet.
June 2nd, 2010 at 10:38 pm
If we get to the water and ammo stage, then capital markets will be irrelevant and only land will matter. That seems an unlikely although not impossible scenario.
For the time being at least, “they” still have a semblance of control and this market will be elevated for long enough to allow for a controlled exit by trapped longs.
A depression is inevitable. We just have to decide on the flavor.
June 2nd, 2010 at 10:40 pm
I believe a top was put in on April 26th which will last for at least a year. It may hold far longer. Check your 10-month Rate of Change readings on the Dow and look back for precedents – going back a century, you’ll find them most revealing…
June 2nd, 2010 at 10:41 pm
Very good article. I enjoyed it and also found it useful. I would like to say, though, that I agree 100% with the comment by @Mikes, when he says “The correction, although steep and scary, was actually very typical. We had a big drop, a recovery, another big drop, and a high volume reversal.” We cannot expect the market to be constant, actually, one of the best definitions we can give to the market should include the fact that it is constantly changing. So change is the only constant characteristic of the market.
June 2nd, 2010 at 10:58 pm
Price action looks like markets are flattening/bottoming. With more foreclosures coming and house prices coming down, it is difficult to justify investing here, other than for an oversold bounce/fake – all is well rally.
Energy sector is taking on the chin and carbon tax is coming, consumer discretionary also gave up its leadership – consumer should fix personal balance sheets. Materials won’t do a lot in the mild deflationary environment we are in. That leaves tech as the sole leader. You don’t get a sustained bull market when you kill all leadership sectors (except tech).
I am not very bearish as Fed put its balance sheet against severe recession. Traders can have fun trading 8 to 12% moves up and down.
June 2nd, 2010 at 10:58 pm
@panchog — one last item worthy of perusal when contemplating the use of gold as a wealth preserver in the event of the shipwreck of civilization …
http://nihoncassandra.blogspot.com/2010/04/what-glitters-issweet.html
And currency or currency substitute requires a functioning civilization to be of use. If the wheels truly do come off the cart, something that has a practical utility makes for a better bartering medium than anything abstract. Bars of soap, scotch, antibiotics, those are the staples of societal collapse. And of course, guns and bullets. But in the times when civilization has momentarily collapsed, guns and bullets are remarkably easy to come by — just liberate them from the corpses.
June 2nd, 2010 at 11:01 pm
Nothing happens until all of us come clean and start fixing things.
Lies are contagious.
June 2nd, 2010 at 11:04 pm
leftback,
What is your ultimate downside target for the final bottom? Do the March lows hold, or do you think the next leg down is even further. If so, why?
June 2nd, 2010 at 11:05 pm
@leftback
When the inevitable depression is finally recognized (I am of the persuasion that it has already arrived), what is your best guess at where dollar-priced values for things like oil, gold, gasoline, and the nominal PE multiplier will land?
June 2nd, 2010 at 11:29 pm
What subscriptionblocker said!
I’m not heavily short. Just about 50-50. But, I hope for the whole freaking market and financial system to collapse and start over. It’s all lies.
June 2nd, 2010 at 11:33 pm
@constantnormal -
Add onto what you mention an unemployment rate over 10% and underemployment approaching 20%. That’s yet another drag on any potential inflation.
June 2nd, 2010 at 11:44 pm
Two things are impacting where the Market(s) are going:
1) Politics. Same thing supporting the Market will bring it down. Change coming in November. Majority in USA will vote for austerity candidates and 20% uneployment. (whether voters know it or not) Market will start pricing it in couple a months before – September or so. Impact -20%.
2) 2009 was about USD, 2010 is about EUR and then indirectly USD. The USD vs Market relationship did not mater for a while and now it meters again. It is like soap opera, where we get suprised by same thing over and over again. EUR will drop at least to parity. Short term people will talk about positives for US Market, until we realize that we want their misery and choose austerity path. Impact -20%
Summary of correction taking place in 2010: -20%-20%= -40%.
June 2nd, 2010 at 11:47 pm
I’m with constantnormal, we’re headed for a bout with deflation.
I just hope we won’t be stuck in it for two decades like Japan.
And two things to add to constantnormal’s list:
blankets
canned foods
June 2nd, 2010 at 11:49 pm
I haven’t read the comments on this post………..but, I assume my sentiments aren’t that unique.
Nothing is ever over until it is.
EVERYONE KNOWS ALL THE BAD NEWS…….
That’s the obvious trade. And, a lot of people are EARLY. To quote Yogi Bera….”It aint over till its over”
And, all of a sudden………………………………………………………………………….all the talk about the FED being on hold………………..is a given……there ARE NO STORIES WHAT SO EVER ABOUT THE FED RAISING…………
Haven’t been since when? The latest top?
Trading today is about politics. That’s fundamental analysis.
How do you value BP? Congress will raise the liability limits……..that’s a given…….what kind of lawsuits are forthcoming? How long could that drag out? Can THIS congress prohibit off-shore drilling before the elections? And, what will the Brits do about BP? Will they protect them? Gotta believe that they will give them more scrutiny in the North Sea………
With that in mind……….think about the banks…..they’re mostly broke…….don’t know about the majority of credit unions. So, the overwhelming majority of important stakeholders cannot afford a deflationary spiral. Otherwise, they’ll be overthrown. Further, local and state governments MUST contract spending because they cannot print money………We’re seeing a collision of conflicting fiscal policies on state and federal levels………..ultimately, the states will win this………and a deflationary spiral is inevitable.
When……….hell if I know…
That’s like knowing when Chow Yun Fat runs out of bullets in the killer. Logic tells you he must. But, John Woo keeps rolling……..
June 2nd, 2010 at 11:55 pm
uformula @ 8:25.
That’s the one.
October, here we come.
.
June 3rd, 2010 at 12:09 am
It took a lot of long boring trading days to wind the VIX down to the BIG pop. Now that volatility is being priced back in, I am guessing we will see a similar repeat. Maybe not, but either way this seems like a good place to slow down and practice some patience. Which usually means an upward trend. Wait for the gimme and save some for the next guy. :)
http://www.youtube.com/watch?v=xtrEN-YKLBM
June 3rd, 2010 at 12:26 am
My my we’re a cheery bunch tonight :-)
June 3rd, 2010 at 12:57 am
I think June will be an up month.
All the short traders have had a great May and won’t want to give back their profits (and quarterly bonuses) if June starts to rise so they’ll close out at the first hint of strength.
All the long traders have had enough of the May decline and know their only chance of a quarterly bonus will be a good June so they’re looking for any good news (ADP tomorrow, NFP friday) to push.
June 3rd, 2010 at 1:30 am
My impression is that the financial blogs are full of itchy trigger-finger survivalist types who are heavily emotionally invested in ‘the end of civilization as we know it.’
I’m with Mr. Ripsnorting Bullish. It’s a typical correction
June 3rd, 2010 at 6:33 am
Magically, we stopped short of the 200 dma–again. I think today’s NFP jubilance may push it through. That, and we are oversold as well as numb to the existing bad news. There is no reason why the market couldn’t rally to 1150 in the near term. And yet we’d still be in a downtrend… A lot is going to be news driven…Until the end of June comes, earnings won’t really come into play. The NFP numbers could be fluff for a while as the Census employees are only now working through the system…
I will say as an indicator, the Navistar plant whose parking lot had become a sales lot for returned Harvester trucks–well, probably half of the trucks are gone now. They’re going somewhere… I wouldn’t buy one unless I had stuff to haul. However, the Navistar plant IS closed now, which is quite an impact on the community.
June 3rd, 2010 at 7:23 am
Jim Cramer is capitulating. (To my complete rue, I ignored his total capitulation last Mar.) Time to load up.
June 3rd, 2010 at 7:48 am
Correction over; resume positions.
June 3rd, 2010 at 8:55 am
Greg0658 (ya me) – “did you notice something over the past 5 or 10 years / the exportable product of sports song and dance got bought up by foreign corporations ie beer … we are expelling our labor energy to enrich the corporation Estate”
Why do we let that happen? The business structure of cap’ism requires it? Do you think that once gone we can get it back? Are you ready to play the Nationalization game? Gonna take on the Super-Corp that standard way to bring it back?
http://www.ritholtz.com/blog/2010/06/largest-consensus-guess-ever-for-may-payrolls-what-does-it-mean/#comment-312646
June 3rd, 2010 at 8:56 am
Wars and rumours of wars.
Bruits de bottes….
We’ fooocked.
June 3rd, 2010 at 9:25 am
scotch? how about corn?
totally LOL .. Marc says “Stop the Presses” BP downgraded by Moodys
June 3rd, 2010 at 10:27 am
BR: I know this is somewhat out of context, however a while back you asked what we all thought was going to be “the next big thing”, and i just stumbled on what i think is a likely candidate (full disclosure, I own no shares) : enzymes for 2. generation bio ethanol.
http://www.reuters.com/article/idUSLDE61E0LM20100215
June 3rd, 2010 at 10:43 am
bounce not bull. punk volume. credit not confirming. lots of bear crossing…China, EFA, CRB, EEM soon. bull flattener on yield curve. LEIs have peaked. cooler weather ahead.
June 3rd, 2010 at 11:25 am
I assume there is still profit to be had by technical traders, but long term I agree with the chap who said the U.S. today is the same as Britain in the early 1900′s. All the headline news about payroll, manufacturing indices, housing starts, etc. is just a sideshow to the overall economic decay of this country.