Thursday, September 30, 2010

Morning News Notes: 9.30.10

The morning news notes as prepared by TL....Paris on red alert, China's PMI, is the US looking like Japan?, Nikkei falls 2%, US Postal Service is broke, a graph from the Conference Board showing Jobs Plentiful minus Jobs Hard to Get v. Unemployment Rate, and households continue to deleverage. 

Wednesday, September 29, 2010

Morning News Notes: 9.29.10

The morning news notes as prepared by TL....President Jimmy Carter hospitalized, Americans don't trust the media, American Truckers Association truck tonnage index, North Korea, large cap stocks favored by Roubini, ECB 3 month auction, and hedge funds increasing short positions in Chinese financials and material companies.

Tuesday, September 28, 2010

Morning News Notes: 9.28.10

The morning news notes as prepared by TL....China and Russia in energy collaboration, IATA, leading indicators for Eurozone point to slowdown, Ken Fisher with comments on investing in the next decade, the argument against structural unemployment, trade wars, Rohm Emanuel, the value of Facebook, and RIMM.

An Obvious and Important Divergence

As you know, equities have been on a tear in September, and in this market environment, we also know most assets are highly correlated and tend to move together.  At times, it seems like there are only two trades.  There is the "risk on" trade as represented by equities and commodities, and there is the "risk off" trade when bonds outperform.  This is nothing new and something that has been present for a long while.

Monday, September 27, 2010

Morning News Notes: 9.27.10

The morning news notes as prepared by TL....silver hits 30 year high, Greenspan on budget deficits v. tax cuts, Roubini on likelihood of double dip, this week's economic highlight: Friday's ISM report, IPO's, CSCO and fiscal policy, universal currency debasement, and new home sales.

Investor Sentiment: Split Decision

In aggregate, investor sentiment is neutral.  However, when looking at the data in greater detail, we note that company insiders are neutral while the "smart money" is bullish and that the "dumb money" is neutral while the Rydex market timers are bearish (i.e., bull signal).  Similar data on opposite ends of the investing spectrum yields a somewhat confusing yet neutral reading.

Friday, September 24, 2010

Morning News Notes: 9.24.10

The morning news notes as prepared by TL....stock pickers suffer in current market environment, ORCL, BAC. JP Morgan raises target on crude oil, NFLX, and comments by Paul Volcker.

Nice Video On Gold

I heard this fascinating analysis this morning on the radio why gold should continue higher.  CNBC interviewed Aaron Regent, Barrick Gold president and CEO.  Barrick Gold (symbol: ABX) is the world's largest gold producer.  While not meant for market timing, there is some good common sense insight for what may be ahead for the yellow metal.

Thursday, September 23, 2010

Morning News Notes: 9.23.10

The morning news notes (afternoon version) as prepared by TL....initial jobless claims, Elizabeth Warren on fair play, US banks, IPO markets not strong, SP500 technical update from JP Morgan, TARP expense forecast, Forbes: 400 richest Americans, and Chinese Premier comments on rising Yuan.

Dollar Devaluation: Pushing On A String?

Through the ups and downs of the stock market over the last 3 months, there has been one constant: the Dollar Index has gone down.  This is surprising as the Dollar has barely managed a bounce following a very strong up move from November, 2009 to June, 2010.  Even its safe haven status in times of market turbulence is now in question as traders have moved on to the Swiss Franc or Japanese Yen.

Wednesday, September 22, 2010

Morning News Notes: 9.22.10

The morning news notes as prepared by TL....yesterday's FOMC statement, Geithner comments on Basel 3, Lawrence Summers to leave his post, recession isn't over for Wal-Mart shoppers, and the supplemental nutrition assistance program.

Tuesday, September 21, 2010

FOMC Statement: Side by Side

Some more great work by good friend TL on the changes to today's FOMC statement.

The Stock Market As A Voting Machine

I am not sure I would ascribe the market's recent frenzy of buying activity to anything more than short covering.  Yesterday's "breakout" seem to get the bulls all lathered up, but when I hear the words "breakout" it is like fingernails on a chalkboard.  There is little significance to a "breakout" and context (i.e., bull market v. bear market) really does matter. 

Morning News Notes: 9.21.10

The morning news notes as prepared by TL....US has emerged from recession, the Tea Party, economy and jobs are number 1 issues, bond auctions in Ireland, Spain and Greece, business/ consumer confidence ratio, outlook for air transport industry, and China's manufacturing prospects.

Monday, September 20, 2010

Morning News Notes: 9.20.10

The morning news notes as prepared by TL....University of Michigan consumer sentiment, 1 in 7 Americans lived in poverty in 2009, global trade disputes on the rise, PIMCO's El-Erian on the Fed and European bank bailouts, stock buybacks increase, gold still below its inflation adjusted high, and Americans disapprove of Congress.

Sunday, September 19, 2010

Investor Sentiment: Onus On The Bulls

Three weeks ago investor sentiment was very bearish and this was a bull signal.  As expected, stocks advanced rather handsomely.  Of course, this was on anemic volume, and of course, all news was good news and of course, stocks only proceeded in one direction ---up!  No doubt such price action is the hallmark of short covering.  While this is how most rallies get started anyway, at some point stocks will need to gain on their own merit.  We are at that point.  With the sentiment indicators turning neutral, stocks will no longer have short covering to propel them higher.  This puts the onus on the bulls - it is time to put up.

Friday, September 17, 2010

This Is A Great Rant

This is a great rant/video from Bernie Marcus founder of Home Depot and head of the Marcus Foundation.

Morning News Notes: 9.17.10

The morning news notes as prepared by TL....Gallup unemployment poll, Basel capital rules, HPQ, Obama reaches out to Wall Street, and spot Gold.

Thursday, September 16, 2010

Morning News Notes: 9.16.10

The morning news notes as prepared by TL....principles for economic survival an OpEd in WSJ, Byron Wein's market comment, M & A activity and the stock market, the state of state pension plans, collapse of Lehman Brothers, and US Treasury to pressure China to appreciate currency.

Wednesday, September 15, 2010

Investor Sentiment: Where Is The Value?

In part 1 of this series, I put forth the notion that extreme data points, like investor sentiment, don't always result in a reversion to the mean, but may in fact represent the start of a new trend.  Today, I will tear apart the sentiment indicators even more putting their value into question.

Morning News Notes: 9.15.10

The morning news notes as prepared by TL....Japan sells Yen, CSCO to issue dividend, entitlement spending, Obama's job approval, and signs of emigration from Greece due to weak economy.

Tuesday, September 14, 2010

Morning News Notes: 9.14.10

The morning news notes as prepared by TL....August retail sales, MSFT, more women than man receive PhD's, Cuba, oil drilling, Euro Area economy to slow in 2011,  USA's superpower status and the deficit, and arms sales to Saudi Arabia.

Investor Sentiment: Composite Indicator

Several weeks ago we had perfect alignment of our sentiment indicators, and since that time, the bounce has come, but it has come on lackluster volume.  Of note, in the past 5 years, there have been only two other times when all the sentiment indicators have lined like two weeks ago, and this was in July, 2006 and the March, 2009 bottom.

Monday, September 13, 2010

Morning News Notes: 9.13.10

The morning news notes as prepared by TL.... Basel Committee on Banking Supervision, faster manufacturing growth in China, Boehner on tax cuts, Pimco's view of Treasury yields, recovery in Europe lags the US, Geithner interview in WSJ, US job outlook, and survey of economists by WSJ.

Sunday, September 12, 2010

Investor Sentiment: Expected Bounce, But....

Last week's perfect alignment of the sentiment indicators has led to the expected bounce, but buying conviction remains a big question as volume was the lowest total for any week since Christmas, 2009.

Friday, September 10, 2010

Some Simple TA: TLT

I have been bullish for some time on long term US Treasury bonds, and despite the recent pullback, I remain so.

Wednesday, September 8, 2010

Investor Sentiment: New Thinking For An Old Tool

I have spent a fair amount of time in these blog writings on deciphering where and how investors are positioned with their capital.  We have the "dumb money" and the "smart money" and all sorts of flavors in between, and if we could avoid being the "dumb money" and understand what the "smart money" is really doing, my investing world would be a whole lot better.  Unfortunately, the market is never really that easy or simplistic.

Morning News Notes: 9.8.10

The morning news notes as prepared by TL.... Bank Basel capital standards, Obama launching a slew of new initiatives, Chicago Mayor Daley not to seek re-election, homebuilders, and overnight global equity performance. 

Tuesday, September 7, 2010

Morning News Notes: 9.7.10

The morning news notes as prepared by TL....Roubini on unemployment, Larry Summers goes to China, European banks under pressure today, Obama pushing hard for a new stimulus, 13% of US population receiving food stamps, and charts on the 10 year Treasury yield.

Monday, September 6, 2010

Investor Sentiment: Perfect Alignment

Last week's bullish signal is this week's perfect four as all four sentiment indicators are issuing buy signals.  Essentially, the "smart money" is buying while the "dumb money" is bearish.

Friday, September 3, 2010

Bearish Investor Sentiment Isn't Always a Bullish Signal

Over the past couple of weeks, investors have turned decidedly bearish and as I pointed out in recent articles (click here and here), this is a bullish signal.  This was the place to buy, but I have questioned the sustainability of any rally beyond a couple of weeks because the longer term data suggests a market in the topping process.  This analysis could change down the road, but for now that is how I see it.

Morning News Notes: 9.3.10

The morning news notes as prepared by TL....non farm payrolls, explosion in the Gulf, Kabul bank, Obama administration floating ideas to "fix" the economy, costs of BP oil spill, and ECB's Trichet hawkish tone.

Thursday, September 2, 2010

Rydex Report for 8.30.10

This report was sent to subscribers of the Premium Content service on Sunday night.  While the makings of a short term bottom are present, the sustainability of any upside move in equities remains the big question.  A tradeable rally for those who are nimble?  Yes.  A big liftoff?  Not likely.

Morning News Notes: 9.2.10

The morning news notes as prepared by TL....initial jobless claims, freight shipments for August, China's PMI, US industrial production, and countries with unsustainable debt.