Market analysis doesn't need to be too complicated to be good, and probably simpler is better. Heck, we have just spent the past 12 months listening to every analyst, commentator and pundit under the sun tell us why this market is the buy of the century, and when I look at the numbers, I note the S&P500 is up only 3.68% over the past 52 weeks. That's a lot of verbage for so little beef. If you have been holding the S&P500 for 52 weeks, you have made 3.68% on your money. That's a fact, not an opinion.
Tuesday, August 31, 2010
The morning news notes as prepared by TL....Republicans lead by 51% to 41% among registered voters, Obama's advisers to examine more options to create jobs, Euro as a reserve currency, German unemployment drops for 14 straight months, corporate profits to slow in 3rd quarter, extended unemployment benefits and the unemployment rate, and income and spending data.
Monday, August 30, 2010
The morning news notes as prepared by TL....Bernanke's speech from Jackson Hole, ECB's Trichet, White House proposes more fixes for housing, Obama's approval rating, Roubini on the economy, Google to launch Facebook competitor, BP/Gulf, tax cuts and analyst ratings.
Sunday, August 29, 2010
Friday, August 27, 2010
The morning news notes as prepared by TL....German economy is a bright spot, SEC promises more action against financial industry, 23% of all mortgages are underwater, AAII sentiment, napping on the job, and Bernanke speach.
Posted by Guy M. Lerner at Friday, August 27, 2010
Thursday, August 26, 2010
Figure 1 is a weekly chart of the S&P Select SPDR Financial Fund (symbol: XLF). The red and black dots are on the price chart are key pivot points, which represent areas of buying (support) and selling (resistance).
I last looked at the Shanghai Composite Index in May, 2010. (Click here and here.) My interest in the Chinese market is the possibility that it is a leading indicator for the US indices. Back in May with the Shanghai Composite off its highs by 17%, I stated "that US equity bulls should be concerned that the Chinese market has been diverging from the US indices. After all, the Shanghai Composite led the US markets off the bottom back in late 2008 and early 2009." So once again let's look at the technicals for this important market.
The morning news notes as prepared by TL....initial jobless claims, Japan buys foreign bonds, money supply is growing, the bond bubble, sales of new homes declined in July, and economists cut their GDP forecast.
Tuesday, August 24, 2010
My thoughts on the bond bubble can be summarized in two words: "not likely". When commentators have to tell you it is a bubble, it isn't a bubble. Or to put this in another context, name me one market top in the last 10 years where the commentators on CNBC where not imploring their audience to buy at the top. If anything, the commentators have this aura of incredulousness. "How dare bonds head higher and stocks head lower. Doesn't everyone know how undervalued equities are?" When CNBC throws in the towel and when they utter those famous words - "is it to late to buy now?" - then we can consider the possibility of a bond bubble.
The "Morning News Notes" as prepared by TL...the egg recall, AIG, mortgages + White House = government guarantees, the YEN, consumer debt, US Equity technicals, Zandi on the housing market, California struggles to pay its bills, and drilling.
Monday, August 23, 2010
The "Morning News Notes" as prepared by TL...why CEO's aren't hiring, excess cash at companies, Gallup poll on automotive companies, former chief economist at IMF on low interest rates, Wall St. job cuts, small investors flee stocks, US housing, Doug Kass is bullish, Obama to give speech on Iraq, and the political outlook for November.
Sunday, August 22, 2010
Insiders are buying, and the "dumb money" indicator is neutral but nearly becoming more bearish (i.e., bull signal). Another week of downside pressure will likely set up another buying opportunity in the near future as lower prices will bring out the bears. How sustainable will this buying opportunity be is the only question. In recent months, bearish extremes in investor sentiment have led to quick rallies (1-2 weeks) on lackluster volume that have been prone to fail. In other words, the markets aren't going anywhere fast, and the risk of failure is mounting.
Friday, August 20, 2010
The Utility Sector is thought to be a safe haven in the time of market duress. There is no question that the market is under pressure, but I would be very careful about betting on the assumption (dogma?) that safety will be found in the Utility Sector. Currently, it should be noted that utility company insiders are net sellers of their shares to an extreme degree. This is the "smart money". On the other hand, utilizing the Rydex asset data, these market timers (who we might call the "dumb money" because of their propensity to get it wrong) are betting to an extreme degree on higher prices in the Utility Sector. I ask: in such a weak market, why would I bet against the "smart money" and on the "dumb money"?
The "Morning News Notes" as prepared by TL...mini boom in mergers, the SLOOS report, US workers and their salaries, NYC unemployment rate falls, record number of people "tap" retirement accounts, BP, Philly Fed Index, social security, and chances of a double dip.
Thursday, August 19, 2010
The "Morning News Notes" as prepared by TL...initial jobless claims, SEC sues NJ, technical update on SP500 from JP Morgan, housing, US banks, mortgage refinancing increases last week, GLD, and the decoupling of stock prices and bond yields.
Wednesday, August 18, 2010
See figure 1 a weekly price chart. The 40 week moving average (i.e, red line) is heading higher, and prices are trading above key pivot points, which are areas of support (buying) and resistance (selling). In essence, this is a "beautiful" chart with lots of momentum (i.e., note the breakout gaps). If this were a stock, the analysts and pundits would be all over the "breakout" ---blah, blah, blah.
The "Morning News Notes" as prepared by TL...American households pare their debt, Renminbi depreciation, Bill Gross on mortgages, oil drilling in the Gulf, Jeremy Siegel on the "Great American Bond Bubble", Fed's senior loan officer survey, and Obama administration to lax travel to Cuba.
Tuesday, August 17, 2010
The "Morning News Notes" as prepared by TL...candidate preferences in 2010 elections, new rules to protect mortgage buyers, loosening of lending at big banks, Obama bans on deep water drilling, Mark Mobius on global recovery, China's leading economic index, Euroland, and corn.
Figure 1 is a composite look at investor sentiment as of week end. The indicator is constructed from the "Dumb Money" and "Smart Money" indicators, Rydex asset data, and InsiderScore total market value of insider buying and selling shown in the weekly round up on sentiment. 11 unique data points are utilized.
Monday, August 16, 2010
The "Morning News Notes" as prepared by TL...stimulus spending, China GDP, US economic growth, PIMCO and US Treasuries, credit scores surge, Greenspan on the economy, Thomas Hoenig of the Kansas City Fed expands upon his dissenting vote and General Petraeus on the strategy in Afghanistan.