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5 posts
msg #95175
Ignore donato40
7/28/2010 7:00:58 PM

There is no "real" recovery. When it will collapse again? Who knows, but it will, -- more debt and borrowing are not long term fixes.

Keynesian economics is a big government farse and more borrowing and spending will not work. Wall street is doing well thanks to government spending and "stimulus" , but the middle class is paying the bill.

The USA is caught in a system of socialism and at the same time corporate fascism.

Is there really any difference between Obama and Bush?

11,734 posts
msg #95385
Ignore johnpaulca
8/4/2010 4:32:24 PM


Monday's good data was said to be responsible for the Dow's +200 point rally. Today's horrible data was nearly wholly ignored, as the Dow closed marginally lower. The trend is up now, which makes it easy to ignore that which doesn't agree with the price action. The news doesn't affect the price, price affects the news.

Today's data came in three flavors of bad news: personal income & outlays, factory orders, and pending home sales.

Personal income and outlays (spending) was worse than expected. Bloomberg said, According to Fed Chairman Ben Bernanke, the Fed is hoping that a bump up in consumer spending will help strengthen the recovery. Apparently, that will have to wait until at least next month. Personal income in June was unchanged, following a 0.3 percent boost the month before. The median market forecast was for an incremental 0.1 percent gain. The wages & salaries component slipped 0.1 percent after posting a healthy 0.4 percent advance in May. June weakness was partially due to the cutting of temporary Census workers.

Spending was also down, so both income & outlays were worse than expected.

Factory orders; what factory orders? Factory orders fell 1.2 percent in June which follows a 1.8 percent drop in May (revised downward from minus 1.4 percent). The decline for the durable goods component was revised two tenths lower to 1.2 percent. Orders for nondurable goods fell 1.3 percent. The data show declines across many categories including for both capital and consumer goods.

Pending home sales dropped like a rock last month, falling 2.6%. Pending home sales index fell 2.6 percent in June to 75.7. Year-on-year the index is down 18.6 percent. Sales were down in three of regions. The National Association of Realtors is warning that near-term sales of existing homes are likely to be "notably lower" in contrast to the spring surge which was fed by government stimulus.

Down only a little today with all of this news? Interesting, isn't it?

Source: Larry Levin

11,734 posts
msg #95395
Ignore johnpaulca
8/5/2010 9:02:10 AM


Although some recent news has been good, most is bad and yet the mark goes up. Although the volume is positively atrocious, the market goes up. Although employment is not getting better and without it the economy will not grow, the market goes up. OK, you knew all of that; however, did you know that retail investors have pulled money out of equities for over a year...and yet the market goes up? How does THAT work?

From Zero Hedge, we read the full story

_What more cann we say here that we have not said for 12 times in a row already. Retail investors are dunzo. The latest update from ICI shows that the week ended July 28 saw a record 13th consecutive outflow from domestic mutual funds as stocks bloody surged. Good thing the HFT algos can now essentially communicate with each other in the actual unique flow patterns of cancelled stock bids, thereby announcing to all other participants the plans of one which promptly become those of all, in the most under the radar concerted effort to "club" the market's HFT participants as one big trading force. As for retail: it is all over. We won't even chart the latest move. Figure it out: nearly $50 billion in outflows YTD as the market is well green. When the coordinated computerized front running game (of stupid carbon based lifeforms) in which one Atari machine sells to another, and repeats into infinity, while all book liquidity rebates, comes to an end and the theater is finally perceived to have been burning all along, watch out for the binary stampede.

But don't take our word for it. According to the FT, banks are starting to panic that as a result of collapsing trade volumes, profit target misses and massive layoffs are just around the corner.

US banks with Wall Street operations are bracing for a slump in trading profits this year after the third quarter got off to a poor start, with global economic uncertainty and Europe’s sovereign debt woes leading to a slowdown in market activity in July.

Executives said volumes and profitability last month were even lower than during the sluggish second quarter, with hedge funds particularly reluctant to take big bets on equities and debt.

“July was a miserable month for trading,” one senior banker said. “If August and September don’t rebound sharply, banks will be forced to cut jobs.”

The squeeze in trading profits highlights the rising importance of groups’ consumer and commercial banking operations, whose performance is improving as the economy heals.

The lack of activity led many banks to miss internal targets for trading revenues in both fixed income commodities and currencies – a key recent driver of profitability – and equities.

John Brady, senior vice-president at MF Global, said: “A lot of the drop we have seen in trading volumes during June and July follows violent changes in markets during the preceding months.”

Retail investors have also shunned stocks. US equity mutual funds have been hit by 12 straight weeks of outflows totalling $40.7bn, says the Investment Company Institute.__

11,734 posts
msg #95438
Ignore johnpaulca
8/6/2010 8:50:39 AM

Jobs Data

The market has clearly been waiting for Friday's Jobs data all week. The market exploded Monday and has been there ever since.
Thursday's close is within 3-points of Monday's close. Moreover, the ES (mini S&P) has traded in a tight balancing area of roughly 9-points...all week! Indeed, the market is on pins & needles waiting for the morning report.

Please check the following consensus data with the actual data. How the market will react is anyone's guess.

* Non-Farm payroll, MoM change = -70,000 (consensus)
* Private payroll MoM change = 100,000
* Unemployment rate = 9.6%
* Ave hourly earnings MoM change = .2%
* Ave workweek = 34.1

11,734 posts
msg #95520
Ignore johnpaulca
8/8/2010 11:06:13 PM

Why Traders Fail

Trading is simple, but not easy. Despite its simplicity, most people who try to trade have a hard time finding consistent profitability. Trading well is as much about doing certain things right as it is about avoiding the common mistakes. Here is a list of the common causes of trader failure.

1. Lack of Knowledge
Trading does not have to be complex or involve a sophisticated understanding of capital markets. In one day, I can teach a person the skills that I use as a trader. However, like riding a bicycle, being good at applying those skills takes practice and usually involves some painful mistakes through the learning process. You probably were pretty wobbly the first time you pedaled a bicycle but, with time, you found your balance and got good at it. Trading is no different.

However, unlike riding a bike, there are thousands of ways to trade. You have a choice in what you trade, the hold period for your trades and the strategies you apply.

There are many options for people looking to learn trading. You can take classes, study online, read books or try to figure it out on your own. Each approach to learning has a cost; don't underestimate the price for how you intend to learn.

With so many approaches to acquiring the knowledge you need to trade, there is not necessarily just right and wrong ways to learn. It becomes a question of what is right for you, what best fits your learning style. What is most important is that you get educated before you risk a penny of your money in the market. Most people can't beat the market because they don't know what they are doing. Don't let a lack of knowledge ensure your failure.

2. Poor Risk Management
The focuses for most aspiring traders are the decisions to enter and exit the trade. They spend a lot of time trying to find the right stock to buy and then try to make a good decision on when to enter. They miss out on the most important component of the trading process.

Risk management is that often forgotten piece of the trading puzzle. Without capital to trade with, you have nothing to do. Protect your capital first and never try to get rich overnight. Some might get lucky in the short term but those who fail to manage risk over the longer term will go broke. That is guaranteed.

For every trade, you need to know your downside. Being wrong is part of trading so you must have a plan for what to do when you are wrong.

3. Insufficient Capital
Since being wrong is part of a profitable trading strategy, you need to allow for drawdowns of your capital base. There will be times when market conditions will not be great for the strategies you are applying.
When planning your trading business, you must allow for this potential deterioration of capital. You may make five steps backward before you start to go forward, make sure you have the capital to ride out these losing periods.

4. Trading Without Proven Strategies
I have seen a lot of people trade without a strategy that they have tested. They think that they can beat the market by doing things that make sense. This is often the biggest problem with people who are successful in other areas of life.

It is a bad idea to think that you can beat the market by being smart. The markets rarely do what makes sense, at least in the context of the information that we have. This is because the market often moves on information that most of us just don't have.

For that reason, it is smart to have a set of trading rules that you first test exhaustively before you trade. Your testing must determine whether the rules yield a positive expected value. Over a large number of trades, your rules should make a profit. What happens on any individual trade really does not matter.

5. Failure to Follow Rules
The rules you define and test are only effective if you follow them. While this is easy for all of us to understand, it is a very hard thing to actually do. We break rules because we are afraid of losing money. Emotion is a hard thing to overcome.

To minimize the impact of emotion requires a comfort with the risk you are taking. Most traders find that paper trading, simulated trading without using real money, is not too hard. It is only when they have their capital at risk that they start to make mistakes.

The solution to this problem is to not take more risk than you are comfortable with. The best traders are those who don't care about the money. The more you can do to take out emotion, the better your chances will be to follow the trading rules.

6. Lack of Determination
Doing anything well requires the determination to learn and gain expertise. This is very much the case for trading because it is such an emotional pursuit. There will be times when the novice trader will feel overwhelmed with emotion and ready to give up.

I don't think trading is something that can be done well by someone who does not like it. Having a passion for trading is what will get you through the hard times and ensure that you stick with it when your heart may tell you otherwise.

7. Poor Focus
The shorter the time frame you trade, the more focused you need to be. Position trading (hold period measured in weeks or months) is not that demanding mentally because you have a lot of time to make your trading decisions. Swing trading (hold period measured in days) requires you make quicker decisions but is not as demanding as day trading. The day trader (hold periods measured in hours or minutes) has to make decisions in only seconds and work hard to not miss out on good trading opportunities.

It is hard to trade if you have a lot of distractions while you are trading. You have to do what is necessary to avoid letting outside factors have an effect on your trading decisions.

8. Inability to Adapt
The market is constantly changing and you need to be able to adapt with it. That means applying trading strategies that are appropriate for the present conditions; you may not want to apply a buying strategy in a market with strong downward momentum.

Avoiding chasing the market with your rules is a challenge that many traders have trouble with. You should have a set of trading principles that do not change over time, these based on source of opportunity that you are pursuing. Do not constantly change the rules of your tested and proven strategies.

However, how and when you apply your strategies will change as the market evolves. I keep a stable of trading strategies that I apply as conditions warrant.

Source: Stockscores

11,734 posts
msg #95560
Ignore johnpaulca
8/10/2010 8:41:52 AM

Jobs Review

Monday was an incredibly slow day. The market was up again, despite amazingly low volume and Friday's horrible jobs data. Why is that poor employment report being ignored? The answer: The Federal Reserve. Specifically, the market is expecting the Fed to announce another round of money printing, which is called "quantitative easing," (QE)Tuesday afternoon at 1:15pm central. The last round of QE didn't do a thing, nor did president Bush's tax cut stimulus, but put the country into deeper debt. Somehow, however, "this time" it will work?

In the meantime, let's take a look at a recap of Friday's report from analyst Dave Rosenberg.

From Breakfast with Rosie:

* Forget about private payrolls, which for some reason the markets have been brainwashed into watching (though these did come in well below market expectations, at +71k versus +90k expected) — we should be adding in state/local government employment. Bottom line is that when adjusting for the Census worker effect, the economy only generated 12k net new jobs last month. Pathetic.
* The Birth-Death adjustment factor tacked in 16k jobs to the seasonally adjusted data, so actually, that 12k number was probably more like -4k. Doubly pathetic.
* The Household survey showed a 159k loss, which was the third decline in a row — something that in the past occurred outside of recessions a mere 2% of the time. Full-time employment tanked 570k (on top of a 70k falloff in June) which was the steepest decline since the depths of economic and market despair in March 2009.
* The Household Survey, on a population and payroll concept adjusted basis, posted a decline of 315k and this followed a 363k loss the month before.
* If not for the near one million decline in the labour force since April — the number of discouraged workers has ballooned 50% in the past year — the unemployment rate would be sitting at 10.4% right now (if the participation rate was unchanged from April’s level).
* As a sign of how far the economy has slowed from its springtime peak, the employment/population ratio dipped from 58.8% in April to 58.7% in May, to 58.5% in June, to 58.4% in July — the lowest it has been since the turn of the year. Moreover, two-thirds of the private sector job creation this year took place in March and April, when the economy was hitting its peak.
* We had mentioned that one of the bright spots in the data was the pickup on factory payrolls, but again this was more the result of seasonal adjustment wizardry than anything else. Somehow, a 16k drop in the automotive industry in the raw data managed to swing to a +21k print on a seasonally adjusted basis and this likely reflected the one-off lack of plant idling this year at GM.
* The workweek did edge up, but it is still an anaemic 34.2 hours and this reflects the ability of businesses to adapt their labour force needs more than anything else. The fact that they chose this route rather than add bodies, and shedding full-time workers, is a sign that companies lack a commitment right now. The fact that they cut their reliance on the temp agency market for the first time in 10 months is another indication that the aggregate demand for labour contracted last month.
* At the rate the economy is creating jobs — 654,000 so far this year — we will not get back to the previous peak in employment until 2017. Just to get back to the 8% unemployment rate that the White House had forecasted we would require job creation of at least 2.5 million. At the rate we are going, that will take longer than two years to accomplish.
* Let’s not lose sight of the fact that initial jobless claims kicked off the month of August by jumping 19k, to 479k, the highest level since last August. If we see this number back up to over 500k, then for sure we will see less denial over double-dip risks.

11,734 posts
msg #95561
Ignore johnpaulca
8/10/2010 9:44:28 AM

What is quantitative easing? It is when the Fed allows the Mortgage backed securities to mature and then takes the cash and buys treasuries. This causes the price to go up and yields to come down. This makes interest rates cheaper across the board.

4,689 posts
msg #95571
Ignore Eman93
8/11/2010 12:23:03 AM

msg #95561
- Ignore johnpaulca 8/10/2010 9:44:28 AM

What is quantitative easing? It is when the Fed allows the Mortgage backed securities to mature and then takes the cash and buys treasuries. This causes the price to go up and yields to come down. This makes interest rates cheaper across the board.

The Fed is trying to every thing it can to INFLATE this mess away.... Deflation death spiral is what keep Ben up at night.

the CPI keeps ticking down.

Inflation Rates Graph (2000-2010)

Table of Inflation Rates by Month and Year (1999-2010)
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2010 2.6 2.1 2.3 2.2 2.0 1.1

4,689 posts
msg #95572
Ignore Eman93
8/11/2010 12:36:33 AM

Like anyone has time to read....... a good article and some great cometary... on the inflation deflation debate.

long dollar short equities? Keeping my eye on UUP

11,734 posts
msg #96604
Ignore johnpaulca
9/29/2010 12:00:23 AM

No Need to Complain About This Market....Bob Lang.

About three weeks ago I penned a blog entry on stating that I was bullish on markets into the end of the year. None of that has changed. This market is showing great flashes of potential here. I'm not one to make predictions about where markets will go, but it seems this may run further than most expect. Among the characteristics I look at there is only high quality about this rally and its sustainability. Oh, but how about a correction you ask? Sure, we'll see it...100% chance of that happening at some point (how's that for a hedge?). But you're not going to nail me on the timing; the market will tell you (and me) when it's time but until then we ride the trend.

Bond Market Review

There is a strange relationship between bonds and stocks. At times stocks need bonds to be strong and at other times stocks want bonds to be the competition. Bond prices rise, yields drop making for cheap financing. We're seeing many companies come to the trough to feed on the markets by selling debt. Microsoft was a recent participant, selling longer term bonds at a yield under 1% (they apparently used it to increase their dividend and to buy back stock). When bonds rise and money flows to fixed income however, funds have to come from somewhere, and it's usually the stock market. So, we have a equity players do we like bonds going up or down? I've always felt the bond market is a better predictor of economic activity worldwide and domestically. If we take our cues from bonds then it can only mean one thing: stocks can go higher.

How About those Metals?

What a move by gold and silver these last few weeks. New all time highs for gold and 2 1/2 yr highs eclipsed for silver. Have they gone parabolic, and is there more left? Well, I will never tell you to fight a trend 'just because', as many have now been hung out to dry trying to short this massive move...'just because'. We have to see some weakness and heavy selling before the trend gives way to the other direction. The charts of gold and silver below tell the story...strength begets strength, and those fighting the trend can lose. Who knows how far these metals will go...there is certainly a great deal of interest and curiosity here, enough to pump prices up. Don't you want to be on that move? Or, are you afraid of coming in late to the party?

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