S&P 500 Financial Sector at Key Inflection Point 16 comments
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The S&P 500 Financial sector is down just over 12% from its recent intraday high last Friday. And heading into next Monday, the sector is currently sitting at a key inflection point that should help identify which way the sector will trade over the next month or so. As shown below, the Financial sector is currently sitting right on support that formed when the sector hit its highs in early April. It's also sitting right at the bottom of the tight uptrend channel that it has been trading in since the March lows. If the sector can hold its price and then trade higher on Monday, technicians will interpret this as a sign that the rally will resume. If the sector breaks support and trades down, the uptrend will be broken and lower prices will most likely ensue.
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Good stuff.
dow-market-timing.blog...
What has been accomplished in the past six months by all of this Federal Government intervention that the Free Market wouldn't have accomplished, quicker, better and honestly? The Fed and Treasury have just rearranged the chairs of the Financial Titanic by transferring their risks, as well as large salaries, to the taxpayers in order to protect their Cronies and political contributors. Coincidentally they have placed generations of Americans in debt which can only be reduced by debase our currency. Thank you Mr. Keynes who always knew the politicians would love his theories as they give them power over the people's earnings.
The economic history of Bush-Obama is a replica of Hoover-FDR - more government regulations, control, power and inefficiency thrown on the back of the efficient, honest, hard working middle class. It is astonishing that we have not learned from the mistakes of the thirties. If things do not change quickly we can look forward to the 1936-type disaster that was only bailed out by the WWII War build up.
Is that where BHO is going to take us after he gets all of this power and control? Will he try to remove Presidential Term Limits, similar FDR's attempt to stack the Supreme Court, at a time when we need them for Congress in order to return our government to the citizens? Now that we are a one party, left-wing Federal Government they can virtually do anything they want unless the voters wake up in 2010 and radically change Congress, the people with the purse strings.
Most of the companies in the DJIA as well as the most heavily weighted in the S&P 500 are matured, ripe organizations unable to be managed efficiently or compete and managed by bureaucrats who are more interested in policy and politics than efficiency, productivity and customer service.. They are going the way of the banks, insurance companies and autos. The compounded "real" return of these indices over the past forty-years is 1.6%, BEFORE FEES, less than 90 day T Bills. Why are these money managers and hedge funds being paid such large salaries by pension funds, trust funds, mutual funds, etc.? Because they are Crony-owned and Wall Street is a con.
Financial Sector? What Financial Sector? Equity investing has been a Losers Gamer for forty years, except for inefficient, unproductive, dishonest management that skims from the retired. Our manufacturing systems are gone. When you need food what good is gold?
This Memorial Day when you are saying a prayer for those men and women who have given the ultimate sacrifice in the protection of our Democracy, say a prayer for the Free Enterprise System. May it RIP!
Who regulates the regulators? Politicians? Who regulates them with their power of incumbency and not Congressional Term Limits?
Citizens have power if only they had the guts to exercise it!
Like everything else technical analysis has it's role, it should be combines with other issues in order to decide good entry and exit points to trades.
I expect 1 to two up days early next week followed by falling below the line. those that have entered the fray have done so, those that are waiting for a bigger pull back will do so. therefore it makes it only a short term trade rally at best. i see no reason at all we should break highs, but I saw very little reason for the size and speed of this rally to begin with.
watch out for signs that goldman is using it's supplemental liquidity program. I saw very little of that last week.
stockta.com
Healthy trading!
On May 16 11:24 AM dcb wrote:
> does anyone know a good free charting service?
>
> Like everything else technical analysis has it's role, it should
> be combines with other issues in order to decide good entry and exit
> points to trades.
>
> I expect 1 to two up days early next week followed by falling below
> the line. those that have entered the fray have done so, those that
> are waiting for a bigger pull back will do so. therefore it makes
> it only a short term trade rally at best. i see no reason at all
> we should break highs, but I saw very little reason for the size
> and speed of this rally to begin with.
>
> watch out for signs that goldman is using it's supplemental liquidity
> program. I saw very little of that last week.
I am watching with great interest what direction the world’s only financial system trends in the coming days. It will greatly affect my trading decisions come Wednesday.
Healthy Trading!
16 10:01 AM Prudent Man CFA wrote:
> What financial sector? It is bankrupt and being kept alive by a bankrupt
> Federal Government! Talk about a house of cards. What is the "Black
> Swan" on the horizon?
>
> What has been accomplished in the past six months by all of this
> Federal Government intervention that the Free Market wouldn't have
> accomplished, quicker, better and honestly? The Fed and Treasury
> have just rearranged the chairs of the Financial Titanic by transferring
> their risks, as well as large salaries, to the taxpayers in order
> to protect their Cronies and political contributors. Coincidentally
> they have placed generations of Americans in debt which can only
> be reduced by debase our currency. Thank you Mr. Keynes who always
> knew the politicians would love his theories as they give them power
> over the people's earnings.
>
> The economic history of Bush-Obama is a replica of Hoover-FDR - more
> government regulations, control, power and inefficiency thrown on
> the back of the efficient, honest, hard working middle class. It
> is astonishing that we have not learned from the mistakes of the
> thirties. If things do not change quickly we can look forward to
> the 1936-type disaster that was only bailed out by the WWII War build
> up.
>
> Is that where BHO is going to take us after he gets all of this power
> and control? Will he try to remove Presidential Term Limits, similar
> FDR's attempt to stack the Supreme Court, at a time when we need
> them for Congress in order to return our government to the citizens?
> Now that we are a one party, left-wing Federal Government they can
> virtually do anything they want unless the voters wake up in 2010
> and radically change Congress, the people with the purse strings.
>
>
> Most of the companies in the DJIA as well as the most heavily weighted
> in the S&P 500 are matured, ripe organizations unable to be managed
> efficiently or compete and managed by bureaucrats who are more interested
> in policy and politics than efficiency, productivity and customer
> service.. They are going the way of the banks, insurance companies
> and autos. The compounded "real" return of these indices over the
> past forty-years is 1.6%, BEFORE FEES, less than 90 day T Bills.
> Why are these money managers and hedge funds being paid such large
> salaries by pension funds, trust funds, mutual funds, etc.? Because
> they are Crony-owned and Wall Street is a con.
>
> Financial Sector? What Financial Sector? Equity investing has been
> a Losers Gamer for forty years, except for inefficient, unproductive,
> dishonest management that skims from the retired. Our manufacturing
> systems are gone. When you need food what good is gold?
>
> This Memorial Day when you are saying a prayer for those men and
> women who have given the ultimate sacrifice in the protection of
> our Democracy, say a prayer for the Free Enterprise System. May it
> RIP!
The sale may have raised about $1.27 billion, based on the average price of Bank of America stock in the first quarter. The divestment was completed by March 31, according to a U.S. filing. Temasek declined to comment on the price.
Temasek, whose investments shrank 31 percent in the eight months through Nov. 30, raised its stake in China Construction Bank Corp. this week, and Chief Executive Officer Ho Ching said yesterday the fund would reduce exposure to developed economies. Temasek had spent about $5.9 billion since 2007 buying shares in Merrill Lynch & Co., acquired by Bank of America on Jan. 1 after the stock slid 78 percent last year.
“The belief now is that the world is not so American- centric anymore,” said Melvyn Teo, associate professor of finance at the Singapore Management University. “It’s going to be driven more and more by the Chinese economy and consumer so might as well load up more on Chinese banks than American banks.”
The value of Temasek’s assets fell to S$127 billion ($87 billion) in the eight months to Nov. 30 as the credit crisis drove down the value of stakes in Merrill Lynch, Barclays Plc and Standard Chartered Plc. The drop in the portfolio tracked a 38 percent retreat in the MSCI World Index.
Bank of America Stake
Ho, wife of Singapore Prime Minister Lee Hsien Loong, drove an expansion outside Singapore and increased financial assets to 40 percent of the company’s portfolio. Charles ‘Chip’ Goodyear, the 51-year-old former head of BHP Billiton Ltd. who oversaw a fourfold increase in the company’s stock during his almost five- year tenure as CEO, will replace Ho in October.
A Form 13F filing to the U.S. Securities and Exchange Commission yesterday from Temasek indicates that the fund no longer held shares in Bank of America or Merrill Lynch as of March 31. An earlier filing showed that the Singapore firm owned 219.7 million Merrill Lynch shares at the end of 2008.
At the average price of $6.73 for the first quarter, the stake would have been valued at $1.27 billion. The sale would have been worth $2.14 billion at yesterday’s closing price.
Since the end of March, when Temasek completed the sale, Bank of America has risen 66 percent. The stock dropped 52 percent in the first quarter.
Temasek confirmed it sold its Bank of America shares in an e-mailed response to Bloomberg News queries today. The company declined to say how much it sold the stake for or when the sale was conducted. Mark Tsang, a Hong Kong spokesman at Bank of America, declined to comment.
Raising Capital
“They probably want to turn the page on this one and move on,” said David Cohen, an economist with Action Economics in Singapore. “I suspect they’re telling themselves they should have focused on Asian investments, particularly China. You can’t fault them now. The financial crisis blind-sided a lot of investors.”
Merrill Lynch investors received 0.8595 Bank of America stock for each share held in the U.S. brokerage in the acquisition. The deal meant Temasek received about 188.8 million Bank of America shares, the equivalent of a 3.8 percent stake in the company, according to calculations by Bloomberg.
Bank of America Chief Executive Officer Kenneth Lewis has said he was pressured in December by Federal Reserve Chairman Ben S. Bernanke and former Treasury Secretary Henry Paulson to complete the Merrill Lynch acquisition amid mounting losses at the brokerage firm.
The Charlotte, North Carolina-based bank has to raise $33.9 billion to boost capital after U.S. regulator stress tests. Its shares have tumbled 69 percent in the past year, outpacing the 37 percent decline in the Standard & Poor’s 500 Index.
Wealth Funds
Bank of America sold part of its Construction Bank stake to a group of investors including Hopu Investment Management Co., a private-equity fund run by Goldman Sachs Group Inc.’s China partner Fang Fenglei, and Temasek, two people with knowledge of the matter said on May 12.
Morgan Stanley acted as an agent for Bank of America in the sale, not Merrill Lynch, the Wall Street Journal reported today, citing people familiar with the transaction.
Bank of America rose 2.7 percent to $11.31 in New York yesterday. It traded between $14.81 and $2.53 apiece in the first quarter.
Sovereign funds, mostly from Asia, have made “substantial losses” on more than $60 billion invested in U.S., Swiss and U.K. banks since the start of the subprime crisis, according to International Financial Services London, an industry lobby group.
Standard Chartered, Barclays
Along with its stake in Merrill Lynch, Temasek also raised holdings in Standard Chartered, the London-based bank that gets almost all its profit from emerging markets, and bought shares in Barclays, the U.K.’s third-biggest bank. The company had earlier said it wants the Organization for Economic Cooperation and Development countries to account for about a third of its investment portfolio.
Temasek will cut its holdings in the so-called OECD countries to 20 percent as it expands in Asia and emerging markets from Latin America to Africa, Ho said in a speech posted on the company’s Web site yesterday.
The MSCI World Index that tracks almost 1,700 stocks in developed markets has risen 0.5 percent this year, compared with a 45 percent gain in China’s benchmark Shanghai Composite Index.
Other Investments
“We have also been re-assessing our long term portfolio balance over the last two years,” Ho, 56, said in the May 12 speech. “As Asia continues to develop, it continues to de-risk. We are increasingly more confident of Asia’s future.”
Temasek was founded in 1974 to foster development of the island’s banks, airlines and ports, and remains the biggest shareholder of six of the 10 biggest Singapore companies by market value. It owns shares of the island’s biggest bank and its largest telephone company.
Temasek’s investments in Asia include Bank of China Ltd. and ICICI Bank Ltd., India’s No. 2 lender.
“We’ve been very heavily overweight in Asia for some years now and leery of the Western financial institutions because Asia is where the growth is at,” said Hugh Young, managing director at Aberdeen Asset Management Plc, which has about $30 billion of Asian assets.
To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net
Last Updated: May 15, 2009 05:58 EDT
earning the title of most extreme move ever. The percent now is 68%. In the past it would take months to see a 20% change.
At 68% the market is bull confirmed but at historic highs that recent past has shown lead to sharp reversals, 64% is a reversal. Bespoke Investment Group has a blog on the Russell 1000 stocks with highest short interest, sign of things to come?
To put is simply, this is an indicator of who is in charge, buyers or sellers.
Can't beat it.
On May 16 11:24 AM dcb wrote:
> does anyone know a good free charting service?
>
> Like everything else technical analysis has it's role, it should
> be combines with other issues in order to decide good entry and exit
> points to trades.
>
> I expect 1 to two up days early next week followed by falling below
> the line. those that have entered the fray have done so, those that
> are waiting for a bigger pull back will do so. therefore it makes
> it only a short term trade rally at best. i see no reason at all
> we should break highs, but I saw very little reason for the size
> and speed of this rally to begin with.
>
> watch out for signs that goldman is using it's supplemental liquidity
> program. I saw very little of that last week.
finviz.com
Yes, timely chart. During normal market times, I find myself preferring T/A. But since we aren't in normal times now, I prefer fundamentals like failed treasury auctions, US and world political conditions, unemployment, inflation numbers, housing foreclosure trends, etcetra. as my primary compass.
Thank you
freestockcharts.com
On May 16 11:24 AM dcb wrote:
> does anyone know a good free charting service?
>
> Like everything else technical analysis has it's role, it should
> be combines with other issues in order to decide good entry and exit
> points to trades.
>
> I expect 1 to two up days early next week followed by falling below
> the line. those that have entered the fray have done so, those that
> are waiting for a bigger pull back will do so. therefore it makes
> it only a short term trade rally at best. i see no reason at all
> we should break highs, but I saw very little reason for the size
> and speed of this rally to begin with.
>
> watch out for signs that goldman is using it's supplemental liquidity
> program. I saw very little of that last week.