July 10th. data released. Below is the updated thirty-nine-week data compilation of 2009/10 rail shipping weekly figures compared to 2008/09. The Delta change illustrates the rate of change between the previous weeks data. The average at the bottom shows how the delta change average is changing over time. Why is this data useful: To track actual economic recovery outside of government stimulus money, which has distorted real GDP growth data. This, along with Long Beach container shipping and PCI diesel consumption are helpful in judging industrial production output before those figures are released.
7/16/10 STATEMENT: All time periods of weekly rail shipping dropped, some dramatically. Also, chemical (-5.4%), food (-9.3%), forest (-6.6%) and coal (-6.7%) all are now negative. Along with very negative weekly figures from the rail report comes Long Beach container data, released on 7/10, covering the month of June. All delta change averages are now dropping as well, as you can see at the bottom of the rail data.
Both Inbound shipping and outbound Long Beach shipping were down from last month. Out bound containers went from 12.69% May year over year to 1.73% in June, year over year. Total container usage dropped to 15.22% June year over year from 18.23% May year over year.
The Ceridian diesel truck usage data dropped to 109.3 June from 111.4 in May. May, may have been the peak industrial production period for this recovery period.
The stock market actually noticed some of this and responded correctly by selling off. We are very close to confirming a serious downtrend. We have hit up against the 50-day moving average for the third time and are about to confirm a head and shoulders pattern. If the most recent low of SPX 1010 is violated with a close below that, we are headed down to test SPX, 953 about 10 days from now. Where we can have another rally up to the 50-day moving average and then another sell-off down the SPX, 869. These washouts could carry us back down to SPX, 666, the May sign of the devil. At this point the fed should raise interests ½% to begin to force banks to lend, if they continue to offer zero interest banks will continue to live off the spread and never loan another cent. Lowering interest any more is not possible and printing money in sheer suicide, forcing the banks off the spread is the only hope I see.
RAIL TRAFFIC | 2010/09 COMPARED TO 2009/08 | |||||
Yr to Date | Current Wk | 4 Wk Roll Av | ||||
DATE | Delta | Delta | Delta | |||
Change | Change | Change | ||||
7/10/2010 | 9.6 | -0.3 | 1.6 | -24.6 | 14.1 | -3 |
6/30/2010 | 9.9 | 0.6 | 26.2 | 11 | 17.1 | 5.6 |
6/26/2010 | 9.3 | 0.2 | 15.2 | 1 | 11.5 | -2.7 |
6/19/2010 | 9.1 | 0.2 | 14.2 | 0.7 | 14.2 | 0.7 |
6/12/2010 | 8.9 | 0.2 | 13.5 | 10.5 | 13.5 | -0.6 |
6/5/2010 | 8.7 | -0.2 | 3 | -24.5 | 14.1 | -3 |
5/29/2010 | 8.9 | 0.8 | 27.5 | 16 | 17.1 | 2.9 |
5/22/2010 | 8.1 | 0.2 | 11.5 | -4.5 | 14.2 | -0.8 |
5/15/2010 | 7.9 | 0.8 | 16 | 1 | 15 | -0.2 |
5/1/2010 | 7.1 | 0.5 | 15 | 0.2 | 15.2 | 1.6 |
4/24/2010 | 6.6 | 0.5 | 14.8 | -0.7 | 13.6 | 0 |
4/17/2010 | 6.1 | 0.7 | 15.5 | 0 | 13.6 | 2.4 |
4/10/2010 | 5.4 | 0.7 | 15.5 | 6.7 | 11.2 | 1.8 |
4/3/2010 | 4.7 | 0.3 | 8.8 | -5.8 | 9.4 | -0.1 |
3/26/2010 | 4.4 | 0.9 | 14.6 | 8.2 | 9.5 | 1.5 |
3/19/2010 | 3.5 | 0.3 | 6.4 | -1.5 | 8 | 0.1 |
3/12/2010 | 3.2 | 0.5 | 7.9 | -1.4 | 7.9 | 3.2 |
3/5/2010 | 2.7 | 0.8 | 9.3 | 1 | 4.7 | 1.6 |
2/27/2010 | 1.9 | 1 | 8.3 | 2.9 | 3.1 | 0.5 |
2/20/2010 | 0.9 | 0.8 | 5.4 | 10 | 2.6 | 0.4 |
2/13/2010 | 0.1 | -1 | -4.6 | -7.6 | 2.2 | -1.5 |
2/6/2010 | 1.1 | 0.4 | 3 | -4.2 | 3.7 | 3 |
1/30/2010 | 0.7 | 2.1 | 7.2 | 3.7 | 0.7 | 1.9 |
1/23/2010 | -1.4 | 2.9 | 3.5 | 3.4 | -1.2 | 0.4 |
1/16/2010 | -4.3 | 4.3 | 0.1 | 8.7 | -1.6 | -1.1 |
1/9/2010 | -8.6 | 6.7 | -8.6 | -8.4 | -0.5 | -0.2 |
1/2/2010 | -15.3 | 0.2 | -0.2 | -5 | -0.3 | 1.3 |
12/26/2009 | -15.5 | 0.3 | 4.8 | 1 | -1.6 | 1.8 |
12/19/2009 | -15.8 | 0.4 | 3.8 | 9.6 | -3.4 | 2.1 |
12/12/2009 | -16.2 | 0.1 | -5.8 | -0.9 | -5.5 | 0.4 |
12/5/2009 | -16.3 | 0.2 | -4.9 | 0 | -5.9 | 1.7 |
11/28/2009 | -16.5 | 0.2 | -4.9 | 0.4 | -7.6 | 1.8 |
11/21/2009 | -16.7 | 0.2 | -5.3 | 3.1 | -9.4 | 1.9 |
11/14/2009 | -16.9 | 0.2 | -8.4 | 2.7 | -11.3 | 1.4 |
11/7/2009 | -17.1 | 0.2 | -11.1 | 1.5 | -12.7 | 0.9 |
10/31/2009 | -17.3 | 0.3 | -12.6 | -0.4 | -13.6 | 0 |
10/24/2009 | -17.6 | 0.3 | -12.2 | 1.7 | -13.6 | 0.4 |
11/11/2009 | -17.9 | 0.1 | -13.9 | 1.1 | -14 | 2 |
10/3/2009 | -18 | 0.1 | -15 | 1.2 | -16 | 1.2 |
9/26/2009 | -18.1 | 0 | -16.2 | 0 | -17.2 | 0 |
7/10/2010 | AVERAGE= | 0.71 | AVERAGE= | 0.46 | AVERAGE= | 0.80 |
6/30/2010 | AVERAGE= | 0.74 | AVERAGE= | 1.12 | AVERAGE= | 0.90 |
6/26/2010 | AVERAGE= | 0.74 | AVERAGE= | 0.85 | AVERAGE= | 0.78 |
6/19/2010 | AVERAGE= | 0.76 | AVERAGE= | 0.84 | AVERAGE= | 0.87 |
6/12/2010 | AVERAGE= | 0.77 | AVERAGE= | 0.85 | AVERAGE= | 0.88 |
6/5/2010 | AVERAGE= | 0.79 | AVERAGE= | 0.56 | AVERAGE= | 0.92 |
5/29/2010 | AVERAGE= | 0.82 | AVERAGE= | 1.32 | AVERAGE= | 1.04 |
5/22/2010 | AVERAGE= | 0.82 | AVERAGE= | 0.87 | AVERAGE= | 0.98 |
5/15/2010 | AVERAGE= | 0.84 | AVERAGE= | 1.04 | AVERAGE= | 1.04 |
5/1/2010 | AVERAGE= | 0.84 | AVERAGE= | 1.04 | AVERAGE= | 1.08 |
7/11/2010 STATEMENT: Rail is looking pretty good here. Big move up in the weekly figures. Of the 7 industrial sectors food is the only one negative at –4.5%.
7/2/2010 STATEMENT: Of the seven industrial groups tracked in the weekly rail data only one was negative. This was food at –1% and lumber moved positive at +.1%. The delta change between weeks has slowed and the average of the delta change is dropping. There is nothing in this that reflects anything but slow GDP growth going forward. A GDP at 3% can’t create a recovery with the stimulus insufficient, misdirected and now the US gove is out of bullets.
Our employment picture is anemic with the stimulus applied to banks who have horded the money and stymied any possibility of small business growth. The drop to 34.1 in the hours worked and the 650K people who have stopped looking for work and the 301K household employment data is very distressing. The ISM data dropping to 56.2 from 59 only confirms the slow pace of this recovery. We have spent 800 billion to employ 593,000 citizens. I don’t even have a calculator, which can figure how much money it has costs to get these people employed, but it is an utter disaster. Our president probably knows how screwed up this is and I wonder if he realizes how much he has screwed up. Judging from his trust in BP management I can only assume he is a brilliant man, yet a slow learner, to trusting of big brained sociopath’s.
From a trading perspective we are so oversold that it looks like the DJI and the SPX at 1008 may hold as a tradable bottom. But only for trading in a range, in a down trend, with the 200 day MA as the selloff top. Again, this is a very bad sign, and any negative news can now drive the SPX into a new range with the bottom between 950/980. I bought LPL, TC and FBR as trades only, not as buy and holds. Good luck and be careful.
6/19/2010 STATEMENT: On the surface the weekly rail figures continue to look ok, however the average change of delta between weeks is dropping in all 3 time frames looked at, (see the average figures below). This change between weeks is a prelude to lack luster industrial growth. The rubber is hitting the road here, as year to date figures compared to last year will be harder and harder to beat. Also, grain turned negative, (first time in a while) along with food, of the 7 industrial groups followed.
Welcome to jive economics, it works much better when last year was easy to beat. Meanwhile, the DJ dropped 400 and the SPX hitting 1067, critical support and testing the bottom and also washing out a few of my stops, (AKS, UNG and GRS). Good luck next week and be careful.
6/16/2010 STATEMENT: The weekly data from last Friday recovered from the week before. Only forest products are negative. It appears however, that the average delta change is starting to slow. This is apparent in the 4 Wk Roll Ave, which has moved down in the last 3 weeks from 1.04 to .88 as noted at the bottom of the data. This is not a good sign as weekly rail figures lead container and diesel consumption.
The Long Beach container data for May was very positive, as was industrial production. Container shipping has improved 18.2% year over year and is only off –5.7% from 2 years ago. With positive PCI diesel data, containers and rail doing ok US GDP should continue around 3%. This is great but still not quite enough to increase employment much and that in turn will adversely effect housing. We are not stalling, but we are not moving ahead quickly enough for a robust recovery.
6/11/2010 STATEMENT: Current week rail data has dropped off a cliff. In the current week time frame the food and forest industrial sectors are now negative and food has turned negative on the four week rolling average. A very weak weekly release, no matter how you cut it. PCI diesel truck figures of +8.89% and Long Beach container data of +18.23% for May were good and support a moderate economic recovery. Rail in the first week in June throws this improvement into question. If this trend continues into June we can look for the PCI, long Beach and industrial production figures to begin to drop pulling down GDP.
6/4/2010 STATEMENT: Weekly rail shipping figures for last week have reversed to the upside. All seven of the industrial groups were positive, reversing the previous weeks trend. The delta change between weeks, improved in all three-time periods. This is encouraging, as comparisons to last year will be increasing more difficult to beat.
This report is helpful, as last months employment headline numbers were horrible. No, private sector jobs growth but underlying improvement in wages and time worked by the employed. No need to hire anyone yet! Now, the SPX will be locked in a trading range below it’s 200 day moving average and the recent low.
5/28/2010 STATEMENT: Of the 7 major sectors tracked in the weekly rail data, food has turned negative, (-3.5%) and coal looks like a close second. The tenor of the 3 periods tracked is changing from positive progress to a serious stall. The relative delta change between weeks is dropping in all 3 periods forecasting a slowdown in overall rail traffic.
If private, non-government generated GDP is to continue to increase, rail traffic should continue at a strong pace. With the continued instability in multiple macro market forces any perceived US economic weakness could cause huge problems in the indexes.
As this bottom is tested we are in a position of weakness. A dangerous place to be. Any strong negative news at this point could take the market down to test another lower support, (SPX 1000). SPX 1045 offers current support but tight stops on all positions
should be set. These positions should be set at least to protect prices just below the recent test low. VXX as a weekend hedge is a good idea, to further protect long positions. These trades can easily be modified on Tuesday if things are more stable.
Disclosure: short spx