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Dr. John Faessel
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Dr. John L. Faessel is a seasoned and respected Wall Street professional with industry-wide recognition for expertise in market strategy and analysis. He is widely recognized for his insights in public companies. For over 20-years Dr. Faessel’s ON THE MARKET reports have been widely distributed... More
  • ON THE MARKET - A No FEAR DANGER Alert! Watch It 0 comments
    Sep 10, 2012 9:32 AM | about stocks: INTC

    Monday pre-market 9-10-2012

    Dr. John L. Faessel

    ON THE MARKET

    Commentary and Insights

    Quote of the Day

    "The continued survival of the euro is assured."

    ~ George Soros ~

    ~~~~~

    A No FEAR DANGER alert! Watch it....

    1. Friday's CBOE Total Exchange Put / Call Volume Ratio - 0.74 is the lowest since the March high in the Market

    2. Vix ticks 14.33 on Friday. The lows of the cycle were 13.44

    Dow Transports still below 50 and 200-day moving averages - a striking divergence

    'Price' in the S&P 500 (SPX) sniffing Channel highs

    The McClellan remains in NEUTRAL at plus 105.

    Key 14-week old Channel resistance off early June lows basically intact. Bullish S&P earnings are supposed to come in at around $100 to $105 in 2012 and $110 next year. S&P 500 futures are off about 4 points. China slowing, Euro concerns & Israeli war with Iran plus you name it have bearish...

    "Let's Pretend" in EuroLand...

    The Euro politicians, sans Germany's, prattle on and on along with ECB President Draghi pushing for Germany to write checks to bail out their spendthrift brethren. This is obviously understandable as they created the mess to begin with and they want to get reelected. This new ECB policy of buying the sovereign bonds of the Southern European countries is a disaster waiting to happen in spite of George Soros's quote above. It's only a matter of time; think out a few months when those southern countries post "new" bad members and get further downgrades from Moody's etc. Note that 27% of the ECB funding does come from Germany; I presume they consider that the cost of doing business, but will they rollover and finance those countries that are actually doing 'nil' to fix the mess. A poll published on Friday on Spiegel Online showed that 54% of Germans were in favor of the court blocking the legislation, reflecting the degree to which public opposition to bailouts is increasing. Recall last week Bundesbank President Jens Weidmann said that he had considered resigning over his opposition to ECB bond purchases. German Finance Minister Wolfgang Schaeuble warned investors not to expect too much from the ECB plan.

    ___________

    Friday major stock market averages ended slightly higher on lower but above average volume; a subdued reaction to what analysts say was a very disappointing jobs report. The S&P 500 (SPX) rose 0.4%. The Dow added 0.1% and the Nasdaq posted a fractional gain. Both averages were pulled down by Intel's (NASDAQ:INTC) 4% decline as revenue guidance suggested a Q3 sales decline of near $1billion from earlier forecasts.

    ________

    EuroLand Bond Yields in big slide as the Euro printing presses set to roar.

    · Greek 10-year yields 21.14% down from 24.41% a couple of weeks ago

    · Italy 10-year (gross) bond yield - 5.18%- off from highs of 7.29% on 11-24.

    · Spanish 10-year (generic) bond yield - 5.67% - a month ago yields ticked cycle highs of 7.41%.

    ---------------------------------------

    The S&P 500 (SPX) closed Friday at 1437.92

    Channel resistance is at 1445.

    Decent multi-point price support at 1397

    50-day moving average support is at 1384

    Key channel / trendline support is at 1386

    Longer out term price support is at 1325 /1320/1313/ 1309

    The 200-day moving average support is at (SPX) 1342

    Stronger 'Price' support in the (SPX) is at the June 4th lows of 1266 and will be the battleground zone if the market tests its lows.

    Friday's key indicators and metrics:

    Cycle highs or lows are in red

    · McClellan Oscillator is NEUTRAL at plus 105

    · Euro - 1.2798

    · VIX - 14.38

    · CBOE Put / Call Volume Ratio - 0.74

    · Canadian Dollar - 1.0221

    · Gold (COMEX) $1740.5

    · Copper - 3.6450

    · Crude oil (NYMEX) $96.42

    · Brent Crude $114.67

    · Lumber (NASDAQ:CME) 284.3

    · Silver (COMEX) 33.690

    · US Dollar Index - 80.234

    · The Treasury 10-year yield 1.66%

    · The 30-year Treasury is at 2.83%

    · Swiss Franc - 1.0577

    · Aussie Dollar - 1.0386

    · Natural Gas (Globex) 2.682

    · 3-month $ LIBOR at 0.412

    · Japanese Yen 12776

    This week's Bullish Investor Sentiment.

    Bullishness eased slightly while the market was in a broad rally

    (High BULLISH readings in the Investor Sentiment Readings usually are signs of Market tops; low ones, market bottoms.)

    · The American Association of Individual Investors [AAII] Investor Sentiment Survey of BULLISHNESS fell to 33.1 from 34.7% prior week it had ticked cycle lows of 22.2% on 7/23/2012 and that was the lowest percentile since August 2010..

    · The Market Vane (Market Letter Survey) for the second week in a row was 63%.

    · Consensus Index BULLISH slipped a tic to 70% from 71% the prior week. 3-weeks ago it was 72%. 4-weeks ago it was 66%.

    · The AAII Investor Survey of BEARISHNESS slipped a tad to 33.1% to from 32.6% the prior week. 3-months ago it was 25.9 4-weeks ago it was 46%. On August 4th 2011 it posted cycle highs of 49.9% in Bearishness.

    · The Citigroup "Panic / Euphoria" Model fell slightly to plus 0.26 from plus 0.33. At the end of June it ticked cycle lows of minus 0.31in the Panic mode. It's still registering in the Neutral zone, but near the highest level in over a year.

    The BARRON's Confidence Index duplicated last week's posting of 66.6. Cycle lows of 64.7 were 5 weeks ago. One-year ago it was 69.6.

    The Confidence Index is the premier measure of how the bond markets trillions (total global is around $91 trillion and USA is 39% of that) are allocated: (The bond market is twice the size of the stock market.)

    The Index is the High-grade bond index divided by intermediate-grade index. A decline in latter vs. former - generally indicates rising confidence, pointing to higher stocks.

    Stocks: INTC
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