Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
Yes, you can put up a chart of multiples and the easy inference to make is that multiples are trending upwards to extend into the promised land occupied by the 1990s, but....I'd like to see that chart overlaid with a plot of global credit growth, and global employment (or as close as you can get to it), perhaps global trade. I don't know, it seems to me that the high multiples in the 90s almost certainly coincided with a massive credit bubble. How indebted were people generally prior to the 90s? How big were the government deficits? Is that same thing going to happen again, with so much debt yet to be either paid down or written off? Really, I can't see it. But hey, I (like most, I imagine) didn't see this rally coming either.
Stocks Could Continue Surprising Ascent [View article]
This market has gone mental. 250 SPX points since the beginning of the year, on the back of earnings that went DOWN. 60 points in May, alone, and we're only about 1/2 way through the month! What are the bulls expecting, another 60 points to end the month? At this rate the SPX will be trading with a 17 handle by the beginning of June...another 720 points puts us at 2300 by the end of the year!!! Mental!!! All this on the back of a few jobless claims reports, when most of the other macro is mediocre at best. Crude put in a bearish engulfing last month, which they bought up sharpish to 97 this month, but which is clearly now rolling over, probably targeting 86 or maybe 78. Copper collapsed today; looks like the short covering in that particularly commodity has run its course. Put-call ratio is in the dumps. Get long up here based on a bunch of charts? No thanks.
The Bottom Is In For Gold And Mining Stocks [View article]
Hmm, buying any option when IV is very high is fraught with danger. You can be bang on on your entry and yet due to the collapse in IV you can actually lose money.
Invest In Greece Because The Turnaround Has Already Started [View article]
Well, looking at that chart, that's a brave call to buy here. At the end of the day, as you point out, the market has seen a very handsome rebound from the lows, which were probably priced for armageddon. The question is, what is the market priced for now? That could be a developing head and shoulders formation on the right hand side of that chart, which doesn't even need to fail for the right shoulder to run back down to the 14 or 15 handle - a 20% drop from here. Alternatively, it could just carry on and bust out of the topside resistance - essentially, a triple top breakout. I'd rather wait for the breakout to take place, or a retracement to 14-15, whichever comes first.
Company Earnings Support Stock Rally: More Upside Potential For The S&P 500 [View article]
"with company earnings growing at a 7% level in the coming years"
Well, there lies the rub. Will they rise at 7% in coming years? You seem to be happy to assume that they will. How much did they rise last year? They seem to have gone from $87.23 to $86.46.
Commodity Chart Of The Day: Lumber - Off The Beaten Path [View article]
FCG, I agree. Nymex (CL) put in a bearish engulfing on the monthly chart last month which I consider to be a leading indicator of where not just CL but equities are headed, although the lag can be months, and indeed there could be many who are playing long equities short commodities so the pull on SPX could be very weak this time round.
Almost predictably that lower lower (circa 86) was and has been bought aggressively (as "da boyz" are not in the game of giving money away easily), up to circa 97 so far this month.
We had a good sell-off yesterday, which again was bought up aggressively presumably to chase out the shorts that are clearly building in the market. Notably though, they weren't able to, or at least didn't, push it higher than Thursday to turn it into a bullish engulfing. Yesterday's action seems to me to be incredibly bearish; I tend to see these kinds of shenanigans occurring at market tops and market bottoms to chase out early shorts and longs respectively.
Interestingly you can compare Brent to Nymex; the latter shows far more weakness. Presumably both are manipulated but to what extent I have no idea. I do though like to check each against the other for confirmation or disconfirmation.
Commodity Chart Of The Day: Lumber - Off The Beaten Path [View article]
This is an interesting chart to post up. I thought I'd check the "lumber leads" thesis as it's been a while since I last looked at a lumber chart and I couldn't remember the conclusions (if any) from the last time that I looked. Well, it looks like lumber is either a leading or coincident indicator - see the following chart which plots lumber futures against the SPX on a monthly chart:
The bad news for SPX bears is that the SPX was able to rise for at least 4 years in the face of declining lumber prices. So, I wouldn't get too heavy on those ES shorts right now.
I've been scratching my head all day trying to figure out what's behind today's massive dollar rally, which coincided with a huge sell-off on crude and gold, but which reversed on crude very strongly, and also to an extent on gold, but which has left dollar crosses languishing. Also copper has been strong today, and equities resilient.
All this has come in the face of a negative and deteriorating macro backdrop, with the sole exception it would seem of the jobless claims and NFPs, which many have argued are being distorted by recent legislative changes.
My best guess, is that this is a huge head-fake, and from here risk assets will be sold, maybe gently through the summer, and the dollar will be sold, perhaps down to the 200DMA. This lumber chart adds some support for that "guess". But it is a guess. The good thing is, I'll know if I'm wrong quite easily because we'll see further deterioration in the $ crosses on Monday if that's the case.
The cost of inflation Christopher is borne by the whole population in the form of higher prices. Furthermore inflation is a debtor's friend and a creditor's enemy. Why should the government or one of its tentacles (the Fed) get to choose the winners and losers? Why should the prudent pay the price of mistakes by the imprudent? Why should those with no assets - the vast majority of any population - pay higher prices to benefit those with assets? This is the subversion of market forces. If the market wants to enforce lower prices it is for a very good reason.
Nominal growth? This is an illusion to make people feel better. Real growth is real. Real anything is real.
There is no free lunch. Repeat. There is no free lunch.
It seems the author is a fully paid-up member of the BB supporters' club.
We "need" inflation in order to restore full employment and to cut the deficit? Really? Like, inflation is some kind of magic wand that does all the good stuff in life and no bad? Incredible.
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
I don't know, it seems to me that the high multiples in the 90s almost certainly coincided with a massive credit bubble. How indebted were people generally prior to the 90s? How big were the government deficits? Is that same thing going to happen again, with so much debt yet to be either paid down or written off? Really, I can't see it. But hey, I (like most, I imagine) didn't see this rally coming either.
S&P 500: Up 1001 Points [View article]
1750 by close.
2000 by Friday.
4000 by Christmas.
Count me in! I'm a buyer!!!
Stocks Could Continue Surprising Ascent [View article]
250 SPX points since the beginning of the year, on the back of earnings that went DOWN.
60 points in May, alone, and we're only about 1/2 way through the month! What are the bulls expecting, another 60 points to end the month? At this rate the SPX will be trading with a 17 handle by the beginning of June...another 720 points puts us at 2300 by the end of the year!!! Mental!!!
All this on the back of a few jobless claims reports, when most of the other macro is mediocre at best.
Crude put in a bearish engulfing last month, which they bought up sharpish to 97 this month, but which is clearly now rolling over, probably targeting 86 or maybe 78.
Copper collapsed today; looks like the short covering in that particularly commodity has run its course.
Put-call ratio is in the dumps.
Get long up here based on a bunch of charts? No thanks.
Invest In Greece Because The Turnaround Has Already Started [View article]
The Bottom Is In For Gold And Mining Stocks [View article]
You can be bang on on your entry and yet due to the collapse in IV you can actually lose money.
Invest In Greece Because The Turnaround Has Already Started [View article]
At the end of the day, as you point out, the market has seen a very handsome rebound from the lows, which were probably priced for armageddon. The question is, what is the market priced for now? That could be a developing head and shoulders formation on the right hand side of that chart, which doesn't even need to fail for the right shoulder to run back down to the 14 or 15 handle - a 20% drop from here.
Alternatively, it could just carry on and bust out of the topside resistance - essentially, a triple top breakout. I'd rather wait for the breakout to take place, or a retracement to 14-15, whichever comes first.
Charting Down Under: The Australia All Ordinaries Index [View article]
I see no update. The attached charts are still dated Feb 2012. They are hence not particularly useful.
Shurely shome mishtake?
A New Baby Boom, Inflation, And The Scariest Jobs Chart Ever [View article]
Recession Watch: ECRI's Weekly Leading Indicator Continues To Show Improvement [View article]
I think that is supposed to read
"..at 131.0, up from last week's 130.6".
http://bit.ly/11sJQn3
Company Earnings Support Stock Rally: More Upside Potential For The S&P 500 [View article]
Well, there lies the rub. Will they rise at 7% in coming years? You seem to be happy to assume that they will. How much did they rise last year? They seem to have gone from $87.23 to $86.46.
Commodity Chart Of The Day: Lumber - Off The Beaten Path [View article]
Almost predictably that lower lower (circa 86) was and has been bought aggressively (as "da boyz" are not in the game of giving money away easily), up to circa 97 so far this month.
We had a good sell-off yesterday, which again was bought up aggressively presumably to chase out the shorts that are clearly building in the market. Notably though, they weren't able to, or at least didn't, push it higher than Thursday to turn it into a bullish engulfing. Yesterday's action seems to me to be incredibly bearish; I tend to see these kinds of shenanigans occurring at market tops and market bottoms to chase out early shorts and longs respectively.
Interestingly you can compare Brent to Nymex; the latter shows far more weakness. Presumably both are manipulated but to what extent I have no idea. I do though like to check each against the other for confirmation or disconfirmation.
Commodity Chart Of The Day: Lumber - Off The Beaten Path [View article]
it looks like 300 is quite doable to the downside.
Commodity Chart Of The Day: Lumber - Off The Beaten Path [View article]
Well, it looks like lumber is either a leading or coincident indicator - see the following chart which plots lumber futures against the SPX on a monthly chart:
http://bit.ly/15VlZxu
The bad news for SPX bears is that the SPX was able to rise for at least 4 years in the face of declining lumber prices. So, I wouldn't get too heavy on those ES shorts right now.
I've been scratching my head all day trying to figure out what's behind today's massive dollar rally, which coincided with a huge sell-off on crude and gold, but which reversed on crude very strongly, and also to an extent on gold, but which has left dollar crosses languishing. Also copper has been strong today, and equities resilient.
All this has come in the face of a negative and deteriorating macro backdrop, with the sole exception it would seem of the jobless claims and NFPs, which many have argued are being distorted by recent legislative changes.
My best guess, is that this is a huge head-fake, and from here risk assets will be sold, maybe gently through the summer, and the dollar will be sold, perhaps down to the 200DMA. This lumber chart adds some support for that "guess".
But it is a guess. The good thing is, I'll know if I'm wrong quite easily because we'll see further deterioration in the $ crosses on Monday if that's the case.
Bull Story Remains Intact [View article]
Nominal growth? This is an illusion to make people feel better. Real growth is real. Real anything is real.
There is no free lunch.
Repeat. There is no free lunch.
Bull Story Remains Intact [View article]
We "need" inflation in order to restore full employment and to cut the deficit? Really? Like, inflation is some kind of magic wand that does all the good stuff in life and no bad? Incredible.