Two Really Important Points From Barron's

This is from the trader column (subscription required):Point 1:Excluding erratic aircraft data, orders for big-ticket items fell in February for a second straight month -- a possible sign corporate belt-tightening may have begun. Will increasing fiscal thrift put a kibosh on hiring -- or worse, lead to job cuts?So far, the robust job market has been a pillar holding up consumer spending and economic growth. And it's even more crucial now, as tightening credit and declining home prices put in peril America's wealth effect and spending habits.Point...

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The "Just Enough" Job Market

In his latest Congressional testimony, Bernanke made positive comments about the job market:Employment has continued to expand as job losses in manufacturing and residential construction have been more than offset by gains in other sectors, notably health care, leisure and hospitality, and professional and technical services, and unemployment remains...

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The Long View

Sometimes it's a really good idea to see where the markets are in relation to the longer trend. This helps to give us an idea of where the markets are in an overall cycle.Of the three averages I track (IWN, QQQQ, and SPY), the IWNs have the most bullish chart. It's a simple 5-year rally with various consolidations along the way.The SPYs had a strong...

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The Markets Last Week

First, here are today's charts. They look very similar to yesterday's chart because -- once again -- we had a change in momentum during the trading day. Mid-day reversals are considered bullish because they indicate there is enough bullish sentiment in the markets to change direction -- to halt a downtrend.Looking at the charts for the week, you'll...

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Chicago PMI Spikes

From CBS: Business conditions improved markedly in the Chicago region in March, according to a closely watched business barometer.The Chicago purchasing managers index rose to 61.7% from 47.9% in February, the NAPM-Chicago reported Friday.It was the largest month-to-month gain in the 39-year history of the index. It was the highest reading since April 2005.Economists were expecting an increase in the Chicago PMI to about 50%, according to a survey conducted by MarketWatch. See Economic Calendar.Readings over 50% indicate a majority of firms in...

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Construction Spending Up .3%

From the Census BureauResidential construction spending dropped 1%; all of the gains came from non-residential spending which increased 1.5%.Residential spending is down 15% from year ago levels while non-residential spending is up 13.6%.Non-residential construction has increased from 44% of the construction market in February 2006 to 51% in February 2007. That means so long as non-residential construction increases at more or less the decrease in residential spending, non-residential should be able to take-up the slack in residential spendi...

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Personal Income Up .6%

First a mea culpa. I used to use the NBER site for links to current news releases. I used their link today to get the personal income information. Unfortunately for me, they still had the old link up so I analyzed the February report. This is the second time the NBER has been late in switching links, so I won't be using their site for this purpose anymore.Anonymous (a regular commenter) caught that and commented on it. Thanks to his pointing that out I only looked like a schmuck for about an hour.NOW -- onto this month's report.From Bloomberg:Both...

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Are Oil Prices Breaking Out?

Here's a daily of oil prices. Recent price action has taken prices above the neckline in the head and shoulders formation.Here's a look at the weekly chart. This gives us a better view of how this price action is playing out over the longer term.Also remember, we have a strong fundamental reason for this price action -- the Iranian situation and...

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OFT Backs Down

Proving once again that the financial regulatory bodies in Britain are "pussies", when it comes to standing up to vested interests, the Office of fair Trading (OFT) has baoked down on imposing limits on bank charges.The OFT tried its best to save face by shrouding its decision in the thin, and flimsy, veneer of initiating an in depth review.Stating:"The banking industry is not straightforward and that a more detailed examination is needed".However, the reality is that the OFT has faced sustained and intense lobbying from the banks and they have...

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GDP Revised Upwards to 2.5%

From CBS Marketwatch:The nation's economy grew at a 2.5% annual pace in the final three months of 2006, slightly faster than the previous estimate of 2.2%, the Commerce Department reported Thursday.The upward revision to gross domestic product mainly reflected higher prices for trucks that boostedvehicle inventories. Investments in software were revised...

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Markets Turnaround

The market had a nice reversal today. All the markets moved in tandem and in two directions. They all sold off until about 1 PM and then rallied to close near even....

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Oil Prices Jump

Here's a 2-week chart as of 2 PM EST.From BloombergCrude oil rose above $66 a barrel in New York, approaching a six-month high, on concern that Iran's capture of 15 British sailors and marines increases the likelihood of a disruption of shipments from the Persian Gulf.Iran, the world's fourth-biggest oil producer, won't release the only woman being...

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SubPrime Shakeout Hitting Retail Sales

From Bloomberg:Atlanta-based Home Depot, the world's largest home- improvement retailer, said last month it expects its first annual profit drop since at least 1990 this year, citing the housing market. The company said profit will decrease this year to as little as $2.55 a share from $2.79, or $5.76 billion, last year. ....Wal-Mart spokesman John Simley declined to comment. The Bentonville, Arkansas-based company will report March sales on April 12. Wal-Mart in 2006 had the smallest same-store sales gain in at least 27 years. Its shares have increased...

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Hamper Schemes Ring-Fenced

Following on from the collapse of Farepak, the Christmas hamper company, last year the government has finally got its act together.It has been announced that payments to Christmas Hamper schemes will be ring-fenced, so that savers will be protected from suffering the same fate as the victims of the Farepak collapse.Consumer minister, Ian McCartney, said that payments to similar schemes should now be placed in separate accounts, run by independent trustees on behalf of the customers.The money would only be released to pay for the customers' orders...

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Market Breadth Turning Neutral

These charts are from Stockcharts. They show a market that is moving away from a bullish sentiment.Fewer new highs means there is less of an upward pull in trading.A moderating advance/decline line also means a moving away from bullish sentime...

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Big Inventory Build Out There ....

After yesterday's durable goods report, I looked at overall business inventories from the St. Louis Fed. There's a lot of stuff in the system.This inventory build may be one reason durable goods orders have dropped 4 of the last 5 months (from the WSJ)"It's looking like capital expenditures aren't going to be able to offset housing and autos with...

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Markets Looking A Bit Weaker

At the end of last week there was a lot of bullishness to the hourly and daily charts. The market trended up until mid-Wednesday, popped big-time after the FOMC announcement and followed with two days of consolidation.That trend is reversing itself this week. I added the Fiboinacci fans to get an idea of where the pullbacks stood in relation to Fib...

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Bernanke on Housing

From his Congressional Statement:The principal source of the slowdown in economic growth that began last spring has been the substantial correction in the housing market. Following an extended boom in housing, the demand for homes began to weaken in mid-2005. By the middle of 2006, sales of both new and existing homes had fallen about 15 percent below their peak levels. Homebuilders responded to the fall in demand by sharply curtailing construction. Even so, the inventory of unsold homes has risen to levels well above recent historical norms. Because...

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The Markets Today

Here are today's daily charts of the SPY, QQQQ and IWN. These charts have a bearish bias for the following reasons:1.) The SPY and the QQQQ all sold-off at the end. The SPY's selling volume was higher than previous bars and the QQQQs had a volume spike at the end.2.) The indexes tried to rally from the post-Ben sell-off, but couldn't keep the momentum...

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Gas Prices Are Still Rising

From This Week in Petroleum:Retail Gasoline Prices Up, Diesel Falls SlightlyGasoline prices were up for the seventh consecutive week, increasing 1.8 cents to 257.7 cents per gallon as of March 19, 2007. Prices are now 7.3 cents per gallon higher than at this time last year. All regions reported price increases. East Coast prices were up 2.0 cents to 255.3 cents per gallon, while Midwest prices rose 0.3 cent to 249.0 cents per gallon. Prices for the Gulf Coast were up 1.6 cents to 241.8 cents per gallon. The largest regional increase was in the...

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Bernanke's Opening Statement, pt. I Inflation

Here is the link to his complete testimonyLet me now turn to the inflation situation. Overall consumer price inflation has come down since last year, primarily as a result of the deceleration of consumers� energy costs. The consumer price index (CPI) increased 2.4 percent over the twelve months ending in February, down from 3.6 percent a year earlier....

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Durable Goods Orders Disapppoint

From Bloomberg:U.S. durable-goods orders excluding transportation unexpectedly fell for a second month in February, jeopardizing the Federal Reserve's forecast for a recovery in investment.The 0.1 percent drop followed a 4.0 percent slide a month earlier, the Commerce Department said in Washington today. None of the 35 economists surveyed by Bloomberg News predicted the decline. Orders for all durable goods -- those made to last several years -- rose 2.5 percent, less than analysts anticipated.Companies are reluctant to buy new machinery and equipment...

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A Look At Homebuilders

After yesterday's announcement of a Federal investigation into Beazer Homes, a look at the homebuilders stocks seems like a good idea.Here's the yearly chart. Like the rest of the market, this sector rallied starting in September of last year. However, in late February the sector broke the upward trend line and fell below the 10, 20 and 50 day SMA....

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Could Be an Interesting Day

1.) We have ongoing tensions between Iran and Britain, which are driving up oil prices. 2.) Bernanke testifies on Capital Hill. To get a better idea of what this testimony is really about Read this article from Barry Ritholtz at the Big Picture3.) We have durable goods data coming out. Pay particular attention to the year-over-year number. Here...

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2006 Subprime Bonds May be Worst Performing Ever

From Bloomberg:Subprime mortgage-backed securities from 2006 may be the ``worst-performing in recent history,'' with delinquencies on the underlying debt ``consistently higher'' than in the prior five years, Standard & Poor's said,.About 13 percent of mortgages made last year to people who have poor or bad credit are delinquent, S&P analysts Michael Stock and Scott Mason said in a report yesterday, with 6.65 percent of the total classified as ``seriously delinquent,'' or more than 90 days late. Losses on bonds backed by the loans will be...

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Money Managers Say Housing Biggest Risk to Markets This Year

From the WSJ:Many managers fear that a housing slowdown could crimp consumer spending, a major driver of economic growth, according to Russell Investment Group's quarterly Investment Manager Outlook survey set to be released today. As stocks moved sharply lower in late February and early March, managers became increasingly bearish on market sectors...

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Fed's Investigating Beazer Home on Fraud

From Business Week:Atlanta-based Beazer, the nation's sixth-largest residential homebuilder, rode high during the heyday of the housing boom—profiting from both selling the homes it constructed and often financing the buyers as well through a wholly owned mortgage arm. It's common in the industry, but Beazer may have pushed the bounds: The North Carolina field offices of the Federal Bureau of Investigation, the Internal Revenue Service, and the Justice Dept. have recently opened a joint investigation into the company over such matters.The Inspector...

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The Markets Today

All of the markets have a downward bias today. They all opened lower and zig-zagged a bit. However, pay particular attention to the SPYs and QQQQs end of the day action. They both sold-off on heavy volume. This is never a good sign because it indicates traders saw something that led them to want to get out of the market. The QQQQs ended the day...

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How Confident Are Consumers?

Here is a chart of the Year-over-year change in retail sales. The figures aren't adjusted for inflation, but are adjusted for seasonal facto...

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How Confident is Business?

Business is ordering less and less new "stuff". Here is a chart of new orders, seasonally adjusted. The black line is total orders. The red line is the percentage change from year ago levels.Transportation orders can really skew these numbers, so let's take them out of the graph. The same color scheme appli...

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Oil Refineries Are Breaking Down With More Frequency

From the LA Times: Refineries across the country are breaking down with unusual frequency this year, boosting prices at the pump and endangering workers and communities.The rash of oil plant problems may not be a coincidence. The breakdowns stem from the hard use of aging equipment, a shortage of trained workers, corporate cost-cutting and ownership changes, refinery experts say.In the first six weeks of 2007, there were 43 incidents involving pipeline leaks, chemical releases, plant breakdowns and fires, more than has been typical, Kim Nibarger,...

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Lennar Earnings Drop

From Bloomberg: Lennar Corp., the largest U.S. homebuilder by revenue, said earnings plummeted 73 percent in the fiscal first-quarter as demand waned in the worst housing slump in more than a decade.Net income for the three months ended Feb. 28 declined to $68.6 million, or 43 cents a share, from $258.1 million, or $1.58, a year earlier, the Miami-based company said today in a statement. Lennar said it will likely miss its 2007 profit forecast as the normally stronger spring selling season had not materialized.``Given the state of the market, we...

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Gasoline Futures Hit 7-Month High

From IBD:April gasoline rose 6.94 cents to $2.0677 a gallon, its highest since Aug. A BP refinery in Indiana is running below pace after a small fire there, reports say. That's the latest in a slew of refinery woes. Crude rose 63 cents to $62.91, a 3-month high amid rising tensions with Iran, OPEC's No. 2 producer. Retail gas prices are up 42 cents...

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