It's that time of the week. Think about anything except the markets and the economy. We'll be back on Mond...
Friday, July 31, 2009
More on GDP
From CNBC:Consumer spending, which accounts for over over two-thirds of U.S. economic activity, fell at a 1.2 percent rate in the second quarter after rising 0.6 percent in the previous quarter.That sliced 0.88 percentage points from second quarter GDP, the department said. .....In contrast to the weak consumer reading, business investment improved significantly in the second quarter. The advance report showed business investment decreased at an 8.9 percent rate in the second quarter after diving 39.2 percent in the previous quarter......Investment...
GDP Decreases 1%
From the BEA:Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 1.0 percent in the second quarter of 2009, (that is, from the first quarter to the second), according to the "advance" estimate released by the Bureau of Economic Analysis. In the...
Forex Fridays
The weekly chart shows a security that wants to go lower. The MACD and RSI are both declining. All the EMAs are moving lower. The shorter EMAs are below the longer EMAs and the 10 and 20 day EMA have moved through the 50 day EMA. However, the daily chart shows there is strong support at the (roughly) 78 area. Prices broke through the lower line...
Toothless and Muddled
The Treasury Select Committee put the boot into the Government's white paper on financial regulation, and called it "toothless" and "muddled" as it has failed to address the key weaknesses in Brown's failed and derided tripartite system.As ever, the fundamental weakness of the tripartite system is that there is no one actually in charge of it.The Treasury's "solution" is to create a fourth body to oversee the the tripartite (named the "Council for Financial Stability")An absurd idea which would only add to the muddle, confusion and buck passing.However,...
Thursday, July 30, 2009
Today's Markets
Click for a larger imageLet's break this rally down into three parts.Part 1: the rally begins. Prices are extremely oversold at this level attracting speculative money. Like most rallies, it does on longer than anticipated. Note that going into this rally we see extremely heavy volume which -- in retrospect -- was probably a selling climax of sorts.Part...
Unemployment Claims Increase
From the DOL:In the week ending July 25, the advance figure for seasonally adjusted initial claims was 584,000, an increase of 25,000 from the previous week's revised figure of 559,000. The 4-week moving average was 559,000, a decrease of 8,250 from the previous week's revised average of 567,250.This ends the period when the auto company issues...
Durable Goods Decrease 2.5%
From the Census:New orders for manufactured durable goods in June decreased $4.1 billion or 2.5 percent to $158.6 billion, the U.S. Census Bureau announced today. This decrease followed two consecutive monthly increases including a 1.3 percent May increase. Excluding transportation, new orders increased 1.1 percent. Excluding defense, new orders decreased...
Federal Reserve Sees Stabilization
From the Beige Book:Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level. Five Districts used the words "slow", "subdued", or "weak" to describe activity levels; Chicago and St. Louis reported that the pace of decline appeared to be moderating; and New York, Cleveland, Kansas City, and San Francisco pointed to signs of stabilization....
The main issue on this chart is that prices are now below the upward sloping trendline that started earlier this year. Also note that prices are in a "lower highs" situation. Finally, prices and the EMAs are bunched together with no clear direction.This is a great example of a pennant pattern. Notice how prices starting falling at the end of June...
How Embarrassing
In a supreme twist of irony, the Office of Fair Trading (OFT), the government body set up to warn consumers against unfair trading practices and fraud, has itself become victim to a £250K internal accounting fraud.£97K went awol in 2007/08, whilst the remaining £153K went missing in 2008/09.It seems, according to the OFT accounts, the fraud was made possible "by a control weakness in the Accounts Payable process".The case is now subject to legal proceedings.As an experienced forensic investigator, and internal auditor, it never ceases to amaze...
Wednesday, July 29, 2009
Today's Markets
Short version: prices are consolidating at the top of a range right now. For the bulls, this is the best possible scenario as it allows prices to consolidate without destroying the ral...
Case Shiller Shows Improvement
Click on all images for a larger imageConsider the following chartsThis is the first month to month gain we've seen in a long time so it's way too early to call a bottom. But it's a very good si...
Consumer Confidence Drops
From the Conference Board:The Conference Board Consumer Confidence Index™, which had retreated in June, declined further in July. The Index now stands at 46.6 (1985=100), down from 49.3 in June. The Present Situation Index decreased to 23.4 from 25.0 last month. The Expectations Index declined to 62.0 from 65.5 in June.Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months. The decline in the Present Situation Index was caused...
BAA Losses Mount
BAA, has seen its losses on operating its airports (such as Heathrow - the scourge of the travelling classes - and Gatwick) mount.Pre-tax losses (as per its half year report) at BAA's London airports trebled to £545.7M, primarily as a result of a drop in air passengers of over 4M.Despite being burdened by debts of over £12BN (of which £9.5BN are secured against its London airports) BAA tried to reassure creditors that it was able to withstand the downturn.Talks about selling Gatwick are still ongoing, BAA want more than the current £1.4BN offered...
Wednesday Commodities Round-Up
Click on all images for a larger imageIndustrial metals continue their upward move. The MACD and RSI are rising. Prices are in a clear uptrend and are consolidating gains along the way. The 10 and 20 day EMA are rising and the 10 day EMA is about to cross over the 50 day EMA. The 20 day EMA is approaching the 50 day EMA.The daily industrial metals...
Tuesday, July 28, 2009
Today's Markets
Click for a larger imageAbove is a 10 day chart in 5 minute increments. The point of the chart is to show that prices have broken the upward trend and are now moving sideways. Click for a larger imageThe above chart shows likely technical support levels in case of a correcti...
Federal Reserve Sees Stabilization
Bernanke:At the time of our February report, financial markets at home and abroad were under intense strains, with equity prices at multiyear lows, risk spreads for private borrowers at very elevated levels, and some important financial markets essentially shut. Today, financial conditions remain stressed, and many households and businesses are finding credit difficult to obtain. Nevertheless, on net, the past few months have seen some notable improvements. For example, interest rate spreads in short-term money markets, such as the interbank market...
New Home Sales Increase 11%
From the WSJ:Sales of single-family homes increased by 11.0% to a seasonally adjusted annual rate of 384,000 compared to the prior month, the Commerce Department said Monday. Though, year-over-year, new-home sales were 21.3% lower than the level in June 2008.The median price for a new home was $206,200 in June, down 12.0% from $234,300 in June 2008....
The Real Reason Unemployment has Skyrocketed
- by New Deal democratIn both the academic and political blogospheres, there are parallel but different discussions going on about the same point: this recession is far more severe in terms of unemployment than the 2.3% loss of GDP from peak would predict. Instead of only an increase of 4.6% in unemployment from its best levels of a few years ago,...
Treasury Tuesdays
Click for a larger imagePrices are below the 200 day EMA, indicating we're in a bear market. Also note that prices have broken the upward sloping trending. In addition, prices are now in a downward sloping channel. All of the shorter EMAs are moving lower, the 10 day EMA has moved through the 50 day EMA and prices are below all the EMAs. However,...
Digital Britain
The government's oft repeated promises of creating a "digital Britain", fit for business in the 21st century, seem to have fallen a little flat if the findings of the report issued by Ofcom are anything to go by.Over 50% of broadband users in Britain are receiving less than half the speed promised by their providers. At least half of users of services that offer "up to 8 Mbps" receive a typical speed of 3.9Mbps.The further away a customer lives from the telephone exchange, or if they use the service between 8pm and 10pm, the slower the speed.Copper...
Monday, July 27, 2009
Today's Markets
Click for a larger imageLet's assume my analysis that the SPYs are in an upside down head and shoulders formation is accurate. The next move is for the market to sell off a bit at least to the neckline or the 10 day EMA (using it for technical suppor...
Is the Recession Over?
First, here is the key paragraph from the Newsweek article:The Great Recession, which rolled over our financial lives like one of P.J. Keating's giant pavers, is most likely over. Home sales, while still far below the levels of a year ago, have risen for three straight months—a first since 2004. The stock market has rallied 44 percent since March,...
Market Mondays
The conventional wisdom right now is we're in for a slow growth environment. The consumer is going to be de-leveraging for the foreseeable future, business investment is low and will be for some time and overall we'll be in the 1-2% growth range for the next few years. No one is talking about anything other than that.So, that got me thinking -- When...
