We are still in a market correction according to Investor's Business Daily. Lately, the up days we have been have been on low volume. Options expiration is tomorrow so look for increased volitaility and wild price swings throughout the day. These low volume days tell us money is not coming into the market and as always, in America, you must follow the money.
I have no opinion on the market in general. Partly because the action I am seeing in the market doesn't make sense. The economy isn't in the best shape, earnings are coming in very poor, especially in retail, the jobless claims numbers are coming in higher than expected, bankruptcies are up. The Federal Reserve chairperson is lowering the public's expectations of a rebound, but yet the market continues to hold up. The one issue that really has me scratching my head is: PMI was up big today, while at the same time foreclosures are hitting all time highs. If someone can leave a comment solving that riddle for me, I would really appreciate it.
Insiders are dumping 300 shares for every 1 share they are buying. They are using this rally to get rid of their shares. This can be seen in the secondary offerings that we are seeing. I worry that the pattern we are seeing is the same pattern we say in 1929. They had a big rally and then 2 years later, the real crash came. Retail sales are still falling despite this 'cash for clunkers'. There is one dealer in New Hampshire that had to file for bankruptcy because he could not get paid by the government.
Showing posts with label PMI. Show all posts
Showing posts with label PMI. Show all posts
Friday, August 21, 2009
Wednesday, August 5, 2009
A strange thing happened in the market; major stock indexes declined in higher volume
IBD says: “A strange thing happened in the market Wednesday; major stock indexes declined in higher volume.”
Although today created a distribution day for the Nasdaq and Dow, the market could have done very much worse today. We started the day with a bout of bad news.
• Private job losses were more than the expected 345,000 as ADP reported 371,000 shed in July
• The Institute for Supply Management's services index declined, also worse than views
With this news, we could have expected a deep sell off in the market, but it didn’t happen. The market closed well off of its lows. One thing I did notice today was that the financials were very strong today. The XLF, the index that I use to track the performance of the Dow Jones Financial Index was up a big 3.45% today. Considering all 3 major indexes were down today, this is quite impressive. Most market rallies are lead by the financials. Although most of us believe this rally in a fraudulent rally, it doesn’t mean we can’t make money on it and as long of the financials are performing, stay long stocks. If the financials start to crack, get the heck out of the way. We are up 50% over the past 5 months; we are way overdue for a significant pullback. A few financials of note today:
• Bank of America up 6.52%
• Citigroup up 10.15%
• CIT group (on the brink of bankruptcy a few weeks ago) up 37.62%
• PMI group up 19.03%
• Wells Fargo up 5.74%
These are defiantly not the type of earnings you expect when people are still losing jobs. But then again, the market is a forecaster of the future.
There is really no take-away for today. Looking at the very big picture, it is a distribution day, a bearish sign, but it’s the first one we have had in weeks, so it is of no consequence unless we start to get more of this. I believe there are still a lot of shorts in the market who are very frustrated at this point, but the market may not go down until every last short has covered.
Although today created a distribution day for the Nasdaq and Dow, the market could have done very much worse today. We started the day with a bout of bad news.
• Private job losses were more than the expected 345,000 as ADP reported 371,000 shed in July
• The Institute for Supply Management's services index declined, also worse than views
With this news, we could have expected a deep sell off in the market, but it didn’t happen. The market closed well off of its lows. One thing I did notice today was that the financials were very strong today. The XLF, the index that I use to track the performance of the Dow Jones Financial Index was up a big 3.45% today. Considering all 3 major indexes were down today, this is quite impressive. Most market rallies are lead by the financials. Although most of us believe this rally in a fraudulent rally, it doesn’t mean we can’t make money on it and as long of the financials are performing, stay long stocks. If the financials start to crack, get the heck out of the way. We are up 50% over the past 5 months; we are way overdue for a significant pullback. A few financials of note today:
• Bank of America up 6.52%
• Citigroup up 10.15%
• CIT group (on the brink of bankruptcy a few weeks ago) up 37.62%
• PMI group up 19.03%
• Wells Fargo up 5.74%
These are defiantly not the type of earnings you expect when people are still losing jobs. But then again, the market is a forecaster of the future.
There is really no take-away for today. Looking at the very big picture, it is a distribution day, a bearish sign, but it’s the first one we have had in weeks, so it is of no consequence unless we start to get more of this. I believe there are still a lot of shorts in the market who are very frustrated at this point, but the market may not go down until every last short has covered.
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