Everybody knows the green shoots are growing on a pile of sh!t econ fundies. Housing is 2X demand + shadow inventory + increasing depreciation projected well into 2010.
As soon as summer is over home sales & construction (residential & commercial) will fall off a cliff.
Credit & spendable paychecks will follow.
The market is increasing only as long as commodoties increase due to our govt increasing debt to keep devaluing the $USD to offset EU & UK economic decline.
Just how long can we keep up that gig?
For weeks now, we've been hearing & reading a bunch of ignorant yap about the market being overbought.
Is the market overbought?
Lettuce apply the scathing eye of Fuzzy Grey Socks to see what's what.
... being an "intelejint" animal, if we use the the average price by volume over the last half year (I had to monkey with the dates to get the percent in the correct place on the left-side margin, almost) then we see the market's up only 8% B from the greatest price by volume channel between SPY $82.5 & $85.
Only a dumba$$ thinks this ~40% off lows rally is overbought.
The mkt was oversold when it kept on dropping below the FEB 17 SloStoch bottom.
Duh!
Did everyone magically forget that?
Idiots.
~40% off lows, yeah.
Oh.
Okay.
So now what?
Well... lettuce see WTH happened these last few months...
TA said that this mkt should have sold off multiple times since mid-MAR.
Well... lettuce see WTH happened these last few months...
TA said that this mkt should have sold off multiple times since mid-MAR.
Every peak for the last two months should have been a great & legit time to sell off & short the market.
And every time we did ("Yes" I did, and lost some money) the market kept pushing higher on hopium.
Why?
More gov't debt kept pushing down the valuation of the $USD. E
Now, I know it's fun to talk about market manipulation & pointing fingers at what a bunch of crooks GS are, but that's all a bunch of paranoid, armchair conspiratorial BS.
The market is not moving on growing, strong fundamentals.
More gov't debt kept pushing down the valuation of the $USD. E
Now, I know it's fun to talk about market manipulation & pointing fingers at what a bunch of crooks GS are, but that's all a bunch of paranoid, armchair conspiratorial BS.
The market is not moving on growing, strong fundamentals.
It's moving on the constant shift between the security of the $USD and the risk benefits of equities.
Every econ event (until that magically becomes irrelevant again) should be viewed as "Is this good or bad for the $USD?"
The market will usually move in the opposite direction.
Examples:
Examples:
NFP sky high but decreasing = hopeful = ditch dollars & grab equities = the market goes up.
EU lowers Central Bank Rates (CBR) = pessimistic = grab dollars & ditch equities = the market goes down.
Retail sales increase = hopeful = ditch dollars & grab equities = the market goes up.
PPI & CPI decrease hard = deflation fears = grab dollars & ditch equities = the market goes down.
Existing Home sales increase = ditch dollars & grab equities = the market goes up.
Iran/NKorea/Taliban provokes a military response = more debt = ditch dollars & grab equities = the market goes up.
What's gonna happen this summer? F
What's gonna happen this summer? F
Employment will increase because (weak) construction lending will pump some credit funny money into the system. (The govt stress test of banks will go a long way toward encouraging that.)
Oil, iron, copper, coal will have increased demand and will increase especially if the $USD keeps dropping.
Consumer discretionary spending to increase when the kids get outta school & summer vacations & athletic events increase.
Watch the EU & UK. Summer may offset their rapidly decelerating economies.
What's gonna happen this fall?
What's gonna happen this fall?
Well... Q3 & Q4 of 2007 just kept on plugging along ever upward, but I don't see that happening again in 2009.
