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ISM Comes In Weaker As Expected
Congratulations to John Bougearel for calling the ISM right.
From Bloomberg:
The Standard & Poor’s 500 Index dropped 0.9 percent to
1,047.15 at 10:03 a.m. in New York after the Institute for
Supply Management’s manufacturing index unexpectedly dropped to
52.6, lower than the reading of 54 forecast by economists in a
Bloomberg survey.
Does this mean that the stimulus funding peak is now long behind us and the manufacturing will actually have to stand on its own two legs? If so, while Q3 GDP may be sufficiently poofed up to not kill the market, Q4 will be a total disaster (see Albert Edwards piece earlier). And as for 2010, better hope a "Cash For The Economy" plan is in the works or else...
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indeed a nice call from John.
John, would love to see an update on 3 peaks/dome.
Thanks very much.
DeadHead, it's nice to see some others indeed follow Lindsey's "Three Peaks and a Domed House" pattern (few do). See comments below. Good luck...
over the years I have learned that studying technical patterns, elliott wave, etc, is a prudent approach and important information for one to possess. though I am more of a fundamentalist at heart, the rational and efficient market is more often not one and the behavioral theorists' approach seems to happen more often than not. i think t.a. and ew captures the human social behavior nicely.
i chuckle sometimes at fellow fundamentalists who push aside tech analysis, elliot wave, dow theory, etc as hog wash yet comment how the equity market is "way overvalued".
I "was" one of them. I didn't look at charts, EW stuff, nothing, exect scour over balance sheets, investment papers you name it. Once I finally took the time and effort to study TA and EW, my trading improved greatly.
I understand the arguments against it, and some think it's all bullshit, but it has made a difference to my wallet. That is good enough proof to me, and I will continue to use it, and learn as much as I can.
On the other hand, it appears so many professionals use it, why shouldn't we as well. If they trade off technicals (many firms have people that do nothing but TA) why shouldn't we? It's like having a road map. Does it always work - no. But from my experience, the trades I make have worked more times than the ones I bought not using it. If nothing else, the timing factor is greatly helped by TA.
Happy trading.
very well summarized.
I would be very interested to see the 3 peaks/dome data as well. I suspect we are likely to see another positive run before all heck breaks loose.
the ellioticians seem to be of a similar view assetman....the debate about whether we are at the end of p2 or beginning of p3 is at its peak.
by the way, I always look for your insights as I enjoy them and it is very obvious to me that you are a very sharp individual. thanks for your consistent input here.
From the John Stewart video:
"If I know about a stocks activity a day before, it is called insider trading, if I know about a stocks activity one second before, its called high frequency trading."
There you have it folks. High frequency trading is INSIDER TRADING.
ISM wasn't the only bad news...continuing claims hit a new HIGH, again(adding State and Federal numbers). The irony of this new high is that it was achieved by adjusting downward last week's Federal EUC number. That lowered last week's new high, allowing this week to touch a new high.
Here's the total claims numbers through Sept. 12 (Federal numbers lag State continuing claims by one week), adding State, EUC, and Extended Benefits:
12-Sep 9,878,254
5-Sep 9,874,772
29-Aug 9,677,514
22-Aug 9,791,551
15-Aug 9,629,696
8-Aug 9,660,992
1-Aug 9,557,535
25-Jul 9,577,202
18-Jul 9,487,075
11-Jul 9,260,272
4-Jul 9,305,347
27-Jun 9,726,080
20-Jun 9,589,660
13-Jun 9,474,884
6-Jun 9,431,551
30-May 9,453,166
23-May 9,159,030
16-May 9,244,953
9-May 9,021,607
2-May 8,944,249
25-Apr 8,621,170
18-Apr 8,612,554
11-Apr 8,525,310
4-Apr 8,212,325
28-Mar 8,012,824
21-Mar 8,006,800
John Bougearel's September call for a TOP via Georga Lindsey's "Three Peaks in a Domed House" pattern will prove correct as well as reported on ZH on 08/21 and 09/14. The market is just experiencing what is called a "throw over." Be patient...
In retail industries, the relationship of sales to inventory is pretty easy to chart. But what about in industries where the production pipeline is > 90 days? I have no idea how you would substantiate it, but I have a sinking suspicion that we may be running head-first into an earnings brick wall as companies blow-out their pipeline (be it sales or otherwise) with nothing behind it to carry the momentum.
Q1'10 is gonna suck.
watching FoxBuSiness (wall to wall Bernanke with a couple of interuptions) but not one single word nor one item on the news ticker (in the past 40 minutes) on the ISM number -
Given Midwest weakness, the number was actually higher than I expected.
The 'better than expected' number out of Milwaukee was insanity. Maybe the folks were just jazzed that finally one union caved on their third 'last chance.' Every previous company up for a cut/reorg had left the state for the non-unionized, tax-friendly Southern states. I wouldn't expect many more concession victories, if any - and therefore much more manufacturing permanently bailing on the Midwest.
Cue Stimulus # 2.
Calling all members of Congress. Red alert. Red alert. Running out of smoke, blower broken, too many asses left. People are beginning to wake up, ramp up that god damn swine flu NOW.
dropping the dollar in 3, 2, 1 & drop.
Comrade de Chaos is spot on the only trade that matters is the DXY. It is at 77 so the market shouldn't be moving too much regardless of the bad economic fundamental news.
Only trade that matters is dollar up or dollar down and markets are inversely correlated.
Cheers,
Pigpen
Keep feeding us lies to inflate the market, and then revise the numbers after the dirty deed has been done.
"WASHINGTON (AP) -- Construction spending rose unexpectedly in August on the biggest jump in housing activity in nearly 16 years, another sign the U.S. housing sector is mounting a recovery.
The Commerce Department said Thursday that construction spending rose 0.8 percent in August, much better than the 0.2 percent drop that economists had expected. But July activity was revised to show a much steeper decline of 1.1 percent instead of the 0.2 percent drop originally reported."
I'm really sick and tired of this fucking United Corporations of America propaganda.
Who has the President's ear regarding the economy? Larry Summers? Is there any hope at all that Obama will change his team, and their strategies?
Yeah change from a GS alumni to a JPM alumni...makes no diff.
The Globalist cabals got him elected and determined his 'team,' so there is no hope of change.
A year ago I would have dismissed such a statement from anyone as delusional. Now it is clear as day, after what turned out to be simple research on the individuals.
the election theme must have been "change you can have faith in" and they just read it wrong.
Mark Twain said "that faith is believing in what you know ain't so". Faith or hope in the white house and the markets and the financial instutitions, etc. amounts to the same thing. In this case with all the evidence in place "change you can believe in" becomes "change you know ain't so".
A weaker ISM justifies that the printing presses of global central banks work OT going forward...we dont want a relapse now do we? Fool me once, shame on you..fool me twice, shame on me.
Through 1040 on SPX, looking for 1025 now. USDZAR set for melt up, hopefully. As those chasing yield get killed, fiscally speaking of course.
Recession, spending program, one quarter positive GDP, recession, spending program, one quarter positive GDP ... rinse...repeat
"Cash For The Economy" plan haha very good
Allow me to chime in, as one deeply imbedded in the residential real estate market. I reported on ZH previously that whatever you saw for July and August which made a "green shoots alert - housing is rebounding" noise would be attributable to that Cash for Clunkers analogue, the $8,000 tax credit. Well, straight out of Wells Fargo's economic commentary a few minutes ago, buried beneath the "best in 16 years" bullshit headline:
"The consecutive gains in single-family outlays are likely due to the first-time home buyer tax credit."
Gee, do ya think? Duh. Demand pulled forward, no more, no less. No other housing area is enjoying any rebound, I assure you. It is still very bad, with no relief in sight, and it is common knowledge that the only game in town for buyer financing is that provided at the ample bosom of Mother Government. Even now, we are bombarded with industry requests to lobby our representatives for an extension of the tax credit that applies to all housing, not just first-time homebuyer. Good for our business? Might sound like it at first, but it also prevents resolution as things are strung out instead of dealt with.
And that's "embedded." Wish I could spell.