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The No Worries Sequester Market

David Fry's picture





 

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Incase you didn’t notice, the
sequester
is in place cutting the rise in government spending by all
of 2%. I woke up this morning expecting the planet to have reversed its
rotation, it was no longer winter and I had aged 30 years. But no, everything
was the same, except for the bullshit emanating from various pundits or
websites. One thing I’ve learned to do, whether its Obama, Boehner, or Reid is
just to tune them out. If there’s a national emergency then I don’t know what
I’d do or who I’d tune in—Big Sis?  Good
grief!

Economic data was all over the map to start March. In China
manufacturing data expanded less than hoped (50.1 vs 50.4) and the government
also put mortgage restrictions in place to presumably slow the property bubble.
This of course was a negative. In Europe manufacturing in the UK fell to
recession levels again (47.9 vs 50.5). Overall unemployment in the Europe was
11.9%. The range of the data was a low of 6.9% in Germany and Spain at near
25%.

Meanwhile in the U.S. Personal Income fell (-3.4%) by the largest in 20
years, which was due of course to higher taxes. Consumer Spending was
fractionally higher (.2%) about as expected. PMI Mfg was poor (54.3 vs 55.8)
while the ISM Mfg Index rose (54.2 vs prior 53.1). Consumer Sentiment, old news
but more closely aligned with stock market data, also rose (77.6 vs 76.3
prior). But then Construction Spending declined (-2.1% vs 1.1% prior). A mixed
bag overall.

Stocks fell sharply early until a rumor circulated meaning a “sequester
settlement” had been struck as congressional leaders met at the WH. But such
was not to be and stocks began to decline. Not too much later algos launched
some buy programs goosing markets back higher. But gains were meager overall and
markets feel edgy and fatigued.

Leading stocks higher were biotech sectors (IBB) homebuilders (ITB) and
not much else. The dollar (UUP) was once again higher which in turn trashed
commodities (DBC) especially energy (USO) and metals (JJC). Bonds (TLT) prices
were higher and yields lower.

Obviously everyone is keen to know what’s going on with the consumer and
recent GDP data. Richard Davis,
Consumer Metrics Institute takes
apart the GDP data in detail.

With China being both important and recently weak, we reviewed what’s
been happening with GXC
(SPDR China ETF) with appropriate weekly and daily
chart annotations.

Volume picked up some with as algos had one eye on the sequester and another on new record high targets. Alas, not much came of anything. Breadth per the WSJ was mildly positive.

 

 

 

  • SPY 5 MINUTE

     

  • SPX WEEKLY

     

  • INDU WEEKLY

     

  • RUT WEEKLY

     

  • QQQ WEEKLY

     

  • AAPL WEEKLY

     

  • QQEW WEEKLY

     

  • IBB WEEKLY

     

  • ITB WEEKLY

     

  • BWX WEEKLY

     

  • TLT WEEKLY

     

  • UUP WEEKLY

     

  • DBV WEEKLY

     

  • GLD WEEKLY

    GLD WEEKLY

     

  • GDX WEEKLY

     

  • DBC WEEKLY

     

  • JJC WEEKLY

     

  • IEV WEEKLY

     

  • EEM WEEKLY

     

  • EPI WEEKLY

     

  • $NAHL

 

  • NYMO

     

    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

     

  • NYSI

     

    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.

     

  • VIX

     

    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.



    It will be interesting to see, given how flat this volatile market was
    this week, how many weekly DeMark 9s we’ll register.

    Good news is perhaps the immature political rhetoric will cease and serious
    work on the country’s issues can take place. Seriously? Not a chance.

    Enjoy your weekend!

     

 


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Sat, 03/02/2013 - 13:57 | Link to Comment David Fry
David Fry's picture

Thanks disablevet!

Sat, 03/02/2013 - 07:22 | Link to Comment Jack Sheet
Jack Sheet's picture

The analysts warning about a market peak could indeed be correct, and perhaps a major top is already in place. But they could be wrong as well, and the market could be presenting a bear trap for those shorting. If you watch the key support levels and the 127 day 15 hour exponential harmonic moving average,  you may perhaps better gauge your sentiments on this issue.

If support levels hold, or are only temporarily breached, it could be that the market moves higher and traps any bears that have shorted it. On the other hand, any true breaching of these support levels may indicate a significant correction is under way.

The reverse is of course true for key resistance levels. Not to mention the high significance of the MACD, RSI and Bernanke BS oscillator.

Therefore my advice is that you plug your ass and watch the charts.

 

Fri, 03/01/2013 - 21:25 | Link to Comment fuu
fuu's picture

Your charts are ugly and you are no Alfred.

Grats on on your 73 hours though.

/tradition

Fri, 03/01/2013 - 21:16 | Link to Comment disabledvet
disabledvet's picture

C'mon ZH'ers. Big huzza huzza for our new guy!

Do NOT follow this link or you will be banned from the site!