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Cashin On Transports And 'End Of The World' Headlines

Tyler Durden's picture




 

The avuncular Art Cashin is sounding a lot less sanguine than many of his market-watching peers. UBS' main man notes that traders are particularly struck by the continued weakness in the transports group (with FedEx and UPS down 8 of the last 11 sessions - and the Dow Transports down the equivalent of 300 points for the Industrials on Friday alone). "The sharp contraction in the Transport area and recent sharp drops in several trucking statistics add to growing fears that the economy may have stalled over the last four weeks," is how he puts it, but it is his cocktail-napkin charting that concerns the most.

Art Cashin. Cocktail Napkin Charting - As hinted above, the history of the week after July Expiration is not particularly attractive. Here’s how savvy veteran, Jim Brown over at Premier Investor Newsletter set it up:

Historically, even in years that don't have multiple "end of the world as we know it" headlines in the news, the equity markets decline in the week after July option expiration. Sometimes the decline is significant. Twice in the last five years the S&P lost more than 4% in the week after July expiration.

 

Obviously we can't predict market direction by looking at performance in years past. The levels are different, headlines are different, sentiment is different, etc. Charts are to tell us what happened in the market in response to conditions in a specific timeframe. Without the macro data we can't compare timeframes.

 

However, we can compare 2011 to 2012. The S&P crashed -25.6% beginning on July 22nd 2011 in response to the debt ceiling debate that came to a head in August. That decline began in the week after the July option expiration and the drop was dramatic.

 

So, does that mean we should tether the elephants? No, but we should be alert and nimble on a week with a somewhat spotty history. For today, napkins see resistance in the S&P at 1368/1371 then 1375/1378 and 1380/1383. Support looks like 1348/1352 then 1339/1342 and 1332/1335.

 

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Mon, 07/23/2012 - 09:42 | 2642251 samsara
samsara's picture

KCCO

Keep Calm

Chive On.

Mon, 07/23/2012 - 09:42 | 2642252 Debtonation
Debtonation's picture

Just get Obama to issue an executive order declaring recessions illegal punishable by death.  All our problems will be solved instantaneously.

Mon, 07/23/2012 - 09:45 | 2642262 otto skorzeny
otto skorzeny's picture

if we're gonna be hauled off to FEMA camps can they at least do it in a ChoomWagon replica?

Mon, 07/23/2012 - 10:18 | 2642388 Treeplanter
Treeplanter's picture

What have you done for The Party lately?

Mon, 07/23/2012 - 10:27 | 2642433 Skateboarder
Skateboarder's picture

If they gonna send you to camp, they should at least smoke you out first, right?

Mon, 07/23/2012 - 09:49 | 2642271 nmewn
nmewn's picture

So, whats the deal with the stock market...no road out front, bridge closed or what? ;-)

Mon, 07/23/2012 - 09:49 | 2642272 caimen garou
caimen garou's picture

good one debtonation,thanks for my morning laugh!

Mon, 07/23/2012 - 09:43 | 2642256 TideFighter
TideFighter's picture

The trade is oil, Mr. Cashin.

Mon, 07/23/2012 - 09:44 | 2642260 DoChenRollingBearing
DoChenRollingBearing's picture

Ann Barnhardt was right 9 days ago.

She wrote: Get Out.

 

It's all crooked...

Mon, 07/23/2012 - 09:59 | 2642298 Stock Tips Inve...
Stock Tips Investment's picture

Obviously, the situation of the stock market is very fragile. The crisis in Europe is more serious every week and its effect on the rest of the world is becoming more evident. Starting today, Bernanke and other Fed should be listing the pen to sign the following QE. The big question is whether the ability of market manipulation may successfully face economic reality.

Mon, 07/23/2012 - 10:25 | 2642427 Treeplanter
Treeplanter's picture

The manipulaters are on the short bandwagon now.  Think Pappa Joe Kennedy.  There's great money in a good crash. 

Mon, 07/23/2012 - 10:03 | 2642313 Buckaroo Banzai
Buckaroo Banzai's picture

Here's Ann Barnhardt comparing the historical events preceding the Vendee genocide to the Obama regime's current behaviors.

Never heard of the Vendee genocide? Where 450,000 catholics were brutally exterminated during the French Revolution? Well neither had I. Apparently the French government still denies it ever happened despite documented historical evidence to the contrary. Down the memory hole!

4 20-minute videos, definitely worth your time. Prepare to be even more sickened than you ever thought possible by the filthy Marxist, Obama. And by the craven leadership of the Catholic Church in the US as they capitulate to The State.

Part 1: http://www.youtube.com/watch?v=qaMLoLtFn6s&feature=player_embedded

Part 2: http://www.youtube.com/watch?v=IBMm6o5jra8&feature=relmfu

Part 3: http://www.youtube.com/watch?v=Ib49I4wYw7I&feature=relmfu

Part 4: http://www.youtube.com/watch?v=ztlNj8rWviI&feature=relmfu

Mon, 07/23/2012 - 10:10 | 2642350 DoChenRollingBearing
DoChenRollingBearing's picture

+ a big fat 1

Wow, Buckaroo!  I will watch at least one of them as soon as I get out of Starbucks...  Might get lynched in here otherwise...

Mon, 07/23/2012 - 10:26 | 2642428 otto skorzeny
otto skorzeny's picture

the church was better off when the had some military muscle. maybe when heathen europe collapses they'll return to the chuch,evict the Islamists from their midst and get back to good old-fashioned anti-semitism.

Mon, 07/23/2012 - 10:32 | 2642461 aerojet
aerojet's picture

Are you shitting me?  The Dark Ages were dark because of the plague and the Catholic Church!

Mon, 07/23/2012 - 11:23 | 2642690 Buckaroo Banzai
Buckaroo Banzai's picture

Keep believing the socialist/marxist propaganda about the Catholic Church, and see where it gets you.

Mon, 07/23/2012 - 11:19 | 2642662 graneros
graneros's picture

Thank for posting.  Very interesting.  Watched the first part and am now downloading the other parts to watch tonight.

Mon, 07/23/2012 - 17:48 | 2643842 Diogenes
Diogenes's picture

9 months ago. She closed her brokerage after MF Global blew up and warned everyone to get their money out of the markets and close their accounts. MF Global wouldn't be the last. She was right.

Mon, 07/23/2012 - 09:45 | 2642263 monopoly
monopoly's picture

And aftert 1332......? Then what. LOL

Mon, 07/23/2012 - 09:47 | 2642266 bigdumbnugly
bigdumbnugly's picture

short sanguine

Mon, 07/23/2012 - 11:34 | 2642737 Nobody For President
Nobody For President's picture

^ Esoteric bumper sticker of the day

Mon, 07/23/2012 - 09:47 | 2642268 txsilverbug
txsilverbug's picture

1331

Mon, 07/23/2012 - 09:46 | 2642265 caimen garou
caimen garou's picture

get out of transports and invest in bullets,it's the only sure thing.

Mon, 07/23/2012 - 10:14 | 2642358 otto skorzeny
otto skorzeny's picture

you guys that stroke your guns and spend thousands on some POS AR-15 crack me up-like you'll ever do anyting more with them than discuss them on internet chat rooms(or shoot up the occasional public gathering). the gun price bubble is bigger than the real estate bubble.

Mon, 07/23/2012 - 10:32 | 2642460 Treeplanter
Treeplanter's picture

More likely a long term bull market.

Mon, 07/23/2012 - 10:51 | 2642531 knightowl77
knightowl77's picture

They're not an investment....they're life insurance, except they are designed to defend your life and property instead of pay off after losing life or property,,,,

Mon, 07/23/2012 - 10:56 | 2642559 Overfed
Overfed's picture

So, what you're saying is that you prefer the AKM over the AR platform?

Mon, 07/23/2012 - 12:05 | 2642858 bagehot99
bagehot99's picture

If someone other than Holmes had a gun in the auditorium on Friday, there'd be about 11 fewer dead people. Instead, the movie theater violates everyone's constitutional right to self-defense, and has the blood of 12 innocents on their hands as a consequence.

Gun mockers/grabbers/haters are the first people to call the police when they feel threatened, and the Police bring......guns. Guns prevent violence, including gun violence, which is why we provide them to soldiers and law enforcement.

When the angry mob are pillaging your leafy suburbn idyll, you'll wish you had a weapon to protect what is yours, including your and your family's lives. Because once the cops aren't getting a paycheck worth the name, they won't be coming over any more.

And if I'm wrong, nobody gets harmed; if you're wrong everybody does.

Mon, 07/23/2012 - 12:06 | 2642859 caimen garou
caimen garou's picture

think everyone has a ar-15? I'm more of a m-1 garand,.30cal carbine,and m1903 springfield type of person. besides I was speaking of ammo stocks with the government buying so much.

Mon, 07/23/2012 - 10:33 | 2642467 aerojet
aerojet's picture

I think that shithead in Colorado did that, but then he went after the wrong targets.

Mon, 07/23/2012 - 09:48 | 2642270 monopoly
monopoly's picture

OK, bullets. Check.

 And where is Robot when we need him. Is it time to buy CMG? Will admit his call on treasuries is right on. But that is bullish??? I think not.

Mon, 07/23/2012 - 09:56 | 2642291 Quinvarius
Quinvarius's picture

How many aliases do you have, robotard?

Mon, 07/23/2012 - 09:54 | 2642275 virgilcaine
virgilcaine's picture

We shall dine on cooked goose when Art retires!

http://www.npr.org/templates/story/story.php?storyId=17336306

 

Mon, 07/23/2012 - 09:51 | 2642277 marz929
marz929's picture

A must read for this new "low rate" environment from Hoisington:

 

http://www.hoisingtonmgt.com/pdf/HIM2012Q2NP.pdf

Mon, 07/23/2012 - 09:52 | 2642279 Randall Cabot
Randall Cabot's picture

"However, we can compare 2011 to 2012. The S&P crashed -25.6% beginning on July 22nd 2011 in response to the debt ceiling debate that came to a head in August. That decline began in the week after the July option expiration and the drop was dramatic. So, does that mean we should tether the elephants? No, but we should be alert and nimble on a week with a somewhat spotty history."

What the heck does "be alert and nimble" mean when the market might fall off a cliff in seconds?

Mon, 07/23/2012 - 09:55 | 2642288 caimen garou
caimen garou's picture

just don't get to drunk just a mild buzzzzzzzzzzzzz

Mon, 07/23/2012 - 09:57 | 2642294 Tinky
Tinky's picture

Check to make sure that your 'golden' parachute is intact.

Mon, 07/23/2012 - 10:01 | 2642309 fuu
fuu's picture

I read it as, "GTFO and don't look back."

Mon, 07/23/2012 - 10:19 | 2642282 Mercury
Mercury's picture

DLR Van Halen kills it with that new song by the way...after taking a 30 year breather no less:

http://www.youtube.com/watch?v=7Mk1uifmAEw

Should have used Art in their video.

Mon, 07/23/2012 - 11:37 | 2642753 KK Tipton
KK Tipton's picture

Not bad.

But then there's Electric Six

Electric Six - Rip It!  - YouTube - http://youtu.be/zgOLI3ur-wk

Electric Six - Infected Girls - YouTube - http://youtu.be/KET11SOC5YA

Electric Six - Pulling The Plug On The Party - YouTube - http://youtu.be/PhxSgAyn0jQ

Mon, 07/23/2012 - 09:58 | 2642296 hedgeisforpussies
hedgeisforpussies's picture

1325, 1305, 1300, 1260, 1200

 

Mon, 07/23/2012 - 10:42 | 2642495 Treeplanter
Treeplanter's picture

Cover your shorts at 1200.  Schmucky Schumer will make Ben print.  Come on, his donors are hurtin.  You gotta have priorities.

Mon, 07/23/2012 - 09:59 | 2642299 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

what happened to talking forex real time?

Mon, 07/23/2012 - 09:59 | 2642302 Bubble
Bubble's picture

How is the Euro suddenly so steady?
Keep calm and carry on fixing mkt prices through the central banks

Mon, 07/23/2012 - 10:00 | 2642306 ATG
ATG's picture

Just took 103% profits on DIA Aug 128 puts held less than a week.

For our next Overnight Options trade:

http://richcash8tradeblog.blogspot.com/2012/07/rich-cash-overnight-options.html

Mon, 07/23/2012 - 13:47 | 2642653 ATG
ATG's picture

Not sure why anyone who wants to make money in these volatile markets would click the red button.

Overnight Options portfolio is a quadruple since it began 2 July 2012 and was posted in real time for others to benefit.

Maybe some people are too skeptical to make money?

Oh well.

"A skeptic knows the price of everything and th value of nothing."

We do donate to TD/ZD for every subscriber who mentions TD/ZD as their source... 

Mon, 07/23/2012 - 10:01 | 2642311 sudzee
sudzee's picture

Oh, oh have all rumours been used up?

Mon, 07/23/2012 - 10:08 | 2642341 RSloane
RSloane's picture

Don't you just hate it when "end of the world as we know it" headlines signal accurately the end of the world as we know it?

Mon, 07/23/2012 - 10:12 | 2642356 txsilverbug
txsilverbug's picture

"Pull off the bandaid. Eat our peas. Now is the time to do it. If not now, when?"

 

- Barrack Obama June 11, 2011

 

Long on Del Monte peas.

Mon, 07/23/2012 - 10:37 | 2642479 Need More Cowbell
Need More Cowbell's picture

The S&P crashed -25.6% beginning on July 22nd 2011

THIS STATEMENT IS WRONG!

The SPY only fell 20.5% from July 22 to the Oct 2011 low.

Mon, 07/23/2012 - 11:11 | 2642628 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Art Crashin!

Mon, 07/23/2012 - 13:17 | 2643128 Grand Supercycle
Grand Supercycle's picture

SPX bearish weekly chart strengthens: an important development.

As mentioned on Friday, SPX downleg continues.

Useful SPX weekly chart at my blog.

http://www.zerohedge.com/news/2012-12-24/market-analysis

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