Weekly Bull/Bear Recap

Tyler Durden's picture


Courtesy of RCS Investments


+ The Conference Board’s Leading Indicator increases 0.3% after a small 0.1% decline in April.  “The index’s 6-month growth rate remains in expansionary territory and well above its growth rate at the end of 2011, pointing to a relatively low risk of a downturn in the second half of 2012.” — Conference Board Economist  

+ Housing is clearly turning the corner.  The NAHB/Wells Fargo Housing Market Index rises to a 5-year high, while lumber prices just hit levels last seen in 2006.  Meanwhile Housing Permits, a leading indicator of housing construction, rise to their highest reading since 2008, while Starts show a YoY reading of close to +30%.  Continued momentum will create jobs.

+ Pro-bailout parties are able to form a government in Greece, adding legitimacy to imposed austerity.  Moreover, policymakers are slowly moving towards using the EFSF to purchase sovereign bonds, relieving periphery countries of their high funding costs.  Germany has left the door open to this course of action.  Spanish and Italian bond markets have begun to sniff out use of the EFSF.  

+ The crisis is uniting world leaders, leading to a more coordinated response to global events.  The G20 backs growth measures alongside more prudent budget management and decries protectionism.  Meanwhile emerging markets show solidarity with Europe, almost doubling the IMF’s firepower.  Finally, central banks stand ready to act to relieve market stress.  


- The global recovery is being upended in front of our eyes.  China’s PMI (HSBC) slumps to a 7-month low, matching the length of contraction seen during the 2008 crisis.  Meanwhile, both the Ifo and ZEW confidence surveys in Germany show a deep recession for the Eurozone is in the offing.  June Eurozone PMIs confirm this as well.  

- The market doesn’t believe the Greek elections have solved the underlying problem of lack of political will amongst the people of Europe to share their debt burdens.  Downside risk for equities will remain high as long as Spanish 10-yr bond yields remain elevated.  The end game for the Eurozone is at our door and few believe this to be the case.  And no bulls, Germany is not using the EFSF nor the ESM to bailout the periphery until budgetary sovereignty is handed to the European Commission.  

- The U.S. economy is coming perilously close to stalling.  Labor market conditions have deteriorated as job openings fall to the lowest in more than a year, while the downtrend in jobless claims has vanished.  Meanwhile growth in the manufacturing sector, the beacon of the U.S. recovery, is fizzling out.  

- While it may seem that the G20 is united against the Eurozone crisis, behind the scenes   is a different story

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Fri, 06/22/2012 - 17:59 | 2552553 Biosci
Biosci's picture

Housing is clearly turning the corner.

wtf?  from the cited article:

The increase in permits to an annual rate of 780,000 in the Census Bureau report mirrors a recent survey of builder confidence, which rose in June to its highest level since 2007, according to the National Association of Home Builders (NAHB).

Actual housing starts, however, dropped 4.8% compared with April, although they did gain 28.5% compared with a year earlier.

oh yeah.  -4.8% m/m is definitely turning the corner.

Fri, 06/22/2012 - 18:10 | 2552626 HD
HD's picture

I stopped reading right at "Housing is clearly turning the corner" to make a snide comment - and saw you beat me to it...

Fri, 06/22/2012 - 19:45 | 2552825 Biosci
Biosci's picture

I thought about dropping a "first, bitchez!" but I let it go.

Sat, 06/23/2012 - 07:39 | 2553354 MuppetMaster
MuppetMaster's picture


I have found Alpha. & I give it to you for free. Come see what I'm doing. See what I'm seeing.

Sat, 06/23/2012 - 00:26 | 2553148 q99x2
q99x2's picture

There is a lot of money from around the world finding a resting place in US housing. But the flight is temporary and better spent at Efoods Direct or on ammunition. You may even be able to sell a piece of wood with a bent rusty nail in it as a work of art these days.

A two headed turtle brings a handsome price.

Fri, 06/22/2012 - 17:53 | 2552603 thatthingcanfly
thatthingcanfly's picture


EBT cards no longer allowed to be swiped in strip clubs. Strippers unions go on strike in three states.

Fri, 06/22/2012 - 18:04 | 2552621 veyron
veyron's picture

Bull: EBT cards can be swiped at Fidelity stores, depositing money in a stock fund.  

Fri, 06/22/2012 - 18:18 | 2552642 slewie the pi-rat
slewie the pi-rat's picture

are you better off than a week ago?

can't take it any more?

send tyler $100 and STFU, BiCheZ!

Fri, 06/22/2012 - 23:02 | 2553060 Raisuli
Raisuli's picture

Who can tell about one's own or another's betters?

One takes until one does not take anymore. It is not about can or can not.

I ain't sendin' anyone anything.

Fri, 06/22/2012 - 19:27 | 2552791 Wave-Tech
Wave-Tech's picture



For those intersted, here is my short-term outlook for the Dow...


Fri, 06/22/2012 - 20:26 | 2552874 knukles
knukles's picture

What if I'm not interested?

Fri, 06/22/2012 - 21:04 | 2552918 One World Mafia
One World Mafia's picture

He said intersted not interested.

Fri, 06/22/2012 - 21:22 | 2552942 orangegeek
orangegeek's picture

An update on primary wave 3 down - it's still in effect - expect more sharp down days in the weeks ahead.



Fri, 06/22/2012 - 22:21 | 2553001 adr
adr's picture

The EPA has made lumber hit record prices, not demand. That and lumber yards going out of business left and right forcing people to pay the 600% markup at home depot.

Housing turned a corner? Does that mean my house will be worth 4 times what it is now by 2015? Come on million dollar midwest 1400sq ft home.

Sun, 06/24/2012 - 11:47 | 2555759 Grand Supercycle
Grand Supercycle's picture

DOW weekly chart shows uncertain market & fluctuating consensus with likely bullish pattern contained within megaphone wedge.


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