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September 3, 2010, 7:00 am EDT …The Standard and Poor’s 500 index futures up 1.00 to 1089.90, as global markets climbed on “new normal” improvement in U.S. economic indicators ahead of a crucial employment report due this morning. August’s jobless rate is forecast to rise to 9.6 percent from 9.5 percent in July with the private sector adding only a net total of 41,000 jobs, fewest since January. Even a 1000 body improvement from the estimates will drive stocks hitter. …Japan’s benchmark Nikkei 225 stock index rose 51.29 points, or 0.6 percent, to 9,114.13 and South Korea’s Kospi edged up 0.2 percent to 1,780.02. Hong Kong’s Hang Seng index added 0.5 percent to 20,971.50. … London’s FTSE was 100 up 0.1 percent to 5,371.0, France’s CAC-40 was up 0.5 percent at 3,649.34 and Germany’s DAX was up 0.4 percent to 6,109.09. … Benchmark oil for October delivery was down 36 cents at $74.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.11 to settle at $75.02 a barrel on Thursday. … In currencies, the dollar rose to 84.41 yen from 84.26 yen in New York late Thursday. The euro climbed to $1.2839 from $1.2820. … Sentiment turned positive on Wall Street after the bogus and misleading National Association of Realtors report on Thursday that the number of buyers who signed contracts to purchase homes rose 5.2 percent in July after hitting a record low in June. Such “news” has compromised the value to rely on technical indicators such as the S&P 500 index. Yesterday, the S&P 500 index struggled in the 1087 area, which should have been resistance, but limited buying in the large-cap tech and large-cap financials spooked the shorts and covering was ramped before the close driving the index to close at its high. Indeed, the advance has the S&P 500 up 3.89 percent in the first two days of September, which offset what was lost in August. Meanwhile, trading volume was light. As for where to set the S&P 500 index —- Change resistance to 1098.70 and support at 1054.00. Allow the jobs report to filter through the financial media since whatever the number it will be given a positive twist: i.e. “Manufacturers have added jobs indicates growth in the economy” “The bottom has been reached with less than expected unemployment.” “The Obama Nation’s new stimulus programs will create new jobs.” “No double-dipping.” So go with the flow and only trade what’s hot. Maintain 70% cash position, except for “special situations” and short term trades. Be careful: the “noise” can win just by the level and persistence of the sound.
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September 2, 2010, 4:00 pm EDT … Closing Thoughts — The Standard and Poor’s 500 index closed up 9.81 to 1090.10, as the National Association of Realtors (NAR) said pending sales of previously owned homes rose unexpectedly in July, while initial jobless claims fell for a second straight week. Still at historically low levels, the “pending sales” data requires the sales to close. What the NAR failed to state —- only 60 percent of contracts actually closed. NAR is notorious for misinformation. So what? The stock market loved it and so did we. … Trade the noise like it’s real and you cannot go wrong in a manipulated financial information environment. Only thing to remember — don’t fall in love with the noise. Merely trade it as long as you can — like a cat on a hot tin roof. ... The housing market continues to be dead in the water, with any blip meaning “the worse is over.” The housing and labor markets are the biggest headwinds facing the recovery, and the data comes a day ahead of a monthly employment report expected to confirm that jobs were lost in August. … In an encouraging sign for the consumer, US retailers posted better-than-expected sales in August as consumers sought bargains during the key back-to-school season. The Morgan Stanley Retail index (.MVR) rose 1.6 per cent while the S&P retail index (.RLX) added 1.6 per cent. … Still the fundamental problems of a troubled housing market and banks that aren’t going away. Even with the Fed stepping in, those issues are likely to remain for some time. … Tracking today’s volume with Dartline BTD statistical arbitrage index (BTD-SAI) shows further short covering as a major factor to the end of day upside surge in stock values. With limited new money added to the pile, the current rally cannot be support. However, fighting logic is a fool’s game. Trade the trend and allow the events to unfold to your advance.
September 2, 2010, 7:00 am EDT …The Standard and Poor’s 500 index futures down 1.10 to 1080.60, as Britain’s FTSE 100 down 0.1 percent to 5,358. At least for yesterday FEAR took a backseat until the next set of economic data like unemployment, homing foreclosures and less liquidity by Corporate America. Indeed, if unemployment rises the market will tank again, which means the recovery is really an illusion. The U.S. Bureau of Labor Statistics is scheduled to release nonfarm payroll and unemployment figures for August on Friday. Economists say the unemployment rate, which stood at 9.5 percent in July, must come down for there to be confidence a genuine recovery is taking hold. … Today’s the day whether a material change to resistance target is made to 1098.90 in the S&P 500 index. Despite yesterday’s strength, the index could not push past its 50-day moving average, which is in the 1080 zone. However, the broad market made its best gain in nearly two months, fueled primarily from short covering. Based on Dartline BTD analysis — of the total volume yesterdays 56 percent was short covering and related short side trades. Therefore, the low volume and lack of overall participation of “real” money suggests that the gains were overdone. While today’s Initial Claims reading would be telling, Friday’s Employment Report has the potential to bring significant volatility before the long weekend. Nonsense trying to guess what the manipulated market with excessive electronic trading will offer. Remain defensive, and allow the technical market events to dedicate trading patterns.
September 1, 2010, 4:00 pm EDT … Closing Thoughts — The Standard and Poor’s 500 index closed up 30.85 to 1080.18 and above near term resistance (1071.19). What it means remains a difficult call. Stocks jumped on the “new normal” report from the Institute for Supply Management on manufacturing activity in the U.S., which rose slightly in August, and in contrast to regional reports from recent weeks that pointed to a slowdown in growth. Since economists had expected a decline the news was a major events to jump-start stocks for the first trading day in September. Without this bit of good news stock were heading low after the initial pop on less than stellar numbers from August ADP Employment data. Like Stocksmirf said, “trade what’s in front of you and allow the tape to track the trend.” … The manufacturing reports have become increasingly important because they are a leading indicator for whether companies might start adding new jobs. Investors will be closely watching the Labor Department’s monthly employment report on Friday, which whatever shows will be twisted to suggest “better results ahead.” … The fireball was the pre-market started from China’s manufacturing sector, which claimed a picked up in August. According to a new report, even though economists expected a pullback, the news set the worldwide markets aflame. … The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.58 percent from 2.47 percent late Tuesday. The yield on government debt anchors borrowing rates for a wide variety of consumer and business loans. … Crude-oil futures rallied past $74 a barrel Wednesday on hope the outlook for global oil demand after petroleum’s sharp tumble last month. Crude oil for October delivery rose $2.40, or 3.3%, to $74.31 a barrel on the New York Mercantile Exchange.
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September 1 , 2010, 7:00 am EDT .. The Standard and Poor’s 500 index futures are up 12.50 1060.80, as data from China manufacturing activity showed recovery in August — the first gain in four months. The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, rose to 51.7 in August from 51.2 July and 52.1 in June. Numbers above 50 show manufacturing activity expanding. Another survey, the HSBC China Manufacturing PMI — a seasonally adjusted index designed to measure the performance of the manufacturing economy — rose in August to its highest level in three month, at 51.9. … China’s economic growth slowed to 10.3 percent over a year earlier in the second quarter, down from its blistering 11.9 percent first quarter pace. A slowdown could weaken the global recovery if it cuts Chinese demand for imported iron ore, industrial machinery and other foreign goods. Moreover, surge in purchasing prices requires further review since it will increase companies’ production costs. … However, U.S. economic data due today will be more telling than noise from China; (1) MBA Mortgage Applications – 7:000 am; (2) August Challenger Job Cuts – 7:30 am: Last month we saw a 57% decline y/y. Suggest report will track ADP number. (3) August ADP Employment – 8:15: Consensus stands at 16K would be the lowest number since February, which will compromise data on jobs report on Friday. (4) August ISM Manufacturing – 10:00 am : Expectations are for the figure to decline to 52.7 from July’s 55.5. In line results would represent the lowest survey since September 2009. (5) July Construction Spending – 10:00 am: More weakness evident. … Maintain 1024.20 in the S&P 500 index as support and resistance at 1071.19. .. Yesterday’s numbers indicate institutional participation: Higher average volume volume (NYSE 1401 closing average of 1307 Nasdaq 2119, 2045), with advancers outpacing decliners on the NYSE and decliners outpacing advancers on the Nasdaq (NYSE 1654/1332 Nasdaq 1264/1320), and with new highs outpacing new lows on the NYSE and new lows outpacing new highs on the Nasdaq (NYSE new highs/new lows 136/36, and NASDAQ new highs/new lows 23/77). Even with professional participation, remain defensive — reduce laggards, take profits and use to tape to trade short term direction.
August 31, 2010, 4:00 pm EDT .. Closing Thoughts — The Standard and Poor’s 500 index closed up 0.40 to 1049.32, and recovered from early losses on reconstituted noise — Minutes of the Fed’s discussions from the Aug. 10 meeting show the central bank recognized that the economy could need further stimulus beyond the debt purchases. Those are intended to lower interest rates on a range of consumer loans — made the rounds for the entire day. … The bottom line: Reinvesting proceeds from the Fed’s holdings of mortgage securities has sent a signal that committee’s readiness to resume large-scale asset purchases will create an imbalance in the money supply. The effect can plunge the country into a deep recession. Now for the BIG LIE: In that speech, Helicopter Bernanke said he believed that the economy would continue to grow modestly in the second half of this year and then rebound to stronger growth in 2011. ... “It is easy to see why so many people have concluded that the entire system is rigged,” said Dan Loeb, hedge fund manager and founder of Third Point LLC, a New York based hedge fund managing over $5.5 billion in assets. Apparently Loeb reads BEAT THE DART since his commentary send to shareholders was directly taken from a Stocksmirf page. It does matter, only the message — “The market is rigged and everybody knows it.” … The message, from the number of chunks of quotes Dealbook pulls out of Loeb’s letter is: I don’t trust the government to do what’s best for the economy, so I’m pulling out of companies that could be impacted by public policy/ In the startling conclusion, Loeb says: “It is easy to see why so many people have concluded that the entire system is rigged. … As every student of American history knows, this country’s core founding principles included non punitive taxation, constitutionally guaranteed protections against persecution of the minority and an inexorable right of self-determination. … Washington has taken actions over the past months, like the Goldman suit that seem designed to fracture the populace by pulling capital and power from the hands of some and putting it in the hands of others. … We have given a great deal of thought about the impact that public policy has on individual companies, industries and the economy generally. … Many people see the collapse of the subprime markets, along with the failure and subsequent rescue of many banks, as failures of capitalism rather than a result of a vile stew of inept management, unaccountable boards of directors and overmatched regulators not just asleep, but comatose, at the proverbial switch. ... It is easy to see why so many people have concluded that the entire system is rigged.” … And not ecause Stocksmirf says so!
August 31, 2010, 7:00 am EDT … The Standard and Poor’s 500 index futures was down 3.70 to 1041.10, as benchmark crude for October delivery was down $1.13 to $73.57 a barrel. The contract lost 47 cents to settle at $74.70 on Monday. Oil traders have been following closely global stock markets as a barometer of overall investor sentiment. The S&P 500 index dropped 1.2 percent Monday after the Commerce Department said consumer spending in the U.S. rose just 0.4 percent in July. … Most major Asian and European stock markets also fell Tuesday, led by a 3.6 percent plunge in Japan’s Nikkei 225 index. . … Maintain 1024.20 in the S&P 500 index as support and resistance at 1071.19. “Remain defensive, trade the tape and don’t embrace the Bernanke noise as fact,” while suggested yesterday, it still hurts. Being right doesn’t change the sentiment. However, watch what happens at 1024.20 — a clear break below will drive the index to 1003.24, last held on September 3, 2009, in a heartbeat. In the interim no sense getting too brave — maintain 70% cash position and keep short side bias. Wall Street is crying for more support and bailouts from Washington. Just a few months ago, the big banks had a different story.
August 30, 2010, 4:00 pm EDT … Closing Thoughts — The Standard and Poor’s 500 index closed down 15.68 to 1048.91, as very low volume and lack of anything caused stocks to drift lower. A minor report showed personal income rose less than expected in July, adding to a slowdown in growth during the second half of the year. However, personal spending added 0.4 percent in July, the biggest jump in four months. Meanwhile, investors focused on employment data. Signs of a slowdown in growth has plagued the market for more than a month. Investors are unsure if companies will be able to keep up strong earnings growth if the recovery runs out of steam or falls back into recession. And consumers aren’t likely to spend more until there are clear and regular signs of hiring. … The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.55 percent from 2.65 percent late Friday. Its yield is often used to set interest rates on mortgages and other consumer loans. … The Institute for Supply Management releases its monthly manufacturing survey Wednesday, which has an employment component to it. Payroll company ADP also releases its data on private jobs growth Wednesday. The Labor Department releases its weekly report on unemployment claims Thursday. New claims fell last week, but remain at elevated levels, which suggests that employers are not adding new workers. The key indicator would be new firing and when it happens the markets will materially decline. Dartline BTD should be ahead of the curve on that issue because of its SPM+Game Theory PRO matrix. Stay posted — we’ll report any changes in the three dedicated filters that assesses data on the subject.
August 30, 2010, 7:00 am EDT … The Standard and Poor’s 500 index futures down 0.50 to 1063.20, as oil prices below $75 a barrel Monday in Asia. Sellers controlled the stock market in recent sessions and, as a result, sent the S&P 500 lower in five of the six sessions leading up to Friday for a cumulative loss of more than 4%. As suggested by Dartline BTD, the decline prompted an oversold situation to cause shorts to cover positions. Low volume, however, made it easy for stock manipulators to control direction — more of the same for a holiday week. … The major indices closed the week with only modest declines after Helicopter Bernanke fueled a large rally on Friday, helping to offset some of the growing concerns regarding the pace of the economic recovery. The S&P 500 fell to a loss of as much as 2.3% this week before recovering to just a 0.7% decline. Only three of the 10 sectors gained, led by utilities (+2.0%). On the downside, the tech sector was the main laggard with a loss of 2.1%. Stocks rallied 1.7% Friday after Bernanke said that he expects a pickup in growth in 2011 [no data to support the noise] , adding that the Fed is ready to use “unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.” Wow!. Maybe he’s going to start printing a new kind of US dollars? The news sparked a sell off in Treasuries. … Maintain 1024.20 in the S&P 500 index as support and resistance at 1071.19. Remain defensive, trade the tape and don’t embrace the Bernanke noise as fact.
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