Market Recap: Called Today’s Action On The Money Almost Literally
August 27, 2008 4:04 PM
I mentioned pre-open that the trade should be long but real strength may take some time. It took about an hour and we really got going to the upside. I also mentioned at the open that we HAD to clear 1285.50 on the futures to move any higher than that and to avoid it there. It hit 1285.25 late afternoon and tried to clear it twice, failed and shot down all the way to 1276 before getting back to 1281 right before the close.
I also said 15 minutes into the open to “buy all checkdowns” and we would “have to clear 1270.50 to cause any problems”. That early call was good for an easy 10 plus points to the upside and gave a FIRM number to avoid that also proved to be one tick below today’s high. Charts “do not matter” (as some believe) but i called that before the market opened. Pure luck yet again - apparently.
Thats about as close to being correct as I can get.
Market Update: My Note On Caution at 1285 Has Proved Correct Thus Far
August 27, 2008 11:39 AM
It is possible that we may have already seen today’s high, but not certain of it. I do not like long near 1285 for certain. If we clear today’s low, especially late in the day, we may pressure yesterday’s low. But this is clearly undecided as of right now.
Real Strength has come after time as I expected. But 1285 area may be a BIG problem. If we clear 1285.50 on the futures we should test 1290-1294.
2:18 Update: 1285.25 was a lid, thus far as i warned. This is still in doubt however….
Market Open 1272: Trade Should Be Long Checkdowns, But May Take Some Time For Real Strength
August 27, 2008 9:30 AM
Opening in the 1272-1273 range is actually good to be long. An open much higher would likely be sold. Be careful up top near 1285.50. We would have to clear that in order to make a run at 1302. I doubt we will challenge 1285 today, but anything is possible. The early action may be a grind until the SMA’s catch up.
Morning Call: Futures Move Higher On Durable Goods
August 27, 2008 8:36 AM
Durable Goods just came out and were strong and the futures popped up. The futures charts are clearly better to have continued strength than yesterday. We have both yesterday’s low and 1260.50 as a backstop to the downside (1263 and 1261 cash market). To the upside be VERY cautious in the 1285.50 on the futures. We HAVE to clear that number to have any chance of making a run higher.
The big issue with the Durable Goods number is although it was up 1.3%, is that it is driven by business and government spending not consumers. Business spending has been holding up because of the weak dollar and exports. This has little or nothing to do with the real problems in the country and that is real incomes for consumers here continuing to fall. But for now, it is what it is.
45 Minutes before the open we are at 1275 and change. If we open much higher than that be very careful that the gap may be sold, especially if we open near 1280.
Oil may cause some concern if it spikes much higher. it is currently up almost $2 as concerns about the hurricane gain steam.
FDIC Report: 117 Financial Institutions In Trouble, One Big Problem, I Do Not Believe It
August 27, 2008 12:54 AM
Today the FDIC came out with their report of possible troubled financial institution list. it counted 117 as possibly troubled, up from 90 the previous quarter.one small problem, I believe this nonsense like not at all. The only reason that there were not far more on the list as banks refuse to realize the true value of the loans they hold. This was witnessed recently by I believe Merrill when they sold loans at $7 billion when they they had them on the the books just weeks before at $37 billion.
Today;s number of banks in trouble was comical, at best. It has to be far worse than indicated and people that believe otherwise are wrong. I have said this for over a year, and have been proven correct each and every time, and am right again. This is nonsense. The banks should be required to write down the value of the loans to CURRENT values NOW and move on. They refuse to do so. The list is FAR bigger than 117 and there needs to be something done about the financial institutions that continue to “hide” bad debts on their balance sheet. And I mean something punititive. Then again, this was supposed to be illegal, as Cramer has alluded to many times.
Consumer Confidence Up? This Is Clearly An Indictment On Public Education
August 26, 2008 9:03 PM
Consumer Confidence numbers released today were up to a reading of 53. Much was made of of the number as a “percentage”. This is complete nonsense. If consumer confidence was 1.0 and then moved to 2.0 it would be the largest percentage move of all time, by far. Would that be meaningful? Uhhhh no.
The facts are the facts are the facts. Real incomes in the U.S. have fallen for 8 years. Real incomes in China are skyrocketing. Maufacturing is at an all time low in the U.S. Manufacturing is at an all time high in China. Literally 100% of the wealth in the United States is held by those over 40 (prior to free trade with China). Consumer debt levels are at all time highs and consumer delinquncies are rising rapidly. Those ARE the facts.
And consumer confidence up? From what and why? Election hysteria is the only possible answer. The eternal hope for massive change. Unfortunately the change that would be made by an an all Democratic Congress and Obama presidency would very, very likely cause a worldwide depression, if addopted in full. The trade issue with China, while i am in 100% in support that it is a massive mistake has to be handled with great care. If we place significant protectionist tariffs, nationalize both FNM and Freddie Mac, nationalize healthcare, we WILL go into a depression, IMO. Without question the stock market will be FAR lower than it is today. That is a given.
I would provide an outline of what i believe needs to be done but unfortunaely nobody cares, lol.
Market Direction: While The Chart Still Says Long….
August 26, 2008 8:34 PM
While the chart still says long above 1261 cash, 1260.50 futures, I have a belief probably not widely shared. Most seem to believe the more times an area or trend is tested the stronger it becomes. I believe the exact opposite. It tells me the market wants to break it and likely will, at some point - but nobody wants to be the lone ranger in taking it out.
If we revisit the lows soon, I do not believe they will hold next time around. The market continues to test the 1261 area. I am a firm believer that the first test of an area will almost always hold. The second test is questionable, the third test is likely to fail. The market has pooked around the 1263-1265 area the last two days to see the resolve. It appears weak, at best. I could be wrong, but do not expect the next visit to this area to hold if and when we get there.
Market Recap: 1261 Held once Again
August 26, 2008 5:13 PM
Sometimes I make this far more complicated than it needs to be. What did I say before the open? The trade is long unless we clear 1261 and cannot immediately reverse. Period. Today’s low? 1263. Once again the KISS principle should have come into play. KEEP IT SIMPLE.
I was long early on once I saw 1263.25 hold on the futures but was surprised when it backed off 1275.75 and never challenged it again. It did, to some extent as it ran back to 1272 and reversed. Then I knew 1272 was an issue to the upside. It ran up to 1271.75 and I warned it HAD to clear 1272 to be long up there. It ran all the way down to a new low off that number.
Tomorrow we have Durable Orders before the bell. It will be same story different day. 1261 (cash market) HAS to hold OR immediately reverse if cleared or we will be heading for a retest of 1200, which I have long felt is coming anyhow. Theoretically (my theory anyhow) 1200 is NOT the low on the SP. I will stick to that view until proven correct, which I believe I will be, eventually.
I need the Grasshopper for this post as I obviously need to learn from my own comments.
Market Update: Market Was Bought Early, 3:00 EST Is Likely Key
August 26, 2008 2:08 PM
The market was bought above 1261 early as I thought was very likely. It rallied to 1275 and change. If we clear 1260.50 to the downside after the release of the number of banks in trouble at 3:00 EST, we will either IMMEDIATELY reverse or we will close at the low of the day. I would guess the latter is FAR more likely.
2:20 Update: They released the list already for some reason. 117 banks in trouble, up from 90 last quarter, but based on the size, no huge banks can be on the list. This “may” save the market today from a big selloff, not sure.
Closing Update: We held 1261 on the cash market and moved up above that. The banking release helped the market into the close because apparently no big banks on the list (they do not list names, just asset sizes). That was a relief to the market and prevented a big selloff.
Market Open: 1263.25 Early Low
August 26, 2008 9:43 AM
I mentioned yesterday that 1263.25 was likely the next level to hold. It is the early low. We need to reverse off this low with some force and take out 1272.25 to the upside to possibly put in a low as I see things.
I am long at 1268.50 early on, but we have to clear 1272.25.
-
Recent Commentary
- Market Recap: Called Today’s Action On The Money Almost Literally
- Market Update: My Note On Caution at 1285 Has Proved Correct Thus Far
- Market Open 1272: Trade Should Be Long Checkdowns, But May Take Some Time For Real Strength
- Morning Call: Futures Move Higher On Durable Goods
- FDIC Report: 117 Financial Institutions In Trouble, One Big Problem, I Do Not Believe It
- Consumer Confidence Up? This Is Clearly An Indictment On Public Education
- Market Direction: While The Chart Still Says Long….
- Market Recap: 1261 Held once Again
- Market Update: Market Was Bought Early, 3:00 EST Is Likely Key
- Market Open: 1263.25 Early Low
- Morning Call: Futures Flat, New Home Sales At 10:00, FOMC Minutes Late
- Market Recap: My Gap Rule Ruled The Day
- Market Update: 1261 Should Hold - If Not We May See Panic
- Open: 1285, 1282.75 Still Important
- Morning Call: Decision Time
- Market Update: Typical Trend Day Higher Early As Predicted, Now The Outcome Is Clearly In Doubt
- Market Open: Watch The Gap Reaction
- Morning Call: Futures Up, Long All CheckDowns Early Should Be Play
Our Mascot Trading Goal: Ferrari 599
