Millionaire Now!

Pre-Market Open News and Links for Friday

Chart of The Day: "With a large majority of third-quarter earnings in the books (87% of S&P 500 companies have reported for Q3 2009), today's chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates how earnings declined over 92% from its Q3 2007 peak to its Q3 2009 trough, which makes it easily the largest decline on record (the data goes back to 1936). On the positive side, S&P 500 earnings bottomed and are moving up sharply." - chartoftheday.com

via chart of the day

Stocks fell across the globe as the US dollar rallied and concern spread regarding the underlying health of the economic recovery. Volume, a critical component of institutional demand, was higher than Wednesday's levels across the board which marked a distribution day for the major averages. Decliners trumped advancers by about a 4-to-1 ratio on the NYSE and Nasdaq exchange.
In terms of new leadership, it was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and Nasdaq exchange.
The Oil Services Index ($OSX -3.49%) sank under its 50-day moving average line again after recently encountering resistance at its upward trendline connecting its July lows.
One of the largest reversals in earnings trends is for the S&P 500 itself, with earnings expected to jump 65% in the fourth quarter relative to last year's fourth quarter (up from a third-quarter year-over-year loss of 17%):

Other notable reversals are in the information technology sector and materials sector.

One clear theme among the sectors, industries and companies with the best earnings prospects is foreign-sourced revenues.

For large-cap companies in particular, foreign profit's weight climbed steadily from 2004 to 2008 before skyrocketing this year as more companies reported losses in their US operations. Even small-cap companies' foreign profit share spiked this year, after declining slightly during the prior five-year period.

The weak dollar has clearly been a contributor to better earnings for some companies. A weak dollar can boost profitability in two ways:

First, US-based multinationals' products are more competitively priced globally.
Second, sales in other currencies get translated at higher exchange rates when they're converted after the dollar declines.

Record-breaking productivity growth has also been a contributor as companies have kept unit labor (and other) costs in check as demand has begun to rise from the ashes.

However, Brazil, South Korea, Russia and other developing nations are now fighting a losing battle to mute gains in their currencies as a falling dollar and economic recovery create more demand for their assets than central banks can handle. South Korea Deputy Finance Minister Shin Je Yoon said… the country will leave the level of its currency to market forces after adding about $63 billion to its foreign exchange reserves this year. Chile Finance Minister Andres Velasco said… that lawmakers approved an increase in local debt sales to finance spending, a move that will allow the government to keep more of its dollar-based savings overseas and slow the peso’s rally. Governments are amassing record foreign-exchange reserves as they direct central banks to buy dollars in an attempt to stem the greenback’s slide. Continue to hold GOLD.

From 24/7 Wall St.:

From Trading Markets:

From MarketWatch:

Wall Street Breakfast - What you need to know in early trading today.

The public will believe anything, so long as it is not founded on truth. – Dame Edith Sitwell (1887 – 1964)

California October Home Sales

An estimated 41,280 new and resale houses and condos were sold statewide last month. That was up 2.6 percent from 40,216 in September, and down 2.4 percent from 42,293 for October 2008. California sales for the month of October have varied from a low of 25,832 in 2007 to a peak of 70,152 in 2003, the average is 44,451... full story

Bay Area median price tops year-ago level for first time since '07 - The Bay Area’s housing market continued to ease back toward normalcy last month as fewer distressed properties sold and $500,000-plus sales accounted for a greater share of transactions than a year ago. The result: The nine-county region posted a modest year-over-year gain in its median sale price – the first in nearly two years... full story

Additional Reading:

San Francisco Home Prices Rise, First Time Since ‘07 (Bloomberg)
San Francisco Bay Area home prices inch toward stability (Los Angeles Times)
San Francisco area home prices perk up in October (Reuters)
Silicon Valley real estate turnaround? Prices, sales up in October (San Jose Mercury News)
California median home price rises (Associated Press)

Thursday Morning Market Comment and Links (for traders)

Mild Distribution As Nasdaq's Loss Comes On Higher Volume-
The major averages closed lower after a series of mixed economic data was released. Volume, a critical component of institutional demand, was heavier than Tuesday's levels across the board which marked a distribution day for the Nasdaq Composite Index, but percentage-wise the losses were too small on NYSE indices to constitute a distribution day. Decliners led advancers by an 8-to-7 ratio on the NYSE and by a 3-to-2 ratio on the Nasdaq exchange. The Nasdaq Composite Index fell on higher volume and marked a distribution day for the tech-heavy index.

The key metric in the market since last week has been the breaching of the psychologically and technically significant 1,100 mark on the S&P 500 Index. The index managed to punch a hole in this ceiling on its way to a new, 52-week high.

As you can see by the chart below of SPX, this broad market index has been on a tear ever since March. That tear has been nearly uninterrupted since the index bounced off of its 200-day moving average in early July.

The S&P 500 now trades firmly above that long-term moving average, but it also now trades well above its short-term, 50-day moving average (blue line). This is clearly a bullish sign for SPX and, because of this, I do think it’s safe to put money to work in this market. But if you are going to do so, be certain you have a tight stop loss in place to protect your gains if the market comes rolling back.

The market is becoming narrower with some glaring divergences...namely the SMALL CAPS. While the DOW is at new highs, the RUSSELL 2000 and SMALL CAP 600 are still below the 50-day...amazingly so. This tells me that it is going to get tougher going forward and that one needs to concentrate on the larger names. This is the type of action that usually occurs at the latter part of a move...so be on guard. BIG CAP Growth Tech looks poised higher as the market gets narrower. Looks like they will attempt to move out of small ranges.

Now, one sector that hasn’t quite punched through that upper end of technical resistance is financials. If we look at the chart below of the Financial Select Sector SPDR (XLF), we see this fund is now trading right at its 50-day moving average.

This failure to trade at new highs along with the SPX is significant, because financial stocks were the ones that led this rally back from the March brink. Bargain buying in the severely battered sector helped the wider markets recover and, if we see this sector start to lag, it could be an indication that the remarkable 2009 bull run finally is losing steam.

The Trend Trader for Thursday, November 19th

Wall Street Breakfast What you need to know in early trading today.

Media Digest 11/19/2009 Reuters, WSJ, NYTimes, Barron's 24/7 Wall St.

7 Stocks for Thursday by Trading Markets

Stocks in focus for Thursday.- MarketWatch

Bloomberg Futures

Unemployment sucks in Europe

Affordable Prices Draw Investors to Real Estate: Nationwide survey found 12% of people responding plan to buy a home as an investment, twice the share (5.6%) expressing such interest in March.

The survey by the online property listing service Move.com said the lure of lower prices and foreclosure bargains were chief reasons for the growing interest.

The survey by Move.com also found:

Of those expressing interest in investing in homes, 25.3% were interested in buying foreclosed homes.
42% of potential foreclosure buyers are looking for an investment, while 57.6% are looking for a home to live in.
Of those planning to buy a home in the near future, 48.3% are first-time buyers.
Of the foreclosure investors, 13.2% intend to rent the home out; 11.3% plan to fix them up for resale; while 17.4% plan to have relatives live in the home until it can be sold at a profit.
58% of foreclosure buyers expect to find a home at no more than 20% below market value; 38.5% expect a discount of 25% or more.
73% expect properties to appreciate by 10% or more in five years; 28% believe values will go up 20% or more.
48.2% expressed dissatisfaction with the federal government’s efforts to stabilize the housing market in October vs. 42.2% in March.

The poll was Move.com’s fifth quarterly Homeownership Survey. The latest sampling resulted from 1,002 interviews from Oct. 16-18. The poll has a margin of error of +/- 3%. Move Inc. operates several online real estate listing services, include the National Association of Realtors’ Realtor.com. Chief Revenue Officer Errol Samuelson said the survey …

“… validates what many had hoped to see in the housing markets — affordable prices and ample inventories are restoring the appeal of real estate to investors while providing opportunities for first-time homebuyers to enter the market.”

Four Years and Running

Clusterstock: We've seen this over and over again.

"While Americans seem to recognize that there's been this thing called the housing crash, they don't believe it's happened to them, or at least a lot don't.

Zillow: However, the third quarter of 2009 is a different story in both market behavior and homeowner perception. As individual markets behaved very differently (some improving, some flat, many still continuing to decline), homeowner perception was literally all over the map. And for the first time, one sector of homeowners — those in the Northeast — was overly cynical about home values. Meanwhile in the hardest-hit region of the country, the Western states, homeowners continued to be overly optimistic when evaluating the value of their own homes.

Nationwide, when asked about their own home’s value over the past year:

• 25% think their home’s value has increased
• 26% think their home’s value has stayed the same
• 49% think their home’s value has decreased

In reality, 72 percent of U.S. homes lost value over the past year, and 22 percent of homes increased in value. That’s fewer homes declining versus Q2(83%), and a smaller Misperception Index of 10 (vs. 13 in Q2 and 17 in Q3 2008). A Misperception Index of zero would mean homeowners’ perceptions were in line with actual values."

Housing Bubble Hits Four Year Anniversary: This month marks the fourth year since the discovery of what turned out to be the latest housing slump — the one that triggered the worst recession since the Great Depression.

October 2005 was the first month when total homes sold in California fell from year-before levels. Similar annual sales drops continued month-in, month-out for the next 2 3/4 years locally.

The Great Recession that followed reads like a slow-moving catastrophe: Subprime lenders collapsed as defaults and foreclosures soared, followed by the global credit crunch, the collapse of Wall Street mortgage traders and hedge funds, the federal takeover of government-sponsored lending agencies and finally massive layoffs and the stock market crash.

Many economists now say that the slump has ended and recovery has begun. Some Realtors, commentators and many readers on this blog say pronouncements of the slump’s demise are premature.

There have been three major housing slumps since the early 1980s. An analysis of California housing data back to 1979 shows that each major slump is spaced roughly five to 10 years apart.

This latest slump turned out to be the most severe and shortest of modern slumps on record. It hit swiftly, lasted just three years, induced the steepest price drop in 30 years of housing data, then — some say — began a slow turnaround early this year.

It took 21 months for price drops to take hold after sales first slumped. Such denial is typical of recent slumps. It took three years for the first annual price drop to appear in California after sales slumped in January 1980. It took a year in the early ’90s

Based on monthly housing data from the California Association of Realtors and MDA DataQuick, here’s a synopsis of key milestones from the last three major housing slumps: the early 1980s, the early 1990s and the Great Recession:

Early 1980s: Jan. 1980 to June 1985:

Duration of sales slump: 5 1/2 years
Months w/annual sales drops: 34
Consecutive months w/sales drops: 19
1st sales drop to 1st price drop: 3 years
Price drop, peak to trough: -3.9%

Early 1990s: April 1989 to Sept. 1995:

Duration of sales slump: 6 1/2 years
Total months with annual sales drops: 50
Consecutive mos. w/sales drops: 25
1st sales drop to 1st price drop: 1 year
Price drop, peak to trough: -19%

Latest slump: Oct. 2005 to Feb. 2009:

Duration of sales slump: 2 1/2 years
Total months with annual sales drops: 30
Consecutive months w/sales drops: 30
1st sales drop to 1st price drop: 2 years
Price drop, peak to trough: -57.9%

TOADY'S OPEN: FLAT

U.S. stock futures weaken with housing in focus-
"S&P 500 futures fell 1.9 points to 1,104.40 and Nasdaq 100 futures fell 2 points to 1,801.50. Futures on the Dow Jones Industrial Average fell 12 points, after markets registered advances in nine of the last 11 sessions, with the housing market returning to the spotlight as Home Depot said there are some signs of stabilization with a house builder confidence gauge due for release."

Averages' Rally on Higher Volume Indicates Accumulation-
The major averages rallied smartly on Monday which sent the benchmark Standard & Poor's 500 Index above resistance and to a fresh 2009 high! Volume, a critical component of institutional demand, was higher than Friday's levels on the Nasdaq exchange and the NYSE which signaled large institutions were accumulating stocks. Advancers trumped decliners by over a 4-to-1 ratio on the NYSE and by over a 3-to-1 ratio on the Nasdaq exchange.

PICTURED ABOVE: The Nasdaq Composite Index (QQQQ) rallied to a new 2009 high with better volume behind its gain.

Bespoke Investment Group: "One would think that in a year where the average stock in the S&P 500 is outperforming the index by a wide margin (40.3% vs 22.9%), that most sectors would also be outperforming the overall index. Yet with the S&P 500 trading to a new high for the year, only three out of ten sectors are actually outperforming the index in 2009. Through this morning, Technology (55.1%), Materials (43.5%), and Consumer Discretionary (36.5%) are the three best performing sectors this year, while Telecom Services (-4.1%), Utilities (1.6%), and Consumer Staples (12.7%) have lagged the most."

It’s the “easy button” for politicians and monetary authorities. The pressure is impossible for them to resist. Kick the can down the road as we’ve been doing for the past few decades since the political fortitude to do the right thing just isn’t there. What we’re witnessing is the birth of another (inflation) bubble caused by easy money and easy choices.

While the resulting credit crunch was ongoing, the Fed "convinced" Congress to allow them to pay interest on member bank reserves held by the Fed. Credit, at near zero rates, is now being extended by the Fed to its "anointed" in exchange for their toxic waste as collateral, which proceeds are then being deposited with the Fed as reserves at a 3% rate of interest instead of being re-loaned, and we'll give you three guesses as to who gets to pay for this interest on reserves. That is a very profitable and risk free spread, but only for the "anointed," as the Fed can open and shut its discount loan window to whomever it darn well pleases, being a privately owned bank. The small fry can go scratch, and many have already succumbed. This will continue until the number of banks in our banking system is cut in half. The FDIC is beyond broke. They don't even have enough to cover but a tiny fraction of potential losses, much less to cover the losses from the failure of half of the banks in the entire system. Either the claims for lost deposits will not be paid, or so much money will be printed to pay those claims that the money received in payment will be virtually worthless, along with any and all remaining dollar-denominated assets. This is going to become a very big problem indeed in the not-too-distant future.

Everything's Being Driven By The Dollar

(Via Clusterstock) Some good insight from David P. Goldman:

There is a pretty close inverse correlation between the 10-year yield and the S&P. What could account for this? NOT economic recovery, in which real interest rates rise. And not expectations of lower inflation–the spread between coupons and TIPS continues to widen and commodity prices are soaring.

Eliminate the impossible, and what remains, however improbable, must be true, as Sherlock Holmes liked to say. BOTH bond and stock prices are driven by the dollar. 17.5% unemployment by the broad measure keeps wages down and keeps the CPI low, despite the surge in commodity prices, while the cheap dollar makes US assets a bargain. Well, not exactly: the enormous reserve growth on the part of Asian central banks means that the Treasury’s debt-buying program has been outsourced to America’s Asian trading partners! No-one dares pop the bubble. It’s like what Woody Allen said about death. He wasn’t afraid of it; he just didn’t want to be there when it happened. Read the whole thing>

click to enlarge

Monday Morning Market Comments and Links (for traders)

MORNING MARKET COMMENTARY
for Monday, November 16, 2009

Confirmed New Rally Producing Very Few Buy Candidates-
The major averages confirmed a new rally attempt and ended higher last week as investors digested the latest round of earnings and economic data. Volume, a critical component of institutional demand, was lower on the Nasdaq exchange and the NYSE compared to Thursday's levels. Advancers trumped decliners by about a 3-to-1 ratio on the NYSE and by over a 2-to-1 ratio on the Nasdaq exchange.

Stocks shook off negative news regarding consumer sentiment and ended higher on Friday. So far, over 80% of S&P 500 companies that reported Q3 results have topped estimates which has helped the market hold up rather well considering that profits were negative for a record ninth consecutive quarter. What does all this mean for growth investors? Be patient and continue to watch for leading stocks to breakout of sound bases. Do not force a trade and let the market come to you; i.e. do not chase. It is also important to remain cognizant of what is working in this environment: mainly very liquid large cap leaders as they bounce off their 50-day moving average line or breakout of sound bases. Some of those leaders include: Apple Computer (AAPL +1.22%), Amazon (AMZN +1.87%), Priceline.com (PCLN +2.42%), Google (GOOG -+0.74%), and Baidu Inc. (BIDU +1.25%). The action in these names have served as a great proxy for the overall rally which began in March.

Since 2002, GOLD prices have peaked at new highs early in the even numbered years - in 2004 at $425, in 2006 at $725, and, most recently, in 2008 at $1,035.

In many ways, recent events are shaping up to be a repeat of this pattern which, based on the previous peak-to-peak gains would imply a gold price somewhere north of $1,300 early next year.

Of course, any sharp rebound in the dollar (which some are still loudly predicting) would reverse this trend very quickly.

Bloomberg Futures

How Different Investments Performed Last Week

Media Digest 11/16/2009 Reuters, WSJ, NYTimes, Barron's 24/7 Wall St.

The Trend Trader for Monday, November 16th

Sector Update for November 16th from Dr. Brett

Wall Street Breakfast What you need to know in early trading today.

7 Stocks You Need to Know for Monday TradingMarkets.com

Stocks in focus for Monday Marketwatch

Put your cash in a Safe Place

International real-time economic calendar

I don't make jokes. I just watch the government and report the facts. -- Will Rogers

Recent Articles on Gold and Silver

Pre-Market Open News and Links for Friday

Chart of The Day: "The Dow made another record high Wednesday as it moved further above the 10,000 level. To provide some perspective to the current Dow rally that began back in March, all major market rallies of the last 109 years are plotted on today's chart. Each dot represents a major stock market rally as measured by the Dow. As today's chart illustrates, the Dow has begun a major rally 27 times over the past 109 years which equates to an average of one rally every four years. Also, most major rallies (73%) resulted in a gain of between 30% and 150% (29.8% to 150.5% to be exact) and lasted between 200 and 800 trading days (9.5 months to 3.2 years) -- highlighted in today's chart with a light blue shaded box. As it stands right now, the current Dow rally (hollow blue dot labeled you are here) would be classified as both short in duration and below average in magnitude." - chartoftheday.com

via chart of the day

The major averages ended lower as the US dollar surged on Thursday. Volume, a critical component of institutional demand, was higher on the Nasdaq exchange and near the prior session total on the NYSE. Decliners trumped advancers by about a 4-to-1 ratio on the NYSE and by about a 3-to-1 ratio on the Nasdaq exchange.
In terms of new leadership, it was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and Nasdaq exchange.
The Networking Index ($NWX +0.60%) was Thursday's only positive index among those regularly followed in this IGW section. Intra-day it traded above its 50-day moving average line but it closed below that important short-term average.
The S&P 500 (SPY Below) continues to show growing weakness, enough to get short at 1091.50 during the day. Tuesday's small range was a red flag, a note of caution because buyers were so spent they could not extend the range higher, and at an important point of resistance.
What we know is that the trend is weak. The daily trend is sideways, as I have identified previously.The weekly trend remains up, but depending on where price closes on Friday, that trend has weakened, as well.
Bulls got the news they wanted from better than expected Jobless Claims but in the end unemployment was still viewed negatively which finally makes some sense. Also earnings news is just about done for this quarter.

By the way, when is GS going to pay back the tens of billions that were given to AIG by taxpayers so that Goldman would not go under as the insured counterparty to credit default swaps guaranteed by AIG that had gone sour? They have a lot of nerve issuing bonuses when they still owe the government big-time from the AIG bailout! And they would not have been able to pay the bailout money back if their totally bogus mark-to-model balance sheets were to show true mark-to-market figures. They are just as bankrupt as all the rest of the "anointed" legacy banks and investment banks, with a lot of their toxic waste still off balance sheet and offshore in SIV's, structured investment vehicles, in VIE's, variable interest entities, and in OTC derivatives, which taken together expose them to tens of billions in losses if not hundreds of billions.

From 24/7 Wall St.:

From Trading Markets:

From MarketWatch:

Wall Street Breakfast - What you need to know in early trading today.

The public will believe anything, so long as it is not founded on truth. – Dame Edith Sitwell (1887 – 1964)

Gold: Never below $1000 Again, Going to $5000?

Gold Price Won’t Drop Below $1,000 an Ounce Again, Marc Faber Says

But Faber Is Conflicted About the Price of Gold

The pattern in GLD that built up over multiple months, as it made new highs, is a powerful base that could propel the precious metal to their price short-term target of around $1,250-1,300.

However, Gold formed a key reversal top last night after making a new high. That could be a warning for a sell-off. Bear in mind the near term projection on the daily chart was met and exceeded - suggesting an over bought market. Also, the last four sell-offs all occurred after a new high was made followed by a key reversal top the same day. There is not any real support in this market until 1065.00.

GOLD $5000+ 11/11/09

Millionaire Now!

Friday, November 20, 2009

Pre-Market Open News and Links for Friday

California October Home Sales

Thursday, November 19, 2009

Thursday Morning Market Comment and Links (for traders)

Unemployment sucks in Europe

Wednesday, November 18, 2009

Four Years and Running

Tuesday, November 17, 2009

TOADY'S OPEN: FLAT

Everything's Being Driven By The Dollar

Monday, November 16, 2009

Monday Morning Market Comments and Links (for traders)

Sunday, November 15, 2009

Recent Articles on Gold and Silver

Friday, November 13, 2009

Pre-Market Open News and Links for Friday

Gold: Never below $1000 Again, Going to $5000?

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