If you are buying equities here you are plain crazy- I am looking at massive divergences on larger cycles and as we know larger cycles never lie. Shorter cycles can miss but longer ones never-
Be warned
Thursday, November 11, 2010
Wednesday, November 10, 2010
Tuesday, November 9, 2010
Saturday, November 6, 2010
What next?
So we are at the 62% Fibonacci retracement of the last major swing to the downside that started over 3 years ago.
Here is what I see. We are overbought, we are at key resistance, and the bulls are overly bullish. That being said, there is no reason to try and fight the tape for now. A nice hard gap up that fades just as hard could signal the start of a decline, but whether that decline is just a pullback (probable) or the start of the next super leg down (not nearly as probable) will have to be measured as it unfolds.
Thursday, November 4, 2010
BINGO
So bingo on that call that we would see a full retracement to the highs. From here I am going to sit back and see what happens. Definitely commodities as Gold and Oil are en fuego and looks like it is picking up more average investors.
I warned early this year that this year would not be a low so I was not in the camp to test the lows this year but next year, 2011.
I warned early this year that this year would not be a low so I was not in the camp to test the lows this year but next year, 2011.
Tuesday, November 2, 2010
Still Nothing
Well the market is still doing NADA.
We are above the 78.6% Fibonacci retracement on the daily chart which suggests a full retracement to the highs is due, but we are just not getting in gear at all.
Day trading has turned frustrating for the time being with no late follow through as the market decides which way it wants to go next.
Wish I could give more insight but the market is doing nothing to step out and make any decisive move.
Monday, November 1, 2010
More downside to housing - 8%
The robo-signing controversy is just another issue that the already sluggish housing market didn't need -- but most analysts do not think it will have far-reaching impact.
Nevertheless, the housing market still faces many problems: a weak economy, sluggish hiring, tight mortgage underwriting, falling home prices, and slowing sales.
Then there's the potentially disastrous number of foreclosures that may occur over the coming years.
"The market faces much bigger problems than the robo-signing issue," said Mike Larson, a housing market analyst for Weiss Research.
Prime among them are declines in home prices. And while cheaper homes are good for buyers, they also speak to a housing market that won't stabilize.
Fiserv, a market analytics company, has scaled back its home price projections considerably. In February, it forecast national price gains of about 4% through the end of 2011. The company's latest prediction is for a 7.1% drop in prices between June 30, 2010 and June 30, 2011.
In fact, after five months of gains, prices in the 20 largest metro areas fell 0.2% in August, according to the latest S&P/Case-Shiller report.
The good news is, "There'll be no vicious, self-reinforcing spiral down," according to Mark Zandi, chief economist with Moody's Analytics.
But, he added, "more home price declines are coming."
He's forecasting another 8% drop in home prices through the third quarter of 2011, which will put the total peak-to-trough decline at 34%.
Even after that, in 2012, he sees very little price growth.
Home prices continue to fall because sales aren't taking off. Without buyers, the market can't bottom out.
New home sales continue to languish around historic lows, barely exceeding an annual rate of 307,000. Existing home sales did rise to a 4.53 million annualized rate in September, up 10% compared with a month earlier, but are still well below the boom years.
Of course, nobody is buying homes when they can't find jobs. And still more people can't hang on to their homes because they're out of work.
Nearly a million homes are expected to be repossessed this year, and analysts seem to be competing to issue the most dire forecast for future foreclosure numbers.
Morgan Stanley reported that about 3.1 million borrowers are seriously delinquent with many expected to lose their homes.
Zandi said more than 4 million are in trouble with half of those expected to go to foreclosure.
And Laurie Goodman, of Amherst Securities, estimates the number of homes in danger of foreclosure at a whopping 11 million.
Real estate analyst Kyle Lundstedt of LPS Applied Analytics said serious delinquencies will continue to spike and will not return even to the current rates -- which are already at peak levels -- until late 2012 or early 2013.
"The housing market is very fragile," said Goodman.
However, Zandi sees a few factors that are positive.
These include: Low interest rates; FHA, Fannie Mae and Freddie Mac all lending to qualified buyers; and an improving job picture.
Zandi is especially confident that the employment picture is about to brighten. Corporate profits have spiked and, historically, hiring follow profits -- with a lag of eight to 10 months. That means companies should start hiring workers very soon, Zandi said.
And once Americans start returning to work, they'll find home prices are very reasonable. Housing is the most affordable it's been since the pre-boom years. During the boom, Zandi said, prices were overvalued by about 50%; today it's close to zero.
That has attracted many investors, including foreign buyers. They've been scooping up single-family-homes and condos in hard-hit markets like Florida, the Southwest and the Midwest and renting them out.
"The reason they're in these markets is because they see value," said Zandi.
But, he added, "If they see the robo-signing issue continue, they could begin to exit the market. If they do, there could be more price declines. That's one reason why a foreclosure moratorium could be destructive."
Nevertheless, the housing market still faces many problems: a weak economy, sluggish hiring, tight mortgage underwriting, falling home prices, and slowing sales.
Then there's the potentially disastrous number of foreclosures that may occur over the coming years.
"The market faces much bigger problems than the robo-signing issue," said Mike Larson, a housing market analyst for Weiss Research.
Prime among them are declines in home prices. And while cheaper homes are good for buyers, they also speak to a housing market that won't stabilize.
Fiserv, a market analytics company, has scaled back its home price projections considerably. In February, it forecast national price gains of about 4% through the end of 2011. The company's latest prediction is for a 7.1% drop in prices between June 30, 2010 and June 30, 2011.
In fact, after five months of gains, prices in the 20 largest metro areas fell 0.2% in August, according to the latest S&P/Case-Shiller report.
The good news is, "There'll be no vicious, self-reinforcing spiral down," according to Mark Zandi, chief economist with Moody's Analytics.
But, he added, "more home price declines are coming."
He's forecasting another 8% drop in home prices through the third quarter of 2011, which will put the total peak-to-trough decline at 34%.
Even after that, in 2012, he sees very little price growth.
Home prices continue to fall because sales aren't taking off. Without buyers, the market can't bottom out.
New home sales continue to languish around historic lows, barely exceeding an annual rate of 307,000. Existing home sales did rise to a 4.53 million annualized rate in September, up 10% compared with a month earlier, but are still well below the boom years.
Of course, nobody is buying homes when they can't find jobs. And still more people can't hang on to their homes because they're out of work.
Nearly a million homes are expected to be repossessed this year, and analysts seem to be competing to issue the most dire forecast for future foreclosure numbers.
Morgan Stanley reported that about 3.1 million borrowers are seriously delinquent with many expected to lose their homes.
Zandi said more than 4 million are in trouble with half of those expected to go to foreclosure.
And Laurie Goodman, of Amherst Securities, estimates the number of homes in danger of foreclosure at a whopping 11 million.
Real estate analyst Kyle Lundstedt of LPS Applied Analytics said serious delinquencies will continue to spike and will not return even to the current rates -- which are already at peak levels -- until late 2012 or early 2013.
"The housing market is very fragile," said Goodman.
However, Zandi sees a few factors that are positive.
These include: Low interest rates; FHA, Fannie Mae and Freddie Mac all lending to qualified buyers; and an improving job picture.
Zandi is especially confident that the employment picture is about to brighten. Corporate profits have spiked and, historically, hiring follow profits -- with a lag of eight to 10 months. That means companies should start hiring workers very soon, Zandi said.
And once Americans start returning to work, they'll find home prices are very reasonable. Housing is the most affordable it's been since the pre-boom years. During the boom, Zandi said, prices were overvalued by about 50%; today it's close to zero.
That has attracted many investors, including foreign buyers. They've been scooping up single-family-homes and condos in hard-hit markets like Florida, the Southwest and the Midwest and renting them out.
"The reason they're in these markets is because they see value," said Zandi.
But, he added, "If they see the robo-signing issue continue, they could begin to exit the market. If they do, there could be more price declines. That's one reason why a foreclosure moratorium could be destructive."
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