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Thursday, January 7, 2010

Slowest Day


by Larry Levin

I would be hard pressed to remember a slower "regular" day than today. Given the fact that today was neither a half-day nor in a holiday period, it is rather shocking that the S&P500 only managed a 5.80-point total range from high to low. This should happen within the opening moments of the day - not posting the range for the entire day! Despite this fetid action, the market made a new high and closed with a gain. Amazing.

There was more news today; mortgage applications, advanced employment data, ISM non-manufacturing data, and the FOMC minutes. None of it was particularly bullish.

The advanced employment data, the ADP employment report, estimates that Friday's fantasyland number from the BLS will show a job loss of 84,000. Well, maybe I need to rephrase that: the ADP report uses actual data from actual tax filings of actual companies that are actually employing actual people in this country, which therefore means it won't estimate the BS from the BLS at all. The statisticians at the BLS, on the other hand, employ statistical models that yield whatever the current administration wants, thus the reference to the BS from the BLS. Garbage in, garbage out you know.

The ISM non-manufacturing data was not as good as anticipated but still a decent number.

The FOMC said, in so many words, get ready for QE 2.0. Oh sure, the lame stream media will report with glee that the Fed's quantitative easing (QE) programs (printing money out of thin air) have been unwound in the future, but they probably won't report on Act II. Some of the Fed's QE programs will be wound down, but the buying of toxic mortgage assets will increase. It will be like some bozo on TV, whether a reporter or a slimy politician, saying that the taxpayer made money from X, Y, and Z bank when the funds were repaid - clearly ignoring the elephant in the room: AIG funds, GM, Chrysler, GMAC, to never be repaid.

From today's minutes... "The Committee emphasized that it would continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. A few members noted that resource slack was expected to diminish only slowly and observed that it might become desirable at some point in the future to provide more policy stimulus by expanding the planned scale of the Committee's large-scale asset purchases and continuing them beyond the first quarter, especially if the outlook for economic growth were to weaken or if mortgage market functioning were to deteriorate."

The Fed has NO INTENTION of ending its printing-money-out-of-thin-air policy. Don't believe anyone in the lame stream media who says otherwise.

I saved the best for last: mortgage applications. Mortgage Applications didn't bother a soul this morning, which I find amazing since it confirms the horrific Pending Home Sales Report we got yesterday that showed a massive 16% decline. It was another breathtakingly bad data point. Mortgage Applications for the week ending 12/25 were down 22.8% and that's the "adjusted" number - the ACTUAL unadjusted number of applications was down 46.9% from last year.

Market reaction? Yawn!

As long as the operation of Bernanke, Cheatem, & Howe at the Fed continues to flood the banks with freshly printed money - they'll keep buying stocks regardless of the news. What do they care anyway; they're not allowed to fail. None of them have been put on trial - none are in jail. Moreover, whenever this trend ends and they get burned again, they'll be laughing all the way to Capitol Hill for another bailout as YOU pay for THEIR sins AGAIN!



Previous Day's Trading Room Results:

Trade Date: 1/
6/10

E-Mini S&P Trades*
(before fees and commissions):


1) VA sell @ 8:33am at 1131.50 = -1.00 & -1.00 (2 lot)

2) 80% sell @ 11:39am at 1131.50 = -1.50 (1 lot)

3) Algorithm positions (1)

4) "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total...-3.00




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