MARCH 5, 2008: Commodities led the way again. The Nasdaq was up 0.6% making this 2 days of gains in a row for the markets. It appears that the index is headed up to test its 21-day moving average at around 2300.
Commodities continued their bull market run with oil shooting up $5 to over $104 a barrel on supply shortages and flat Saudi production. The spike in crude also sent gold and silver up to new highs. Gold actually hit the illusive $1000 an ounce milestone on the June futures contract today. The sinking dollar hit all-time lows again.
Solar, steel, metals, gold/silver, and oil/gas stocks were strong while banks, financial, and insurance stocks were weak.
JA Solar vaulted 9%. Sunpower, First Solar, So. Peru Copper, Suntech, and Yamana Gold gained 5%. Research In Motion lost 3%.
Here are the top 10 leading groups: Fertilizers, Gold/Silver, Oil/Gas Producers, Farm Machinery, Ores, Steel, Solar Energy, Agricultural Ops, Oil/Gas Drillers, and Mining Machinery. We have to ask ourselves if this is really a stock market rally or a commodities rally? Is inflation really taking off globally evidenced by soaring food, energy, gold, and raw materials prices. I think so.
The stock market indexes have tested their down trending 50-day moving averages from an ‘overbought’ position and failed. IBD has now switched from ‘Market in a Confirmed Rally’ to ‘Rally Under Pressure.’ Gold, silver, grains, and oil are all moving higher in very definite up trends. We may be witnessing a ‘disconnect’ between commodities and stocks.
It’s best to stay on the sidelines in stock markets like this and not get sucked into ‘leaderless’ bear markets. Patience, Grasshopper! More at www.goldenticker.com
FEBRUARY 20, 2008: Inflation showed up again today in the ‘hot’ CPI number. In January, core inflation rose 0.4% vs the forecasted 0.3%. Minutes from the last Fed meeting however indicated that the they would do everything they could to keep the economy from going into a recession. The Nasdaq celebrated by rallying 0.9% on heavier but average volume.
Retailers, oil drillers, and steel producers were strong today. Medical related, solars, and automobile stocks sold off. Transocean was up 7%. Research in Motion advanced 5%, and fertilizer maker Mosaic moved up 4%. Suntech Power dropped 12% and Sunpower lost 4%.
The Nasdaq is now 19% off it’s October highs. Stimulus packages, multiple rate cuts, bail-outs, etc. may have brought us a ‘counter-trend’ rally but have failed to change the direction of the markets, which is decidedly down.
Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day and see top-rated stocks breaking out of proper bases before committing money to the long side of stocks.
Don’t forget that the banking system is in serious trouble, the housing sector is in ‘melt-down’ mode and the consumer feeling the pinch of higher inflation and less access to credit. More info at www.goldenticker.com
FEBRUARY 19, 2008: Oil closed above $100 for the first time today sending inflation fears rippling through the markets. The Bank of England may not be cutting rates soon due to inflation worries as well. It was also announced over the weekend that the U.K. will be nationalizing the failed lender Northern Rock, essentially taking on it’s massive sub-prime losses. The Nasdaq fell 0.7% on below average volume.Precious metals, steel, and oil related stocks were strong. These are typically seen as inflation hedges. Retail and finance stocks were among the weakest groups. Mechel Oao Steel was up 10%, fertilizer maker Mosaic advanced 6%, and leading gold miner broke out of a triangle formation and shot up 6%. Chinese solar Yingli Green Energy lost 8%, and Bidu.com lost 5% and fell further below its 200-day line.
The Nasdaq is now almost 20% off it’s October highs. Stimulus packages, multiple rate cuts, bail-outs, etc. may have brought us a ‘counter-trend’ rally but have failed to change the direction of the markets, which is decidedly down.
Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day and see top-rated stocks breaking out of proper bases before committing money to the long side of stocks.
Don’t forget that the banking system is in serious trouble, the housing sector is in ‘melt-down’ mode and the consumer feeling the pinch of higher inflation and less access to credit. More info at www.goldenticker.com
FEBRUARY 13, 2008: SURPRISING RETAIL SALES FUEL GAINS: Experts were expecting a .3% dip but they got a .3% gain instead which sparked optimism among the bulls sending stocks higher. The Nasdaq advanced 2% in lighter trade than yesterday. First Solar beat street estimates and vaulted 30% today. Other solar stocks were also strong like JASO, STP, and SPWR. Ben Bernanke speaks tomorrow and options expiration is on Friday so we could have a few more days of strength at the least. The DOW and S&P appear to be headed towards their 50-day moving averages which has been a place of resistance. The Nasdaq is now 17% off it’s October highs. Stimulus packages, multiple rate cuts, bail-outs, etc. may have brought us a ‘counter-trend’ rally but have failed to change the direction of the markets, which is decidedly down. Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. Don’t forget that the banking system is in serious trouble, the housing sector is in ‘melt-down’ mode and the consumer feeling the pinch of higher inflation and less access to credit. More info at www.goldenticker.com
Legendary Investor Julian Robertson talks about the dollar and recession.
FEBRUARY 6, 2008: Markets fell again on comments from Philly Fed President Charles Plosser who said that inflation is still a problem. This put a damper on traders hopes for further rate cuts. The Nasdaq lost 1.3% and made a new 16 month closing low. After the bell Cisco warned of slowing profits which could send stocks lower tomorrow. In the past 3 days most of the gains from last weeks historic run have been wiped out. This is the nature of corrections and bear markets as the bulls still hold on to hopes of higher prices. Stimulus packages, multiple rate cuts, bail-outs, etc. may have brought us a ‘counter-trend’ rally but have failed to change the direction of the markets, which is decidedly down. Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. Don’t forget that the banking system is in serious trouble, the housing sector is in ‘melt-down’ mode and the consumer feeling the pinch of higher inflation and less access to credit. More info at www.goldenticker.com
Zimbabwe – What 1200% annual inflation can do to a country.
FEBRUARY 5, 2008: Recession fears gripped the markets today and sent the Nasdaq down 73pts or 3.1% in heavy volume. In the past 2 days most of the gains from last weeks historic run have been wiped out. This is the nature of corrections and bear markets as the bulls still hold on to hopes of higher prices. The Institute for Supply Management’s service-sector index dived below 50 in January, falling well short of estimates. This is the biggest drop in the history of the index which began in 1997. The service sector makes up to 80% of the American economy and this kind of weakness could be foretelling our GDP going negative for the first time in 6 years. Merrill Lynch annalists are saying there is now a big chance of an inter-meeting rate cut, but will it help? Stimulus packages, multiple rate cuts, bail-outs, etc. may have brought us a ‘counter-trend’ rally but have failed to change the direction of the markets, which is decidedly down. Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. Don’t forget that the banking system is in serious trouble, the housing sector is in ‘melt-down’ mode and the consumer feeling the pinch of higher inflation and less access to credit. More info at www.goldenticker.com
“Our Country Is Technically Bankrupt”- Glenn Beck ( A must see video)
FEBRUARY 1, 2008: The Nasdaq rallied 1% today and 3.75% for the week on improving volume. Small caps have been the strongest and the S&P 600 is approaching its 50-day moving average (see chart). Yahoo vaulted 48% on take-over talks with Microsoft in its effort to compete with Google. Intuitive Surgical, one of our favorites of the last rally, gapped up 20% in heavy volume on good earnings. Google fell further below its 200-day line in heavy volume after missing their numbers. The street was expecting 70,000 new jobs but non-farm payroll numbers showed 17,000 jobs were lost – a surprise hit. This was the first drop in 4-years. Traders are betting that this weakness forces the Fed to cut interest rates further next month. Stimulus packages, multiple rate cuts, bail-outs, etc. have brought us a “counter-trend” rally but have failed to change the direction of the markets, which is decidedly down. Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. Don’t forget that the banking system is in serious trouble, the housing sector is in “melt-down” mode and the consumer feeling the pinch of higher inflation and less access to credit. More info at www.goldenticker.com
Jim Rogers tells the Financial Times that “Bernanke has been a disaster.” (video)
JANUARY 29, 2008: The Nasdaq gained 0.3% but volume was light again as traders await tomorrow’s Fed meeting where they are widely expected to cut rates by 1/2%. That would be a 1.25% cut in just a week, the biggest in 25 years. Some are saying that the Fed may have to cut rates below the current 2.5% inflation rate. Durable goods orders came in strong which may lessen the chance of a 1/2 point cut. Nevertheless, the Nasdaq has been rallying lately on falling volume-a sign that this unconfirmed rally could fail. Former leaders like Google, Amazon.com, and Apple are still below their 200-day moving averages-a major sign of weakness. Potash, Monsanto, and Deere have been holding up better than most stocks but are rallying on decreasing or ‘wedging’ volume. Counter-trend rallies during corrections are by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. More info at www.goldenticker.com
Paul Krugman warns of housing bubble and financial turmoil in September, 2006.
Things may be getting really scary on the global financial scene, but always remember to smile no matter what happens.
JANUARY 25, 2008: The nascent 2-day rally could not make it a third day as all 4 major indexes staged a ‘bearish reversal’ but pulled back in lighter volume. The Nasdaq started out strong but lost 1.5% and was down 0.6% for the week. It’s hard to believe that the Fed did a ’shock and awe’ surprise rate cut of 3/4% this week. This is an indication that we are in a severe correction. Credit concerns got the blame again today for the fall. The light volume today may be due to traders staying on the sidelines ahead of next week’s Fed meeting where they are widely expected to cut rates further. Transports, fertilizers, and solar stocks were strong today. Finance, retailers, and computer related stocks were weak. Some leaders were SPWR +6%, MTL +7%. Notable losers were YGE -5%, RIMM -4%, AAPL – 4%. This latest rally has the feel of ’short covering’ and is by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. More info at www.goldenticker.com
Rick Santelli has been dead on during this current financial crisis. In this video he
critisises Ben Bernanke’s comments that a lower dollar does not affect prices at home.
Why isn’t the Securities and Exchange Commission getting more involved in the whole banking sector writedown situation? Especially since the numbers are likely to get worse, not better? That’s what Jim Cramer, CNBC’s resident stock guru, wants to know.
“It’s all fiction!” he declared during a forceful exchange (see it in full in the accompanying video) on CNBC’s “Squawk Box.”
“How can we have these levels of fiction in financials after Sarbanes-Oxley? How do people get away with this? How do they live with themselves?”
Cramer made his comments while reviewing results from Merrill. But his real consternation surrounded the insurers who cover banking investments. Some of those insurers haven’t come clean about their liabilities, Cramer speculated. Eventually they will, and then the “fiction” will disappear, he said.
The banking sector and its related industries are all too chummy, Cramer accused. That led the numbers related to mortgage investments — investments that are currently souring — to break from reality.
“I think the financial guys all belong to the same club and they got to protect each other,” he said.
Worse, those executives behind the current credit crunch are unlikely to get any punishment for their mistakes and disingenuousness about their numbers, Cramer opined.
“I’m fed up with it. The American people should be fed up with it. And the SEC should be fed up with it,” Cramer said.
Peter Schiff explains that the Dow has been in a “bear market” since 2000 and has lost ground based in Euros, Swiss Francs, and most other currencies including gold. Your purchasing power is being slowly lost.
According to David Walker, Comptroller General of the United States, we are technically bankrupt and facing a financial “tsunami.” This is scary stuff folks.
It’s great to see predictions a year later and see who got it right. Peter Schiff once again calls it right and “the most smartest investor” Ben Stein gets it wrong again.
The Inevitable Collapse of the US Dollar – A “must see” video.
January 23, 2008Peter Schiff has been a voice of reason for many years and now many of his dire predictions are materializing.
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