The Dow was up another 64 points on Friday, which takes it within 45 points of a new yearly high. This is impressive, considering that the Dollar Index also advanced 0.6% that day. The decoupling of the Dow from the Dollar is a significant development. They have been trading in a closely correlated inverse relationship for months. Full Article
On Monday, the dollar finally rallied. A rising dollar is bad for equities, which is one reason the Dow was down 104 points. The greenback has been so badly kicked around that it really had no where to go but up. There has been so much gold-love and dollar bashing that someone had to call the cops on the monetary hoodlums. Full Article
The majority of Wall Street economists are predicting an end to the U.S. recession this quarter and a super-surge in bank earnings in the fourth quarter. Full Article
Banks were the heroes on Monday, but today belongs to tech. After the bell yesterday, Intel reported better than expected revenue and blew away earnings estimates, delivering 18 cents vs an 8 cent consensus figure. The news popped index futures up enough to open the S&P 500 near our expected target of 915 today. Full Article
Well, God bless Meredith Whitney. When important bellwether bears such as Whitney turn bullish on a formerly panned sector, even for a ‘trading call,’ fireworks follow. Whitney upgraded her view of Goldman Sachs’ earning potential in particular, but also made positive comments on the banks in general, for a short-term trade. Full Article
The S&P 500 is still hanging on near the May lows. Perhaps Wall Street is hoping for a silver lining in the earnings reports this week. Or perhaps now that the bearish “head & shoulders” topping pattern is being discussed on CNBC, the market will get contrary for a while.
Meanwhile, the Fed is stealthily tightening, not by raising rates, but by withdrawing funds from the money supply. Year over year M2 growth was 9.3% in June and has only increased 2.5% year to date. Banks have increased their cash reserves by more than 25% in the last year, but lending is not increasing. Full Article
Despite its oversold condition, the market could not gather much enthusiasm for a bounce. Perhaps declining retail sales weighed on sentiment.
Overall, retail sales dropped 4.9% in June, due in part to deep discounting. That headline figure may not sound too bad, but double- digit sales declines were common among many top names: ANF posted a 32% year over year decline. We were a little too impatient with our ANF short sale. Full Article
This appears to be the start of Act II of the Obama Relief rally. That’s good news, as we all would appreciate the market looking across the valley of the shadow of death and anticipating better days six months from now. That’s what it is supposed to do. Full Article
The fat lady sang on Wednesday but the play turned from a tragedy on Thursday morning into a comedy by Thursday afternoon. Here’s what Don Worden of Telechart had to say. Don has been involved with the markets since the 1950s and was doing technical analysis back when it was done with a pencil, a ruler and a paper chart. He writes: Full Article
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