Investment

» BoltonCT - Testing, testing, testing

Japan, our canary in the equities market mineshaft broke through its recent lows and indicates we are beginning the next leg down to a new low.

http://finance.yahoo.com/echarts?s=%5EN2...

China is testing recent lows and the next few days will tell if the decline is also the beginning of a new leg downward.

http://finance.yahoo.com/echarts?s=%5EHS...

Most of the European markets began their day up about 0.5% and have swung now to the loss side. Britain and Spain have been flat until now but are beginning to decline. Europe will also be testing lows today.

http://finance.yahoo.com/echarts?s=%5EGD...

The American markets have all given old Spiral sell signals within the last four days and American futures are presently all down fractionally. They could test old lows in the next few days too.

We are again at the critical juncture when investors decide if this is the final low or if that old bear market resumes the decline. While the evidence points downward and the USA market bath was joined last week by bell weather GE, no one can predict which way the decision go in the next few days.

Yesterday, in addition to claiming his foretelling of the G7 outcome, and saying Asian markets followed GE's Friday decline the famous advisor we quoted said, " But I expect a positive market today by the close." I guess he is just a tea leaf reader and is now 0 for 1 since we started testing his clairvoyance. According to his reports... gold is a bad investment and is almost always going down according to his reports. Here are the facts about Gold.

http://www.tfc-charts.w2d.com/chart/ZG/W

According to the same expert tea leaf reader the oil and other commodities "bubble" burst two weeks ago. Here are the facts about oil.

http://www.tfc-charts.w2d.com/chart/CO/58

Based on testable predictions in the last two weeks we have to give the tea leaf advisor zero for three. Based on his claims though he is always right. Who is that masked advisor who has lost his long term memory along with his followers? It is not Norm or Permabear who have been doing rather well and do not make wild claims. Suite 101 is becoming well known for thoughtful independent advice that has become better under the new management.

-- posted by BoltonCT

» Normxxx - Smart Money Got It Wrong

How The Smart Money Got It Wrong

http://normxxx.blogspot.com/2008/04/smar...

-- posted by Normxxx

» BoltonCT - We are losing our minds

Intel doesn't chose to bathe
U.S. stock-index futures rose after Intel Corp. forecast sales that beat analysts' estimates, easing concern that corporate baths will continue to drag down corporate earnings. Intel the world's largest semiconductor maker said a weakening economy shows no signs of hurting their revenue. Rarely do the analysts have anything good to say about Intel any more with the rapid growth of Intel competitors. The stock has been ignored for years but meeting or slightly exceeding the Wall Street expectations is how stocks become favorites and is why corporations manage their financial ratios to hide their loses for so long. Oh, you mean that failed major product line... uh... uh... well that is now valuable investment in research which we will get back... uh... ten fold in no time. So that was no loss, that is a valuable asset now... uh we learned a lot.

PC sales are declining fast but the giant backlog that Intel has makes it a lagging indicator like employment rate.

World markets continue to probe the recent lows testing for weak hands or preparing to decline to new lows depending on whether you are bullish or bearish. European markets are currently up fractionally. Asian markets are more bi-polar with China down and most of the rest of Asia in positive territory on the order of one percent. American market futures are currently positive clutching to straws based on Intel's news.

It is interesting that USA reported that the wholesale inflation rate was reported over a 12% per year yesterday. This is how we give every USA worker and retired person automatic pay cut. This is how we give every American a tax increase and push them into a higher tax bracket. Norm points out how the presses run to ease the credit crunch. And this is happening as USA jobs are exported keeping wage pressure in the USA low. When women were added to the USA labor force there were complaints about the disparity in pay scale. But the USA can currently hire foreign doctors for the same wage as American social workers. We can afford to have Asian Ph ds answering the phone. How long will it take before American's have lost all competitive advantage. First we exported our industry, and then we exported our technology, now we import our brains. Obviously we need to import our minds next because we have lost ours.

-- posted by BoltonCT

» BoltonCT - The battle is on

It is interesting that while most of Asia followed the American market up, Shanghai was on its own and down 2.1%. China may now be leading world markets rather than the follower it used to be.
http://finance.yahoo.com/q/ta?s=000001.S...

The best performance in Asia was given by the Nikkei which was up 1.9%. But it also remains in a serious decline.
http://finance.yahoo.com/q/ta?s=%5EN225&...

European markets are mixed this morning but slightly positive. Britain, France, and Germany are all fractionally higher at the moment.

Pope Benedict was visiting yesterday and we saw what seemed like a miracle on Wall Street. Perhaps it was the singing of the Hymn of the Republic at his ceremony that sent all of the trader's hearts a flutter. The American markets gapped up in the morning and then went into the heavens.
http://finance.yahoo.com/q/ta?s=%5EGSPC&...

The question is whether the market must now decline because Mammon, the stock market god, requires that the gap must be filled, or whether WS will get some sort of dispensation.

While the majority of the news yesterday was very good for a change, treasuries Rose to the highest 10-Year Yield level in Seven Weeks as investors walked away. You see the world allows America to go into deeper debt when things look very bad abroad and then we get a sub-discounted treasury bonus. Treasury rates get so low then that America is lured into greater debt, beyond our ability to sustain much less pay back.

When things look good abroad the world invests abroad and that cause debt payments to rise. But when things look good abroad and American debt looks bad and unsustainable in America we will see a flight of money from dollars and US Treasuries that will drive treasuries sky high in interest. So just as the sub-prime crisis put over extended homeowner debtors into default, the interest payments on American debt will be unsustainable and will require more borrowing just to pay the interest. That is the real battle we face and what we have been saying that since the FED began flooding Wall Street with cash. The crisis we have faced all along has been a debt crisis and it showed up first with sub-prime loans. All the quick fixes the FED and Congress have applied to the mortgage market have exacerbated the national debt crisis. A mild recession would have forced us to correct the debt problem as we did when Regan took office. Now America is much more vulnerable and inflation followed by a great depression is where Wall Street and the FED are leading us. The battle is on for the minds of Americans and just one look into Bernanke's eyes shows you there is a big void in there. Quick fixes have produced an American economy that seeks a continuous and unsustainable high.

-- posted by BoltonCT

» BoltonCT - Resistance area

We are losing our minds
Shanghai continued its incredible slide down another 2.1% last night but shows evidence the slide may have halted for now. Overall the Asian markets were mixed last night. The Nikkei was up .58%.

The European markets are up uniformly already in a range from .4% to 2.4% with the average being just under 1%.

Google has become the ridiculous puffed up mediocre giant that AOL was in 2000. The best Google could do at this point is buy a company like Time Warner and preserve some of its capital before it drops to $50/sh. It is a fraud now. Who is monitoring its claims on clicks? How much do you buy based on Google clicks? If you believe their BS you should buy their stock. AOL was giving free subscriptions in 2000 to hide the fact that people were dropping AOL service like hot potatoes. I know because I dropped them and they gave AOL service to me free for several more years until Time Warner realized they were bought out by a fraud. With the money dumped into the Google black hole you could probably own every airline in the world. The funds want you to buy now because they are moving out of Google stock.

The bail out of mortgages is high on the priority list of Congress. That is another moral hazard issue and more money for the people who created the problem in the first place. But it will provide more cash fore sure in this inflation economy. What would create jobs and infrastructure would be the passage of those super bills tied up in Congress now. It is less than $20 billion but they maintain bridges, dikes, and national parks, and are usually held hostage to the squabbling in Congress. We have never had a more dysfunctional congress than we have right now.

While the futures are up at the moment the markets face upside resistance at these levels and are likely to whipsaw to clear the decks of bulls and bears who perhaps are too sensitively set with limit orders right now.

-- posted by BoltonCT

» BoltonCT - The credit crisis is expanding.

Investor sentiment became bullish last week indicating that a relative market high was achieved. Japanese markets closed higher on Monday as a weaker yen boosted encourages exporters to the USA, pushing the benchmark Nikkei index to its best level in seven weeks but still not near a break out. The Nikkei and most of the Asian markets that were higher were clearly fixed higher and gapped up from the start. The Asian markets that were allowed to adjust to market conditions started high but lost most of the original gap-up in prices. The Asian markets ended generally up in a wide range from -.57% to +2.91%.

European markets are fading rapidly at the moment and down an average of about 1% half way though the session.

The euro moved higher on Monday against the U.S. dollar, reaching $1.5835 in morning European trading, up and approaching the all-time high of $1.5982 it reached last Thursday. Oil prices surged as well to a new record $117.40 a barrel.

The Bank of England is planning another 100 B infusion to support their banks. USA mortgage market failures created a trillion-dollar mortgage time bomb raising the likelihood that Fannie Mae and Freddie Mac will for the first time in history go bankrupt unless Congress agrees to a bailout.

The credit crisis is expanding. Bank of America Corp., the second- largest U.S. bank, said profit dropped 77 percent as job losses and high consumer debt caused more people to miss payments on credit cards and home loans.

Just because investment sentiment is up now does not mean the market must go down. The old MACD and old Spiral indicators have given buy signals. The New MACD has not given a buy signal but the New Spiral has indicating we should begin looking for buying opportunities. The earliest an all-out buy signal could occur is in about seven days. That is a lot of good news away from where we are today. American market futures are declining at this time.

-- posted by BoltonCT

» Normxxx - RE: From The Front Lines

In The Eye Of The Housing Hurricane
Other Voices Views- From Beyond The Barron's Staff

http://normxxx.blogspot.com/2008/04/in-e...

-- posted by Normxxx

» BoltonCT - The biggest effective tax increase for consumers in American his

The biggest effective tax increase for consumers in American history is here now.
Investor sentiment remains bullish this week indicating that a relative market high is in place.

Japanese markets closed lower last night, dropping the benchmark Nikkei away from a break out. The Nikkei and most of the Asian markets were lower were clearly fixed lower from the start. The Asian markets that were allowed to adjust to market conditions started low but rose in the last two hours of trading. The Asian markets ended generally down in a wide range from -2.0% to +.99%.

European markets are mixed at the moment half way though the session.

Light, sweet crude for May delivery rose as high as $118.05 a barrel. Inflation is hitting the world consumers in the pocket book as effectively as the largest tax increase in recent history of the world. And everyone knows the medicine for inflation is reduced fiscal spending and higher interest rates and a recession. So here we are with the world poised for a recession and consumer spending being consumed by inflation. To top it off banks are now faced with rising defaults on credit cards and consumer loans. One large German bank is getting its fifth bailout. The FED has Wall Street awash with cash and the market rise reflects the initial effects of inflation on income as the prices rise so fast now that by the time the raw materials are converted to products... the value of the materials have risen enough to increase the profit margin.

Let's say that again because this is an important factor. You know the game people played in the housing market where they borrowed money to buy a house and then sold it after prices rose and they made a considerable profit. True value did not change. The profit was due to inflation between buying and selling the asset. The same kind of thing is now occurring in manufacturing. The materials used to make widgets increases significantly in price from the time the material is bought to when the product is sold. For instance you may fill your gas station tanks with gasoline at $3.50 and the next week it is at $3.60 and you made 3% in one week just from inflation.

This profit comes at a cost because it is not based on value added. The profit comes from effectively picking the consumer's pockets. Ultimately it is effectively the biggest tax rise we have seen in American history but does nothing to help balance the budget. It goes however to create the illusion that Wall Street is profiting. It is an inflation bubble on corporate balance sheets and when it pops we will see many manufacturers go bankrupt the way the banks are now going bankrupt. And then even more bank loans will go into default.

-- posted by BoltonCT

» BoltonCT - RE: From The Front Lines

In response to RE: From The Front Lines posted by Normxxx:

Norm,
Now apply the same hurricane analogy to commodities, manufacturing, farming, retail etc. The inflation is boosting profits everywhere right now because it boosts the selling price just as waiting boosted the selling price of the homes in the bubble. So anyone in the businesses related to commodities, manufacturing, farming, retail, oil refiners etc are reaping what seems like obscene profits due to the inflation bubble. It could get so bad that the housing bubble even starts up again before it all collapses in one massive collapse.

-- posted by BoltonCT

» BoltonCT - RE: From The Front Lines

In response to RE: From The Front Lines posted by Normxxx:

Norm,
Now apply the same hurricane analogy to commodities, manufacturing, farming, retail etc. The inflation is boosting profits everywhere right now because it boosts the selling price just as waiting boosted the selling price of the homes in the bubble. So anyone in the businesses related to commodities, manufacturing, farming, retail, oil refiners etc are reaping what seems like obscene profits due to the inflation bubble. It could get so bad that the housing bubble even starts up again before it all collapses in one massive collapse.

-- posted by BoltonCT