Yesterday the market was rallying on perceptions that progress was being made on the fiscal cliff. Then Harry Reid came on tv and said the sides are still far apart. That caused a market swoon right away. This morning the markets opened very weak but then Boehner spoke with more comments about being flexible on tax rates and the market rallied a quick 100 points.
That is a huge amount of volatility on just political rhetoric. But I don't think it is going away in the short-term. I expect a lot more back and forth and political posturing that will continue to sway market sentiment in short bursts. But we have yet to see any concrete progress other than words.
My guess is as time goes on the swings in the market will be less pronounced, but it does seem like we are going to continue to see the market rally on fiscal cliff hopes and decline on worries that nothing will actually get done before the deadline. I am on record as saying that I think the best case will be a couple of items get addressed before 12/31 but the majority of the Bush tax cuts simply get extended until 2013 to kick the can down the road and give Congress more time.
Asian markets were lower overnight on concerns about US fiscal cliff. China fell to a 46-month low. A Japanese PM candidate suggested the country should employ unlimited money printing. But at least someone is Asia is seeing a pickup in economic growth-- the Philippines saw Q3 GDP surge +7.1%, above estimates.
Europes markets are also lower this morning. Spanish retail sales fell -9.7%. And Eurozone private loans decreased 0.7%.
In corporate news, Costco (COST) is higher after reporting good same-store sales and declaring a special cash dividend of $7.00. Analysts expect more companies with excess cash on their balance sheets to also declare special dividends.
Commodities are taking it on the chin today. Gold prices fell close to the $1700 level and have started to bounce a bit. And oil prices fell below the $86 level before but are also off their earlier lows. Copper and silver prices are lower as well.
Trading comment: We mentioned the SPX in neutral territory between its key 50-day and 200-day averages. This morning's selloff took the SPX down within 1 point of its 200-day support-- which is close enough for govt work. Right on cue, buyers stepped in and the market began to bounce (aided by Boehner's comments). But it supports the notion we laid out earlier this week that the 200-day could come into play if the market pulled back. It's hard to forecast market direction short-term when so much sentiment is being swayed by political commentary, but that is the reality of things for the next few weeks.
28 Kasım 2012 Çarşamba
27 Kasım 2012 Salı
Do Stocks Have More Gas Left In The Tank?
The market is mixed to lower in early trading, with the first early dip attracting buyers. Yesterday the S&P 500 was down as much as 12 points but rallied back late in the day to close down only 3 points. That's not too much of a give back following the outsized gains from Thanksgiving week. The question is do stocks have any gas left in the tank?
If the market was in a more bearish mode, we would have seen a bigger pullback already from last week's gains. But the action so far looks more like consolidation. If this can continue then it would normally point to another push to the upside for stocks. Stay tuned.
In economic news, the latest consumer confidence reading for November came in at 73.7, up from 72.2 last month. The Housing Price Index for September increased 1.1%. And the Case-Shiller home price index rose by 3.0%. Also, durable goods were unchanged for October, but rose +1.5% ex-transportation. Both of these were better than expected.
In corporate news, ConAgra (CAG) will acquire Ralcorp (RAH) for $90 per share, a 28% premium to yesterday's closing price.
Asian markets were mostly higher overnight on new out of Europe. But China failed to rally and fell -1.3% below the 2000 level for the Shanghai Index. That marks the lowest levels seen in that index since January 2009.
Europe's markets are higher this morning after the EU and IMF were able to agree on Greece. Greece will receive 34.4 billion euros in December, and its debt-to-gdp is targeted to fall to 120% by 2020.
Commodities are mostly lower as the dollar index gains for a second day. Oil prices have eased back to $87.16 and gold prices are lower near $1744. Copper and silver prices are lower also.
The 10-year yield is lower to 1.65%. And the volatility index remains below its 50-day average near the 15.25 level.
Trading comment: The S&P 500 is still kind of in neutral territory between its 50-day and 200-day averages. The more sideways consolidation it can muster the greater the likelihood of another push to the upside. But for our balanced accounts we would be looking to trim equity exposures a bit more on a push towards the SPX 1420 level. We still think that the uncertainty surrounding fiscal cliff progress coupled with a slowdown in economic growth and corporate profits is likely to weigh on stocks in the intermediate-term and want to reflect this concern in our asset allocations.
If the market was in a more bearish mode, we would have seen a bigger pullback already from last week's gains. But the action so far looks more like consolidation. If this can continue then it would normally point to another push to the upside for stocks. Stay tuned.
In economic news, the latest consumer confidence reading for November came in at 73.7, up from 72.2 last month. The Housing Price Index for September increased 1.1%. And the Case-Shiller home price index rose by 3.0%. Also, durable goods were unchanged for October, but rose +1.5% ex-transportation. Both of these were better than expected.
In corporate news, ConAgra (CAG) will acquire Ralcorp (RAH) for $90 per share, a 28% premium to yesterday's closing price.
Asian markets were mostly higher overnight on new out of Europe. But China failed to rally and fell -1.3% below the 2000 level for the Shanghai Index. That marks the lowest levels seen in that index since January 2009.
Europe's markets are higher this morning after the EU and IMF were able to agree on Greece. Greece will receive 34.4 billion euros in December, and its debt-to-gdp is targeted to fall to 120% by 2020.
Commodities are mostly lower as the dollar index gains for a second day. Oil prices have eased back to $87.16 and gold prices are lower near $1744. Copper and silver prices are lower also.
The 10-year yield is lower to 1.65%. And the volatility index remains below its 50-day average near the 15.25 level.
Trading comment: The S&P 500 is still kind of in neutral territory between its 50-day and 200-day averages. The more sideways consolidation it can muster the greater the likelihood of another push to the upside. But for our balanced accounts we would be looking to trim equity exposures a bit more on a push towards the SPX 1420 level. We still think that the uncertainty surrounding fiscal cliff progress coupled with a slowdown in economic growth and corporate profits is likely to weigh on stocks in the intermediate-term and want to reflect this concern in our asset allocations.
26 Kasım 2012 Pazartesi
Monday Morning Musings
After one of the best weeks for the market last week, stocks are pulling back in early trade this morning. The market had become quite oversold coming into last week, so a bounce was not unexpected. But now that we have seen a big bouce, we will have to see if more profit taking sets in or if buyers will look to add more stocks into month end which occurs this week.
There is not much market moving economic news this morning. In corporate news, AAPL is bouncing after a Citi upgrade and a $675 price target. Facebook (FB) is also spiking +8% after receiving a pair of upgrades and bullish comments about its upcoming quarter.
On the downside, DreamWorks (DWA) is down -5% after "Rise of the Guardians" disappointed with $32.4 million in box office sales this weekend. That's too bad. I took my kids to see it yesteday and we all liked it.
Retail stocks are mostly lower this weekend on mixed sentiment over Black Friday sales. Utilities are bucking the early weakness and boucing after the drubbing the sector has experienced since Superstorm Sandy.
Asian markets were mixed to lower overnight as traders remained cautious ahead of another EU finance ministers meeting in Brussels today. Morgan Stanley put a note out that it expects China's GDP to grow 8.2% in 2013.
Europe is lower this morning amid chatter that finance ministers are considering a haircut for Greek bondholders that could reduce the country's debt-to-GDP ratio to 70% by 2015, down from 120%. Seems like a big haircut that might be hard to push through.
Commodities are lower as the dollar index remains in positive territory. Oil prices are pulling back to $87.67 and gold prices are a tad lower near $1749. Silver and copper prices are also slightly lower.
The 10-year yield is down to 1.64%. It was unable to break above its 50-day resistance near 1.70% last week.
The volatility index is 4% higher this morning to 15.77, still a relatively lower absolute level.
Trading comment: The S&P 500 is now right in the middle of the range between its overhead 50-day and its 200-day support. We sold half of our trading ETFs last week, and will likely exit the rest today. If the bulls are ready to do more buying into month end this week, then I could see the SPX testing the underside of its 50-day near 1425. But if this selling continues and it looks like traders are reducing equity exposure again then we could be back at the 200-day in a hurry. The 200-day currently sits near 1383. I think another test of the 200-day could set up a bounce but at SPX 1400 right now I think the market is in neutral territory.
KAM Advisors has long positions in AAPL, FB
There is not much market moving economic news this morning. In corporate news, AAPL is bouncing after a Citi upgrade and a $675 price target. Facebook (FB) is also spiking +8% after receiving a pair of upgrades and bullish comments about its upcoming quarter.
On the downside, DreamWorks (DWA) is down -5% after "Rise of the Guardians" disappointed with $32.4 million in box office sales this weekend. That's too bad. I took my kids to see it yesteday and we all liked it.
Retail stocks are mostly lower this weekend on mixed sentiment over Black Friday sales. Utilities are bucking the early weakness and boucing after the drubbing the sector has experienced since Superstorm Sandy.
Asian markets were mixed to lower overnight as traders remained cautious ahead of another EU finance ministers meeting in Brussels today. Morgan Stanley put a note out that it expects China's GDP to grow 8.2% in 2013.
Europe is lower this morning amid chatter that finance ministers are considering a haircut for Greek bondholders that could reduce the country's debt-to-GDP ratio to 70% by 2015, down from 120%. Seems like a big haircut that might be hard to push through.
Commodities are lower as the dollar index remains in positive territory. Oil prices are pulling back to $87.67 and gold prices are a tad lower near $1749. Silver and copper prices are also slightly lower.
The 10-year yield is down to 1.64%. It was unable to break above its 50-day resistance near 1.70% last week.
The volatility index is 4% higher this morning to 15.77, still a relatively lower absolute level.
Trading comment: The S&P 500 is now right in the middle of the range between its overhead 50-day and its 200-day support. We sold half of our trading ETFs last week, and will likely exit the rest today. If the bulls are ready to do more buying into month end this week, then I could see the SPX testing the underside of its 50-day near 1425. But if this selling continues and it looks like traders are reducing equity exposure again then we could be back at the 200-day in a hurry. The 200-day currently sits near 1383. I think another test of the 200-day could set up a bounce but at SPX 1400 right now I think the market is in neutral territory.
KAM Advisors has long positions in AAPL, FB
24 Kasım 2012 Cumartesi
BIG MOVES COMING IN DECEMBER, JANUARY & FEBRUARY
Well how was that for the start of a new intermediate cycle? While many analysts were calling for continued losses or even a market crash I repeatedly warned traders that an intermediate degree bottom was coming and that markets routinely rally violently out of those bottoms often generating 5-8% gains in the first 12 to 15 days. This particular intermediate bottom has already gained 5% in the first five days.
Like I've been saying all along, I think the market will easily make new highs in the next two or three months, possibly even significant new highs, or a test of the 2007 top as QE3 starts to work it's magic.
That being said stocks and gold are now due for a short-term breather. Why is that you ask, if all markets have just formed major intermediate cycle lows? The reason has to do with the daily dollar cycle. Friday marked the 24th day in the current daily cycle. That cycle generally runs about 18-28 days trough to trough. At 24 days the cycle is well into the timing band for a bottom and bounce.
That bounce should force stocks into a short-term correction, or sideways consolidation, and gold into its next daily cycle low.
However don't be fooled by any short-term corrective move as stocks and gold have all clearly formed major intermediate bottoms. There are always corrective moves along the way, nothing goes straight up, but intermediate cycles don't usually form a final top until sometime around week 12-15. As last week was only week 1 of a new intermediate cycle, we probably don't need to look for a final top until sometime in February, or early March.
Coincidentally, that is when the dollar is due to form its yearly cycle low. A yearly cycle bottom is the most severe cyclical decline other than a three year cycle low (the next one of those isn't due until mid 2014). I think we can safely assume that QE3 is going to complete the head and shoulders topping pattern for this particular three year cycle, and just like I said months ago the dollar topped back in the summer when the CRB index formed its final three year cycle low.
The dollar should now head generally lower over the next year and a half with brief bear market rallies similar to what we just experienced. This will drive an inflationary phase that should drive all asset prices higher into mid-2013, and commodities into a super spike in mid-2014 (this is when I expect gold to reach its next C-wave top at roughly $4000).
By mid-2013 inflation will start to take its toll on the economy, and stocks will stagnate and begin an extended topping process as inflation continues to surge, similar to what happened in 2007/08.
I think we will experience the same phenomenon this time as QE3 eventually generates the same unexpected consequences and spikes commodity inflation.
Traders need to be prepared next week for some kind of corrective move. Understand this is not the beginning of another leg down, but a second chance to get positioned for what should be a very profitable intermediate degree rally over the next 2-3 months.
SMT premium newsletter. $10 one week trial.
Like I've been saying all along, I think the market will easily make new highs in the next two or three months, possibly even significant new highs, or a test of the 2007 top as QE3 starts to work it's magic.
That being said stocks and gold are now due for a short-term breather. Why is that you ask, if all markets have just formed major intermediate cycle lows? The reason has to do with the daily dollar cycle. Friday marked the 24th day in the current daily cycle. That cycle generally runs about 18-28 days trough to trough. At 24 days the cycle is well into the timing band for a bottom and bounce.
That bounce should force stocks into a short-term correction, or sideways consolidation, and gold into its next daily cycle low.
However don't be fooled by any short-term corrective move as stocks and gold have all clearly formed major intermediate bottoms. There are always corrective moves along the way, nothing goes straight up, but intermediate cycles don't usually form a final top until sometime around week 12-15. As last week was only week 1 of a new intermediate cycle, we probably don't need to look for a final top until sometime in February, or early March.
Coincidentally, that is when the dollar is due to form its yearly cycle low. A yearly cycle bottom is the most severe cyclical decline other than a three year cycle low (the next one of those isn't due until mid 2014). I think we can safely assume that QE3 is going to complete the head and shoulders topping pattern for this particular three year cycle, and just like I said months ago the dollar topped back in the summer when the CRB index formed its final three year cycle low.
The dollar should now head generally lower over the next year and a half with brief bear market rallies similar to what we just experienced. This will drive an inflationary phase that should drive all asset prices higher into mid-2013, and commodities into a super spike in mid-2014 (this is when I expect gold to reach its next C-wave top at roughly $4000).
By mid-2013 inflation will start to take its toll on the economy, and stocks will stagnate and begin an extended topping process as inflation continues to surge, similar to what happened in 2007/08.
I think we will experience the same phenomenon this time as QE3 eventually generates the same unexpected consequences and spikes commodity inflation.
Traders need to be prepared next week for some kind of corrective move. Understand this is not the beginning of another leg down, but a second chance to get positioned for what should be a very profitable intermediate degree rally over the next 2-3 months.
SMT premium newsletter. $10 one week trial.
21 Kasım 2012 Çarşamba
US Stocks Open Flat Despite Overnight Bounce in Asia
US stock markets are hovering near the flat line in early trading. There hasn't been too much news, and I would expect that trading today would be relatively light ahead of the Thanksgiving holiday. On Friday the market will only be open a half day.
In economic news, the Univ of Mich consumer sentiment survey for November slid to 82.7 from its preliminary reading of 84.9. The latest weekly jobless claims figures totaled 410,000 which is down from last week's total of 451,000.
Overnight Asian markets rallied despite some weak Japan trade figures. The latest traded data from Japan showed exports from Japan to China fell -11.6% and exports to Europe slumped -20.1%.
European markets are mixed to lower today after a bit of delay between the EU and IMF on agreeing to release the next tranche of aid to Greece.
In the Middle East, talks yesterday of a cease fire appear to be a bit premature as fighting continues. a bus bomb exploded in Tel Aviv this morning killing 21 people.
Commodities are mixed as the dollar is relatively flat. Oil prices are up a bit to $87.45 and gold prices are also a touch higher near $1725. Copper prices are more than 1% lower on the day.
The 10-year yield is up again to 1.68%. Its overhead 50-day resistance comes into play around 1.70%. And the VIX is down fractionally below the 15 level.
Trading comment: The market bent a little yesterday but was able to bounce back into the close and end in positive territory. So far the pattern of consolidation after the strong 2-day rally looks normal. But I would like to see the market push through to some more upside soon to keep these rally hopes alive. I still feel like sentiment is fragile at this juncture and if the bulls don't keep their pedal on the gas this market could roll over again. Volume levels today and Friday should be light and hopefully the bears have left early for their holiday festivities.
In economic news, the Univ of Mich consumer sentiment survey for November slid to 82.7 from its preliminary reading of 84.9. The latest weekly jobless claims figures totaled 410,000 which is down from last week's total of 451,000.
Overnight Asian markets rallied despite some weak Japan trade figures. The latest traded data from Japan showed exports from Japan to China fell -11.6% and exports to Europe slumped -20.1%.
European markets are mixed to lower today after a bit of delay between the EU and IMF on agreeing to release the next tranche of aid to Greece.
In the Middle East, talks yesterday of a cease fire appear to be a bit premature as fighting continues. a bus bomb exploded in Tel Aviv this morning killing 21 people.
Commodities are mixed as the dollar is relatively flat. Oil prices are up a bit to $87.45 and gold prices are also a touch higher near $1725. Copper prices are more than 1% lower on the day.
The 10-year yield is up again to 1.68%. Its overhead 50-day resistance comes into play around 1.70%. And the VIX is down fractionally below the 15 level.
Trading comment: The market bent a little yesterday but was able to bounce back into the close and end in positive territory. So far the pattern of consolidation after the strong 2-day rally looks normal. But I would like to see the market push through to some more upside soon to keep these rally hopes alive. I still feel like sentiment is fragile at this juncture and if the bulls don't keep their pedal on the gas this market could roll over again. Volume levels today and Friday should be light and hopefully the bears have left early for their holiday festivities.
20 Kasım 2012 Salı
Are Stocks Catching Their Breath After Monday's Rally?
The markets are roughly flat in early trading following yesterday's solid rally. Stocks rallied both Friday and Monday, so its rational for them to take a breather. The question for investors is whether stocks are just catching their breath before another push to the upside or if the last 2 day rally was just a breather from the recent downtrend action? I think the markets still have some more upside, though I don't see us getting back to the highs of the year.
This morning both BBY and HPQ are making new lows after reporting disappointing earnings. BBY has lost all of its mojo that was surrounding the prospect of its founder taking the company private. And HPQ took a huge charge related to improprieties and misrepresentations from Autonomy which it bought.
In economic news, housing starts rose to 894,000 units in October from 863,000 last month.
Overnight Asian markets were mixed, although China slid 0.4% hitting a new 45-month low. That can't be a good sign. I'm surprised the media doesn't mention this more whenever they are talking about secular growth theme in China.
European markets are also mixed despite the Moody's downgrade of France. Moody's also mentioned the outlook for Italy's banking system remains negative. In Brussels, EU finance ministers have agreed in principle to unfreeze loans to Greece.
Commodities are mostly lower following a rise in the dollar today. Gold prices are near $1730. Oil prices are pulling back to $87.50, down almost $2 as news hits the wires about a ceasefire from Israel.
The 10-year yield is up to 1.65%. And the VIX is up fractionally to 15.38 after a big drop yesterday.
Trading comment: I still like the long side here for a trade. We added some long ETFs in trading accounts and haven't sold them yet. For our balanced accounts, we still want to stay defensive and reduce our equity exposures as we near year-end. So for longer-term investors we are using any further strength in the market to continue to rebalance portfolios with an eye toward the fiscal cliff uncertainty and a continued slow growth economy as we enter 2013.
This morning both BBY and HPQ are making new lows after reporting disappointing earnings. BBY has lost all of its mojo that was surrounding the prospect of its founder taking the company private. And HPQ took a huge charge related to improprieties and misrepresentations from Autonomy which it bought.
In economic news, housing starts rose to 894,000 units in October from 863,000 last month.
Overnight Asian markets were mixed, although China slid 0.4% hitting a new 45-month low. That can't be a good sign. I'm surprised the media doesn't mention this more whenever they are talking about secular growth theme in China.
European markets are also mixed despite the Moody's downgrade of France. Moody's also mentioned the outlook for Italy's banking system remains negative. In Brussels, EU finance ministers have agreed in principle to unfreeze loans to Greece.
Commodities are mostly lower following a rise in the dollar today. Gold prices are near $1730. Oil prices are pulling back to $87.50, down almost $2 as news hits the wires about a ceasefire from Israel.
The 10-year yield is up to 1.65%. And the VIX is up fractionally to 15.38 after a big drop yesterday.
Trading comment: I still like the long side here for a trade. We added some long ETFs in trading accounts and haven't sold them yet. For our balanced accounts, we still want to stay defensive and reduce our equity exposures as we near year-end. So for longer-term investors we are using any further strength in the market to continue to rebalance portfolios with an eye toward the fiscal cliff uncertainty and a continued slow growth economy as we enter 2013.
19 Kasım 2012 Pazartesi
Monday Morning Musings
The markets are nicely higher in early trading, with the Dow up 150 points following strength on Friday's close and rallies in overseas markets last night and this morning.
Israel has said it may increase its assault on the Gaza strip, and that has oil rallying another $2 to $89. But that has not derailed the rally in stocks so far this morning. One thing that concerns me a bit is that I never like to see very strong opens as that leaves a lot of time during the trading session for sellers to emerge knock down the market. I prefer to see stocks rally into the close like they did on Friday.
In economic news we got some more positive housing data. Existing home sales for October rose to 4.79 million from 4.69 million last month. And the NAHB Housing index for November rose from 41 last month to 46 this month. Both readings were above consensus.
Overnight markets in Asia were higher. Japan led with a 1.4% gain and China lagged with 0.1% rise as news came out that China saw housing prices decline in 17 of 22 major cities last month.
European markets are also higher today despite a member of the ECB saying Greece will be unable to return to public markets in 2015-16 and will likely need more aid.
The dollar is lower today and helping to boost commodities. Oil is up past $89, aided by the escalating Israel conflict. Gold prices are higher to $1733. And silver and copper prices are higher as well.
The 10-year yield is higher to 1.61%. And the VIX is down -3.7% today back below its 50-day average to 15.80.
Trading comment: Last week I commented that the Nazz had been down 6 straight weeks and was overdue for a bounce. We started to add some QQQ on Friday to trading accounts and I was looking to add to it today but with the markets up as much as they are this morning I don't want to chase and overpay. If we get an intraday dip I will likely add some as I still think the markets could see further upside this week. The market is very short-term oversold and investor sentiment had recently become pretty bearish. So that should provide a backdrop for more than just a one-day bounce.
KAM Advisors has long positions in QQQ
Israel has said it may increase its assault on the Gaza strip, and that has oil rallying another $2 to $89. But that has not derailed the rally in stocks so far this morning. One thing that concerns me a bit is that I never like to see very strong opens as that leaves a lot of time during the trading session for sellers to emerge knock down the market. I prefer to see stocks rally into the close like they did on Friday.
In economic news we got some more positive housing data. Existing home sales for October rose to 4.79 million from 4.69 million last month. And the NAHB Housing index for November rose from 41 last month to 46 this month. Both readings were above consensus.
Overnight markets in Asia were higher. Japan led with a 1.4% gain and China lagged with 0.1% rise as news came out that China saw housing prices decline in 17 of 22 major cities last month.
European markets are also higher today despite a member of the ECB saying Greece will be unable to return to public markets in 2015-16 and will likely need more aid.
The dollar is lower today and helping to boost commodities. Oil is up past $89, aided by the escalating Israel conflict. Gold prices are higher to $1733. And silver and copper prices are higher as well.
The 10-year yield is higher to 1.61%. And the VIX is down -3.7% today back below its 50-day average to 15.80.
Trading comment: Last week I commented that the Nazz had been down 6 straight weeks and was overdue for a bounce. We started to add some QQQ on Friday to trading accounts and I was looking to add to it today but with the markets up as much as they are this morning I don't want to chase and overpay. If we get an intraday dip I will likely add some as I still think the markets could see further upside this week. The market is very short-term oversold and investor sentiment had recently become pretty bearish. So that should provide a backdrop for more than just a one-day bounce.
KAM Advisors has long positions in QQQ
THE ODDS ARE HIGH THAT THE BOTTOM IS IN
In my last couple of articles I mentioned that I was waiting for the S&P to form a swing low as the first confirmation that an intermediate degree bottom had formed. That swing is going to form on the open Monday morning.
Typically the stock market will rally fairly aggressively out of one of these major intermediate bottoms, often gaining 6%-8% in the first 15-20 days. At that point the market will dip down into a half cycle low that will establish the trend line for this particular daily cycle.
Since the dollar is now on the 21st day of its daily cycle it is now overdue for a move down into a short-term low. This should drive the first half of that 6%-8% move, followed by a very short corrective move as the dollar bounces and then rolls over quickly into a another leg down.
That cycle would be due to bottom around the first of the year, and should drive the stock market generally higher until early January at which time we should get a more significant correction, probably as nervousness builds before the next earnings season.
I've diagrammed the general directions and rough targets for what I think will unfold over the next month and a half in the chart below.
However, the dollar shouldn't put in the true yearly cycle low until sometime in mid February to early March so there should be another leg down after the one bottoming in January.
The final leg down on the dollar index into its yearly cycle low should drive the stock market back to at least marginal new highs later this spring.
Back in June when the CRB made its final three year cycle low I said at the time that this should correspond with the three year cycle top in the dollar, which so far has been the case.
We should continue to see the dollar generally heading lower with intermittent bear market rallies until it puts in a final three year cycle low in mid-2014. This should keep the stock market generally moving higher at least until the point where commodity inflation, especially energy, gets to the point it collapses consumer spending. Once that occurs the stock market will start to stagnate and refuse to rise even if the dollar continues to fall. If Bernanke didn't learn his lesson in 2008 he will continue to print and spike inflation even higher creating the conditions for the next recession.
As has been the case in the 70s and also during the last cyclical bull market in 2007, I think we will probably see the stock market at least test the all-time highs, if not a marginal break above them, before rolling over into what I expect will be a very complex bear market bottoming sometime in 2015.
Today should be the opportunity to get on board what is likely to be a significant rally over the next 3 weeks and probably a move to new highs over the next 2-3 months.
However I think the really big money will be made in mining stocks as gold should rally enough to make it's first test of the all time highs at $1900. It's not unreasonable to think miners will follow and test 640 during this time.
Typically the stock market will rally fairly aggressively out of one of these major intermediate bottoms, often gaining 6%-8% in the first 15-20 days. At that point the market will dip down into a half cycle low that will establish the trend line for this particular daily cycle.
Since the dollar is now on the 21st day of its daily cycle it is now overdue for a move down into a short-term low. This should drive the first half of that 6%-8% move, followed by a very short corrective move as the dollar bounces and then rolls over quickly into a another leg down.
That cycle would be due to bottom around the first of the year, and should drive the stock market generally higher until early January at which time we should get a more significant correction, probably as nervousness builds before the next earnings season.
I've diagrammed the general directions and rough targets for what I think will unfold over the next month and a half in the chart below.
However, the dollar shouldn't put in the true yearly cycle low until sometime in mid February to early March so there should be another leg down after the one bottoming in January.
The final leg down on the dollar index into its yearly cycle low should drive the stock market back to at least marginal new highs later this spring.
Back in June when the CRB made its final three year cycle low I said at the time that this should correspond with the three year cycle top in the dollar, which so far has been the case.
We should continue to see the dollar generally heading lower with intermittent bear market rallies until it puts in a final three year cycle low in mid-2014. This should keep the stock market generally moving higher at least until the point where commodity inflation, especially energy, gets to the point it collapses consumer spending. Once that occurs the stock market will start to stagnate and refuse to rise even if the dollar continues to fall. If Bernanke didn't learn his lesson in 2008 he will continue to print and spike inflation even higher creating the conditions for the next recession.
As has been the case in the 70s and also during the last cyclical bull market in 2007, I think we will probably see the stock market at least test the all-time highs, if not a marginal break above them, before rolling over into what I expect will be a very complex bear market bottoming sometime in 2015.
Today should be the opportunity to get on board what is likely to be a significant rally over the next 3 weeks and probably a move to new highs over the next 2-3 months.
However I think the really big money will be made in mining stocks as gold should rally enough to make it's first test of the all time highs at $1900. It's not unreasonable to think miners will follow and test 640 during this time.
16 Kasım 2012 Cuma
Oversold Nazz Looks Due For A Bounce
The market is lower once again in early trading as this market continues to trade heavy and just can't seem to bounce. Bearish sentiment is on the rise, which should help the market bounce at some point. Also, the Nasdaq has been down 6 straight weeks so it looks overdue for a bounce as well.
Fears about the fiscal cliff continue to manifest themselves in the form of high dividend paying stock getting hit the hardest. Today telecom stocks are getting sold off, and the utilities sector has already seen heavy selling. I think that is a mistake and that investors will realize that even if dividend taxes rise ultra low interest rates remain and that keeps these dividend streams attractive on a relative basis.
The latest news is that the White House is considering delaying the spending cuts. We mentioned recently that this has been the call from our sources at Goldman. They think Congress will kick the can down the road maybe to June 2013.
In economic news, industrial production fell by -0.4% in October, below expectations. And capacity utilization fell to 77.8% from 78.2% the prior month. This figure points to the continued slack in the economy and lends itself to the notion that inflationary pressures like unit labor costs seem a ways off.
Asian markets were mixed overnight with Japan rallying and China selloff off to a 7-week low after the Chinese press warned that the recent bounce in economic data may be temporary.
Europe is also lower this morning after Germany's Merkel made comments that the ECB should limit its bond buys from highly indebted states and that the OMT program should only be used in emergencies.
Elsewhere, the fighting between Israel and Hamas continues to escalate. Oil prices are nearing $87, but I'm surprised that they haven't surpassed $90 on the escalation of these mideast tensions.
Gold prices are weaker today, near $1711. Silver and copper prices are lower as well.
The 10-year yield has slid back to 1.56%. And the VIX is up 2% back above the 18 level. It bounced hard off its 50-day and still looks like it could test the 20 level.
Trading comment: This market feels very heavy. We have held off from doing any buying, but with things very oversold now bounce candidates are looking more attractive. I mentioned that the Nazz has been down 6 straight weeks. That has often been about as long of a streak as we have seen and usually a good time to take a stab at the long side. We are looking at adding some QQQ for a trade. AAPL continues to pace the Nasdaq on the downside as it approaches the $500 level. I hope that stock can make a stand soon as I am surprised it hasn't found better support already. I would like to see the market bottom this morning and close higher into the close to make me feel better. But that may be wishful thinking. Stay tuned.
KAM Advisors has long positions in AAPL
Fears about the fiscal cliff continue to manifest themselves in the form of high dividend paying stock getting hit the hardest. Today telecom stocks are getting sold off, and the utilities sector has already seen heavy selling. I think that is a mistake and that investors will realize that even if dividend taxes rise ultra low interest rates remain and that keeps these dividend streams attractive on a relative basis.
The latest news is that the White House is considering delaying the spending cuts. We mentioned recently that this has been the call from our sources at Goldman. They think Congress will kick the can down the road maybe to June 2013.
In economic news, industrial production fell by -0.4% in October, below expectations. And capacity utilization fell to 77.8% from 78.2% the prior month. This figure points to the continued slack in the economy and lends itself to the notion that inflationary pressures like unit labor costs seem a ways off.
Asian markets were mixed overnight with Japan rallying and China selloff off to a 7-week low after the Chinese press warned that the recent bounce in economic data may be temporary.
Europe is also lower this morning after Germany's Merkel made comments that the ECB should limit its bond buys from highly indebted states and that the OMT program should only be used in emergencies.
Elsewhere, the fighting between Israel and Hamas continues to escalate. Oil prices are nearing $87, but I'm surprised that they haven't surpassed $90 on the escalation of these mideast tensions.
Gold prices are weaker today, near $1711. Silver and copper prices are lower as well.
The 10-year yield has slid back to 1.56%. And the VIX is up 2% back above the 18 level. It bounced hard off its 50-day and still looks like it could test the 20 level.
Trading comment: This market feels very heavy. We have held off from doing any buying, but with things very oversold now bounce candidates are looking more attractive. I mentioned that the Nazz has been down 6 straight weeks. That has often been about as long of a streak as we have seen and usually a good time to take a stab at the long side. We are looking at adding some QQQ for a trade. AAPL continues to pace the Nasdaq on the downside as it approaches the $500 level. I hope that stock can make a stand soon as I am surprised it hasn't found better support already. I would like to see the market bottom this morning and close higher into the close to make me feel better. But that may be wishful thinking. Stay tuned.
KAM Advisors has long positions in AAPL
15 Kasım 2012 Perşembe
Schedule Conflict
I have meetings this morning. Please check back tomorrow for our next market update.
Thank you--
Thank you--
14 Kasım 2012 Çarşamba
MAJOR BUYING OPPORTUNITY
I'm just going to do a quick post today. The relevant factors are that gold appears to have put in an intermediate degree bottom last week. Miners are being dragged down at the moment as the stock market makes its final move into an intermediate bottom. This happens pretty much like clockwork every 20-25 weeks (currently on week 23).
Invariably when stocks move down into one of these major cycle bottoms the selling pressure infects everything. It finally grabbed the miners today even though gold has barely budged. Not to worry though, we've seen this happen dozens of times in the past, and the miners always snap back violently once the selling pressure in the stock market exhausts.
More importantly than where things are going tomorrow or the next day is where they are headed over the next intermediate cycle. As I have diagrammed in the chart below the dollar is due for a move down into a yearly cycle low around mid February or early March. Roughly the same time as last year. This will drive the next intermediate rally in gold (and stocks) for about the next 12-15 weeks.
I'll say it again. Buying anywhere around these levels will deliver big gains over the next 3-4 months. Probably largest in the miners, but certainly significant in virtually all sectors.
This is that period of time that comes only once or twice a year when the chartists get fleeced (the charts always say the market is going lower at intermediate bottoms. This is why chartists always miss these major bottoms. You need different tools to spot these kind of buying opportunities.) and the smart money positions for the next leg up.
The choice is yours. Do you want to sell at the bottom again, or will you be a buyer this time and make some money? (I think big money.)
Invariably when stocks move down into one of these major cycle bottoms the selling pressure infects everything. It finally grabbed the miners today even though gold has barely budged. Not to worry though, we've seen this happen dozens of times in the past, and the miners always snap back violently once the selling pressure in the stock market exhausts.
More importantly than where things are going tomorrow or the next day is where they are headed over the next intermediate cycle. As I have diagrammed in the chart below the dollar is due for a move down into a yearly cycle low around mid February or early March. Roughly the same time as last year. This will drive the next intermediate rally in gold (and stocks) for about the next 12-15 weeks.
I'll say it again. Buying anywhere around these levels will deliver big gains over the next 3-4 months. Probably largest in the miners, but certainly significant in virtually all sectors.
This is that period of time that comes only once or twice a year when the chartists get fleeced (the charts always say the market is going lower at intermediate bottoms. This is why chartists always miss these major bottoms. You need different tools to spot these kind of buying opportunities.) and the smart money positions for the next leg up.
The choice is yours. Do you want to sell at the bottom again, or will you be a buyer this time and make some money? (I think big money.)
Can Market Reverse Its Recent Trend?
Yesterday I said that the market looked solid with the SPX testing its 200-day but that I needed to see a strong close for stocks in order to get more constructive. Lo and behold the market sold off again at the end of the day and finished weak. That has been the pattern for over a week, and we need to see that change.
This morning the market opened slightly higher, but quickly turned tail and moved into negative territory. Obama is coming on TV soon, and if he is bearish about the fiscal cliff prospects stocks could sell off further. But if he is optimistic in his tone then maybe we will see a strong finish to stocks which could unleash a further short-term bounce in the market.
Asian markets were mostly higher overnight as China's Party Congress concluded its leadership transition.
Europe is lower today after Greece reported a -7.2% drop in Q3 GDP. Ouch. Workers in France, Spain, Italy, and Portugal are demonstrating against budget cuts. And industrial orders in Spain declined -5.7%.
In the US, retail sales declined -0.3%, but were unchanged if you exclude autos.
The Nasdaq is down less than the S&P right now after Cisco (CSCO) reported solid earnings and its stock is 7% higher. Facebook is also up 8% despite the large share lockup expiration that is occurring today. This could imply a short-term bottom for FB shares which have been weak for months.
Oil is trading higher as tensions heat up between Israel and Hamas. Strikes are breaking out and both sides seem to be gearing up for a bigger conflict. Not good. Oil is up to $86 so far.
The dollar is lower helping precious metals. Gold is higher to $1726, although copper is not participating.
The 10-year yield is firm at 1.60%. And the VIX is up slightly to 16.87, bouncing off its 50-day support.
Trading comment: I have not added to any trading longs recently due to the string of weak closes we have seen in the market. I am looking for a change of character in the form of a strong close. Maybe we will see it today. Who knows. But the SPX is moving further below its 200-day average, which becomes a more challenging technical setup. Big picture for our balance accounts we remain defensive and are tilting our equity allocations below average until we get past the fiscal cliff hump and see how the markets fare in early 2013.
KAM Advisors has long positions in FB
This morning the market opened slightly higher, but quickly turned tail and moved into negative territory. Obama is coming on TV soon, and if he is bearish about the fiscal cliff prospects stocks could sell off further. But if he is optimistic in his tone then maybe we will see a strong finish to stocks which could unleash a further short-term bounce in the market.
Asian markets were mostly higher overnight as China's Party Congress concluded its leadership transition.
Europe is lower today after Greece reported a -7.2% drop in Q3 GDP. Ouch. Workers in France, Spain, Italy, and Portugal are demonstrating against budget cuts. And industrial orders in Spain declined -5.7%.
In the US, retail sales declined -0.3%, but were unchanged if you exclude autos.
The Nasdaq is down less than the S&P right now after Cisco (CSCO) reported solid earnings and its stock is 7% higher. Facebook is also up 8% despite the large share lockup expiration that is occurring today. This could imply a short-term bottom for FB shares which have been weak for months.
Oil is trading higher as tensions heat up between Israel and Hamas. Strikes are breaking out and both sides seem to be gearing up for a bigger conflict. Not good. Oil is up to $86 so far.
The dollar is lower helping precious metals. Gold is higher to $1726, although copper is not participating.
The 10-year yield is firm at 1.60%. And the VIX is up slightly to 16.87, bouncing off its 50-day support.
Trading comment: I have not added to any trading longs recently due to the string of weak closes we have seen in the market. I am looking for a change of character in the form of a strong close. Maybe we will see it today. Who knows. But the SPX is moving further below its 200-day average, which becomes a more challenging technical setup. Big picture for our balance accounts we remain defensive and are tilting our equity allocations below average until we get past the fiscal cliff hump and see how the markets fare in early 2013.
KAM Advisors has long positions in FB
13 Kasım 2012 Salı
An Early Rebound For Stocks
Stocks followed the overseas weakness and opened lower, but immediately bottomed and so far look to be staging a solid turnaround day. We could use a strong day where the markets close at their highs.
There are still a few earnings reports trickling in. Some stocks on the upside after reporting include HD. KORS, and TJX to name a few. But earnings season is winding down.
The weakness started last night in Asia. China fell -1.5% last night. Japan reported a -4.1% drip in industrial production.
Europe is also lower across the board this morning after the Eurozone meeting came up with few results and the decision regarding the next tranche of Greek aid will be delayed. There is still lots of disagreement. EU Pres. Juncker said Greece would be given two more years to get to 120% debt to GDP. But IMF Director Lagarde publicly disagreed and said that the year 2020 is a more appropriate target. Separately Germany's ZEW Economic Sentiment came in at -15.7, well below expectations of -9.8.
There were no big economic releases in the US this morning.
The dollar is a bit higher today, and commodities are flat to lower. Oil prices are pulling back to $85 and gold prices are a bit lower near $1728.
The 10-year yield is holding near 1.60%. And the VIX is down another 3% after a big down day yesterday. It is currently at 16.20 and sitting on its 50-day average.
Trading comment: I have been looking for an opportunity to get longer for a trade, but yesterday the market once again finished on a weak note. I don't want to add any long ETFs until I see the market close at its highs for the day. Maybe today will be that day. The market is short-term oversold looking at a variety of technical indicators. The SPX has also been hovering around its 200-day support for a 4th day and could be poised to bounce. So that's what we are watching.
There are still a few earnings reports trickling in. Some stocks on the upside after reporting include HD. KORS, and TJX to name a few. But earnings season is winding down.
The weakness started last night in Asia. China fell -1.5% last night. Japan reported a -4.1% drip in industrial production.
Europe is also lower across the board this morning after the Eurozone meeting came up with few results and the decision regarding the next tranche of Greek aid will be delayed. There is still lots of disagreement. EU Pres. Juncker said Greece would be given two more years to get to 120% debt to GDP. But IMF Director Lagarde publicly disagreed and said that the year 2020 is a more appropriate target. Separately Germany's ZEW Economic Sentiment came in at -15.7, well below expectations of -9.8.
There were no big economic releases in the US this morning.
The dollar is a bit higher today, and commodities are flat to lower. Oil prices are pulling back to $85 and gold prices are a bit lower near $1728.
The 10-year yield is holding near 1.60%. And the VIX is down another 3% after a big down day yesterday. It is currently at 16.20 and sitting on its 50-day average.
Trading comment: I have been looking for an opportunity to get longer for a trade, but yesterday the market once again finished on a weak note. I don't want to add any long ETFs until I see the market close at its highs for the day. Maybe today will be that day. The market is short-term oversold looking at a variety of technical indicators. The SPX has also been hovering around its 200-day support for a 4th day and could be poised to bounce. So that's what we are watching.
12 Kasım 2012 Pazartesi
Senator Kyl Sees Higher Revenues Without a Tax Hike
A federal budget deal to avoid the fiscal cliff can be achieved without
raising tax rates, Senate Minority Whip Jon Kyl said Friday on the Kudlow
Report.
“Tax revenues can be generated by two ways other than raising tax rates,” he said. “One is to eliminate some of the deductions, credits, exemptions, special provisions in the code that end up producing more revenue but without affecting the rates. And the other is through economic growth.”
The senator from Arizona said he thought it likely a deal could be struck to avoid the so-called “fiscal cliff,” a deadline by which the lack of a federal budget would result in the expiration of the Bush tax cuts and trigger automatic spending cuts.
Kyl sees additional revenues as the key.
The senator from Arizona said he thought it likely a deal could be struck to avoid the so-called “fiscal cliff,” a deadline by which the lack of a federal budget would result in the expiration of the Bush tax cuts and trigger automatic spending cuts.
Kyl sees additional revenues as the key.
“If we can focus, not on tax rates, but to give the president something that he
wants, more tax revenues, as I said, there are ways to get more tax
revenues,” he said. “Either through and/or producing more wealth as a
country, thus resulting in more taxes paid to the government.”
The Republican senator also took issue with the recommendations of the
special committee co-chaired by former Sen. Alan Simpson, R-Wyo., and
former Clinton White House Chief of Staff Erskine Bowles.
“Simpson-Bowles is not a good template here because it sets up a contest
between lowering marginal tax rates and raising the business taxes, that is to
say, dividends, capital gains and the estate tax,” he said. “Simpson-Bowles
in effect says, you can have lower rates on one side or another, but not both.
That’s not good.”
Monday Morning Musings
The market was slightly higher in early trading, but not much of a bounce given how far the markets have come down in recent weeks. As of this post, the early gains are eroding and the indexes are flirting with going back in the red on the session.
Biotech stocks are leading the market this morning after some positive trial data. CELG is up 7% after results from a pancreatic cancer trial. And GILD is up as much as 12% after positive Hep C trial data.
In M&A news, Jeffires (JEF) is 22% higher after confirming plans to merge with Leucadia (LUK). Also, TIE is surging 43% after being acquired by Precision Castparts (PCP).
There are no economic data releases scheduled today.
Asian markets were mixed overnight after China's trade balance showed exports grew 11.6% year/year. This was enough for one BofA analyst to say that China has bottomed. But in Japan Q3 GDP declined -0.9% sparking concerns another recession could be looming.
European markets are also mixed after the Greek parliament approved its 2013 budget. Eurozone finance ministers meet today to discuss options to avoid a Greek default.
The 10-year yield is flattish near 1.61%. And the VIX is down 5% despite the flat market, falling below the 18 level that has held support for the better part of the last week.
Trading comment: The market continues to feel weak. The S&P 500 is sitting at its 200-day average, which would be a logical area from which to bounce. But we need to see some strength in the form of a market that can rally into the close and close at highs for the day. That has been missing lately. Until we see some signs of strength like that, we are remaining defensive in our accounts. Balanced accounts are seeing their equity allocations being lowered, and trading accounts are sitting on cash waiting for a buying opportunity.
Biotech stocks are leading the market this morning after some positive trial data. CELG is up 7% after results from a pancreatic cancer trial. And GILD is up as much as 12% after positive Hep C trial data.
In M&A news, Jeffires (JEF) is 22% higher after confirming plans to merge with Leucadia (LUK). Also, TIE is surging 43% after being acquired by Precision Castparts (PCP).
There are no economic data releases scheduled today.
Asian markets were mixed overnight after China's trade balance showed exports grew 11.6% year/year. This was enough for one BofA analyst to say that China has bottomed. But in Japan Q3 GDP declined -0.9% sparking concerns another recession could be looming.
European markets are also mixed after the Greek parliament approved its 2013 budget. Eurozone finance ministers meet today to discuss options to avoid a Greek default.
The 10-year yield is flattish near 1.61%. And the VIX is down 5% despite the flat market, falling below the 18 level that has held support for the better part of the last week.
Trading comment: The market continues to feel weak. The S&P 500 is sitting at its 200-day average, which would be a logical area from which to bounce. But we need to see some strength in the form of a market that can rally into the close and close at highs for the day. That has been missing lately. Until we see some signs of strength like that, we are remaining defensive in our accounts. Balanced accounts are seeing their equity allocations being lowered, and trading accounts are sitting on cash waiting for a buying opportunity.
9 Kasım 2012 Cuma
An End Of Week Bounce For Stocks?
Stocks are trying to muster a bounce in early trading, although it should be noted there is still a lot of time left in this trading session. Coming into today, the S&P 500 was down -2.6% for the week. So far it is bouncing roughly 0.5%. AAPL bulls are also happy that at least for now the stock appears to have found some support and is up $11 so far.
The Univ. of Mich. consumer confidence number surprised everyone to the upside, coming in at 84.9. That is the highest reading since July 2007. Can anyone tell me where all this confidence is coming from? Because it sure isn't being reflected this week in the chart of the S&P 500.
In M&A news, Kayak Software (KYAK) is up more than 25% after being acquired by Priceline for $40 per share.
Stocks rising on earnings: FWLT, COV, NNI, PSA, ENR
Stocks falling on earnings: JCP, AEE, STRA, GTY, GXP
Asian markets remained weak overnight, despite China retail sales and industrial production coming in above expectations. The Bank of Korea left rates unchanged.
Europe is also seeing weakness this morning after Germany's economics ministry gave a downbeat outlook for the remainder of the year and the Bank of France predicted that French GDP will see a -0.1% decline in Q4.
The dollar is higher for a 3rd day, and commodities are mixed. Oil prices are flat near $85.10. Gold prices are slightly higher around $1732. But copper prices are lower.
The 10-year yield is flat near 1.62%. And the VIX is down 2% near 18.16.
Trading comment: Yesterday I cautioned that the SPX might have a date with the 200-day moving average. I didn't think it would break below it by the end of the day, but that is why we show up each day. If predicting the market were easy, we'd all be calling in our trades from our yachts. So the SPX closed below its 200-day yesterday, and today is bouncing above it. The markets are short-term oversold, so I would expect a bounce here. But I don't like to buy on the first bounce. I prefer to wait for the market to come down again and hopefully find more solid support, maybe around that 200-day again. That should offer a better buying opportunity. I would also like to see more constructive action among market leading stocks.
KAM Advisors has long positions in AEE, PSA, PCLN
The Univ. of Mich. consumer confidence number surprised everyone to the upside, coming in at 84.9. That is the highest reading since July 2007. Can anyone tell me where all this confidence is coming from? Because it sure isn't being reflected this week in the chart of the S&P 500.
In M&A news, Kayak Software (KYAK) is up more than 25% after being acquired by Priceline for $40 per share.
Stocks rising on earnings: FWLT, COV, NNI, PSA, ENR
Stocks falling on earnings: JCP, AEE, STRA, GTY, GXP
Asian markets remained weak overnight, despite China retail sales and industrial production coming in above expectations. The Bank of Korea left rates unchanged.
Europe is also seeing weakness this morning after Germany's economics ministry gave a downbeat outlook for the remainder of the year and the Bank of France predicted that French GDP will see a -0.1% decline in Q4.
The dollar is higher for a 3rd day, and commodities are mixed. Oil prices are flat near $85.10. Gold prices are slightly higher around $1732. But copper prices are lower.
The 10-year yield is flat near 1.62%. And the VIX is down 2% near 18.16.
Trading comment: Yesterday I cautioned that the SPX might have a date with the 200-day moving average. I didn't think it would break below it by the end of the day, but that is why we show up each day. If predicting the market were easy, we'd all be calling in our trades from our yachts. So the SPX closed below its 200-day yesterday, and today is bouncing above it. The markets are short-term oversold, so I would expect a bounce here. But I don't like to buy on the first bounce. I prefer to wait for the market to come down again and hopefully find more solid support, maybe around that 200-day again. That should offer a better buying opportunity. I would also like to see more constructive action among market leading stocks.
KAM Advisors has long positions in AEE, PSA, PCLN
8 Kasım 2012 Perşembe
Does The S&P 500 Have A Date With Its 200-day?
Markets opened higher but gave up those gains in the first hour of trading. The S&P 500 bounced to 1401 but has given back about 10 points and is now trying to stabilize. Yesterday's selloff came on pretty high volume, and it looks like the next level of support for the SPX will be near the 200-day average which currently sits at 1380.
Utilities (XLU) are bouncing the most, after selling off in the wake of Hurricane Sandy and the damage to East Coast electrical systems. Financials (XLF) are also getting a bounce following yesterday's selloff. BAC was upped to Buy at ISI, and JPMorgan got approval from the Fed to resume stock buybacks.
Stocks rising on earnings: QCOM, DF, AWK, TWGP, ETP, HE, AAP, AMCX, FE, DDS
Stocks falling on earnings: PANL, MNST, WFM, TRLA, VMC
In Asia overnight markets were sharply lower. Hong Kong fell -2.4% and China skidded -1.6% following the handoff in power there. Australia's unemployment rate held steady at 5.4%. JPMorgan thinks the Reserve Bank of Australia will cut rates further in December.
In Europe, markets were higher this morning but have been fading. Greece passed its key austerity vote yesterday in order to get more aid, but sentiment is souring that Spain will soon need to seek a bailout as well. The ECB held rates steady at 0.75%, and President Draghi said that growth will remain weak in 2013.
The dollar is higher again, but commodities are holding up. Oil prices are a bit higher to $84.80 and gold prices are firm near $1716.
The 10-year yield is getting a small boost to 1.67%. And the VIX is lower by -3.6% to 18.38 despite the weak action in early trading.
Trading comment: The market sold off yesterday on strong volume. It is now back at oversold levels so that should help it put together some sort of bounce in the near-term. But the SPX is right in the middle of the range between its 50- and 200-day. It hasn't touched the 200-day since June, and I think it is likely we see another test of that key moving average. So I think a defensive posture remains appropriate and I would look to add to stocks and/or reduce hedges after we see a test of that 200-day.
KAM Advisors has long positions in AWK, FE, ETP
Utilities (XLU) are bouncing the most, after selling off in the wake of Hurricane Sandy and the damage to East Coast electrical systems. Financials (XLF) are also getting a bounce following yesterday's selloff. BAC was upped to Buy at ISI, and JPMorgan got approval from the Fed to resume stock buybacks.
Stocks rising on earnings: QCOM, DF, AWK, TWGP, ETP, HE, AAP, AMCX, FE, DDS
Stocks falling on earnings: PANL, MNST, WFM, TRLA, VMC
In Asia overnight markets were sharply lower. Hong Kong fell -2.4% and China skidded -1.6% following the handoff in power there. Australia's unemployment rate held steady at 5.4%. JPMorgan thinks the Reserve Bank of Australia will cut rates further in December.
In Europe, markets were higher this morning but have been fading. Greece passed its key austerity vote yesterday in order to get more aid, but sentiment is souring that Spain will soon need to seek a bailout as well. The ECB held rates steady at 0.75%, and President Draghi said that growth will remain weak in 2013.
The dollar is higher again, but commodities are holding up. Oil prices are a bit higher to $84.80 and gold prices are firm near $1716.
The 10-year yield is getting a small boost to 1.67%. And the VIX is lower by -3.6% to 18.38 despite the weak action in early trading.
Trading comment: The market sold off yesterday on strong volume. It is now back at oversold levels so that should help it put together some sort of bounce in the near-term. But the SPX is right in the middle of the range between its 50- and 200-day. It hasn't touched the 200-day since June, and I think it is likely we see another test of that key moving average. So I think a defensive posture remains appropriate and I would look to add to stocks and/or reduce hedges after we see a test of that 200-day.
KAM Advisors has long positions in AWK, FE, ETP
7 Kasım 2012 Çarşamba
Market Jeers Election Results
Markets in the US are down sharply pretty much across the board following last nights presidential election. As for this post, the Dow is down 300 points, although it is still early in the session so its possible we could recoup some of this decline into the close. Let's hope.
Sectors that were perceived to benefit under a Romney administration are getting hit hard today. Coal stocks are down sharply (KOL), and financials stocks (XLF) are also down more than the other sectors today. Interestingly, consumer discretionary stocks (XLY) are down the least.
Commodities are also getting hit hard, and the dollar is higher. Oil prices are down more than $3 to $85.15. Even gold prices are lower near $1710 despite the perception that Obama will reappoint Bernanke and easy monetary policy should be supportive to gold prices.
Stocks rising on earnings: SODA, M, THC, HFC
Stocks falling on earnings: WLP, DVN, PRGO, TAP, AGU
Overnight Asian markets were mixed following the US election. China was flat and now turns its attention to the handoff in leadership in their country.
In Europe, the euro is lower today and European markets are lower on slowing economic data. Spain and Germany reported disappointing industrial production numbers. Also, Greece is set to vote on austerity measures today which need to pass in order for the troubled country to receive its next tranche of financial aid.
The 10-year yield is sharply lower today falling back to 1.63%. And the VIX is moving higher. It had a bit of a delayed reaction this morning, but is now up more than 10% to 19.35 as the selling in the markets intensifies.
Trading comment: The market is having a decidedly negative reaction to the election results last night. I don't think it will last too long, but our job is to trade the market in front of us and not invest based on hope. The S&P 500 has broken below recent support at the 1400 level. The mid-cap index has turned tail and broken back below its 50-day moving average. So caution is warranted until we see signs that the selling pressure is abating. So far, the SPX is about -5.5% off its recent highs. So we could see further declines in this current correction. Corrections don't usually reverse overnight. It takes some time to build a new base from which the market can launch its next rally. So be patient, but also defensive in the meantime.
Sectors that were perceived to benefit under a Romney administration are getting hit hard today. Coal stocks are down sharply (KOL), and financials stocks (XLF) are also down more than the other sectors today. Interestingly, consumer discretionary stocks (XLY) are down the least.
Commodities are also getting hit hard, and the dollar is higher. Oil prices are down more than $3 to $85.15. Even gold prices are lower near $1710 despite the perception that Obama will reappoint Bernanke and easy monetary policy should be supportive to gold prices.
Stocks rising on earnings: SODA, M, THC, HFC
Stocks falling on earnings: WLP, DVN, PRGO, TAP, AGU
Overnight Asian markets were mixed following the US election. China was flat and now turns its attention to the handoff in leadership in their country.
In Europe, the euro is lower today and European markets are lower on slowing economic data. Spain and Germany reported disappointing industrial production numbers. Also, Greece is set to vote on austerity measures today which need to pass in order for the troubled country to receive its next tranche of financial aid.
The 10-year yield is sharply lower today falling back to 1.63%. And the VIX is moving higher. It had a bit of a delayed reaction this morning, but is now up more than 10% to 19.35 as the selling in the markets intensifies.
Trading comment: The market is having a decidedly negative reaction to the election results last night. I don't think it will last too long, but our job is to trade the market in front of us and not invest based on hope. The S&P 500 has broken below recent support at the 1400 level. The mid-cap index has turned tail and broken back below its 50-day moving average. So caution is warranted until we see signs that the selling pressure is abating. So far, the SPX is about -5.5% off its recent highs. So we could see further declines in this current correction. Corrections don't usually reverse overnight. It takes some time to build a new base from which the market can launch its next rally. So be patient, but also defensive in the meantime.
6 Kasım 2012 Salı
Is Australia Seeing China Stabilization?
Markets are higher in early trading on light volume ahead of tonight's presidential election. There is much speculation about how the market will fare tomorrow depending on who wins. I have said I think the market should bounce in the near-term either way due to the removal of uncertainty. If the vote can't be decided tonight for some reason (remember Florida?) we could see some downside.
Overnight the action in Asia was mostly lower ahead of the election and the handoff in power in China. The Reserve Bank of Australia surprised markets last night by holding rates steady at 3.25%. The market had been pricing in another rate cut to 3.00%. But the central bank noted that is seeing some signs of stabilization in China. A pickup in growth in China would likely have impacts on global markets as commodity prices would rally, emerging markets would rally, etc. China is the fastest growing large economy and is really the marginal driver of global growth these days.
European markets were lower early this morning but have since bounced. Services PMI data in France and Germany both missed expectations. EU commish Olli Rehn believes the Eurozone will start to recover next year and accelerate in 2014. I think he is being a bit optimistic in his timeline, although I hope I am wrong and he is right.
Stocks rising on earnings: EXPD, AFSI, FUN, THX, AOL, EMR, VSI
Stocks falling on earnings: ESRX, Z, FOSL, NSM, DTV, CVC, DISCA
The dollar is down slightly and commodities are higher. Oil prices are up to $86.20 and gold prices are rising to $1691.
The 10-year yield is up a tad to 1.70%. The VIX is down -3% ahead of the election near 17.86, and has been consolidating around the 18 level for the better part of a week.
Trading comment: I'm still watching the dynamic of the S&P 500 consolidating underneath its overhead 50-day average while the S&P 400 midcap has recouped its 50-day. If we see a favorable reaction to the election I think the SPX could break above its 50-day tomorrow. But if the market trades down on the election results we will have to reassess the duration of this recent pullback and remain cautious. Many leading stocks are still in correction mode, so I want to use them as a leading indicator as well.
KAM Advisors has long positions in ESRX, EXPD, EMR
Overnight the action in Asia was mostly lower ahead of the election and the handoff in power in China. The Reserve Bank of Australia surprised markets last night by holding rates steady at 3.25%. The market had been pricing in another rate cut to 3.00%. But the central bank noted that is seeing some signs of stabilization in China. A pickup in growth in China would likely have impacts on global markets as commodity prices would rally, emerging markets would rally, etc. China is the fastest growing large economy and is really the marginal driver of global growth these days.
European markets were lower early this morning but have since bounced. Services PMI data in France and Germany both missed expectations. EU commish Olli Rehn believes the Eurozone will start to recover next year and accelerate in 2014. I think he is being a bit optimistic in his timeline, although I hope I am wrong and he is right.
Stocks rising on earnings: EXPD, AFSI, FUN, THX, AOL, EMR, VSI
Stocks falling on earnings: ESRX, Z, FOSL, NSM, DTV, CVC, DISCA
The dollar is down slightly and commodities are higher. Oil prices are up to $86.20 and gold prices are rising to $1691.
The 10-year yield is up a tad to 1.70%. The VIX is down -3% ahead of the election near 17.86, and has been consolidating around the 18 level for the better part of a week.
Trading comment: I'm still watching the dynamic of the S&P 500 consolidating underneath its overhead 50-day average while the S&P 400 midcap has recouped its 50-day. If we see a favorable reaction to the election I think the SPX could break above its 50-day tomorrow. But if the market trades down on the election results we will have to reassess the duration of this recent pullback and remain cautious. Many leading stocks are still in correction mode, so I want to use them as a leading indicator as well.
KAM Advisors has long positions in ESRX, EXPD, EMR
5 Kasım 2012 Pazartesi
Monday Morning Musings
The market is off to a bit of a weak start this morning likely due to the uncertainty over the US presidential election tomorrow.
In economic news, the October ISM Services index came in at 54.2, which was below expectations and down from last month's reading of 55.1.
On the M&A front, KBW announced a merger with Stifel Financial (SF) at a 7% premium to Friday's closing price.
Markets were mostly lower in Asia overnight ahead of the US election as well as the hand-off in power Thursday to the 18th National Congress in China. China also released its services PMI over the weekend, which rose to 55.5 from 53.7. In Japan, shares of Sharp plunged 7% after getting a 6-notch downgrade from Fitch, which warned about the company's ability to survive.
European markets are also weak this morning after German Chancellor Merkel suggest the euro crisis could still drag on for another 5 years. Also, the IMF is reportedly urging Greek debt holders to take a haircut on their bonds in order to help Greece reach sustainable debt levels.
Shares of Apple are trading higher after the company said it sold 3 million iPads over the weekend, a new record. This figure included the new iPad minis as well as the other larger iPads.
The dollar is higher today, but commodities are mixed. Oil prices are up to $85 and gold prices are also higher near $1683. Copper prices are lower.
The 10-year yield has slipped back below its 50-day average to 1.68%. The volatility index is up 3.6% to 18.25.
Trading comment: The market continues to trade thin and cautiously ahead of the election tomorrow. The polls show the race being very tight, probably too tight to call. But I think that the markets could be poised to enjoy a relief rally regardless of the outcome only because either way this element of uncertainty will be removed. I'm not sure how far any relief rally can carry us since we still have the fiscal cliff ahead to deal with. But let's focus on a potential rally first.
KAM Advisors has long positions in AAPL
In economic news, the October ISM Services index came in at 54.2, which was below expectations and down from last month's reading of 55.1.
On the M&A front, KBW announced a merger with Stifel Financial (SF) at a 7% premium to Friday's closing price.
Markets were mostly lower in Asia overnight ahead of the US election as well as the hand-off in power Thursday to the 18th National Congress in China. China also released its services PMI over the weekend, which rose to 55.5 from 53.7. In Japan, shares of Sharp plunged 7% after getting a 6-notch downgrade from Fitch, which warned about the company's ability to survive.
European markets are also weak this morning after German Chancellor Merkel suggest the euro crisis could still drag on for another 5 years. Also, the IMF is reportedly urging Greek debt holders to take a haircut on their bonds in order to help Greece reach sustainable debt levels.
Shares of Apple are trading higher after the company said it sold 3 million iPads over the weekend, a new record. This figure included the new iPad minis as well as the other larger iPads.
The dollar is higher today, but commodities are mixed. Oil prices are up to $85 and gold prices are also higher near $1683. Copper prices are lower.
The 10-year yield has slipped back below its 50-day average to 1.68%. The volatility index is up 3.6% to 18.25.
Trading comment: The market continues to trade thin and cautiously ahead of the election tomorrow. The polls show the race being very tight, probably too tight to call. But I think that the markets could be poised to enjoy a relief rally regardless of the outcome only because either way this element of uncertainty will be removed. I'm not sure how far any relief rally can carry us since we still have the fiscal cliff ahead to deal with. But let's focus on a potential rally first.
KAM Advisors has long positions in AAPL
2 Kasım 2012 Cuma
TIME TO BUY, BUY, BUY
If you aren't already in, Monday or Tuesday should represent an exceptional buying opportunity as gold moves into it's final intermediate cycle bottom.
Now that the 38% retracement has been breached I would look for a final exhaustion move to test the 50% level early next week as we move into the elections.
At that point sentiment should be completely washed out and gold will be set up for an explosive move to test the all time highs by the end of the year or early January.
Miners should deliver even bigger gains as I expect them to break out of the bull flag that's been forming over the last 4 weeks and generate a 25-30% rally to test the all time highs.
We are moving into one of those rare buying opportunities that only come around once or twice a year. This is that point that I warned about in my last post where you have to ignore the media and nonsense about QE3 not working. It is going to work, and it is going to work extremely well. I fully expect it to drive gold to $4000 by mid 2014.
This is purely a profit taking event, nothing more. They happen like clock work about every 20-25 weeks, as you can see in the chart below. Gold is now very late in the timing band for that major cycle bottom.
I'll have more in the weekend report. But I think the odds are very high we get a final bottom by mid week.
SMT premium newsletter. $10 one week trial.
Now that the 38% retracement has been breached I would look for a final exhaustion move to test the 50% level early next week as we move into the elections.
Miners should deliver even bigger gains as I expect them to break out of the bull flag that's been forming over the last 4 weeks and generate a 25-30% rally to test the all time highs.
We are moving into one of those rare buying opportunities that only come around once or twice a year. This is that point that I warned about in my last post where you have to ignore the media and nonsense about QE3 not working. It is going to work, and it is going to work extremely well. I fully expect it to drive gold to $4000 by mid 2014.
This is purely a profit taking event, nothing more. They happen like clock work about every 20-25 weeks, as you can see in the chart below. Gold is now very late in the timing band for that major cycle bottom.
I'll have more in the weekend report. But I think the odds are very high we get a final bottom by mid week.
SMT premium newsletter. $10 one week trial.
SPX Turned Away At 50-Day Average
The markets were higher in early trading after a better than expected jobs report, but the S&P 500 ran into resistance and all of the major indexes turned lower such that they are currently back in the red.
Today's nonfarm payrolls report surprised to the upside with 171,000 payrolls added in October vs. consensus of 125,000. The prior month's reading was also revised higher to 148k jobs added from the initial estimate of 114k. The unemployment rate ticked a notch higher to 7.9%.
Separately, September factory orders showed an increase of 4.8%.
Overnight, markets in Asia ended mostly higher after the big gains in the U.S. yesterday. Japan and Hong Kong led the way.
In Europe, markets got a boost this morning from the US nonfarm payrolls data. The Financial Times reported that stock buybacks from European companies have slid to their lowest levels in three years.
Stocks rising on earnings reports: SBUX, PCLN, TRIP, WPO, RL, HAR, CTB
Stocks falling on earnings reports: AIG, SSYS, MHP, IT
The dollar is getting a big boost today and that is weighing heavily on commodities. Oil prices are weaker near $85.44. Gold prices have fallen back below the $1700 level to $1685. And silver and copper prices are sharply lower.
The 10-year yield has gotten a boost from the economic data today, rising to 1.73%. And the VIX has bounced off its 50-day support back to the 17 level.
Trading comment: Yesterday I commented on the price action of the SPX and how the overhead 50-day average would be a test. This morning the senior index rallied right up to that resistance level and promptly was turned back. I suspect after a little backing and filling that we will see a successful retest of the 50-day with a breakout above it. The election still is a big element of uncertainty for investors, but next week that uncertainty will be removed one way or the other and that could lead to a rally in the markets.
KAM Advisors has long positions in PCLN, SBUX
Today's nonfarm payrolls report surprised to the upside with 171,000 payrolls added in October vs. consensus of 125,000. The prior month's reading was also revised higher to 148k jobs added from the initial estimate of 114k. The unemployment rate ticked a notch higher to 7.9%.
Separately, September factory orders showed an increase of 4.8%.
Overnight, markets in Asia ended mostly higher after the big gains in the U.S. yesterday. Japan and Hong Kong led the way.
In Europe, markets got a boost this morning from the US nonfarm payrolls data. The Financial Times reported that stock buybacks from European companies have slid to their lowest levels in three years.
Stocks rising on earnings reports: SBUX, PCLN, TRIP, WPO, RL, HAR, CTB
Stocks falling on earnings reports: AIG, SSYS, MHP, IT
The dollar is getting a big boost today and that is weighing heavily on commodities. Oil prices are weaker near $85.44. Gold prices have fallen back below the $1700 level to $1685. And silver and copper prices are sharply lower.
The 10-year yield has gotten a boost from the economic data today, rising to 1.73%. And the VIX has bounced off its 50-day support back to the 17 level.
Trading comment: Yesterday I commented on the price action of the SPX and how the overhead 50-day average would be a test. This morning the senior index rallied right up to that resistance level and promptly was turned back. I suspect after a little backing and filling that we will see a successful retest of the 50-day with a breakout above it. The election still is a big element of uncertainty for investors, but next week that uncertainty will be removed one way or the other and that could lead to a rally in the markets.
KAM Advisors has long positions in PCLN, SBUX
1 Kasım 2012 Perşembe
Why Religion?
I made it to Salt Lake City and back, and it all went very well. But let me back up a couple weeks.
Ried
A 23-year-old named Ried from Minnesota hitched into town. He had read the book and decided to come camp with me for a while. He's a total joy, a shining light, making me and everybody I know smile. My friend Arlen also started camping out with us off and on, making for sublime music and conversation around the fire. While I went to SLC, Ried decided to hitch to Boulder to meet up with new-found friends. He says he plans to come back here in a short while. But you never know where wind will blow.
SLC
Last Friday, my friend Chris picked me up hitch-hiking and took me all the way to Salt Lake City, and I stayed at my friend Lin's. Lin has a huge drum and we percussed and discussed, the perfect preparation for the next day.
Mark Sundeen's and my KCPW interview the next day with Jennifer Napier-Pearce went very well, and the audience was sublime. The KCPW interview is on podcast now (I haven't listened yet since I lost my dumpstered earphones). [On the last post I mistakenly said the interview was through KUER, not KCPW. Napier-Pearce was formerly with KUER but now is with KCPW].
Westwater Canyon
On Sunday, Mark and his fiance, Cedar, took me on a river trip through Westwater Canyon (between Colorado and Utah) with seven other Moab friends, and it was stupendous. Then on Tuesday night Chris (the one who had picked me up hitching), took me to a drum circle (or more like an oval or trapezoid) jam in a culvert with some other Moabite friends. Now that jamming I can't even describe, it was so beyond-imagination-extraordinary.
Why Religion?
I've had a burr in my pants these days. You might have noticed the blog entry before last was burr inspired.
I've got myself on a line between the religious world and the secular world, and sometimes find it either pisses off both or inspires both. One side keeps warning me I'm slipping over to the other. The razor's edge.
Lately I've been saying that all I care about is that people be true and just. Whatever motivates people to be true and just, I support. I simply don't care whether or not they are called Christians, Buddhists, Muslims, Pagans, Atheists. As the Dalai Lama said, "My religion is kindness." My saying this really upset some of my friends and loved ones who consider themselves Christian. But I can't deny what I see. Good fruit is good fruit. Know them by their fruit, not their talk, not their vocabulary. There are a few secular folks who get turned off by my vocabulary, too. It's like I'm on a tightrope, balancing between both sides, translating language between both sides.
I keep saying that if we erase all money and simply look at reality, we see truth so simply an infant understands. In the same way, if we erase all words and simply look at reality, we see truth so simply an infant understands. Let go of the imagination of your mind, and you see Truth.
How do deer and ants and coyotes eat nutritious, balanced diets? They do it without books or manuals or school! They know how to eat because they have no words to deceive them!
Ironically I find that non-religious people, including self-proclaimed atheists, are more accepting and comfortable with Jesus' teachings than self-proclaimed followers of Jesus. I guess it's always been that way, the religious persecute their own prophets and then worship them when they're good and comfortably gone. And Jesus himself states more than once he finds more faith outside his religion-nation than inside it, which is why he hung out with non-religious people. That got him crucified.
Lately I've had several conversations with Evangelicals about Jesus' teachings. Every single one of them has an explanation why Jesus' teachings are not for us, or Jesus didn't really mean what he said, or else they find clever "salvation-by-grace" loopholes, or "dispensationalist" loopholes, to cancel out Jesus' teachings. I've personally witnessed many even call me evil and going to hell if I even suggest keeping his teachings! They put incredible amounts of energy into diverting attention away from Jesus' teachings with distracting doctrines and scripture-quoting rather than simply admit they don't believe in their own Jesus! I was impressed by some sincere Evangelicals a few months ago. They simply admitted they didn't believe, but they wanted to. The first step to believing in Jesus is to admit that you don't. The first step into being able to practice Jesus' teachings is to admit that you can't. Religious AA! This is the paradox of all spirituality.
The only way to acting truth is by admitting truth.
Admitting you don't believe truth is truth, and makes you truth.
Lie that admits itself as lie annihilates itself and resurrects as Truth.
If Satan admitted he were Satan, he would annihilate himself and resurrect as God.
A few weeks ago I was reading notes by Charles Ryrie from the Ryrie Study Bible on the Sermon on the Mount. Ryrie's notes pretty much encapsulate Fundamentalist, Evangelical doctrine, and are popular with Fundamentalists. The hallmark of Fundamentalist doctrine is that the Bible must be taken literally. Genesis Creation: literal. The Flood: literal. The Red Sea parting: literal. Armageddon: literal. If you even question the literalness of these stories, most Fundamentalists would call you non-Christian! But things change when we get to Jesus' teachings. Jesus' teachings have to do with doing, taking personal, active responsibility, Here and Now. If it's about past (Genesis) or future (Apocalypse), which have nothing to do with personal responsibility, it's literal. If it's about present, which means changing our behavior, then it's mysteriously not literal.
Ryrie states that the Sermon on the Mount, nice as it is, simply cannot be taken literally, unless we want all churches and Christian schools and institutions to collapse. After all, he says, what institution could survive giving to everyone who asks? What organization could exist if it gave up all it owned to the poor? What will happen to our rich donors if we talk about camels squeezing through needle's eyes?
I repeat: Evangelical scholar Ryrie says that the Sermon on the Mount simply cannot be taken literally, unless we want all churches and Christian schools and institutions to collapse.
Collapse! Hallelujah!
If everyone practiced the core principles of their own religion, religion would go obsolete, just as money would go obsolete. Collapse. The Law would be written on our hearts, as it has been from the beginning, and we would stop worshiping scriptures and dogmas. When the Law is on the heart, there is no more need to talk about God, as the Prophet Jeremiah prophecies (Jeremiah 31:33-34). No more ranting about how God is taken out of schools and congress. We would no longer be under law (scriptures) but grace. We would simply be ourselves.
It's written that the religious people, in deciding what to do with Jesus, said, "If we let him alone like this, everyone will believe in him, and the Romans will come and take away both our place and nation." So they opted to crucify him. Christendom would lose its place and its empire if it followed its own Jesus. But our institutions, our dogmas, our scriptures, are more important to us than love and justice and simplicity. Religion, Money, and Nationalism are the Unholy Trinity. Separate one from the other, and watch the religious dogmatist go ballistic.
Crucifixion of All that I THINK I am
I had an epiphany a few weeks ago:
To say, "I am Christian" is to say "I am righteous."
No righteous person can say "I am righteous."
Only an egotist can say "I am righteous."
No Christian mind can say, "I am Christian."
Only an egotistical mind can say, "I am Christian"
or, "I am Buddhist" or "I am Muslim" or "I am Hindu."
This is why the Bible forbids calling yourself a Christian (1 Cor 1:12)
or whatever religious label.
Both Christ and Christian mean "Annointed One," Messiah.
No Christ can say, "I am Christ."
Only ego can say, "I am Christ" or "I am Christian".
Only an honest person can refuse giving herself religious labels, and have trust enough to say, "what does my life and works say?" (John 2:24)
I am not labels,
I am who I am.
If I am good, it will be self evident.
If I am bad it will be self evident.
It's not for me to say,
but only my life.
I can't be anything else but who I am,
so why try?
Only my actions can bear witness to who I am.
The Quran states that, at the Judgment Day,
all of us will be silenced, unable to speak on our own behalf.
Only our bodies will bear witness to us.
Erase all words, and Truth is revealed.
There is no higher name, no greater power, no God but I am who I am.
The world's institutions always want to know what authority sent you.
What government, what nation, what institution, what religion?
What degree? What certification? What identification?
What credentials? What credit?
If you refuse to go to war by saying, "I am Christian', "I am Brethren", "I am Mennonite", "I am Quaker," or even "I am Buddhist", your refusal will be respected, legally. But if you say, "I refuse to go to war under no authority but my conscience. No authority but I am who I am," you'll be imprisoned and persecuted. [Nov 8 CORRECTION: jbkranger commented below: "since the 1960's the US military has allowed for non-religious conscience objection." He's right. I didn't do my homework: see Conscentious Objector] If you are completely sincere, if you can say, I am who I am, the Name above all names, Word beyond all words, you will find that those who are actors (those who refuse to be themselves) will pick up stones to stone you. The Greek word for actor is hypocrite. I am who I am: there is no other way, no other truth, no other life. Anything more or anything less is not love, not real.
A word, a thought, a symbol, is something that represents something else. It is not the thing, but represents the thing. If a word, a thought, or a symbol, represented itself, it would vanish from sight, from hearing, from mind. A rose speaks for itself, because it has no words but itself. Even called by any other name, a rose is a rose. Imagine not imagining! Think what it would be to not think! To see everything as it is, as an infant! Zen mind!
Reality speaks for itself, having no words but itself as one never-ending Word. In the beginning is the Word, and the Word is with Reality and the Word is Reality. In the realm of time, the Word became not reality, separated from Reality, and only represented reality, to dwell among us who are unreal. No thought becomes thought in order to lead thoughts back to no thought. The Buddha leaves Nirvana to become a boddhisattva to lead lost thoughts back to Nirvana. All we like sheep have gone astray. All we thoughts have wandered away from Reality. And Reality becomes not reality, the shepherd becomes a sheep and searches for lost sheep to lead them back to Reality.
There is nothing like reality. Reality is itself and nothing else.
As both the Bible and the Quran emphasize, there nothing else like God.
Funny how we don't consider this.
"Let Us make man in Our image, according to Our likeness (Genesis 1:26)
To be yourself is to be the Image of God, like no other.
To try to be like anybody else is to not be True.
"I shall be satisfied when I awake in Your Likeness." (Psalm 17:15)
For I am God, and there is no other; I am God, and there is none like Me (Isaiah 46:9)
The only way I can be the Image of God is to put away likenesses that I think I am, to put away all that I think I am: thoughts, images, labels, and simply Be Who I Am.
I am who I am, the only way, the only truth, the only life.
There is no other way to Reality
And there is no Heaven but Reality,
No God but Reality.
There is no power greater than
I am who I am.
I am who I am,
right here, right now,
in the flesh.
Any action (spirit) that
does not confess
that I am who I am,
right here, right now,
in the flesh,
is Anti-Messiah.
Ried
A 23-year-old named Ried from Minnesota hitched into town. He had read the book and decided to come camp with me for a while. He's a total joy, a shining light, making me and everybody I know smile. My friend Arlen also started camping out with us off and on, making for sublime music and conversation around the fire. While I went to SLC, Ried decided to hitch to Boulder to meet up with new-found friends. He says he plans to come back here in a short while. But you never know where wind will blow.
SLC
Last Friday, my friend Chris picked me up hitch-hiking and took me all the way to Salt Lake City, and I stayed at my friend Lin's. Lin has a huge drum and we percussed and discussed, the perfect preparation for the next day.
Mark Sundeen's and my KCPW interview the next day with Jennifer Napier-Pearce went very well, and the audience was sublime. The KCPW interview is on podcast now (I haven't listened yet since I lost my dumpstered earphones). [On the last post I mistakenly said the interview was through KUER, not KCPW. Napier-Pearce was formerly with KUER but now is with KCPW].
Westwater Canyon
On Sunday, Mark and his fiance, Cedar, took me on a river trip through Westwater Canyon (between Colorado and Utah) with seven other Moab friends, and it was stupendous. Then on Tuesday night Chris (the one who had picked me up hitching), took me to a drum circle (or more like an oval or trapezoid) jam in a culvert with some other Moabite friends. Now that jamming I can't even describe, it was so beyond-imagination-extraordinary.
Why Religion?
I've had a burr in my pants these days. You might have noticed the blog entry before last was burr inspired.
I've got myself on a line between the religious world and the secular world, and sometimes find it either pisses off both or inspires both. One side keeps warning me I'm slipping over to the other. The razor's edge.
Lately I've been saying that all I care about is that people be true and just. Whatever motivates people to be true and just, I support. I simply don't care whether or not they are called Christians, Buddhists, Muslims, Pagans, Atheists. As the Dalai Lama said, "My religion is kindness." My saying this really upset some of my friends and loved ones who consider themselves Christian. But I can't deny what I see. Good fruit is good fruit. Know them by their fruit, not their talk, not their vocabulary. There are a few secular folks who get turned off by my vocabulary, too. It's like I'm on a tightrope, balancing between both sides, translating language between both sides.
I keep saying that if we erase all money and simply look at reality, we see truth so simply an infant understands. In the same way, if we erase all words and simply look at reality, we see truth so simply an infant understands. Let go of the imagination of your mind, and you see Truth.
How do deer and ants and coyotes eat nutritious, balanced diets? They do it without books or manuals or school! They know how to eat because they have no words to deceive them!
Ironically I find that non-religious people, including self-proclaimed atheists, are more accepting and comfortable with Jesus' teachings than self-proclaimed followers of Jesus. I guess it's always been that way, the religious persecute their own prophets and then worship them when they're good and comfortably gone. And Jesus himself states more than once he finds more faith outside his religion-nation than inside it, which is why he hung out with non-religious people. That got him crucified.
Lately I've had several conversations with Evangelicals about Jesus' teachings. Every single one of them has an explanation why Jesus' teachings are not for us, or Jesus didn't really mean what he said, or else they find clever "salvation-by-grace" loopholes, or "dispensationalist" loopholes, to cancel out Jesus' teachings. I've personally witnessed many even call me evil and going to hell if I even suggest keeping his teachings! They put incredible amounts of energy into diverting attention away from Jesus' teachings with distracting doctrines and scripture-quoting rather than simply admit they don't believe in their own Jesus! I was impressed by some sincere Evangelicals a few months ago. They simply admitted they didn't believe, but they wanted to. The first step to believing in Jesus is to admit that you don't. The first step into being able to practice Jesus' teachings is to admit that you can't. Religious AA! This is the paradox of all spirituality.
The only way to acting truth is by admitting truth.
Admitting you don't believe truth is truth, and makes you truth.
Lie that admits itself as lie annihilates itself and resurrects as Truth.
If Satan admitted he were Satan, he would annihilate himself and resurrect as God.
A few weeks ago I was reading notes by Charles Ryrie from the Ryrie Study Bible on the Sermon on the Mount. Ryrie's notes pretty much encapsulate Fundamentalist, Evangelical doctrine, and are popular with Fundamentalists. The hallmark of Fundamentalist doctrine is that the Bible must be taken literally. Genesis Creation: literal. The Flood: literal. The Red Sea parting: literal. Armageddon: literal. If you even question the literalness of these stories, most Fundamentalists would call you non-Christian! But things change when we get to Jesus' teachings. Jesus' teachings have to do with doing, taking personal, active responsibility, Here and Now. If it's about past (Genesis) or future (Apocalypse), which have nothing to do with personal responsibility, it's literal. If it's about present, which means changing our behavior, then it's mysteriously not literal.
Ryrie states that the Sermon on the Mount, nice as it is, simply cannot be taken literally, unless we want all churches and Christian schools and institutions to collapse. After all, he says, what institution could survive giving to everyone who asks? What organization could exist if it gave up all it owned to the poor? What will happen to our rich donors if we talk about camels squeezing through needle's eyes?
I repeat: Evangelical scholar Ryrie says that the Sermon on the Mount simply cannot be taken literally, unless we want all churches and Christian schools and institutions to collapse.
Collapse! Hallelujah!
If everyone practiced the core principles of their own religion, religion would go obsolete, just as money would go obsolete. Collapse. The Law would be written on our hearts, as it has been from the beginning, and we would stop worshiping scriptures and dogmas. When the Law is on the heart, there is no more need to talk about God, as the Prophet Jeremiah prophecies (Jeremiah 31:33-34). No more ranting about how God is taken out of schools and congress. We would no longer be under law (scriptures) but grace. We would simply be ourselves.
It's written that the religious people, in deciding what to do with Jesus, said, "If we let him alone like this, everyone will believe in him, and the Romans will come and take away both our place and nation." So they opted to crucify him. Christendom would lose its place and its empire if it followed its own Jesus. But our institutions, our dogmas, our scriptures, are more important to us than love and justice and simplicity. Religion, Money, and Nationalism are the Unholy Trinity. Separate one from the other, and watch the religious dogmatist go ballistic.
Crucifixion of All that I THINK I am
I had an epiphany a few weeks ago:
To say, "I am Christian" is to say "I am righteous."
No righteous person can say "I am righteous."
Only an egotist can say "I am righteous."
No Christian mind can say, "I am Christian."
Only an egotistical mind can say, "I am Christian"
or, "I am Buddhist" or "I am Muslim" or "I am Hindu."
This is why the Bible forbids calling yourself a Christian (1 Cor 1:12)
or whatever religious label.
Both Christ and Christian mean "Annointed One," Messiah.
No Christ can say, "I am Christ."
Only ego can say, "I am Christ" or "I am Christian".
Only an honest person can refuse giving herself religious labels, and have trust enough to say, "what does my life and works say?" (John 2:24)
I am not labels,
I am who I am.
If I am good, it will be self evident.
If I am bad it will be self evident.
It's not for me to say,
but only my life.
I can't be anything else but who I am,
so why try?
Only my actions can bear witness to who I am.
The Quran states that, at the Judgment Day,
all of us will be silenced, unable to speak on our own behalf.
Only our bodies will bear witness to us.
Erase all words, and Truth is revealed.
There is no higher name, no greater power, no God but I am who I am.
The world's institutions always want to know what authority sent you.
What government, what nation, what institution, what religion?
What degree? What certification? What identification?
What credentials? What credit?
If you refuse to go to war by saying, "I am Christian', "I am Brethren", "I am Mennonite", "I am Quaker," or even "I am Buddhist", your refusal will be respected, legally. But if you say, "I refuse to go to war under no authority but my conscience. No authority but I am who I am," you'll be imprisoned and persecuted. [Nov 8 CORRECTION: jbkranger commented below: "since the 1960's the US military has allowed for non-religious conscience objection." He's right. I didn't do my homework: see Conscentious Objector] If you are completely sincere, if you can say, I am who I am, the Name above all names, Word beyond all words, you will find that those who are actors (those who refuse to be themselves) will pick up stones to stone you. The Greek word for actor is hypocrite. I am who I am: there is no other way, no other truth, no other life. Anything more or anything less is not love, not real.
A word, a thought, a symbol, is something that represents something else. It is not the thing, but represents the thing. If a word, a thought, or a symbol, represented itself, it would vanish from sight, from hearing, from mind. A rose speaks for itself, because it has no words but itself. Even called by any other name, a rose is a rose. Imagine not imagining! Think what it would be to not think! To see everything as it is, as an infant! Zen mind!
Reality speaks for itself, having no words but itself as one never-ending Word. In the beginning is the Word, and the Word is with Reality and the Word is Reality. In the realm of time, the Word became not reality, separated from Reality, and only represented reality, to dwell among us who are unreal. No thought becomes thought in order to lead thoughts back to no thought. The Buddha leaves Nirvana to become a boddhisattva to lead lost thoughts back to Nirvana. All we like sheep have gone astray. All we thoughts have wandered away from Reality. And Reality becomes not reality, the shepherd becomes a sheep and searches for lost sheep to lead them back to Reality.
There is nothing like reality. Reality is itself and nothing else.
As both the Bible and the Quran emphasize, there nothing else like God.
Funny how we don't consider this.
"Let Us make man in Our image, according to Our likeness (Genesis 1:26)
To be yourself is to be the Image of God, like no other.
To try to be like anybody else is to not be True.
"I shall be satisfied when I awake in Your Likeness." (Psalm 17:15)
For I am God, and there is no other; I am God, and there is none like Me (Isaiah 46:9)
The only way I can be the Image of God is to put away likenesses that I think I am, to put away all that I think I am: thoughts, images, labels, and simply Be Who I Am.
I am who I am, the only way, the only truth, the only life.
There is no other way to Reality
And there is no Heaven but Reality,
No God but Reality.
There is no power greater than
I am who I am.
I am who I am,
right here, right now,
in the flesh.
Any action (spirit) that
does not confess
that I am who I am,
right here, right now,
in the flesh,
is Anti-Messiah.
Is China's Economy Bottoming?
Markets are sharply higher this morning on what has to be the first of the month type of action in terms of portfolio managers putting money to work. There was some positive economic data out also, but not so strong that it would cause a 150-point rally in the market.
The ADP Employment report showed that private businesses added 158,000 jobs in October, slightly better than the 143k consensus. The October ISM manuf index also came in above expectations at 51.7 vs. last month's reading of 51.5. Consumer confidence rose to 72.2 in October from 70.3 in the prior month. And Q3 unit labor costs actually fell -0.1%, indicating little inflationary pressure on the labor front.
So those are all good economic data, and its nice to see the data coming in above expectations. Another thing that could be helping the market today is some hope that China's economy may be bottoming. China's stock market rallied 1.7% overnight after its PMI reading ticked up to 50.2, the first expansionary number in 3 months. But the HSBC PMI reading is still below 50 at 49.5. The Chinese press reported that the PBOC injected a record 379 billion CNY into their financial system last week. So if manufacturing is bottoming and monetary stimulus continues, we could see the slowdown in GDP growth subside. Time will tell.
In M&A news, Williams Controls (WMCO) will be acquired by Curtis-Wright (CW) for a 41% premium.
Retail sales numbers are also out this morning. Some positive reactions can be seen in stocks like KSS, JWN, and M. While I see disappointments in ZUMZ, ROST, as well as TGT.
Stocks rising on earnings: V, K, CBOE, ADP, CTRX
Stocks falling on earnings: PFE, CRUS, GNC, ITRI, EL
The dollar is lower again and commodities are mostly higher. Oil prices are up to $86.75 and gold prices are a tad higher near $1720. Copper prices are also rallying on the positive China sentiment.
The 10-year yield is getting a small boost to 1.73%. And the VIX is down 6.7% this morning to 17.35.
Trading comment: I said earlier this week that I thought we could see some beginning of the month strength in the market. I didn't think we would see a 150 point rally, but that's why we play the game. The market is always surprising us. Of course, it's still early in the session so I don't want to jinx the rally. Looking at the charts of the major indexes, the S&P 400 midcap is rallying back above its 50-day average today. This is the first index to recapture this key moving average, so it will be interesting to see if the S&P 500 and Nasdaq follow suit. If they do, I think PMs will rush to buy stocks. I don't think we will see too much buying enthusiasm ahead of the elections though, as there is still that element of uncertainty.
KAM Advisors has long positions in CTRX, V
The ADP Employment report showed that private businesses added 158,000 jobs in October, slightly better than the 143k consensus. The October ISM manuf index also came in above expectations at 51.7 vs. last month's reading of 51.5. Consumer confidence rose to 72.2 in October from 70.3 in the prior month. And Q3 unit labor costs actually fell -0.1%, indicating little inflationary pressure on the labor front.
So those are all good economic data, and its nice to see the data coming in above expectations. Another thing that could be helping the market today is some hope that China's economy may be bottoming. China's stock market rallied 1.7% overnight after its PMI reading ticked up to 50.2, the first expansionary number in 3 months. But the HSBC PMI reading is still below 50 at 49.5. The Chinese press reported that the PBOC injected a record 379 billion CNY into their financial system last week. So if manufacturing is bottoming and monetary stimulus continues, we could see the slowdown in GDP growth subside. Time will tell.
In M&A news, Williams Controls (WMCO) will be acquired by Curtis-Wright (CW) for a 41% premium.
Retail sales numbers are also out this morning. Some positive reactions can be seen in stocks like KSS, JWN, and M. While I see disappointments in ZUMZ, ROST, as well as TGT.
Stocks rising on earnings: V, K, CBOE, ADP, CTRX
Stocks falling on earnings: PFE, CRUS, GNC, ITRI, EL
The dollar is lower again and commodities are mostly higher. Oil prices are up to $86.75 and gold prices are a tad higher near $1720. Copper prices are also rallying on the positive China sentiment.
The 10-year yield is getting a small boost to 1.73%. And the VIX is down 6.7% this morning to 17.35.
Trading comment: I said earlier this week that I thought we could see some beginning of the month strength in the market. I didn't think we would see a 150 point rally, but that's why we play the game. The market is always surprising us. Of course, it's still early in the session so I don't want to jinx the rally. Looking at the charts of the major indexes, the S&P 400 midcap is rallying back above its 50-day average today. This is the first index to recapture this key moving average, so it will be interesting to see if the S&P 500 and Nasdaq follow suit. If they do, I think PMs will rush to buy stocks. I don't think we will see too much buying enthusiasm ahead of the elections though, as there is still that element of uncertainty.
KAM Advisors has long positions in CTRX, V
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