Current Affairs

  • Market Commentary from June 20th, 2008

    The March lows are in sight, at least for the Dow (and the Financial Sector is already beneath that level).

    Sentiment is getting more bearish.  And, the S&P 500 is set to have its fourth consecutive quarter of negative earnings growth.   Based on history, though, the market has typically outperformed its averages after earnings have been weak for this long.

    For your reading pleasure, here are some of the items that caught my eye this week:

    • Fed sending signals that rates aren’t going higher yet. (WSJ, FT, WP)
    • AAII Bear Sentiment above 50%, for 11th time in past year. (Bespoke)
    • Royal Bank of Scotland issues crash warning for stock and credit markets. (Telegraph)
    • Ex-Bear Stearns Fund Managers Arrested. (Bloomberg)
    • Short-Selling is tough, and good for the Markets. (The Economist)
    • Is the S&P 500 Index a good benchmark to compare performance against? (Infectious Greed)
    • “The Frozen Gaze” Op-Ed Column on Tiger Wood’s Focus and Mental Toughness. (NYTimes)
    • Obama 1st major party candidate to reject public financing and its spending limits. (NYTimes)
    • IBM Roadrunner is the new world’s fastest computer. (InformationWeek)
    • Philadelphia to Fake-Out Drivers With 3D Speed Bump Images. (Gizmodo)
    • Bad guys really do get the most girls. (New Scientist)

  • Cell Phone Popcorn Popper

    Up till now, I've kept my cell phone in my front pants pocket.  After watching these videos I'm worried about fried eggs.  Pretty cool … or hot … depending on the perspective.

    Here is the direct link.

    Just in case one wasn't enough.

    Here is the direct link.

    So, what does Snopes say?

  • Cell Phone Popcorn Popper

    Up till now, I've kept my cell phone in my front pants pocket.  After watching these videos I'm worried about fried eggs.  Pretty cool … or hot … depending on the perspective.

    Here is the direct link.

    Just in case one wasn't enough.

    Here is the direct link.

    So, what does Snopes say?

  • Market Commentary from June 13th, 2008

    Wall Street is expecting another volatile week.  In addition to our regular complement of oil price spikes, Dollar worries, inflation fears and economic reports on home building and wholesales prices … this week, the biggest news might be the quarterly earnings reports from Morgan Stanley (MS), Goldman Sachs (GS), and Lehman Brothers (LEH).

    Currently, just 33% of stocks in the S&P 500 are above their 50-day moving averages.  Much of this weakness has come from the Financial sector.  Only 17% of Financials are above their 50-day moving averages.  To see how ugly that sector has been, take a look at the charts of the Financial Sector SPDR (XLF) and the Banking Index ($BKX).  Both are back at, or near, their lows. 

    But, next week also has Phi Day.  What?  Your friendly Fibonacci traders may note that June 18 is 6-18 (and everyone knows how important .618 is in trading).  If not, then you haven't spent time at Prechter's site.  Even if you don't believe it, enough traders watch the 61.8% retracement level, it is worth monitoring.  For example, check out the current chart on the Dow.

    080613 INDU Fib Level 600p
    Of course, not all US Equity Indices have fallen that far.  In contrast, note the relative strength of the S&P MidCap Index.

    080613 MID Relative Strength 600p

    Here are some of the things that caught my eye this week:

  • Market Commentary from June 13th, 2008

    Wall Street is expecting another volatile week.  In addition to our regular complement of oil price spikes, Dollar worries, inflation fears and economic reports on home building and wholesales prices … this week, the biggest news might be the quarterly earnings reports from Morgan Stanley (MS), Goldman Sachs (GS), and Lehman Brothers (LEH).

    Currently, just 33% of stocks in the S&P 500 are above their 50-day moving averages.  Much of this weakness has come from the Financial sector.  Only 17% of Financials are above their 50-day moving averages.  To see how ugly that sector has been, take a look at the charts of the Financial Sector SPDR (XLF) and the Banking Index ($BKX).  Both are back at, or near, their lows. 

    But, next week also has Phi Day.  What?  Your friendly Fibonacci traders may note that June 18 is 6-18 (and everyone knows how important .618 is in trading).  If not, then you haven't spent time at Prechter's site.  Even if you don't believe it, enough traders watch the 61.8% retracement level, it is worth monitoring.  For example, check out the current chart on the Dow.

    080613 INDU Fib Level 600p
    Of course, not all US Equity Indices have fallen that far.  In contrast, note the relative strength of the S&P MidCap Index.

    080613 MID Relative Strength 600p

    Here are some of the things that caught my eye this week:

  • Virgin America(n)

    Fuel costs have certainly affected the average American.  It is possible that these added costs might have an even bigger effect on another American (as in, the airline).  Industry-wide losses for airlines are blamed on fuel cost too. And AA is no exception.

    While I was on a American Airlines flight, recently, I overheard two flight attendants talking.  The topic was that they were worried that AA was going to get bought by Virgin.  Of course, US airlines can't be purchased by foreign concerns.  However, they meant Virgin America.  At first, I didn't think much about it.

    They noted that some very senior AA alumns had high positions there.  And that rumors were that the first condition of the purported deal was that Virgin didn't want American Eagle (which is now being shopped).

    While I certainly have no inside information, or positions in any of these companies, I thought it was worth mentioning.

    AMR, American's parent company, recently said they are not in danger of bankruptcy.  However, the airline industry is certainly hurting. 

    For some additional context, here is an article that describes the current state of affairs and where Virgin's chief sees more industry failures coming.  Also, here is a recent BusinessWeek interview with AA's ex-head Robert Crandall.

    Something to keep an eye on …

  • Virgin America(n)

    Fuel costs have certainly affected the average American.  It is possible that these added costs might have an even bigger effect on another American (as in, the airline).  Industry-wide losses for airlines are blamed on fuel cost too. And AA is no exception.

    While I was on a American Airlines flight, recently, I overheard two flight attendants talking.  The topic was that they were worried that AA was going to get bought by Virgin.  Of course, US airlines can't be purchased by foreign concerns.  However, they meant Virgin America.  At first, I didn't think much about it.

    They noted that some very senior AA alumns had high positions there.  And that rumors were that the first condition of the purported deal was that Virgin didn't want American Eagle (which is now being shopped).

    While I certainly have no inside information, or positions in any of these companies, I thought it was worth mentioning.

    AMR, American's parent company, recently said they are not in danger of bankruptcy.  However, the airline industry is certainly hurting. 

    For some additional context, here is an article that describes the current state of affairs and where Virgin's chief sees more industry failures coming.  Also, here is a recent BusinessWeek interview with AA's ex-head Robert Crandall.

    Something to keep an eye on …

  • Where Does All the Spam Come From?

    Yesterday I got over 400 spam e-mail messages.  Either I spend way too much time in questionable chat-rooms, or the technologies they use for spam, viruses, worms, etc., are getting better and more efficient.

    As for me, I use an anti-spam product called Cloudmark.  It is the best I've seen; so the spam wasn't a problem … just a growing trend.

    On a positive note, new technology is often exploited first in fringe areas (malware, porn, etc.).  I expect that many of the things we curse about the power and sophistication of these techniques are soon harnessed to solve many problems and issues that we haven't yet thought possible.

    So, on a related note, it reminded me that I just saw a nice piece on where spam comes from.  Here is the graphic.

    Spam_chart_x600
    Source: MIT Technology Review.

  • Where Does All the Spam Come From?

    Yesterday I got over 400 spam e-mail messages.  Either I spend way too much time in questionable chat-rooms, or the technologies they use for spam, viruses, worms, etc., are getting better and more efficient.

    As for me, I use an anti-spam product called Cloudmark.  It is the best I've seen; so the spam wasn't a problem … just a growing trend.

    On a positive note, new technology is often exploited first in fringe areas (malware, porn, etc.).  I expect that many of the things we curse about the power and sophistication of these techniques are soon harnessed to solve many problems and issues that we haven't yet thought possible.

    So, on a related note, it reminded me that I just saw a nice piece on where spam comes from.  Here is the graphic.

    Spam_chart_x600
    Source: MIT Technology Review.

  • Market Commentary as of June 6th, 2008

    This week the Markets
    tried to rally several times.  Unfortunately for the Bulls, none of
    these attempts worked.  And Friday's move down was the worst for the
    market in a year-and-a-half.

    So the headlines are "another week
    of a weak dollar, rising oil prices and falling markets."  One of the
    key take-aways, from my perspective, is that the Markets are not
    responding as resiliently to bad economic data as they had a few weeks
    ago.

    You don't have to look much farther than this chart from FinViz.com.
    080606 Red Heat Map from FinViz

    Also, something I'm hearing more of are questions about whether you can trust the government's economic numbers?  Some people are
    saying that key measures have been distorted lately.

    Some things that caught my eye this week: