Market Commentary

  • Weekly Commentary through August 22, 2008

    The bullish arguments are that we still have a series of higher lows off the July bottom; and that the market is performing relatively well in the face of negative news.  The bearish arguments are still almost everything else. 

    On Friday, Oil was down 5 percent — great news? Not quite, it was still up on the week.  The Dow was up 200 points — yet still managed to close down for the week.  Also, the NASDAQ closed just below its 200-day moving average.

    Here are a few of the posts I found interesting this week:

    • With new lows in sight, is Lehman a takeover candidate? (BloggingStocks, Mish, NYTimes)
    • Boone Pickens' Strategy is Water-Tight; form your own town and issue govt bonds (DealBreaker)
    • Supermodels out-perform the Dow (TheStreet.com)
    • Hewlett-Packard's profit climbed 14% to $2.03 billion (WSJ, MarketWatch)
    • Corporate Insider Buying is strong (Hulbert in MarketWatch)
    • Comparison of Bernanke's 2007 and 2008 speeches at Jackson Hole (Infectious Greed)
    • Producer Prices jumped 10% this year, most since 1981 (NYTimes)
    • Goldman Sach's warns of recession fears for half the Globe (UK Telegraph)
    • Barry Ritholtz asks whether we are in a "Psychological Recession"? (Big Picture)
    • Jittery investors redeemed $27 Billion in mutual funds this July (Investment News)
    • Mortgage applications drop to lowest level in eight years (Bizjournals.com)

    And, a little bit extra:

    • Apple planning to make 40 Million iPhones in 2009 (BusinessWeek via MacRumors)
    • Microsoft hires Jerry Seinfeld to tout Vista; but is he still "cool"? (Silicon Alley Insider)
    • The dawn of intelligent machines; surpassing human intelligence by 2050? (BBC)
    • Obama's social networking strategy, and who's behind it (MIT Technology Review)
    • Educators urge lowering of drinking age to curb binge drinking (Washington Post)
    • EBay undergoing Amazonification; moving to fixed price sales (BusinessWeek)
    • Great graphic comparing Usain Bolt's record-setting run to history (NYTimes)
    • Crumbling archives of texts get a new lease on life from an anti-spam tool (BBC)

  • Weekly Market Commentary for 8/15/08

    From last week's wild swings – to a narrowing range, poised for a breakout.  The market has something for everyone.

    The mystery of where the markets are heading continues, reminding me of physicist Niels Bohr’s quotation: “Tomorrow is going to be wonderful, because tonight I do not understand anything.” Echoing that is 84-year old Richard Russell, “Very frankly, I can’t come to a firm conclusion as to whether we’re dealing with a bull or a bear market. Sometimes you just have to wait and allow the market to tell its story. Remember, we may be in a hurry, but the market never is.” (Hat tip: Prieur du Plessis)

    Small-Cap and Tech are showing some leadership.  As it hits its June highs, the Russell 2000 Index is performing better than the other US Equity Indices.  The NASDAQ Index is performing well also, though it is sitting just under its June highs.  In contrast, the S&P 500 and Dow Jones are still lagging.

    Here is a chart of the Dow.  Notice that price sits right at the resistance line and the 50-Day Moving Average.

    080815 Dow at Resistance

    Here are a few of the posts I found interesting this week:

    • S&P Languishing, but less than these previously high fliers (Infectious Greed)
    • What Does Obama imply for the markets and the economy? (Kudlow)
    • Ten Market Rules to Remember (Big Picture)
    • Thoughts on Trading Stress and Emotion (TraderFeed)
    • Short-Selling Restriction Experiment Set to End (NYTimes)
    • The Dilemma facing Thoughtful Investors (A Dash of Insight)
    • What is a Recession – and why we may not get there? (NBER)
    • Down 97%: Tax Trouble Coming For States & Cities (Big Picture)
    • Wall Street hiring again — but in India (ClusterStock)
    • Starbucks needs a jolt (Covel)
    • What happens if you list your house for $1? (Zillow, Big Picture)

    And, a little bit extra:

    • Hot Gadget: Amazon's electronic book viewer, Kindle, gaining in popularity (ZDnet, Bloomberg)
    • Amazon Kindle version 2.0 due out in October, in time for holiday sales (InfoWorld)

  • Weekly Market Commentary for 8/15/08

    From last week's wild swings – to a narrowing range, poised for a breakout.  The market has something for everyone.

    The mystery of where the markets are heading continues, reminding me of physicist Niels Bohr’s quotation: “Tomorrow is going to be wonderful, because tonight I do not understand anything.” Echoing that is 84-year old Richard Russell, “Very frankly, I can’t come to a firm conclusion as to whether we’re dealing with a bull or a bear market. Sometimes you just have to wait and allow the market to tell its story. Remember, we may be in a hurry, but the market never is.” (Hat tip: Prieur du Plessis)

    Small-Cap and Tech are showing some leadership.  As it hits its June highs, the Russell 2000 Index is performing better than the other US Equity Indices.  The NASDAQ Index is performing well also, though it is sitting just under its June highs.  In contrast, the S&P 500 and Dow Jones are still lagging.

    Here is a chart of the Dow.  Notice that price sits right at the resistance line and the 50-Day Moving Average.

    080815 Dow at Resistance

    Here are a few of the posts I found interesting this week:

    • S&P Languishing, but less than these previously high fliers (Infectious Greed)
    • What Does Obama imply for the markets and the economy? (Kudlow)
    • Ten Market Rules to Remember (Big Picture)
    • Thoughts on Trading Stress and Emotion (TraderFeed)
    • Short-Selling Restriction Experiment Set to End (NYTimes)
    • The Dilemma facing Thoughtful Investors (A Dash of Insight)
    • What is a Recession – and why we may not get there? (NBER)
    • Down 97%: Tax Trouble Coming For States & Cities (Big Picture)
    • Wall Street hiring again — but in India (ClusterStock)
    • Starbucks needs a jolt (Covel)
    • What happens if you list your house for $1? (Zillow, Big Picture)

    And, a little bit extra:

    • Hot Gadget: Amazon's electronic book viewer, Kindle, gaining in popularity (ZDnet, Bloomberg)
    • Amazon Kindle version 2.0 due out in October, in time for holiday sales (InfoWorld)

  • Weekly Commentary through August 8th 2008

    The Markets are up, but relatively trendless.  Yes the recent lows have held, and I'm seeing higher lows (and that is a bullish sign).  However, recently, the thing to note has been the markets' volatility.  For the Dow, there have been seven 200-point up or down days and two 300-point up days … but in that time, the Dow is only up 36 points. It is tough to hold trades overnight in this type of trading environment.  Going home bullish or bearish hasn't led to peaceful sleep lately.

    Here are some other stats to ponder.  First, 300-point rallies are pretty normal during bear markets (and in the beginning of new bull markets).  Also, It is quite normal to have intermediate term rallies in bear markets that last 2-3 months. The last one lasted 2 months; but only had narrow leadership in the Commodities.  This time the leadership is much broader (most everything, except Commodities).

    Also this week, the Fed held rates steady, and the US Dollar Index now trades above its 50-day and 200-day
    moving averages, signaling a breakout from its five-month trading range.

    Here are a few of the posts I found interesting this week:

    • IPOs at 5-Year Low, Worldwide (WSJ)
    • Wharton Finance Professor, Jeremy Siegel Calls a Market Bottom (Morningstar)
    • Rackspace IPO loses 20% on first day of trading (WSJ)
    • President Bush: "Wall Street got drunk"…"and now it's got a hangover" (Wall $t. Folly)
    • Does the 4-Year Presidential Cycle have predictive power in the markets? (CXO Advisory)
    • Too many ETFs, too little volume; the weakest are closing (Bespoke)
    • Crisis Averted: Improvisation is one thing, Policy is another (NYTimes)
    • Foreign money buying US properties at deep discounts (NYPost)

    And, a little bit extra:

    • Big Brother is watching: Apple shuts down "I Am Rich" Application for iPhones (Download Squad)
    • Innovations show how water-starved countries could solve their food crises (NYTimes)
    • At $6BB spent, Olympic Security is No Game; but they do ride Segways (BusinessWeek)
    • Twitter's micro-blogging success suggests I'm old, because I still don't get it (Fortune)
    • Caffeine Myths De-Bunked; go get a cup of coffee (NYTimes)

  • Weekly Commentary through August 8th 2008

    The Markets are up, but relatively trendless.  Yes the recent lows have held, and I'm seeing higher lows (and that is a bullish sign).  However, recently, the thing to note has been the markets' volatility.  For the Dow, there have been seven 200-point up or down days and two 300-point up days … but in that time, the Dow is only up 36 points. It is tough to hold trades overnight in this type of trading environment.  Going home bullish or bearish hasn't led to peaceful sleep lately.

    Here are some other stats to ponder.  First, 300-point rallies are pretty normal during bear markets (and in the beginning of new bull markets).  Also, It is quite normal to have intermediate term rallies in bear markets that last 2-3 months. The last one lasted 2 months; but only had narrow leadership in the Commodities.  This time the leadership is much broader (most everything, except Commodities).

    Also this week, the Fed held rates steady, and the US Dollar Index now trades above its 50-day and 200-day
    moving averages, signaling a breakout from its five-month trading range.

    Here are a few of the posts I found interesting this week:

    • IPOs at 5-Year Low, Worldwide (WSJ)
    • Wharton Finance Professor, Jeremy Siegel Calls a Market Bottom (Morningstar)
    • Rackspace IPO loses 20% on first day of trading (WSJ)
    • President Bush: "Wall Street got drunk"…"and now it's got a hangover" (Wall $t. Folly)
    • Does the 4-Year Presidential Cycle have predictive power in the markets? (CXO Advisory)
    • Too many ETFs, too little volume; the weakest are closing (Bespoke)
    • Crisis Averted: Improvisation is one thing, Policy is another (NYTimes)
    • Foreign money buying US properties at deep discounts (NYPost)

    And, a little bit extra:

    • Big Brother is watching: Apple shuts down "I Am Rich" Application for iPhones (Download Squad)
    • Innovations show how water-starved countries could solve their food crises (NYTimes)
    • At $6BB spent, Olympic Security is No Game; but they do ride Segways (BusinessWeek)
    • Twitter's micro-blogging success suggests I'm old, because I still don't get it (Fortune)
    • Caffeine Myths De-Bunked; go get a cup of coffee (NYTimes)

  • Market Commentary from August 1, 2008

    Three out of the four trading days this week experienced 200-point daily moves in the Dow.  Some were up, some were down.  Still the recent low has held.

    The following picture shows charts of the S&P 500 Index on two timeframes: daily and 5-minute bars.

    080801 ES on 2 Timeframes
    There are clearly a series of higher lows (on both charts).  Nonetheless, the market has been fragile lately.  A move up from here would be a big confidence booster.

    Here are a few of the posts I found interesting this week:

    • Hulbert Says The Stars Have Yet to Align to End the Bear Market (NYTimes)
    • Big Mac Index: currencies are expensive in Europe, cheap in Asia (The Economist)
    • Real Estate is down; so flip a website instead (NYTimes)

    And, a little bit extra:

  • Market Commentary from August 1, 2008

    Three out of the four trading days this week experienced 200-point daily moves in the Dow.  Some were up, some were down.  Still the recent low has held.

    The following picture shows charts of the S&P 500 Index on two timeframes: daily and 5-minute bars.

    080801 ES on 2 Timeframes
    There are clearly a series of higher lows (on both charts).  Nonetheless, the market has been fragile lately.  A move up from here would be a big confidence booster.

    Here are a few of the posts I found interesting this week:

    • Hulbert Says The Stars Have Yet to Align to End the Bear Market (NYTimes)
    • Big Mac Index: currencies are expensive in Europe, cheap in Asia (The Economist)
    • Real Estate is down; so flip a website instead (NYTimes)

    And, a little bit extra:

  • Market Commentary from July 25th, 2008

    Last week’s rebound off the lows held-up, and still might prove to be an important turning point for the Markets.  The internals contiune to look better; and from a technical perspective there are nice positive divergences forming. 


    080725 Dow


    One big down day spoiled the party for the Bulls this week.  However, seasonally, this is about the time to start looking for a rally.


    Here are a few of the posts I found interesting this week:

    • Exchanges (like the CME, which is down 43%) were hit hard by credit crisis (WSJ)
    • Amazon’s Profit Doubles with rise in web services business (Seattle Post)
    • Apple and Google are down; is this a buying opportunity? (WSJ)
    • Trading Places: Long Energy and Short Financials – or the other way around?(Bespoke)
    • CFTC study finds oil prices pushed up by supply/demand – not speculators (MarketWatch)
    • The Garage Sale Indicator – Listings up 100% in May from a year ago (Bespoke)
    • The Fundamentals of Market Bottoms (Aleph Blog)

    And, a little bit extra:

    • Is Facebook your next Portal? – They think so (BusinessWeek)

  • Market Commentary from July 25th, 2008

    Last week’s rebound off the lows held-up, and still might prove to be an important turning point for the Markets.  The internals contiune to look better; and from a technical perspective there are nice positive divergences forming. 


    080725 Dow


    One big down day spoiled the party for the Bulls this week.  However, seasonally, this is about the time to start looking for a rally.


    Here are a few of the posts I found interesting this week:

    • Exchanges (like the CME, which is down 43%) were hit hard by credit crisis (WSJ)
    • Amazon’s Profit Doubles with rise in web services business (Seattle Post)
    • Apple and Google are down; is this a buying opportunity? (WSJ)
    • Trading Places: Long Energy and Short Financials – or the other way around?(Bespoke)
    • CFTC study finds oil prices pushed up by supply/demand – not speculators (MarketWatch)
    • The Garage Sale Indicator – Listings up 100% in May from a year ago (Bespoke)
    • The Fundamentals of Market Bottoms (Aleph Blog)

    And, a little bit extra:

    • Is Facebook your next Portal? – They think so (BusinessWeek)

  • Word Cloud Text Toy

    The image on the left is a Word Cloud of Bernanke’s speech from last week. I used it in the prior Weekly Commentary.

    The Word Cloud is more than just a text toy.  It is a data visualization tool that gives emphasis to frequently used words.

    I used one from Wordle (and yes, you can make your own there).

    Click the image to see the full version on the website.

    I liked the result on Bernanke’s speech.  So, I tried it on my list of goals and plans.  Here is the result.

    080720 HMG Bigger Future Word Cloud 820p