Market Commentary

  • 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
     

  • Weekly Commentary through July 18th 2008

    Batlight
    This was a very
    interesting week.  Tuesday saw the markets hitting new lows at levels
    we first saw in 1998.  Investors Intelligence says bearish sentiment is
    now higher than it has been since then too.

    Batman opened this week, just in time to see the warning signs over Gotham.
    The SEC intervened
    by prohibiting “naked short” positions against certain financial sector
    stocks. 

    And apparently, Bernanke and Paulson had fun talking with
    Congress.

    080718 Bernanke Speech WordCloud 600p
    On a lighter note, here is a clip from “The Daily Show”.  President Bush and Fed Chairman Bernanke both spoke at the same time.  John Stewart used this to highlight the similarity (OK, the differences) in their talking points.  It was pretty funny.

    Here are a few of the news items and blog posts I found interesting this week:

    And, a little bit extra:

  • Weekly Commentary through July 18th 2008

    Batlight
    This was a very
    interesting week.  Tuesday saw the markets hitting new lows at levels
    we first saw in 1998.  Investors Intelligence says bearish sentiment is
    now higher than it has been since then too.

    Batman opened this week, just in time to see the warning signs over Gotham.
    The SEC intervened
    by prohibiting “naked short” positions against certain financial sector
    stocks. 

    And apparently, Bernanke and Paulson had fun talking with
    Congress.

    080718 Bernanke Speech WordCloud 600p
    On a lighter note, here is a clip from “The Daily Show”.  President Bush and Fed Chairman Bernanke both spoke at the same time.  John Stewart used this to highlight the similarity (OK, the differences) in their talking points.  It was pretty funny.

    Here are a few of the news items and blog posts I found interesting this week:

    And, a little bit extra:

  • Weekly Commentary Charts through July 18th 2008

    Here are a few charts that caught my eye.  The first is from the
    Trading Godess site.  It is from a post called, “Did someone ring a bell.”  It shows
    that a break above the downtrend, on volume, with MACD turning up.  In
    other words, it has the makings of a decent long set-up.

    080718 DIA from Trading Goddess

    On the other hand Phil Erlanger had this chart, which shows that
    the Dow has re-traced 50% of the move off its 2003 lows, but that it
    might have a little more to go.

    080718 DOW from Erlanger

  • Weekly Commentary Charts through July 18th 2008

    Here are a few charts that caught my eye.  The first is from the
    Trading Godess site.  It is from a post called, “Did someone ring a bell.”  It shows
    that a break above the downtrend, on volume, with MACD turning up.  In
    other words, it has the makings of a decent long set-up.

    080718 DIA from Trading Goddess

    On the other hand Phil Erlanger had this chart, which shows that
    the Dow has re-traced 50% of the move off its 2003 lows, but that it
    might have a little more to go.

    080718 DOW from Erlanger

  • Market Commentary from July 4th, 2008

    As we moved into the July 4th long weekend, the bears remained in control.  This chart comes from Breakpoint Trades.  It is a long-term chart of the S&P500 Index with a 20-Month moving average. 

    080705 SP500 20M MA

    Yes, we are deeply oversold and sentiment is sufficiently fearful that a rally is likely soon. On the other hand, we haven’t really seen capitulation, and earlier market bottoms this year had some help from the Fed. 

    It is certainly possible that we get a bottom without getting the “easy trade.”  Lots of traders are looking for the big volume reversal and the VIX spike.  But how often does the market give people clear signals?

    Here is a follow-up to last week’s chart showing how correlated and poorly most global markets have performed recently.  This table is from an article called “Nowhere to Hide” by Prieur du Plessis.

    080703 World Stock Markets Performance

    Finally, here are a few of the posts I found interesting this week:

    • That Was Ugly: The Worst First Half of a Year Since 1970 (Bespoke)
    • Hot Wheels and Matchbox Cars Don’t Need Gas: Mattel’s value beats GM  (Bloomberg)
    • Bearish Battalions: economic growth & profits down, interest rates & inflation up (Economist)
    • What Really Killed Bear Stearns? (NYTimes and Vanity Fair)
    • Traders Dump Lehman (Minyanville)
    • A contrarian considers whether it’s possible that we’ve seen the low for this year (Street.com)
    • Financial Down 53% from Their Highs – the easier path might now be up (VIX and More)
    • Former NYSE Head, Grasso, Keeps the Money in Dispute Over $187MM Pay (InvestmentNews)
    • Trading volume down at CME – interest rate product volume off 17% (Financial News)
    • Doug Kass Says America is in Debt and Decline, and it is Time for a Change (Street.com)
    • Jobs Decline Again, for 6th Consecutive Month (Global Economic Trend Analysis)

    And, a little bit extra:

    • A New Middle Name: Obama Supporters Take His Name as Their Own (NYTimes)
    • Woman Offers Chance to Marry Her … If You Buy Her House (MSNBC)
    • Not Dead, Can’t Quit: No Limit Thinking with Ex-Navy Seal Trading Coach (TradingMarkets.com)
    • Who Runs the World – wrestling for a seat at the “Grown-ups Table” (Economist)
    • Adobe Makes Flash Content Searchable (BusinessWeek)
    • New Flexible Electronic Paper May Change the Way You Read (NYTimes)