Friday, September 17, 2010

Market comments for Sept. 17th (UPDATE)

Today is Options Expiration for September. The first economic data released this morning was the CPI for August. It came in at +0.3%. Expectations were for an increase of +0.1%, while for July the CPI came in at +0.3%.

Core CPI for August came in at +0.0%, while expectations were for +0.1%.

The third piece of data is that of University of Michigan Sentiment Index for September. Expectations are for 70, while last month a reading of 68.9 had been announced for August. This is the only number released this week, which is not subject to manipulation by neither the Fed nor the government. I will Update this post after the data is released.

UPDATE: 7:00am PST
Michigan Sentiment Index came in at 66.6 vs expectation of 70.0 and last month of a 68.9 reading. This is not good news for those hoping Consumers will be buying anytime soon. As soon as the number was released Volume jumped on the Dow to 161 Million shares and the market went form almost being up 40 points to dropping down 20 points so far! Remember 666 is the mark of the beast according to Christians, so beware! :) Here's a chart of the Index back in time. We have been going straight down in the past few months.

Yesterday’s data showed the Dow eking out a small gain of +22 points to 10,594. This resulted in a White Spinning Top candlestick pattern. For most of the day a Hammer pattern was in affect, but in the last 45 minutes manipulators came in to get the Dow into the positive. What was amazing was that many other indexes had candlestick patterns which were a Hammer and thus a Sell Confirmed signal was issued for these indexes. Those indexes are the following:

Dow Jones Composite Index
S&P Mid Cap
Dow Jones Banks
Dow Jones Air Freight
Dow Jones Broad Market
Dow Jones Cyclical
Dow Jones Durable
Dow Jones Industrials
Dow Jones Transport
Dow Jones Mid Cap
Dow Jones Oil Drillers
Dow Jones Container and Packaging

There were many more I did not choose to list. I think you get the idea. If you want a more complete list, click here.

I have done an analysis on Initial Jobless Claims, for comparative analysis purposes, from December 2004 through November 2007, as well as data from April 15th to yesterday's released data. It surprised me. During the 2nd half of the Bush term, from 2004 to 2007 you will notices that generally the data was in the range of between 290,000 and 350,000 Initial Jobless Claims per week.

The Unemployment rate during that same period was ranged by 4.6% to 5.5%. Here’s the Yearly data.
2004 5.5%
2005 5.1%
2006 4.6%
2007 4.6%
2008 5.8%

As you can see from the chart above, of the Weekly Jobless Claims, from April 15th, 2010 to Sept. 17, 2010, we have been range bound and there has been no appreciable difference in the data over the entire period. The solid straight horizontal dotted red lines show the range of the data from 2004 through 2007. We have a long way to go to get down to those levels. And looking at the chart below, an even more interesting the numbers go from 1967 to 2010. It is clear we are in a high range and are bound to stay that high until the economy improves. Government can't do the majority of the heavy lifting, but the Private sector can and will when Consumers are feeling better about their future.

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