Market commentary for Dec. 30th, 2010

The Initial Jobless Claims number, released this morning, came in below 400K for the first time in several years at 388K. Expectations were for it to come in at 415K. But the previous week's data was revised upward as usual from 420K to 422K. It is not surprising to me that the number came in this week at 388K because last week was Christmas week. The real test of the numbers will come in 2 weeks. Many in Main St. media are saying that the big corporations are adding jobs, but they are hiring abroad, not here in the U.S.. But if you think about it, we only had a 4 day work week at best last week, so 400K jobless claims divided by 5 days would equal 80K a day. With only 4 days you would think it should have been less than the 380K. It should have been 320K.

Continuing Claims increased this week oddly enough from the last reading of 4.064 Million jobs to this week's reading of 4.128 Million jobs. Expectations were that the number would come in at 4.000 Million. That number is going in the wrong direction if one is looking for a lower Unemployment rate number next week.

The Futures market is down slightly on the Dow. European markets are all down currently and the Nikkei closed down last night. Today may signal the beginning of the market drop we have been expecting, although Volume will be light this week. Yesterday's Dow hit 11,621 for a new intraday high, but it closed down below 11,600 to 11,585. A down day today might accelerate the drop going into next week. We may still see a day or two to close at 11,620 but then a selloff will begin.

January should be choppy and a down month from current levels and that should set the expectations for the year, as the month of January is often cited as a determinant of how the Dow will end the year. If January is negative they say the year will have a loss. Key short term levels to watch is going below 11,460 on the Dow. We have completed the top of the right Shoulder of the Head and Shoulder pattern now, as seen on the chart below. As you can see from the sloping line under the head and Shoulder pattern where we are headed from here. It isn't pretty. So be cautious in your purchasing of stocks. Consider hedging with some short positions or ETF Shorts to protect your profits. Taking profits here aren't that bad an option either.

Market comments for Oct. 21st

The data released this morning regarding Initial Jobless Claims showed that things stayed about the same with one notable exception, a correction on last week's data which was significantly worse than we were told last week. Initial Jobless Claims for week ending 10/16 were 452K, compared to expectations of 455K. However the prior week's data was revised upwards from 462K, which set the market on a downer, to an even worse revision to 475K. Continuing Claims came in at 4.441 Million Claims against a prior week's data of 4.445 Million which was revised upward from 4.399 Million. All in all the numbers have not changed much and we seem to be stuck here. But the markets have taken this as "good news" and so the market is rising again at the open. The Nasdaq, Dow and S&P are all up at the open. The Dow is up about 40 points while the Nasdaq is up about 10 points 5 minutes into trading.

The Philly Fed data is released later as is Leading indicators and I will update the data here.

Market news for July 22nd

Initial Jobless claims rose to 464K claims, which was worse than the 445K expected. However, Continuing claims dropped to 4.487 Million from 4.710 Million the prior week. In spite of the increase in Jobless Claims the market seems to be shrugging the news of as the Dow Futures stand at +100 an hour before the open.

Existing Home Sales numbers come out at 7:00am PST, 10:00am EST, but I won't be here to post the numbers. I will upon my return later today along with comments about the market. Also, Leading Indicators are also reported at that hour and those too will be reported here below, in the form of an Update.

Yesterday, E-Bay announced it beat earnings for the last quarter. Congrats to CEO, John Donahoe. WellsFargo Bank also reprted better than expected earnings.

Thanks for stopping by.

UPDATE: 7:02am PST

Leading Economic indicators were down-0.2% from being up 0.5% the previous month. Expectations were for the indicator to be down -0.4%. The Dow now up 207 for the morning. It rose about 30 in the last 2 minutes.

Market outlook for June 25, 2009

Well, the markets are headed lower again today. Several news items contributing to this. First Weekly Jobless Claims were up 15,000 to 627,000. The significance of this was that most expected a decrease in the number of claims and for the overall number to dip below 600,000. Secondly, Continuing Claims also rose an unexpected 29,000 to a total of 6.74 Million jobs.

El Erian, Co CEO of Pimco said this morning that he agreed with Warren Buffet, he was not seeing Green Shoots. He also said "it is too early to relax and it is pretty tricky out there right now."

Art Cashin on CNBC said this morning it looked like we are almost confirming a Dow Theory Sell signal and he expected several corrections each going lower over the next few months.

It looks like finally many are coming around to what I have been saying for over 2 months now. After the close yesterday on CNBC, a man from Lowry Research said we have had two Mondays where 90% of the trade for the day were all on the sell side. He said he expected us to return to the lows of 6,440 and may go below it. He based his reasoning on the fact that Volume has ben light on the rally up compared to the volume coming down to the lows in March and that not many bought into the rally as there is much cash on the sidelines. Most of these viewpoints I have posted here and is why I told many to stay with their ETF Ultra shorts, TZA and SDS and others they had and to buy more and average down the purchase price. It is why I said to sell Apple a week ago when it was near $140 and take the profits. We are headed lower and lower for a while now. Don't get sucked back in on a correction because while the market will go up some days, we are headed for a staircase pattern down for while to come.

Time to sit back and wait now to see when we go significantly lower and how much. But the signs are clearly negative now for the markets. It is not too late to buy some of these ETF Ultra shorts like DXD, SDS, TZA and others as the prices have been low for a while. TZA, for example is now about $25-$26/share but was $20/share recently.

Don't forget if you have not voted this month on my Mini poll to do so. It is on the right margin. Thanks!

UPDATE 9:10am PST

Well the market has thrown the analysts a curve ball, as the market now is up with the Dow up 150 points. Will it hold today? I have no clue!

Market stats coming week of Feb. 17th

This week has a host of data being released and the news is slanted to be terrible by most accounts. On Tuesday, the National Association of Home Builders will release its monthly sentiment survey, which has fallen to record low levels, with fewer than one in 10 builders confident about the business.

Industrial production is expected to have plunged again in January after falling 7% in the past six months. Economists surveyed were looking for a decline of 1.7%, following a 2% drop in December. The figures will be released Wednesday. Total hours worked in the manufacturing sector is seen falling 2.1% in January, with the number of jobs down in almost every industrial sector.

Continuing jobless claims have been at record high levels -- at nearly 5 million -- while initial claims have settled above 600,000 per week. No one knows what this week's data will show but many are expecting some very bad numbers.

The CPI is expected to rise 0.3%, and the PPI 0.4%, according to economists.

The Federal Reserve has warned it sees a risk of near-term deflation, but there's not much more they can do about that risk since rates are near zero.

With all this bad news pretty much expected, watch how the markets react. It is my opinion that the markets will hold and possibly rally on any news that seems to suggest we are near or at bottom or that maybe it is slowing the acceleration rate of these indicators. I particularly would watch how Apple stock reacts this week, as it is a good tech indicator of market direction. And what I plan to do is to again look for opportunities to buy the ETF, TNA, an Ultra short x 3 of the Small Caps. Watch volume for this week as well as it has been weak of late. Any high volume with a price rise will be most welcome and may cause the Shorts to cover.

UPDATE: Tuesday 5:45am PST

It looks pretty bad this morning in pre-market as markets around the World are negative. We must hold the lows of 7,300 on the Dow and 742 on the S&P 500 or we are in for some real pain. Dow futures down about 250 in pre-market. S&P 500 is down to 793 in pre-market. Today is shaping out to have a big drop at the open. The question will be whether we can recover today or are we headed to retest the very lows made earlier in November. Wall Street does not like with the Administration is doing with respect to the economic mess that Wall Street and the Bankers created in the first place. They don't like the restrictions on compensation put on them by the Congress and the Obama Administration. Fear levels are rising.

Hope we can believe in.

As the day begins, there is more hope for reaching a bipartisan agreement on the stimulus package before the Senate today. I would estimate that a few days ago there was only a 35-40% confidence by the public, the media and the Congress that there would be a compromise within the Senate deliberations of the stimulus package. The needle has moved now to about a 55-60% confidence that there will be compromise and a good bill that most can live with.

The Unemployment rate (just announced) is 7.6%, as we had 598,000 jobs lost this past month. These two forces will result in some higher volatility in the market today (as measured by the VIX). Based upon the realities on the ground on the negotiations, I believe the Bulls have the edge over the Bears in this market. Being on the Short side right now is very dangerous as this market can snap up in a heartbeat. I do not have any Short positions nor do I currently have any ETF Ultra Short Funds like TZA, DXD or SDS and if I did have them I would sell them at the first opportunity today.

I did add to all of the shares I have mentioned here. Added yesterday to TNA, SSO, F, and AAPL and feeling very confident these will rise in the next 30 days. When the Stimulus package gets passed by the Senate today and a compromise worked out with the House of Representatives during the next week, hopefully President Obama will be signing the bill by Friday the 13th or more preferably by Feb. 12th, President Lincoln's birthday. And the President will be credited with bringing a different kind of politic to Washington, thereby increasing his popularity with the American people.