Market comments for June 16th

Another day and another market drop. The Dow closed down again yesterday as did our other Indexes. We start today with the Nikkei and European markets down again today because of the turmoil in Greece. Our Economic data was a little better this morning with Initial Jobless Claims dropping for the week of 6/11 to 414K. Expectations were for 425K, so this is a bit better and in the right direction.

Yesterday we closed with another consecutive day when the Put to Call ratio was =>1.00 for the 11th consecutive day. Yesterday's chart shows the history of this indicator and let's face it, people don't really feel that well about the economy or the stock market and are selling, rather than looking to buy on the dips. As long as that mindset is present, it does portend good times ahead for the Bulls, but does for the ever louder Bears.

Today's chart below is of 3 months for the Dow. Of particular interest to me and should be to you was not only the fact that we are getting lower lows and lower highs on bounces, but that the down volume is much stronger than the up volume. Yesterday, the volume was stronger than the previous 2 days of the market rising slightly. And then before that, the volume was higher too. The trend is still down, but we haven't yet gotten to the real scary drops that are coming. Don't say you had no clue of this coming!

The culmination of this in the form of a sharp deep drop may come in the next few weeks. Much is riding on the negotiations of V.P. Biden and the Congressional leaders who are trying to get enough votes to pass the legislation to raise the debt ceiling. It looks now like somewhere between $1 and $2 Trillion dollars will be reduced over the next 10 years, in the level of debt we have. However, if neither political party did nothing, the debt would rise $6 Trillion with what Congress has already approved. So cutting $2 Trillion is a step in the right direction, but not enough. We will be revisiting this issue for the foreseeable future. In the mean time, everyone knows that and many don't have the confidence to buy stocks, so drip, drip, drip, the market goes.

Today is the 100th Birthday of my former employer of 18 years, IBM. Happy Birthday, IBM! It was a great company and still is.

And lastly, I want to thank all those who wrote me privately yesterday on my Cisco article. It looks like many outside AND inside agree with my comments.

Economic data for the week ahead, Sept. 13th

This will be a full week of important economic data being released. I will list them below but here are some of the more important ones that will move the stock markets.

Tuesday is Retail Sales and the NY Fed Empire Mfg Index.
Wednesday is Industrial Production and Import/Export prices
Thursday is the usual Initial Jobless Claims and Continuing Claims but also PPI
Friday will be CPI and Michigan Sentiment

And Friday is also Sept. Options Expiration. So this indeed will be a volatile week. So come here often and see the data as it gets released and any commentary I may make.

Monday, Sept. 13th 11:00am PST
Treasury Budget for Aug. Expectations are for -$104.0 Billion. Last month it was -$103.6 Billion.

Tuesday, Sept 14th 5:30am PST
Retail Sales for Aug. Expectations are for +0.2% and prior month was +0.4%
Retail Sales ex auto for Aug. Expectations are for +0.2% and prior month was +0.2%

Tuesday, Sept 14th 7:00am PST
Business Inventories for July. Expectations are for +0.8% and prior month was +0.3%

Wednesday, Sept. 15th 5:30am PST
NY Fed Empire Mfg Survey for Sept. Expectations are for 5.0 and prior month was 7.1
Export Prices for Aug. Prior month was -0.2%
Import Prices ex-oil. Prior month was -0.3%

Wednesday, Sept. 15th 6:15am PST
Industrial Production for Aug. Expectations are for +0.3% and prior month was +1.0%
Capacity Utilization for Aug. Expectations are for 75.0 and prior month was 74.8

Thursday, Sept. 16th 5:30am PST
Initial Jobless Claims for wk ending 9/11. Expectations are for 440K and prior week was 451K
Continuing Claims. Expectations are for 4.450 Million and prior week was 4.478 Million.
PPI for Aug. Expectations are for +0.3% and prior month was +0.2%
Core PPI for Aug. Expectations are for +0.1% and prior month was +0.3%
Current Account for Q2. Expectations are for -$125 Billion and prior Q1 was -$109.0 Billion

Thursday, Sept. 16th 7:00am PST
Philadelphia Fed for Sept. Expectations are for 0.0 and prior month was -7.7

Friday, Sept. 17th 5:30am PST
CPI for Aug. Expectations are for +0.3% and prior month was +0.3%
Core CPI for Aug. Expectations are for +0.1% and prior month was +0.1%

Friday, Sept. 17th 6:55am PST
Michigan Sentiment Index for Sept. Expectations are for 70.0 and prior month was 68.9

The most important data of the week is Retail Sales on Tuesday. Believe it or not, CPI and PPI are even more important than Initial Jobless Claims. And while normally I would say the Fed data on the NY Mfg Index is also important, I don't trust the Fed in reporting the data accurately as they are into manipulating psychology of Consumers and have been for a while. Much of the data released comes either from the Federal Reserve, the Treasury Dept. the Commerce Dept, or the Labor Dept. The only data released I trust as unvarnished and not manipulated is the Univ. of Michigan data on Sentiment on Friday. There you have it!

You will notice that all the expectations are lower than the previous period. That way they can say, "Better than expected". What BS!

Week of August 30th Economic data to be released (Update)

Here is a look at this week's economic data and what the expectations are. As usual, Thursday's Initial Jobless Claims are very important but also, so is the Unemployment rate for August which comes out on Friday. Tuesday has the Minutes of the FOMC meeting being released, which are always subject to the interpreter. So there will be much to look at. A good way to sort this is to look at which indicators have to do with Q2, which has long been over, and which data are current and forward looking. The oldest data is looking as far back as Q2, then look at the data which looks somewhat backwards within Q3, and lastly, the most current data, which will be of the past 1-2 weeks. Initial Jobless Claims falls into the latter information, as does Chicago PMI, and Consumer Confidence. Most of the other data is at least a month old or as much as 2 months old. Come back during the week to get the actual data, as it is released. Then look at the recent charts I have posted and make up your own mind as to the state of affairs in the economy.




Be sure to read my last post too as it is one of my better ones recently. Thanks!

Update: 8:15am PST Aug. 30th

The data is in for today's results. Everything came in at expectation except there was an increase in Personal Spending to +0.4%. Personal Income came in at +0.2%, as expected.