Market comments for June 2nd UPDATED

The market on Wednesday finally dropped given the recent poor economic news. I have said that I thought there would be lower highs and lower lows going forward and today we seemed to affirm that prediction with a drop of 288 points on the Dow. Below, I have added a 3 month chart of the Dow, which shows new lower lows, signified by Blue arrows and new lower lows, signified in Red arrows.


Thursday will show the release of Initial Jobless Claims, Productivity, Factory Orders and Unit Labor Costs. On Friday the Unemployment rate for May will be released as well.

UPDATED June 2nd at 5:38am PST

Initial Jobless Claims for the week of May 28th came in higher than expected again for the 4th straight week at 422K, while expectations were for only 400K. It seems that it is going to take a long time before we get back below 400K as were were over a month ago. I would expect this data will show that the Unemployment rate ticks up for May to possibly 9.1%. If it does this, that would be the second month in a row where the rate has increased again.

Market commentary Oct. 5th (UPDATE)

There has been little news to comment on with respect to Economic data released this week. Yesterday, Factory Orders for August came in down -0.5%, compared to +0.5% in July. July's data was revised up from +0.1% to +0.5%, so the orders are down.

The stock market closed down yesterday, with the Dow closing down -79 points. Again, within a half hour of the close, it was down -95 points but then the Volume surged in the last 15 minutes to end the day only -79 points. Volume spiked about 30-40 million shares in the final 15 minutes. Now the Futures market today is up +70 points on the Dow. So it appears that the Bulls are recouping yesterday's loss.

The charts look the same. On all indexes they are completing the right shoulder of a Head and Shoulders pattern, so until it does, this market will stay up and still may go to the high of 11,200 on the Dow, as I predicted on Sept. 21st.

The big news of the week will be Thursday with Initial Jobless Claims and Consumer Credit and on Friday with the Unemployment report for the month of September. Also on Friday, Hourly Earnings, Wholesale Inventories for Aug. and Non Farm Payrolls.

UPDATE 7:00am PST

The ISM Services data for Sept. was released and came in at 53.2, while expectations were for 51.0. The prior month data was 51.5.

Market comments for Aug. 3rd

Even with yesterday's high on the Dow and S&P 500, we didn't break above the top resistance lines I drew on my previous post on the Dow and S&P 5 year charts on Saturday. Today's data is sobering yesterday's drunken surge in the market. Personal Income came in flat at 0% gain. Personal Spending had no change as well. Factory Orders were down -1.2%, more than consensus estimates of -1.0%. Pending Home Sales were also down -2.6% and -18.6% below June 2009 levels. Expectations were that the number was coming in at -5% for June, so that number was better than expected.

The markets are down about 0.5% after 1 hour of trading now. The big number for the week will be the Unemployment rate for July. Expectations are that Unemployment will rise to 9.6% from 9.5%. Initial Claims also come out on Thursday and expectations are for that number to come in at 460K Claims.

Market outlook for the week ahead: June 29thth-July 3rd

I thought you might like to see the data that will be announced by day this coming week and have found the Bloomberg survey of leading indicators. On Tuesday, Options Expire for the Qtr. Here's the list to watch for:

Bloomberg Survey

================================================================
Release Period Prior Median
Indicator Date Value Forecast
================================================================
Case Shiller Monthly YO 6/30 April -18.7% -18.8%
Case Shiller Monthly In 6/30 April 140.0 n/a
Consumer Conf Index 6/30 June 54.9 55.2
ADP Payroll ,000’s 7/1 June -532 -390
Construct Spending MOM% 7/1 May 0.8% -0.6%
ISM Manu Index 7/1 June 42.8 44.5
ISM Prices Index 7/1 June 43.5 47.0
Pending Homes MOM% 7/1 May 6.7% 0.5%
Nonfarm Payrolls ,000’s 7/2 June -345 -350
Unemploy Rate % 7/2 June 9.4% 9.6%
Manu Payrolls ,000’s 7/2 June -156 -150
Hourly Earnings MOM% 7/2 June 0.1% 0.1%
Hourly Earnings YOY% 7/2 June 3.1% 2.9%
Avg Weekly Hours 7/2 June 33.1 33.1
Initial Claims ,000’s 7/2 27-Jun 627 615
Cont. Claims ,000’s 7/2 20-Jun 6738 6740
Factory Orders MOM% 7/2 May 0.7% 0.8%
=============================================================

At the close on Friday the Put to Call ratio closed at 0.81 and the VIX closed at 25.93, the lowest value since mid September last year when all the problems with the Sub Prime loans and Banks began.

The Dow continues to hug the downtrend line which started a year ago and was shown in my post last Thursday. I expect it to continue to go down and I expect the S&P 500 to do the same. I am still invested in my ETF Ultra shorts TZA and will hold on to this until we hit back at the lows of 7,300 on the Dow or if we go and retest the low of 6,440, which many believe eventually we will need to successfully retest, before a true Bull market Rally will begin.

What's going on in the economy? Durable Factory orders up in February. (UPDATE)

For the first time in a long time Factory Orders were up in February and many are trying to figure out if it is a real move showing we have bottomed. Well, I can tell you first hand it is real for the following reason. Every Monday and Tuesday for the past 3 months I have been counting the number of trucks I see on the highways on the way to my clients. I wrote about this on my Blog a while ago. I have been telling select friends over the past 4 weeks I have seen a doubling of trucks on these same highways and that I believe orders had to be going up as business activity was increasing. In the beginning I saw no Construction trucks but now I do see some although not many. Most trucks are moving goods from suppliers as their names are often on the sides of the trucks.

Will this trend continue? I don't know but it has both Monday and Tuesday this week. We will take all the good news we can. Maybe when we along with others bought a new refrigerator a month and a half ago helped create an order for a new one.:) May the force be with us!

The market reaction at the open is up 77 on the Dow, wiping out half of yesterday's losses. You see there is the start of good news just like President Obama said. Now let's pass his budget so we continue to implement those things we voted for him to change!

UPDATE 7:00AM PST

I checked and saw that the Put to Call ratio has not closed now over 1.00 since March 5th, so we have settled in a lower range and more normal looking at the history since 2001. The Put to Call ratio closed yesterday at 0.76

Also wanted to update you all, I added shares of the triple play FAS again late yesterday and early morning after the open. This Banking Index triple play was in a range of $20-$30/share back only 4 months ago and if the market recovers back to 9,000 on the Dow led by Banking stocks, this will return 3-5 times your money. It is risky so be very careful about your risk tolerance. My average price now is about $6.50/share.