Monday, March 16, 2015

Mar 21, 2015 The strong dollar has three adverse effects on the American stock markets. First it reduces American company revenue earned abroad when accounted for in US dollars and therefore hurts profits garnered abroad. Secondly it makes domestic US products more expensive abroad so it reduces sales abroad. Third it makes foreign products sold in the US less expensive hence hurting the US balance of trade and causing a loss of American competitiveness and hence a loss of American jobs.

Mar 20, 2015   Irrational exuberance definitely hit the ceiling again this week.  The FED report was spun ten ways to Sunday triggering thousands of stop loss orders.  Then over Thursday night, thousands of other investors covered shorts while still others put in buy orders.  Every index experiences about 80% of its total advance at the opening bell this morning.   But all but the NASDAQ bounced off their former highs and ended lower than their highs.  Some even ended lower that their morning opening surge.   All but the NASDAQ have failed to break new territory.  The NYSE, the broadest index has not broken new ground since July 2014.  Most investors have seen losses since July 2014 but so have short sellers who have been tossed about due to the high volatility.  Only the firms churning the market behind the scene and the brokers have profited from the volatility.  Ultimately the buyers will have their funds exhausted.  This is as it was in early 2008 after our sell signal in late 2007.  Again, while it is a coincidence that 2007 and 2014 are similar and volatility has increased similarly in 2008 and 2015, it only serves as a good warning to act prudently and not impatiently.
http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#%7B%22range%22%3A%221y%22%2C%22scale%22%3A%22linear%22%7D 
 

     Friday the Stoxx 600 index in Europe rose 0.8 percent to within two points of its all-time high reached in 2000 when that bubble burst.  The NASDAQ’s record close then was 5,048.62. Even with today’s advance it remains a long way from its intraday high of 5,132.52, reached in 2000.   During the Dotcom bubble the situation was the same as today with many stocks having revenue but little or no profits.

The pain Russia is feeling from low oil prices has increased crude available for export and the rising shipments from Russia, one of the world’s largest oil producer should push crude prices down more than 60 percent from last year. Falling energy prices have pushed Russia to the brink of recession, damping demand for refined fuel products in the country and increasing the need to export more oil.


Housing Starts Feb 897K down from 1081K

MBA Mortgage Index 03/14 -3.9% down more from -1.3% 

Trade Balance Q4 -$113.5B worsens from -$98.9B
Mar 19, 2015   So far no one has given the right answer for the stock market surge yesterday that was executed with computer precision.  It was not man made; it had the signature of machine driven rally.  Apparently short sellers were covering shorts and swing trader buyers were getting buy signals triggered.  This is what must have happened.  The short sellers and swing traders always establish trading conditions and those conditions were met and automatically triggered.  For instance the swing traders saw the volume dropped the previous day and were anticipating a rally with a hair trigger.  The short traders had standard stop loss triggers and swing traders had their buy signal triggers based on what they computed to be the bottom.  As the market rose the most recent short sellers covered first and most swing traders joined in within the first 15 minutes.  That caught other investors by surprise and the volume convinced other institutional investors to pile in.  That is the computer driven explanation for yesterday and it implies that the lack of human thinking implies that it was a false rally that will not last long.
     Congratulations to Israel for re-electing the candidate Obama tried to defeat.  On Obama’s first tour of the Middle East he snubbed Israel a nation that is the target of a criminally insane minority who also wish to kill all Christians, Buddhists, and Hindus.  Obama appears to be willing to allow Iran to build nuclear weapons if they wait just ten years so it is not blamed on Obama. 
     Citigroup, Goldman Sachs, and other large banks made loans to energy companies that have suffered the oil slump and could now default.  The banks hoped to repackage and sell the debt to investors but instead the banks could have tens of millions of dollars in losses.  
     Boone Pickens says that within four months the US will have cut oil production enough for prices to begin to stabilize and later begin to move up this summer.  He thinks that then within a year the oil price will stabilize at $80/barrel for quite some time.  Most American oil companies are now shutting down non-US shale operations and total world shale oil production has already been cut about 40%.
     Russian socialist harassment has resulted in a 75% drop in GM car sales in Russia forcing GM to shut down their auto production in Russia.  GM was the only American auto manufacturer that invested in Russia.  No other foreign auto makers have suffered Putin’s hostility.  That is a lesson for American “Stupid Party” members who think a dictatorship of the proletariat is a great idea because even the national leader of America’s “Stupid Party” has failed with liberal socialist dictator Putin.
    FOX news has the highest viewing audience and is rated as the most objective.  The Stupid Party proletariat have now infected some web sites that use the name FOX so beware.  Here is one we found today.   This site sent an alarm and threat but apparently did not launch a detectable attack.  If that ever occurs to you the first thing to do is disconnect from the web.  Then close their infecting site and then run a virus scan.   Microsoft found no threat was installed on our system.  If the “Stupid Party” is found to now be damaging the computers of Obama and/or Stupid Party critics there will be a major criminal investigation… far more than Watergate, and severe penalties.   This was the site from were the attack was triggered.
Ratings: Fox #1 for 13th Year, MSNBC Collapses By Double ...
 
    Corruption in Obama’s health programs now exceeds $3.3 billion per year, up from close to zero before.  And Obama only has about 8 million of the 40 million people he said would get his free entitlement coverage.  But $3.3 billion corruption is thought to be just the tip of the ice burg for his administration’s corruption.   Former vice president Cheney called Obama "the worst president in my lifetime, — it's a tragedy, a real tragedy, and we are going to pay a hell of a price just trying to dig out from under his presidency."
The single family housing market is in shambles and deteriorating.  It is still worse than after the DOTCOM bubble and the 911 attack.
 
MBA Mortgage Index 03/14 declined another -3.9% after declining -1.3% last month. 
 
   Mar 18, 2015   Wall Street at first sank while oil prices fell as data showed U.S. crude inventories hit a record high. U.S. crude supply rose nearly three times as much as expected last week according to the Energy Administration information.   Brent for May delivery rose to $54.35 while U.S. crude fell for a seventh straight session, hitting a six-year low at $42.03.   The Fed was weighing whether the U.S. recovery could hold up against collapsing oil prices.   The Federal Reserve did exactly what everyone predicted and yet the market gapped upward by about 1.3% in about 15 minutes time.  The FED has dropped its pledge to be “patient” before raising interest rates, freeing its hands to lift official borrowing costs for the first time in nearly a decade.  Apparently, there was some mechanism going on behind the scene because the market reacted positively to the possibility of FED tightening now.  This is the opposite of what happened every other time the FED suggested tightening again.  It is believed that the FED wants to further weaken the US dollar to strengthen US exports.  The rate of the NYSE trading volume doubled for about an hour after the announcement.   See data from 3-18-2015 on the 5 day plot.
 
Earlier the US Dollar had already weakened vs. major currencies while investors snapped up 3.3 billion Euros of 10-year German Bunds at a sale.   The previous soaring dollar had eaten away at profits of U.S. multinational corporations.  But concern is now growing that the EU's Quantitative easing is creating a shortage of top-rated European debt to back the currency inflation.   Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis said "The U.S. stock market is going to have trouble with interest rates the rest of the year."   
 
Mar 16, 2015   The broad NYSE shows it is a good predictor of the point when American capitalists ignore the paparazzi and hunker down to reality and right off losses, sell miss fitting enterprises, and finally bite the bullet and clean up their balance sheets and earnings reports. Hype is often motivating and energizing but periodically free enterprise economies need to hunker down, reduce debt, strategize for the next campaign, reinforce and prepare to wage a new era of technological and economic growth.
http://finance.yahoo.com/echarts?s=^NYA+Interactive#%7B%22range%22%3A%22max%22%2C%22scale%22%3A%22linear%22%7D
     NY State Manufacturing Mar 6.9 down from 7.8 
     March 2015 Industrial Production was -0.4% but they revised February down -0.5% from what had been +0.2% and brought that 0.5% forward to March to make March look like it improved 0.1% instead of actually falling -0.4% for March.  Most analysts will not examine the fraud this Obama administration perpetrates to make people think things are improving.  If the US banks acted like the Obama administration, people would put their money in Swiss bank accounts.
     The NAHB Housing Market Index for Mar fell 3.9% to 53 from 55 last month.
     Retail sales fell 0.9% last month
Rhttp://www.martincapital.com/index.php?page=graph&view=retail_sales
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