Monday, March 9, 2015

March 14 The stock market decline on Wednesday and the rise on Thursday were on reduced volume. A capitulation is defined as a large reversal on 25% or higher volume. Wednesday’s volume was only 56% of the volume on Oct 15, 2014. But October was no where near capitulation volume levels. Wholesale prices declined in February for a fourth consecutive month, causing a slump in profit margins among wholesalers and retailers. Retail Sales Feb -0.6% down again after -0.8% for January. Business inventories remained unchanged at a high level.



     Russia's economic misery continues to deepen and their central bank slashed its growth forecast.   It now expects the Russian economy to contract by between 3.5% and 4% in 2015, down from its January prediction of growth.
     Robert O'Neill is the Navy Seal who risked his life and actually took out Oslam Bim Labin.  He is under attack now by the Stupid Party.  His crime is he stole the show from Barric Husane Obamba.   So now he is under attack to determine if the president can punish him in some way.   Isn’t that disgusting?
       Mar 12, 2015   U.S. business inventories were unchanged December to January and further declines in hoped-for January discount sales  pushed the number of months it would take to clear shelves to the highest since July 2009.  That suggests a reduction in stock orders in the months ahead and a further slowdown in production.   Unemployment claims appeared to have stopped falling and may be rising again indicating the Obama policies have failed and a new recession is beginning.  The unemployment plot looks very similar to the slowdown in 2007.
    The evidence of the slowdown is significant since the NYSE flat-lining since July 2007, the NYSE sell signal occurred in October and plunging oil prices followed the world’s 2014 economic slowdown in November.  And they all also occurred at the end of the previous business cycle.   Still it will be several months for the DJI, the NASDAQ to decline enough for the Stupid Party’s stock analysts to break the news and then blame George Bush or the US Congress again.  One thing is certain, Obama never has anything to do with and therefore accepts no responsibility for any of the disasters that seem to follow him everywhere.
    Mar 10, 2015   The first round of this bear market ended October 14, 2015.  Yesterday was the confirmation that the second round with the bear is underway.  This too will be followed by a rally which will take some stocks back to recent highs, but this time not just the NYSE will be topped out.   This time we expect some of the broader indices will give sell signals on a cash flow basis if not a price basis.  As we said before the NYSE  gave various stock market price and cash flow sell signals by last Oct 15. 
     Rising U.S. yields and EU Quantitative Easing are drawing funds away from the BRICS and other emerging markets, causing strains on their currencies. The Mexican peso hit a record low against the dollar while the Brazilian real fell against the dollar for the 13th time in the past 15 days.  It is contributing to the destabilization and decline in growth in the developed world that depends on stable trade.  U.S crude dropped below $50 to $49.61 yesterday. 
     JOLTS – January job Openings waiting for qualified workers fell to 4.998Million from 5.028M last month. 
    Target TGT laid off 1,700 workers on Tuesday as part of a previously announced round of cuts.
    Apple’s bonds have lost more than 3 percent since the end of January, almost twice the percent losses on Bank of America’s index of U.S. investment-grade corporate bonds.
    The Average American’s Workweek in Feb was 34.6 hours.   Optimistically that means effectively more than half of all Americans now do part time work (less than 30 hrs per week).   Obama said the Unemployment Rate in Feb was 5.5%.  What if there was no Obama health care 30hr requirement and that 50% part time work force could work 40hrs/week or more.   What would the unemployment rate actually be without playing Obama’s games on who he thinks are just stupid Americans who must be lied to.  Unemployment, if everyone worked 40 hours, would increase (50%*(40-30)/ 40), or by 12.5% to exactly 20% unemployment in America today.  And that only is the unemployment that would be counted.  Many people now are taking early retirement or working “under the table” so they do not show up either.   In southern Italy and parts of Greece the underground economy is larger than the taxed economy.  That is one of the effects of wealth redistribution.
        Mar 9, 2015   S&P earnings have now turned about 2% negative for two consecutive quarters and more and more corporations will now give their balance sheets and income statements a thorough washing.  The losses that were hidden as capital investments and other things over the last six years will now be recognized as the losses they actually were.  Due to harassment by Jim Crammer and others, corporations play Jim’s crooked game and pretend revenue and earnings can grow indefinitely without interruption.   If they disappoint Crammer he bad mouths the management team.  Any semblance of corporate corner office honesty is punished seriously by Jim and his fired-up showmen.  That is why this bubble collapse and the coming Chinese collapse will be frightening to the investors who lose their shirts.   The more corruption and the higher the stock market pimps pump their target prices the longer the stock market run and the more economically disastrous the coming collapse. Some day the investors will get a lawyer and go after the people who demand and orchestrate the corporate cooking of the books and corruption from their positions in MSNBC and other Stupid Party controlled media.
     Intelligent and honest US Senators warned Iran and the rest of the world that the unilateral Executive Decisions of the current Lame Duck president can be cancelled by any future president or even Congress.  This president will be playing by himself in his sand box from now on since he has not learned to work with others.  
     Hanergy a Chinese solar company now sells at 95 times earnings.  The stock has advanced 600% in the past year and the company is now valued higher than Tesla.  This valuation along with China’s Alibaba and many other Chinese stocks are priced as ridiculously as the DOT.com bubble stocks when the market collapsed in 2000.  We expect the collapse of China’s stock market will be the biggest casualty this year.
     Jim Crammer said the market is being pulled down today by the Brazilian currency problems.  The part of his anatomy that gave him that explanation was obviously not his brain.  The real cause is partly the effect of the surge in the American dollar.  The strong dollar is raising US imports but more importantly it is hurting American exports. 
   Jim is also wrong saying falling oil prices are hurting the economy.  He has that backwards too; it is the slowing American economy, the increasing supply of American oil, and the rising dollar that is causing the dollar denominated oil price to decline.  
        Mar 9, 2015   The Wall Street Journal today advocates, Embrace the Bear Market.  That is how to Survive A Bear Market.  Since October 16, 2014 we first detected the latest bear market.  Then we estimated it would take a full year for the media to catch on because that was what it took the last time.  But the media is already coming to the realization only five months after our warning.   We have had sell signals before that were short term such as May 2010 and August of 2011 when there were major selloffs but they lasted only a week or two.  This one was a major sell signal that is a classic NYSE breakdown.  The weakest always breakdown first so one should never look to the DOW or NASDAQ for a timely sell signal.
 
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