Owner: The Kingsland Report URL:http://buttonwood1792.blogspot.com/ Join Date: Mon, 26 Feb 2007 23:13:32 -0600 Rating:0 Site Description: The Blog of veteran financial journalist Jim Kingsland - presenting informed analysis of markets from stocks, bonds to futures and forex Site statistics:Click here
Here's Another Doom And Gloomer - Alan Greenspan 1970-01-01 00:59:59 Of course, I say doom and gloomer tongue in cheek. Greenspan
is the creator of something called the "virtuous cycle" where everything runs just right. Well, now Greeny is thinking that perhaps everything is not running quite right. I've been aware of this all day, but haven't gotten round to posting... just in case you missed it - Greeny spoke his mind today: http://www.mercopress.com/vernoticia.do?id=9942&formato=HTML.Incidentally, I'm adjusting my blogroll. It's gone. I've gone back to a Favorite Links format. I will no longer be linking to blogs authored by anonymous authors and will likely be adding few new names to the list that I now have until I get to know the people behind those blogs. Read more:Alan Greenspan
Gold 1970-01-01 00:59:59 A few folks have emailed me this evening, and I will respond tomorrow morning.I have received several emails concerning gold asking if I remain bullish.The short answer is that I remain personally bullish on gold. Of course, I am not a financial advisor so I do not dispense personal advice on whether you, the reader, should or should not be buying or selling gold.But I continue to hold a large GLD position as well as metals futures positions (though I did pare back the metals futures just a bit to reduce delivery exposure).If you listened to my radio broadcasts even back in the late 1980's on 1010 WINS, New York and WBZ, Boston you probably knew I had a soft spot for the yellow metal since my weekend business reports on the two stations regularly featured gold experts. It has taken quite a while for gold to rise from the ashes, but I personally feel the best is yet to come. Jim Sinclair at JSMineset is looking for an eventual $1650+ and judging by the ignorant scoffers out there now,
Morning Market Comment 1970-01-01 00:59:59 The headline is blazing on Market
watch: "Futures Signal Big Losses". Most times I pay little heed, but with S&P futures down 13 and Dow futures down 95, it does appear as if a slide is on the way.As Marketwatch says, there are a confluence of problems for the bulls:-Durable goods orders fell 7.8% in January.-Shanghai's Composite Index shed nearly 10%, its biggest fall in 10 years, amid profit-taking sparked by concerns that the government may implement new measures to cool speculative behavior. See Asia Markets.-Japanese Yen futures up 123 points! Carry trades being unwound following the China selloff. See Currencies.The news has taken commodities down across the board, including energy and metals.My stop for gold futures is quite a bit below the present levels and of course I won't be selling any GLD.Interesting with the China woes, I have an open put position in Baidu.com (BIDU) which has been SUFFERING, so today that will actually rebound, w/BIDU down about 5%.I also have various Read more:Comment
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Nouriel Roubini's Site 1970-01-01 00:59:59 It's always worth checking out, especially today. First, Nouriel been at the forefront of warning of problems in the economy. Now that Alan Greenspan has joined the camp of warning of a possible recession at the end of the year, Roubini
's theories are being validated as we trudge through 2007. Nouriel discusses the views of Morgan Stanley economist (heavy weight/soft landing proponent/bull) Dick Berner. Dick is a great guy who I had the privilege of interviewing a number of times during my years at Bloomberg Radio and Television. If Dick Berner is getting concerned about credit, you should be too: http://www.rgemonitor.com/content/view/180186/85/
Countrywide (CFC) 1970-01-01 00:59:59 Just a quick note - CFC has been the top of my list of lenders which I despise.I hate it for the insider selling that's been going on.I despise it for the FT.com takeover story stunt last month, which coincided with the CEO filing to sell shares on the same day.If you know anything about the mortgage lending industry, sure they're less than 20% exposed to subprime, but it doesn't hide the fact that CFC has always been a high pressure mortgage sweat shop and that they are well exposed in the A tranches of the credit universe as well which has been falling off a cliff, not to mention the jumbos.Chickens, maybe the bears (LOL) are coming home to roost. Already the stock has blasted down through the $37.50 strike. There was huge buying in the April puts last week there. As the Najarian brothers would say at Optionmonster.com... chaaaachingg! Read more:Countrywide
Tuesday Curtain Raiser 1970-01-01 00:59:59 Earlier today I talked about the slide in the XBD. Here it is again, with a view value added items.The upper chart is a ratio of the XBD to the S&P 500 and look what's happened: an uptrend of better than 5 months has clearly been broken over the last week. I'd say this would be an important red flag to keep an eye on where the overall health of the stock market is concerned. Where, afterall, would the stock market bull be without the brokers over the last 3 years? The brokers have been among the strongest of leaders.John Murphy over at Stockcharts.com sent an email late this afternoon noting that a big weekly MACD divergence is only in the process of forming... We'll have to wait to see how things pain out this week where weekly MACD is concerned, but already, weekly RSI is looking shabbyl. It's just another interesting piece of the puzzle that has featured an overall resiliant market with a capital-R, yet signs continue to pop up of trouble on the horizon.Tuesday
is going to featu Read more:Curtain
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A Big Catch on MyBlogLog - Pete Stolcers 1970-01-01 00:59:59 Pete Stolcers recently joined the MyBlogLog community to highlight his 1Option blog. Pete is the real deal in the world of trading options. Says Pete, "I live to trade and I love to talk about it. From the floor of the CBOT in 1989 to present day professional trader, my career has been centered on options. I started OneOption, LLC to share my passion." This is exciting stuff. I'm proud to add Pete to my "Important/Favorite Links" section. Please take the opportunity to check out Pete's blog and take advantage of the Open House that he's having. Read more:Catch
New Century (NEW) 1970-01-01 00:59:59 One wonders how many more times you go can go back to the well and make a fortune with these subprime stocks? I'm always cautious about going back one time too many. Here we have a stock down 7% today, but still trading above $14, yet volume on the March 10 puts in the first 3 hours of trading is over 1000 on open interest at 22-thousand. While that's not overwhelming reason to jump into those puts head first, it is sure indicative of the bearish sentiment surrounding this stock and many others either directly involved in subprime, or guilty by association. The further slide in NEW shares comes as investors and speculators have totally ignored Friday's upgrade of the stock by UBS from SELL to NEUTRAL and a $17 price target. UBS had stated that NEW's liquidity risk was OK and the weak credit outlook is already reflected in NEW's shares. Really?So we'll see what happens March 1st... just a few days from now. That's when NEW is expected to report the revisions earnings.Obvio Read more:Century
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Mid Afternoon Notes and Comments 1970-01-01 00:59:59 After being away for a week I've had to take care of a bunch of non blog related issues.As noted over the weekend, Downey Financial (DSL) was mentioned in Barron's as a subprime lender at risk for causing grief to its shareholders. Its shares are down 5% today with put volume running 10-1 vs calls in the March contracts.Anyone notice the Dow Transports today? Worst session for the trannies since August. It was a nice run while it lasted. Richard Suttmeier, this guy is one sharp cookie who I interviewed on Bloomberg Television and radio in the 90's, has some very worthy comments if you think valuation means anything - otherwise skip it. Anyone notice XBD today?XBD breakdown should be reason for concern, or am I just fear mongering? Anyone with half a brain knew the gig was up after those incredible Q4 and 2006 numbers would be an almost impossible act to follow in 2007 - plus throw in subprime risk and you've got the recipe for XBD breakdown. December lows of 235 sure seem like a go Read more:Afternoon
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$87 BILLION in Tax Refunds So Far This Year 1970-01-01 00:59:59 The press has been talking about a special telephone excise tax refund that many filers have not taken. What jumps out at me is that the government has sent out nearly $87-BILLION in tax refund checks this year. That's up over 5% from the year before. $87-bln - no doubt some of that money has had to have made its way to you guess it - the stock market. Read more:Refunds
Dow 12500 Point and Figure Sell Signal? 1970-01-01 00:59:59 I mentioned this last night, by way of a John Murphy email that came through yesterday. So here we are already. 50 day moving average at 12,550 already taken out. It is this 12,500 that is of greater interest today from a technical standpoint. Continue to keep an eye on the trannies... It's another rough day there... Still, with these charts showing some negative changes ala Dow Theory, the bears had better gun for a close below 12,500 to do some real damage, or the bulls could be back in the bear china shop later in the week to take it back up and do their own damage.
Some More Economic Data 1970-01-01 00:59:59 WASHINGTON (MarketWatch) -- Sales of existing U.S. homes rose 3% to a seasonally adjusted annual rate of 6.46 million in January, the highest in seven months, the National Association of Realtors reported Tuesday. It was the largest percentage gain in two years. Sales were down 4.3% year-on-year.Remember: It was unusually warm in the first half of January.Other economic news:The consumer confidence index rose to a five-year high of 112.5 in February from 110.3 in January, the Conference Board reported. See full story.10 year note holding to a gain of 10-ticks, yield at just above 4.59%. Read more:Economic
The TRIN Goes Nuts 1970-01-01 00:59:59 We haven't seen the TRIN behave like this since 2002 and that was during the the time the market was putting in a major bottom. Interesting to see a TRIN reading this extreme with the market still relatively close to the highs. The concern here is that the swings are too extreme and that we could see a quick snap back later in the week. We'll see. These are days when I sure miss Bill Lefevre and Lou Ehrenkrantz.
Nasdaq 100 Breaks Key Uptrend Support 1970-01-01 00:59:59 Support had been at 1766... But, still more than hour to go. However, will VIX up in the stratosphere relative to recent levels, the rescue squad may be stuck today. Read more:Nasdaq
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Trading Collars Be Damned 1970-01-01 00:59:59 While it looks as if the market is intent on going lower anyway into the close, the 2:45ish sudden 200 point meltdown was fascinating to watch. As they collared the market, as you would expect the normal flow stopped. As traders placed sell orders against S&P futures when the collars were lifted at 2:45 - BAM... a vacuum of sellers which the system could NOT handle. The discount to fair value on futures vs cash was breath taking! The chart below shows the high jinks on the Dow intraday at the time. Read more:Collars
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What Will The Bears Do For an Encore? 1970-01-01 00:59:59 We'll find out tomorrow morning at 9:30, is probably the best answer.Though, we will have early indication of how things will shape up for tomorrow once trading in Shanghai begins in about 2 hours.Here's a useful link for keeping an eye on the activities in Shanghai: http://www.sse.com.cn/sseportal/en_us/ps/md/sh_b_qci.jsp.With regulators in China worried about excessive speculation, I just can't help but to wonder if the government will allow things to slide a bit further to wring out some speculative excesses in that market. With a TRILLION in foreign reserves, the Chicoms could easily stop any sort of blood letting in their stock market, but excess has been a concern. Helping to grease the skids - new rule changes. And next week, the big meeting of the National People's Congress where more legal reforms may be coming which could impact the Shanghai market. Somewhere in this blog is a link to a WSJ article about folks in China buying stock by using credit card debt and even mort Read more:Bears
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Understanding The China Market Decline Better 1970-01-01 00:59:59 As I suspected. The Chinese market swoon was "engineered".One of the links to the right is for Strafor.com. Stratfor is like having your own CIA. It is a service which I gladly pay my hard earned money to gain objective intelligence on geopolitical matters. What? I'm going to rely on the New York Times, or the Washington Times? Oy, I like to be well informed.Here are a few excerpts of the Strafor take on the Shanghai market debacle:The Chinese government has become increasingly concerned about levels of investment in its economy or, more accurately, the sheer amount of money that is chasing projects. State firms with limitless access to subsidized capital from state banks have used that access to launch thousands of nonprofitable firms. This glut in "investment" money drives up the cost of commodities and adds industrial capacity without actually producing anything of much use, making life more difficult for the average Chinese and unduly harming relations with foreign powers that fac Read more:China
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Global Sante Fe (GSF) 1970-01-01 00:59:59 Now the company is stoking speculation about a takeover, according to this Reuters story. Read more:Global
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Quick Midday Update 1970-01-01 00:59:59 As selling begets selling not only in stocks, but in commodities, I took the opportunity to dump the metals futures positions across the board to lock in recent profits... no sense in ruining an overall up day from profits in VIX calls, BIDU puts, etc on losing profits in metals, especially gold and silver. The run back to $690 in gold earlier was a gift today. Read more:Midday
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S&P Also Breaks Its 50 DMA 1970-01-01 00:59:59 But thus far 50 day on the S&P has been breached by a small amount. I still think the burden is on the bears to close the market below these 50 day moving average marks - otherwise we're talking garden variety pullback. Even better than a close above the 50 day for the bulls would be a rebound late this afternoon above the 1440 level which is the bottom end of the recent upward trading channel.
EEM 1970-01-01 00:59:59 A few weeks ago, maybe sooner (time flies with three kids here), I talked about the EEM, Morgan Stanley Emerging Market Index and how it was looking toppy. Interesting that the recent high was reached on less than stellar volume, and today's plunge on heavier than average volume. The picture is no less pretty for China I-shares.
Brief Wednesday Curtain Raiser 1970-01-01 00:59:59 8;30 ET we get the final revision of 4th quarter Gross Domestic Product. The consensus estimate is for a big DOWNWARD revision to show growth of 2.3%. This consensus number will be important. Anything too far below will scare the stock market into further worries about corporate earnings; too far above 2.3% and inflation worries will grip the markets. GDP price deflator is expected at 1.5%.At 9:45 Chicago NAPM data comes our way. Important stuff here as well on manufacturing. It's forecast to bounce back a bit right to the diffusion line of 50 which would indicate tepid growth.Then at 10, New Home Sales data will be released. An annual pace of just over 1 mln is expected.So there's a good amount of market moving, or disrupting economic data on the way on Wednesday
following the Tuesday slump and dump.I talked earlier about the stock market, so let's not beat a dead horse.I decided to take a breather on the gold futures... actually got out at $688 today. Tonight it's down to $671. I Read more:Brief
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New Home Sales - YIKES! 1970-01-01 00:59:59 DJ * US Jan New HomeSales
-16.6% To 937,000;Consensus1.080M Dow JonesThat's one bad number, even with a December revision:DJ * US Dec New Home Sales
Revised To 1.123M From 1.120M Dow JonesAs noted Sunday night, sales are now down to 2003 levels. In some respects 2003 levels aren't so bad, which is why I mock those who say the bottom is at hand in the housing market. No way Jose.The January drop is the worst since 1994.
Chicago Manufacturing Further Contracts 1970-01-01 00:59:59 DJ * US Chicago
Purch Mgmt Adj Feb Index 47.9 Vs Jan 48.8 Dow Jones This data is not enough to get in the way of the modest little stock rebound that's underway, but certainly something for the bears to tuck under their hats. Manufacturing
is clearly in trouble and that's bad given the troubles in housing and autos. Any reading below 50 on this diffusion index indicates contraction. Read more:Contracts
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Modest Plus Signs 1970-01-01 00:59:59 And that's a good thing. BUT I'd like to see breadth improve. It's not terribly negative but as of 10 a.m... At the NYSE declining issues still hold a roughly 17 to 13 lead over gainers, while at the Nasdaq decliners have advancers beat by margin of 17 to 10. Those numbers need to improve, or we'll have trouble later in the afternoon. No? If breadth turns positive that will be a great bullish later in the day and especially so if VIX can go back toward the 15 mark. Read more:Modest
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