segunda-feira, 28 de abril de 2008

We're Stuck: S&P 500 Range Bound to the Extreme

This chart says it all. We continue to have trouble peeking our head over S&P 500 level 1400. And 4 of the past 6 sessions we've hit or come within a whisker of 1370. Talk about a narrow range - thats 2.2%. On the plus side the longer we hold above the 50 day moving average (1355 and rising) the more bullish it is, but we really need to start getting moving... 200 day moving average is up ahead as resistance @ 1435 if we can ever clear 1400. Otherwise we're stuck for now. It's hard really to make any short term call either way; we could just as easily pop over that 1400 and make a good solid 3-4% run, as we could fall back 3-4% down to 1355. Not much of a hint either way, back to "white noise" areas on the charts. Sort of snoozer action right now.

What's working? Stop me if you've heard this before... coal, natural gas, fertilizer. While I'm happy because I re-upped these positions last Thursday, I still would prefer to take some short term losses and see these names correct a meaningful 15-20% to load the boat, while everyone shrieks on CNBC about the death of commodities, and how the dollar is going to strengthen to par with the Euro within months.

Our US peso is so inept it can't even create a 3 day rally... and looks like our "Economist in Chief" (it's just a mild slowdown, a patch in the road) wants to go out with 3 wars on his hands... no better way to end a tremendous era. Oil Prices Up on Word US Ship Fired on Iranian Boats. I try not to be political here because that is sure to turn off 50% of the readers (and my thought process is 95% of "them" are terrible for "us", regardless of party) but can I please utter "Cmon January 2009... please get here."

As an aside I don't normally comment on surveys, but hmmm... Consumer Sentiment worst in 26 years... you mean like the early 80s? The last time we had stagflation? Nah, never. We don't have either (a) a recession OR (b) inflation so how could we possibly have both? Nah. Impossible.

  • Consumer confidence fell for a third straight month in April, hitting its weakest in 26 years, on heightened worries over inflation and the sagging housing market, a survey showed on Friday.
  • The April result is the lowest since March 1982's 62.0, when the "stagflationary" period of low growth and high inflation was still an issue for many Americans
  • "More consumers reported that their personal financial situation had worsened than any time since 1982 due to high fuel and food prices as well as shrinking income gains and widespread reports of declines in home values," the survey said.
  • "Never before in the long history of the surveys have so many consumers reported hearing news of unfavorable economic development as in the April survey."
  • Nearly nine in 10 consumers thought the economy was now in recession, Reuters/University of Michigan said. (thankfully, 1 in 1 Economists in Chief don't believe so)
Thankfully everything will be fine "in 6 months" or I'd have to be worried. Let's get this stock market going up... everything... will... be... fine. It's all discounted baby.

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