Before the Open (Mar 19)

Posted on by Jason Leavitt

Good morning. Happy Friday.
All but one Asian/Pacific market closed up, but gains were small. All but one European market are up – gains are small there too. Futures here in the States are flat.
My totally random thoughts…
The market is overbought, but that doesn’t seem to matter. Maybe it’s because most of the volume these days is computer algorithms running on autopilot, so once a move starts, it lasts much longer than normal because all the computers are piling on top of each other.
The market will once again close at a level that expires most put options worthless, so the bears have lost again. The market may give some back after OE day (today), but that’s too easy. Others are probably thinking the same thing, so a sell-off may begin today or be delayed until next Tues or Wed.
The intraday movement is stuff I don’t recognize. I categorize all days, and most used to fit the description of something I’ve seen many times before (ergo, in the middle of the day, I could say “oh, it’s a XYZ day”). Not lately. Most days I sit back and admit I don’t know what “kind of day this is.”
If the market really is in recovery mode – albeit at a very slow pace – why doesn’t the Fed raise rates? Do they know something we don’t know?
Regarding the employment situation, I’ve heard from several sources we need ~ 250-300K new jobs every month for several years to recovery what was lost. I’m afraid that will take years (unlike other recoveries which took much shorter). Heck we need over 100K jobs every month just to breakeven when you consider the new people entering the work force. And since we don’t even get this, we’re still falling behind. A full recovery will not be made for many years. WWII got us out of the Great Depression. I hope we don’t need another world war to get us out of the current situation.
There’s another glut of foreclosures in the pipeline.
The gap between rich and poor is growing. The gap between Wall St. and Main St. is growing. A country without a middle class has no chance of being a super power. When will the second American Revolution begin?
I don’t understand gold. If the world collapses, gold does me no good. I can’t eat it or drink it or wear it. And since 99.9% of the population can’t identify gold next to a fake, it won’t be used as a currency. I’d rather own a piece of land where I could plant food. But this is a story for another day.
The weather in Colorado is nutso. It’s been nice all week, and this morning I woke up to a blanket of snow.
That’s it for now. The trend is up, but I’m being cautious.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings Reports
this week’s Economic Numbers

0 thoughts on “Before the Open (Mar 19)”

  1. There is a line in the movie “Peter Pan” where Windy asks the Lost Boys if they believe in the fantasy called “fairies”, as if to say “believing” is all it takes to make fantasy into reality. There is the Indian poem in which 6 blind men each describe the same elephant differently. Maybe your description of the weather in Colorado applies beyon
    What’s my point? Has the media’s hyped perception become our reality? It appears that their contribution to consumer spending is the only thing missed from the 20 million+ “underemployed” Americans contribution. I wonder how much longer we can leverage the American dream?

  2. Here’s another one that’s been on my mind.
    If Web 2.0 is the future, we’re in trouble.
    Facebook is 6 years old and is huge, but they only have 1000 employees.
    Twitter is huge and younger than Facebook. They have less than 100 employees.
    When ebay, yahoo, google, amazon etc (Web 1.0) were the same age, they had many thousand employees.
    So technology enables companies to grow big without having many employees. There’s no way America, as we know it, can last if this remains the case.
    Jason

  3. And other one…
    For some reason it bothers me many of the education stocks are doing well.
    I wonder how many people are paying being sold up a river with the promise of a great paying job?
    I’ll bet there are many people paying $40-$50K for a 2-year degree at a technical school only to end up with a job that pays $12/hour.
    People talk about fraud in the health care industry. How about smoke and mirrors and empty promises from the education companies?

  4. It seems to me we are in the early stages of a deflationary downward spiral that (once recognized) will cause the stock, gold , and commodity markets to head downward once again. Until that moment of recogmition, we can have a market “melt up” that Jason mentioned earlier this week if/when the retail investor and institutional trade decide they have to be in this market. When will that moment of recognition occur? My guess is that it will happen in the Q2 of this year as Option Arm delinquencies become more noticeable, unemployment numbers remain persistenly high, and state/local governments are forced to cut budgets.
    Jason has been on the mark with his technical analysis. We should see the technical deterioration begin to show as the moment of recognition approaches. Until then, from a trading perspective, one has to stay long or out of the market and patiently wait for the last “bear” to capitulate and a confirmation that the stock indexes have “topped”. Patience is the key here, with the potential for big profits on the downside once the secular bear market resumes, in my opinion.

  5. Oh Boy – have you hit the nail on the head Jason.
    Yes the FED autobots are working in overdrive with fake money to keep the markets afloat with the push of a button.
    As soon as they have offloaded their stock onto the few suckers who think they are going to miss out – the market will crash again.
    It is always the last of the buyers who suffer the most – those who are encouraged to buy lest they miss out – and who are they encouraged to buy by – why the sellers of course.
    The world is drowning in debt.
    The longer this false rally continues the harder this next leg down will be and the more long term damage it will do.
    Truthfully speaking – unfortunately there really is no good news out there. We have been sold up the proberbial creek with a barbed wire canoe without a paddle by the worldwide powers that be, who, if the truth be known, wouldn’t know if their butts were on fire.

  6. I agree with your statement on unemployment. If anyone really thinks unemployment is merely 10% I have some land between Miami and Havana to sell you. To fix the problem the United States needs to produce something. In 1960 we were a leading manufacturer of nearly every good imaginable, as well as mining agriculture and oil production. What do we have today? We are still tops in agriculture but the rest? Unless we do something of value look for the trend to continue.

  7. iwm to 50. vooooop voooooop. stay clear of those resources. oil can set you on fire, gold can hurt you if you drop it on your foot, food poisoning is no fun either.

  8. I would be interested in a service that just bought the long or short ETFS like qld,qid,sso,sds,tza ect. Do you provide such a service. In 35 years all the money I have lost has been in stocks.
    bottom line I an not a trader. I think most people are not.
    Any way you might provide this type of service?

  9. Another thing not too many people are talking about is that retail sales data is decent because all the people who aren’t paying their mortgage are using the money to buy stuff. The banks don’t foreclose on them because they’d have to recognize the loss and the people live for free for months and months. I’m hearing stories of 18 months. When the foreclosures happen, retail sales will drop because people will use the money they are spending that should be going to the mortgage to pay the rent at the new place.
    The TBTF banks are insolvent if they foreclose and if their MBS portfolios are priced at market. It’s not my line, but “the math always wins.”

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