The Dow was stopped by the 200 day MA for 3 days but will break above today heading for the extended target of 10600 which should be reached quite - quickly 2-3 days. The little correction I expected lasted not more than 24 h and we are in a desperate situation of deceptive DC and underperforming hedge fundmanagers to drive this rally. Still at 10600 we will run into strong resistance and a stronger correction can be expected next week to the 10300 -350 area. The Dow should run a volatile zigzag the next 2 weeks between 10200 -600 before pick up the downtrend again. actually it will even be more complicated in October as the real downtrend will not resume before November - more on that as we progress but for now this is rather a traders market with an upside bias for another 2-3 days.
1. Obama admin does a real subtle job with faking the payroll number so obviously as the birth -death is a pure cooking instrument nor based on any reality and as last month was 6k where do the 115k come from. This is a criminal way to manipulate markets as false numbers are presented to the public. anyway first target of 1100 reached and we might see a retreat from those levels towards 1070 before the next leg - deceptions - brings the market to the 1130 level once again.
excerpt
August Total Non Farm Payrolls Come At -54K On Consensus Of -105K, Unchanged From July, Unemployment Rate 9.6%, Birth Death Adds 115K
Submitted by Tyler Durden on 09/03/2010 07:32 -0500
Private payrolls come in at +67K as Birth Death adds 115K, compared to just 6K previously, as U-6 rises from 16.5 to 16.7%, highest since April. Workweek unchanged month over month at 34.2 hours, with average hourly earnings up slightly from 0.2% to 0.3%. 42% of the unemployed were out of a job for 27 weeks or longer, compared to 44.9% previously; average duration of unemployment at 33.6 weeks.
excerpt 2 - another great accomplishment from the endless failures of Goldman calls one wonders how they make money after all
1. Well in the aftermath it looks much clearer as the plot unveils itself - 1040 was technically one point to turn the market after it was defended furiously and backed up by cooked numbers as we could witness yesterday with the classic 3 percent melt up rally as the shorts were squeezed. We are back on our way to 1100 at least as Obama wants higher markets and his puppet masters do as well. It was not a coincidence that he declared the war over in Iraq ( which is pathetic ) and claimed to focus on home economics so close to the mid term elections and the market turn. Obama wants you to buy overpriced GM stocks and the banksters want to run a smooth merger season and falling markets are a disturbance. In the mean time the Chicago gang takes deception to an all new level where no numbers can be trusted anymore as even former South American banana republic seem to have had more decency - no offense.
excerpt
Are Existing Home Prices Overrepresented By Up To 40%?
Submitted by Tyler Durden on 09/01/2010 22:04 -0500
A reader writes in with some troubling observations on what could potentially be a pretty substantial scheme to artificially "boost" existing home prices by up to 40%, putting all the NAR data, and all other relevant public housing data materially into question. Since trick is painfully simplistic, and all too easy to spot, we wish to open it up to our readers for verification, as this could be a huge hit to the credibility of all existing home price metrics, and put into question all transitory upticks in home prices, such as the backward looking Case-Shiller index indicated yesterday.
From the email:
Realtors are not reporting the true sold prices on homes. Here are 2 examples. If a home is listed on the MLS and then sells at a auction like Hudson & Marshal or RealtyBid, you can see the sold price online or if you attend the live auctions, see the house sell at open outcry auction. The next day the houses are reported sold on the MLS but always at full price.
The example below sold for $115,000 at Realtybid but is listed as sold for $159,500 on the MLS.
Also, homes are listed on the MLS and sold on the HUD site. You can see the sold area on HUD and the Bid Stats. The house listed below sold on the Hud site for $90,061 but again was listed as sold for full price on the MLS $113,400.
These are only 2 examples, I have seen over 100 and assume it is occurring everywhere. I understand that foreclosures are not included in the sales stats from the Realtor Assoc. but the stats they use are taken from the sold prices listed on the MLS. They are all false.
Simply said, this means that any pricing data coming off Multiple Listing Services is fatally flawed, and if this observation is verified, could potentially be a simplistic means to misrepresent the true home price by up to 40% higher.
As for the examples, here is property 1 as represented by the MLS: note the price of $159,500
And below is the actual final auction price on the exact same property taken from RealtyBid:
The MLS certainly pulled all the correct information on the property... all except for the price.
Another example: 5572 Goodhue Ave, Rockford IL 61109. The house was sold in auction for a purchase price of $90,061 as the below screenshot from the HUD auction indicates:
Yet the very same property was listed on foreclosure.com, and subsequently pulled by Zillow, as having a value of $113,400
These are merely two examples.
We have a simple question: which price is the NAR, Case-Shiler, and every other resi real estate index service pulling: the higher or the lower. For the ongoing credibility of the suddenly green shoot free recoveryless recovery, we at least hope it is the correct one. Which is why we ask readers to advise us of any comparable bifurcations between paid and listed price on properties they may be aware of.
Suddenly David Rosenberg's claim that no properties over $750,000 sold in the past month doesn't seem all that outlandish...
again market manipulation in the most pathetic way - the rothschild rockefeller gang looses all subtile measures as they bluntly do not even pretend its a regular market. they got full support by their banksters as they hold up to their end to keep the mergers running. this last minute ramp up of the market on the last trading day was not unexpected but have at least the courtesy to pretend its a real market one could say. desperation comes to mind as we had a heavy volume day. in any way we will have some sort of low soon as the manipulators will suceed short term to trigger another leg and they try to make the 1040 work with agressiv buying but we have a chance of 50 percent still it starts from 990-1000 spx. the job numbers on friday before the long weekend will make the difference but we all know how much those numbers are cooked as well.
Submitted by Tyler Durden on 08/31/2010 15:43 -0500
How do you prevent a 5% drop in a month (which as Credit Trader points out is precisely what the last minute ramp achieved)? A reader explains:
approx 175k ESU0 traded between 3:59 and 4:00 - $9.1B notional. in the 16 minutes between 3:59 and 4:15 just under 300k contracts traded total (12% of full day / overnight volume --- 200% of the previous 5 trading days) for total of $15B notional
And now you know. Beginning tomorrow, the stock market will open at 3:59 pm and close at 4:15 pm . Traders rejoice as this will open up whole new unexplored avenues to kill time during the day with trips to Scores and Baltusrol.
Submitted by Tyler Durden on 08/31/2010 15:08 -0500
In a day in which volume surged to one of the highest total days in all of August, if not the summer, the FRBNY's Brian Sack can claim victory: Dow closed above the ridiculous 10K level, which for some ungodly reason everyone in the administration sees as the Maginot line of the depression. And despite the spike in volume, the market closed virtually unchanged on the day, even as futures go nuts after hours where it has once again become a felony to sell or put on shorts. Confirming that the market is totally, irrevocably broken, the HY index closed at the day's wides, as futures closed at the highs. Calling this robotic farce a shitshow is an insult to shit and to show. And will the last guy out at Liberty 33 please turn off the "buy everything" program currently raging in the AUDJPY. We got the memo: the FRBNY is in charge.
1. The gap was defended once again and markets lost almost all the gains made on this manipulative Friday event which was done with great volume first time on the upside as the strong 1040 support was a good excuse to squeeze shorts. ı still think we are not finished yet as the target remains at 990-1000 SPX befor a bigger upside move can be expected - more on that in tomorrows tech updates.
2.One of the most amazing news is from STRATFOR because their job is to sell sensible intel and to circulate such a story without any foundation could be deadly for their business. I have no doubt that China has huge hidden losses by many sources as the Shanghai gang may have created losses for China to their own benefit. I have a hard time though figuring out how they may have lost this mind blowing amount in traesuries as china is nominally long and should have made a killing. They need to be short like 5 tril and someone who sells that amount will move the market into his direction but to do so as the FED had to generate free profits for banks by a free ride on the curve would be very foolish to say the least. lets see what else we hear the next days and weeks.
excerpt
Rumor PBoC Governor Zhou "John Meriwether" Xiaochuan Has Defected From China After Suffering Half A Trillion In UST-Related Losses
Submitted by Tyler Durden on 08/30/2010 10:57 -0500
Today's stunning if true news comes from Stratfor which has just issued a blast notifying of circulating rumors "in China that People’s Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country." If proven true, this will be the proverbial first rat bailing on the sinking ship. It gets scarier vis-a-vis prospects of US bonds: "The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBC, including Zhou." Um, $430 Billion in losses? Hopefully this explains why next month's TIC report won't show any incremental increase in Chinese holdings of Treasuries (and most likely quite the opposite). Stratfor continues: "Although Ming Pao on Aug. 30 published a report on its website indicating that the prior report was fabricated by a mainland news site that had attributed the false information to Ming Pao, rumors of Zhou’s defection have spread around China intensively, and Zhou’s name has been blocked from Internet search engines in China." Even if Zhou is safe and sound in Beijing, the fact that China has experienced nearly half a trillion in losses on its UST holdings is shocking, and means that the US Treasury bubble may be approaching the popping phase.
STRATFOR has received no confirmation of the rumor, and reports by state-run Chinese media appeared to send strong indications that Zhou is in no trouble at the moment. However, the release of this rumor and its dispersion throughout the public is significant, particularly as the Communist Party of China (CPC) is preparing for a leadership transition in 2012.
Chinese state-run media and official government websites have run several high-profile reports about Zhou, which should be seen as a move to refute the rumors. The PBC website published two articles on its homepage reporting on Zhou’s meeting with visiting Japanese Financial Services Minister Shozaburo Jimi during the third China-Japan high-level economic dialogue as well as a meeting with an Italian delegation. Xinhua news agency reported that Zhou told the PBC Party Committee Enlargement Meeting on Aug. 30 it should “continue to implement justice, and strengthen legislative work in the financial system.” Prior to this news, Zhou appeared at the 2nd annual conference of the heads of the Chinese, Japanese and Korean central banks held on Aug. 3, and his most recent public appearance was Aug. 10 for China’s Financial System Anti-corruption Construction Exhibition.
Zhou is known to have lofty political ambitions and is believed to be a close ally to former Chinese President Jiang Zemin, as well as a core figure for Jiang’s “Shanghai Gang.” There has been no shortage of rumors about Zhou’s possible dismissal in the past five years, as he is believed to be associated with several high-level financial scandals. For example, Zhou was rumored to be under “shuanggui,” a form of house arrest administered by the CPC, during the massive crackdown of Shanghai Party Secretary Chen Liangyu in 2006, which was perceived in the country as a crackdown of the Shanghai Gang and part of Hu’s effort to consolidate power ahead of the 2007 power transition. There was also a rumor that he might have been detained following the investigation and arrest of Wang Yi, the vice governor of the China Development Bank, along with several other officials in the financial circle. Currently, several financial scandals are still under investigation, and it is likely that Zhou, as PBC governor and one of the most powerful economic players in the country, could be associated with some cases. Therefore, whether or not the rumor is true at this time, the leaking of this news is very likely to be associated with a power struggle within the Communist Party’s economic hierarchy.
We will bring you more as we get it on this potentially groundbreaking development.
Some math:
Assuming average 6 Year duration on holdings (completely arbitrary), and a 2% drop in rates, means $430 billion is 12% of total notional, so somehow China must be short $3.5 trillion in notional or synthetically. Not good.
So far the price action goes with the script we tested the gap area yesterday to fall back in a 24 h spike. The trendline serves as a perfect resistance and we are heading for the final decline for now towards 990-1000 which should happen fairly quickly now. Today is crucial with strong revised GDP and Bernanke speech expected to give clues for the scale of QE. The charts say we are rather heading for a disappointment and a mini-capitulation. As plenty sentiment readings are oversold another drop of around 5 % will trigger a short covering rally as even Barrons has now eyed the head and shoulder pattern - though its the bigger scale one we rather see a fake out for now. Obama and his puppet masters no that a dropping stock market will be not good for them in many ways as it would also stop the mergers machine starting to run again and they want to sell plenty of GM so they will through PPT into the game early Sep to screw with the shorts once again. For traders I recommend covering shorts around 1000 and below short term.
zerohedge is really excellent in finding those correlations - as expected per yesterday we briefly turned around to test yesterdays gap - tomorrow we should drop again.
excerpt
A Butterfly Flaps Its Wings And The Market Goes Up...
Submitted by Tyler Durden on 08/25/2010 13:47 -0500
No, this is not some new age chaos theory mantra - it is a direct observation of what has recently been, and continues to be the primary source of funding for the market: the ES is now following the 2s10s30s butterfly tick for tick, as stocks no longer have faith that Central banks will do everything in their power to preserve the Ponzi regime. So any move in the butterfly's wings result in an immediate HFT mediated ramp in stocks, which in turn pushes all other risky pairs into the stratosphere. And yes, today will be one of those days where Mr. Brian Sack of the FRBNY's open market manipulation committee, who unfortunately will not be able to make the Jackson Hole meeting this year due to "market conditions" on Wednesday through Friday, will do all in his power to get stocks, bonds, gold and oil all up, now that the economy is confirmed to be in a depression. Incidentally, all those who hope the Fed will announce QE w this Friday, will be disappointed. (reference: Jim Hatzius comments from last night).
Let other people speak today - the following excerpts have to be digested with care as plenty bullshit propaganda is part of it. Fact is we do not have a real market anymore as HFTs and PPT dominate at least 80 percent of much lower volume on average. Still serious money is in the game with all the pension funds who are in a zero interest world now and have anyway not made any money the last 10 years in stocks a lot is at stake. Any serious selling would drop the markets by half and ı am not talking about a crash. we do not trade at any fair equilibrum right now - just to give you one idea
Stocks opened lower for a fifth straight day Wednesday, following a disappointing durable-goods report. Joseph Keating, executive vice president and chief investment officer at CenterState Bank, and David Hefty, chief executive of Hefty Wealth Partners, discussed their market outlooks.
“We’re continuing to see the market trade with the theme of decelerated growth,” Hefty told CNBC.
“We have to have the economy grow and we're not seeing that happen—it’s going to lead us into a double-dip recession.”
In the worst case, Hefty expects markets to pull back 20 to 25 percent with more losses in 2011.
“What points us to that direction is that wages and disposable income across the country is coming down. Housing prices had a rally over the last 12 months or so; however, we’re seeing that tip the other way,” he said.
'Not the Way to Grow'
In the meantime, Keating said there needs to be changes in Washington’s policy in order for the economy to turn around.
“We need to send a message that big government spending, big taxes, big deficits, rule-making is not the way to grow the economy,” he said. “We have to elect people that will bring us back to a smaller-government, more incentive-driven policy.”
Even if the economy performs as poorly as expected for the rest of the year, that may not mean bad times on Wall Street.
Key Points
Stocks often rise even in bad economic times. Some analysts maintain that cheap valuation will provide a boost to the markets in the current downtrend.
In fact, during times of slow economic growth since 1990, stocks have risen twice as often as they have fallen. The trend is important to remember amid a series of GDP downgrades from major analysts and worries that the economy even could fall into a double-dip or worse.
Many major analysts—Goldman Sachs and JPMorgan among them—have cut their GDP projections to below 2 percent for the third quarter and about 2 percent for the fourth. What that means for the stock market, though, may not be so obvious.
"Basically when you look at GDP numbers coming out they usually are not a very good predictor of the stock market," says Sam Stovall, chief investment strategist at Standard & Poor's. "It's sort of the other way around. The stock market tends to predict movements in the economy by six months."
The recent history of economic slowdowns is one of opportunity for stock-buying investors, sometimes in the extreme.
Take 1995, for instance. With GDP trudging along at a respective 1 and 0.9 percent pace in the first and second quarters, stocks were booming. The Standard & Poor's 500
[.SPX1047.67-4.20(-0.4%)]gained 9 percent in the first quarter, then kept the momentum going with an 8.8 percent rise in the following three months.
AP
The 2001-2003 recession also saw good times for the market. GDP grew 1.4 percent in the fourth quarter of 2001, while the S&P rose 10.3 percent; growth was 0.1 percent in the fourth quarter of 2002, vs. an S&P gain of 7.9 percent.
The average stock marketresult on the 18 quarters between 1990 to 2010 when GDP was between zero and 2 percent was a gain of just under 3 percent.
One of the keys to the reverse coordination between the two measuring sticks is that stocks tend to do well when nobody expects it.
"When you have lowered expectations you can have a potentially good rally," says Ryan Detrick, senior analyst at Schaeffer's Investment Research in Cincinnati. "It makes sense that at times when you have lukewarm growth but overall expectations are probably lowered, you can have those upward surprises in the stock market."
Stocks even have held their own during times of economic contraction.
Of the seven negative GDP readings during the same time period, the S&P rose three times, including the 15.8 percent gain in the second quarter of 2009 when GDP fell 4.9 percent, and a 13.6 percent rise in the first quarter of 1991 when GDP fell 1.9 percent. The average was a gain of 1.23 percent.
Jeff Cox Staff Writer CNBC.com
"You've got this economic growth piece, but then you've got this other piece which is, 'What do I do with all this money in a money market paying me 0.25 percent?'" says Nadav Baum, executive vice president at BPU Investment Management in Pittsburgh. "That's the dilemma that investors are looking at, and they're starting to realize that 'I'm probably OK to go out and buy big dividend-paying stocks.'"
With the possibility of the US economy slipping back into negative growth posing an increasingly high danger, the notion that stocks can still rise might provide some comfort to equities investors.
Economist David Rosenberg of Gluskin Sheff on Tuesday reiterated his assertion that the US economy is not in a recession but rather a depression. But even he pointed out that stocks rallied sharply for several years during the Great Depression before falling again.
"Even though the GDP number is getting weak, that doesn't mean stocks can't go higher," Baum says. "It's not just a factor of GDP. There are other forces that can help stock prices go up right now. The bigger factor is, 'Where can I do to make the money on my money?'"
S&P's Stovall argues that valuations continue to be attractive based on current consensus earnings estimates.
The current S&P price-to-earnings ratioon a non-Generally Accepted Accounting Principles basis is 14, which Stovall says is a 26 percent discount to the average P/E on trailing earnings on records dating back 22 years. On a GAAP basis, that number goes to 17, which is actually a 36 percent discount to average over the same 22-year period, and is level with the average GAAP basis since 1936.
S&P actually is projecting that stocks could fall on a short-term basis back to a bear market—20 percent drop from the April 23 highs—before shoring up and turning positive. The firm has a 1,190 price target for the "500" in the next 12 months, a jump of about 13.5 percent from the current level. The index has fallen 14 percent from the April high.
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"Unless we expect earnings to actually decline moving forward, rather than advance at a slower pace, I would tend to say that valuations would stop us from seeing anything more than a light to average bear market," Stovall says. "The market is readjusting itself. Maybe we could end up seeing a sharper move downward in the next month because investors want to get it over with.
The DJIA will lose about half of its value over the next couple of years as it follows a Nikkei-like pattern, according to Charles Nenner of Charles Nenner Research.
The NDX broke as expected below the neckline of the head and shoulder with a gap which is a classic to the book pattern and is now running into the short term support in the 1760-80 zone which was our conservative target. The odds are favoring the more extreme target now by the way we reached the current one. The target derived from the head and shoulder pattern is 1675 and our overall target for this leg is 1650 and it should be reached quickly but we might see some tricky moves in between remember its mercury retrogade time. Expect a test of the gap once we reach the 1760 area likely tomorrow before the trend is picked up again 24h later approx. a confirmation for such an mini move will be a day below daily Bollingers today at 1763 that are random details though. Just do not get nervous once you see the countermove when it appears as that will generate a chance to sell if you are not fully positioned.
usdtry is about to break the 1.5310 resistance after we hold a strong support around 1.49. the tl has stayed quite strong although the situation is far from being rosy in real terms. ınflationary pressures are very high despite the official reports and turkey has deep negative interest rates. he relation with the USA is at the edge and a war with with Iran would not be added value.A referendum in 3 weeks about massive changes in the constitution will trigger tension going forward. nothing of all these facts is priced in so far thanks to massive manipulations and smartasses who think emerging markets are the smart play with their potential to decouple. well nobody can decouple from a bankrupt world but the corrupt central bankers keep the illusion alive. target for the usdtry is 1.55-6 short term as the eurusd is heading for 1.25 short term. we might even see 1.60 once again but ı suspect that eur will regain strength again as dollar strength is not an option heading for the midterm elections and for the economic stability of usa as it delivers perfect exits for china to get out of treasuries.
The Dow was stopped by the 200 day MA for 3 days but will break above today heading for the extended target of 10600 which should be reached quite - quickly 2-3 days. The little correction I expected lasted not more than 24 h and we are in a desperate situation of deceptive DC and underperforming hedge fundmanagers to drive this rally. Still at 10600 we will run into strong resistance and a stronger correction can be expected next week to the 10300 -350 area. The Dow should run a volatile zigzag the next 2 weeks between 10200 -600 before pick up the downtrend again. actually it will even be more complicated in October as the real downtrend will not resume before November - more on that as we progress but for now this is rather a traders market with an upside bias for another 2-3 days.
