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Showing results for tags 'larry levin'.
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Today’s early signs of life in the market were arguably due to the large drop in the Euro. And by “early signs of life” I mean the drop of US equities at the open. We don’t care which way it moves, just as long as “something” is happening. Sadly, when the Euro slowed its trading pace, which usually occurs @ 1-1:30pm CT, the mini-S&P slowed as well. In fact, the S&P traded in about a 5-pt range from mid-morning into the close. Some folks were perplexed: “Why is the Euro falling? Wasn’t the Italian auction excellent?” Yes it was; however, it was only an auction for 6-month Bills. Heck, I’ll bet even Greece, California, and Illinois can auction off 6-month Bills. Nevertheless, the yield demanded by investors was 50% lower than the Nov. 25th auction. What probably worried the markets were the recent actions of European banks and Thursday’s next Italian auction. This morning’s news from the European Central Bank shows us that (ECB) overnight deposits swelled to a record high of €455 billion. Why would banks park their money at the ECB and get 0.25% when it costs 1%? Isn’t that a guaranteed loss? Doesn’t this imply rather forcefully that the banksters know there is another shoe ready to drop? It sure seems like it, and that’s why I believe the Euro fell apart today. So what could be that other “shoe to drop?” Well, if there is one, it suggests that the bankers know they will not be buying the Italian junk…pardon, debt…and therefore the trading desks slammed the Euro and bought “safety” in the US dollar. Perhaps they know something else entirely? Is a major downgrade of sovereign debt coming to a EuroZone country and that caused the move in the Euro/Dollar? Thursday could be interesting. Larry Levin Founder & President - Trading Advantage
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Today’s missive – R&R - is not about rest and relaxation, but “rollover” and “rumors.” Thursday begins the S&P500 futures rollover. This is when traders switch from December (the current contract) to the next contract month, which is March 2012. Stock futures trade quarterly. Please switch all of your charts before the open. Rollover is normally an unfriendly trading environment because traders gradually switch from one quarterly contract to the next. With volume spread between two contracts, we often see small choppy ranges; however, we’re not in normal times. The current times are all about financial central planning, mad-Keynesian spending plans, bailouts, currency rigging, etc. And since there is currently a little of all of the aforementioned on tap, the market may indeed be active during this roll. In fact, the most recent “roll” was one of the best I can remember. I’m expecting that again. The other “R” is rumors and we had a lot more of that nonsense today. This morning there was a rumor that may become fact, which mentioned Germany would force its banks to (finally) recapitalize like the US banks did. The banks will be bailed out by a rescue fund called Soffin. The market put in its low and every single sell on the bid was covered, while every available offer was lifted. The other rumor was denied within roughly 30-minutes but that didn’t matter, the initial sell-off was simply bought back before the close. It started with more BS from a news outlet (NIKKEI): G20 CONSIDERING $600 BILLION IMF LENDING PROGRAM FOR EUROPE. How many super-special IMF, G20, EFSF, ESFS-squared, ECB, EFSF bonds, etc bailout funds were there? Too many to count in my opinion. However many; how many were legitimate? None. After this was released there was a +14.50-point EXPLOSION…then promptly denied. But as mentioned above, the market re-rallied into the close. After all, why would the truth matter to Fraud Street? Trade well and follow the trend, not the so-called “experts.” Larry Levin Founder & President- Trading Advantage Larry Levin's Trading Advantage is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin's proven techniques for powerful results.
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Wednesday is supposed to be D-Day for the banking mafia. Will the Europeans have it all worked out by then – and by worked out I mean sufficiently screwing the taxpayers – or will they continue bickering? Whatever the result is Wednesday, I’ll bet they agreed on more meetings. In the mean time, let’s take a look at some of today’s data. The S&P Case-Shiller HPI wasn’t very good. Home prices are not rising. Bloomberg, of course, tries to put a good spin on it “Home prices, at best, may be stabilizing according to Case-Shiller data that show no change in the adjusted composite-20 index for August. The reading ends three prior months of 0.1 percent declines (July revised downward from no change). The unadjusted reading, at a very weak plus 0.2 percent vs plus 0.9 percent and plus 1.1 percent in the two prior months, points to price contraction in August given that monthly readings in this report are three-month averages. Nevertheless, the unadjusted year-on-year pace of minus 3.8 percent is the best reading since February in what hints at a flattening in the slope of price contraction.” The FHFA House Price Index was much worse. The consensus was for a reading of +0.3% but it was -0.1%. Moreover, last month’s reading of +0.8% was brought back to reality with a revised +0.1%. Finally, we have the consumer confidence data that was just awful – the WORST since March 2009. Bloomberg’s take: The consumer's assessment of current conditions is at its lowest point since December while consumer expectations are at their lowest point since the recession. The consumer confidence index fell 6.6 points in October to 39.8 with the current conditions component down a sharp seven points to 26.3 and the expectations component down 6.4 points to 48.7. Stand-out weakness appears in the current assessment of business conditions where fewer, 11.0 percent, describe conditions as good and more, 43.7 percent, describe conditions as bad. And what is not a good sign for holiday spending, stand-out weakness also appears in income expectations where fewer, 10.3 percent, see their income rising and more, 19.2%, see their income decreasing. This inversion in income with pessimists on top is very rare for this series. But data doesn’t matter when there “may” be a meeting in Europe…sometime…soon, I think? Pass the Hopium please. Trade well and follow the trend, not the so-called “experts.” Larry Levin Founder & President of TradingAdvantage.
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To say that today’s trade was slow is an understatement of massive proportions. It was so slow; it is hard to imagine how it could get any worse. People have a natural tendency to wonder why this happens and the only reason for today must have been the impending AAPL and IBM earning announcements. Both were very good. AAPL earnings were better than expected. Can it already be priced in or is it going to $400/share? Q1 revenue USD 26.74bln vs. Exp. USD 24.42bln Q1 Macs sold 4.13mln, up 23% Q1 iPhone sold 16.24mln, up 86% Q1 gross margin 38.5% vs. Exp. 37.3% Q1 iPods sold 19.45mln, down 7% Q1 iPads sold 7.33mln Sees Q1 revenue about USD 22bln vs. Exp. 20.87bln, sees Earnings at $4.90 on expectations of $4.47 IBM… Q4 revenue USD 29.02bln vs. Exp. USD 28.28bln Q4 gross profit USD 14.2bln Q4 net USD 5.26bln vs. Exp. USD 5.14bln Q4 software revenue USD 7.04bln Q4 global technology services revenue USD 10.2bln Q4 systems and technology revenue USD 6.28bln Q4 gross margin 49.0% vs. Exp. 48.8% Q4 global business services revenue USD 4.76bln Q4 signed services USD 22.1bln, up 18% The ES is almost at my target “level” of 1,300.00 to 1313.75. One wonders if Globex traders will take the baton and run with it into that range. If so, what’s next? Oh, never mind. There are POMO operations every day but 2 this month so it’s up, up & away! Trade well and follow the trend, not the so-called “experts.” Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters. Larry Levin larrylevin@tradingadvantage.com Trading Advantage (888) 755-3846__
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Austerity is a word that is being used to describe what some Euro-Zone countries have to do to comply with IMF and ECB loans. According to Wikipedia the definition is “In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided.[1] Austerity policies are often used by governments to reduce their deficit spending[2] while sometimes coupled with increases in taxes to pay back creditors to reduce debt.[3]” Now, however, it is being used to describe what is happening in Illinois. I couldn’t disagree more. Jan 11 (Reuters) – “A big income tax increase was poised to move to the floor of the Illinois House on Tuesday as Democratic lawmakers played beat-the-clock to get the measure passed before a new legislative session begins on Wednesday. The bill would raise about $6.8 billion a year for the state's beleaguered budget by raising the individual income tax rate temporarily to 5 percent from 3 percent and the corporate tax rate to 7 percent from 4.8 percent.” The Illinois House today passed the 66% tax increase, which now goes to the Senate. It will pass the Senate too, I’m sure. As you can see, in Illinois what comes first are tax increases, not last according to Wikipedia’s “austerity” definition. “Revenue from the tax hikes would allow Illinois to sell about $12.2 billion of bonds to pay off a huge bill backlog and make a $3.7 billion fiscal 2011 pension fund payment. Illinois, which faces a budget gap that could grow to $15 billion, is one of many U.S. states grappling with record budget deficits after the deep recession stunted tax revenue needed to keep daily operations running. It is considered one of the weakest states after years of what critics say was mismanagement of state finances. Democrats control both chambers of the legislature and the governor's office, where Governor Pat Quinn is on board with the tax plan and spending cap, his spokeswoman said on Tuesday.” According to Reuters (and the governor himself) the new tax revenue (if it materializes in the amounts believed) will be used to increase debt when Illinois sells another massive amount of bonds. According to the Chicago Tribune “In addition, Quinn and lawmakers are looking at using the tax hike to spend more than $700 million more on education a year.” Unlike real austerity, you can see that Illinois will actually increase spending. Moreover, a large portion of the increased debt will be applied to kicking the can further down the road since it will be added to union pension funds. Unlike real austerity, there seems to be no “reduction of benefits” to unions because, after all, they got Mr. Quinn elected. In the Bill titled Taxpayer Accountability and Budget Stabilization Act I have to ask the following… I have to start with the name: Are the taxpayers being held accountable for the brain-dead politicians that spent the state into insolvency because the average slack-jawed taxpayer voted them into office; or is this bill going to be accountable to the taxpayer? An odd name to be sure. If it is the latter, just how is increased debt being accountable to the taxpayer? If it is the latter, just how is increased spending being accountable to the taxpayer and stabilizing the budget? If it is the latter, just how are pension benefits NOT being reduced being accountable to the taxpayer? Defined pensions have gone the way of the dinosaur in private companies because they are unaffordable. Of course, politicians spend/promise your money as if it were meaningless Monopoly money and couldn’t care less that they are the only ones foolish enough to still cling to wholly unaffordable defined pension plans. All public unions should have 401k accounts like the rest of us, and of course the state would contribute but not at a rate greater than the average corporation. If it is the latter, just how is a massive 66% tax increase being accountable to the taxpayer? We need the exact opposite of these so-called solutions. We need a real governor. We need a Governor like Chris Christie in Illinois! With the current lot in the capitol of Springfield, Illinois could rival the city of Detroit in short order. This is not austerity but business as usual. Trade well and follow the trend, not the so-called “experts.” Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters. Larry Levin larrylevin@tradingadvantage.com Trading Advantage (888) 755-3846__
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The markets were shocked today when Ben “Benron” Bernanke announced a ¼-point rate hike! The S&P500 suffered a 2.5% drop on the news. Well, uhh, by “shocked” I meant took it in stride. And by Ben “Benron” Bernanke I really meant the Bank of China. Oh yeah, and by “2.5% drop,” I really meant a 1 point GAIN for the S&P500. Oh sure, the European markets were slammed on the news but this is the land of the free…free of economic & financial gravity. At the shores of the USA all economic & financial truisms, like spending more than you make is a bad thing, stops cold. It doesn’t apply to us. Why would China raise interest rates? Don’t they know that rates can be at ZERO 4evaaah? Apparently not. The Chinese central planners must be far behind the curve of American central planners because it looks like the Chinese actually compute inflation based on things that go up in price. Said another way, they should make like an American economist and simply exclude everything that rises in price like; oil, medicine, food, tuition, health care, etc. (When home prices are rising US economists do not include price increases, but rather decreasing OER.) Specifically, China has a property bubble on its hands and wants to deflate it slowly; however, ¼-point hikes won’t do a thing. Although consumer prices are rising in China, its real problem is asset inflation – commercial and residential property. Sound familiar? Check out this article and the staggering amount and size of EMPTY buildings…and whole cities in China that are vacant. Here’s a thought: stop overbuilding. http://www.dailymail.co.uk/news/article-1339536/Ghost-towns-China-Satellite-images-cities-lying-completely-deserted.html No worries though folks; if China’s bubble pops and brings the global banksters Round II of Financial Armageddon, Zimbabwe-Ben will just print more money. No worries, indeed. Trade well and follow the trend, not the so-called “experts.” Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters. Larry Levin larrylevin@tradingadvantage.com Trading Advantage (888) 755-3846__
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In a normal week today's economic data would have made a bigger splash than it did; however, this is not a normal week. Clearly Tuesday's vote, Wednesday's printing press Ponzi scheme, and Friday's jobs data may create a tsunami of waves. First up was the income & spending report. The news came as no surprise to me: incomes were down, but good Americans that we are - we increased our spending. Personal income was far worse than expected at -0.1% and spending was 50% worse than estimated at +0.2%. This data is not not good, but who needs good economic data when the Fed is going to print like maniacs? The ISM report beat expectations by a wide margin. Consensus estimates were for a reading of 54.5 but it came in at 56.9. What is definitely odd is the fact that the regional "manufacturing" reports are a constant disappointment and even show contraction if memory serves me correctly. Somehow, however, when the national data is released it is far better than the sum of its parts. Here are a few quotes from respondents of the survey... * "The dollar is weakening again, which is resulting in higher costs for our materials we purchase overseas. It is hurting our profit margins." (Transportation Equipment) * "Business slowing down but still double digit over last year." (Chemical Products) * "Currency continues to wreak havoc with commodity pricing." (Food, Beverage & Tobacco Products) * "Customers remain cautious, placing orders at the last minute, making supply planning a challenge." (Machinery) * "Our customer base — auto manufacturers — is expanding capacity and making major capital investments." (Fabricated Metal Products) The final report of the day was construction spending. Like the ISM data, it easily beat expectations: consensus estimates were for a reading of -0.5% but it came in at +0.5%. Bloomberg said, "The boost in September was led by a 1.8 percent increase in private residential outlays, following a 4.2 percent decline in August. These numbers reflect recent improvement in housing starts." It looks like this activity took place BEFORE the Fraudclosure scam made it into the Lame Stream Media. This may not continue. Trade well and follow the trend, not the so-called “experts.” Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters. Larry Levin larrylevin@tradingadvantage.com Trading Advantage (888) 755-3846__
