Tuesday, December 23, 2008
Merry Christmas
Tomorrow is Christmas Eve. I and Mr$. Bonddad have a ton of work to do before we have our first Christmas dinner with family at our house. Daddy Bonddad is in town along with a lot of other family. Needless to say, my list of honey do's is long. To that end, I am going to sign off the blog until next Monday. On behalf of me, Mr$. Bonndad and our our extended family I want to wish all the readers of this blog a Merry Christmas.
Treasury Tuesdays
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Notice the prices are way above the trend channel that lasted for most of nine months. That's a big deal
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Notice the following on the daily chart:
-- Prices are 7% above the upper trend line of 9 month trend channel mentioned above
-- All the SMAs are moving higher
-- The shorter SMAs are above the longer SMAs
-- Prices are above all the SMAs
The 10-year treasury is currently yielding 2.15%. Who would have thought that was even possible? A county that is about to balloon its existing debt can do so at 2.15%? Go figure.
Today's Markets
Actually -- it's yesterday's market, but who's counting?
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One of the big events yesterday is prices broke through the upward sloping trendline that started at the beginning of November.
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In addition, there was an upward sloping triangle that prices broke through as well.
The only good news about these trend breaks is they occurred on lower volume.
Click for a larger image
One of the big events yesterday is prices broke through the upward sloping trendline that started at the beginning of November.
Click for a larger image
In addition, there was an upward sloping triangle that prices broke through as well.
The only good news about these trend breaks is they occurred on lower volume.
Monday, December 22, 2008
Today's Markets
Mr$ Bonddad here, Bonddad has picked up Daddybonddad up from the airport for holiday festivities. He'll be back in the morning.
Don't Count on the Little Guy
From the WSJ:
This is a prime reason why the Madoff scandal is so debilitating -- it completely kills confidence in the market.
Today's investors, too, are surveying a stock-market collapse and a wave of Wall Street failures and scandals. Many have headed for the exits: Investors pulled a record $72 billion from stock funds overall in October alone, according to the Investment Company Institute, a mutual-fund trade group. While more recent figures aren't available, mutual-fund companies say withdrawals have remained heavy.
If history is any guide, they may not return quickly.
......
Individual investors arguably form the bedrock of the market. It's difficult to pinpoint how much stock they hold, because they own shares through mutual funds, retirement accounts and other vehicles. But once retirement accounts are factored in, individuals likely account for half or more of all U.S. stock holdings, according to data from Birinyi Associates in Westport, Conn.
Investors' discomfort with stocks has been growing for years, since just after the 2000 selloff of dotcom shares. From 2002 through 2005, investors put an average of $62 billion a year into U.S. stock mutual funds, less than half the annual level of the previous decade. Since 2006, investors have been pulling money out of U.S. stock funds at a rate of about $40 billion a year.
Such skittishness already promises to put a brake on the stock market's recovery, which could make it harder for companies to raise capital and could squeeze financial firms' profits. That, in turn, could delay the economy's emergence from the severe recession that began last year.
This is a prime reason why the Madoff scandal is so debilitating -- it completely kills confidence in the market.
What About Next Year?
Above is a video from this week's Barron's. Essentially, people are seeing a modest recovery but nothing to write home about. The Fed printing money and the mammoth spending plan coming in will help but the economy is facing incredibly strong headwinds. That being said, consider the following charts of the NYSE and NASDAQ advance/decline and new highs/new lows line with the charts listed below.
Click on all images for a larger image
With all of these charts, notice the new highs/new lows line is decreasing at a far lower rate and the advance decline line has rebounded somewhat.
Market Monday's
Let's take a look at a few charts to get the ball rolling. I'm going to start with the IWMs. This is the ETF tracking stock for the Russell 2000. Because this index deals with smaller cap stocks it's a good proxy for risk capital.
Click for a larger image
Notice the following on the three month chart:
-- The market has been rallying since the end of November
-- Prices have broken through upside resistance from the upper downward sloping trend line
-- Prices are above the 50 day SMA
-- The 10 and 20 day SMA are moving higher
-- The 10 day SMA is above the 20 day SMA
-- Volume has been steady
Click for a larger image
Notice the following on the QQQQs:
-- The market has been rallying since the end of November
-- Volume has been dropping for the duration of the rally
-- Prices have broken through upside resistance from the upper downward sloping trend line
-- Prices have formed a triangle consolidation pattern over the last week or so
-- Prices are right below the 50 day SMA
-- The 10 and 20 day SMA are moving higher
-- The 10 day SMA is above the 20 day SMA
Click for a larger image
Notice the following on the three month SPY chart:
-- The market has been rallying since late November
-- Volume has been decreasing for the duration of the rally
-- Prices can't quite get over the upper line of the downward sloping channel
-- The 10 day SMA is above the 20 day SMA
-- The 10 day SMA recently turning down but the general trend is still up
-- The 10, 20, and 50 day SMA are jammed into a small price area
Bottom line: the situation with the Russell 2000 is very positive. That index has been rising on good volume and has broken through key upside resistance. All of these factors indicate early risk capital is getting in. The QQQQs are also in good technical shape save the declining volume over the last rally. However, this could also be a sign of people not wanting to over-commit to a possible rally. The SPYs suffer from two problems: they haven't broken above hey upside levels yet and they have declining volume. Again -- this could be because people want to participate but not too much or there is leglitamte concern.
Still, the positives outweight the negatives on these combined charts. The markets look poised for some early year gains.
Click for a larger image
Notice the following on the three month chart:
-- The market has been rallying since the end of November
-- Prices have broken through upside resistance from the upper downward sloping trend line
-- Prices are above the 50 day SMA
-- The 10 and 20 day SMA are moving higher
-- The 10 day SMA is above the 20 day SMA
-- Volume has been steady
Click for a larger image
Notice the following on the QQQQs:
-- The market has been rallying since the end of November
-- Volume has been dropping for the duration of the rally
-- Prices have broken through upside resistance from the upper downward sloping trend line
-- Prices have formed a triangle consolidation pattern over the last week or so
-- Prices are right below the 50 day SMA
-- The 10 and 20 day SMA are moving higher
-- The 10 day SMA is above the 20 day SMA
Click for a larger image
Notice the following on the three month SPY chart:
-- The market has been rallying since late November
-- Volume has been decreasing for the duration of the rally
-- Prices can't quite get over the upper line of the downward sloping channel
-- The 10 day SMA is above the 20 day SMA
-- The 10 day SMA recently turning down but the general trend is still up
-- The 10, 20, and 50 day SMA are jammed into a small price area
Bottom line: the situation with the Russell 2000 is very positive. That index has been rising on good volume and has broken through key upside resistance. All of these factors indicate early risk capital is getting in. The QQQQs are also in good technical shape save the declining volume over the last rally. However, this could also be a sign of people not wanting to over-commit to a possible rally. The SPYs suffer from two problems: they haven't broken above hey upside levels yet and they have declining volume. Again -- this could be because people want to participate but not too much or there is leglitamte concern.
Still, the positives outweight the negatives on these combined charts. The markets look poised for some early year gains.