Tuesday, June 2, 2009

Morning Update/ Market Thread 6/2

Good Morning,

Futures are down slightly this morning, bonds are up, the dollar’s down and gold is rising again:

We receive vehicle sales data later today, the ICSC store sales data showed a week over week drop of .6%, but a year over year gain of .6%, while the Redbook chain store sales showed a .1% improvement for the week. At 10 eastern pending home sales data is released.

We now have two new components of the DOW Industrials. Traveler’s Insurance (gee, that sounds industrial), and Cisco Systems. Look for both of those firms to rise now that they are a part of the index. Again though, substitution bias influences the index. The ONLY company remaining of the original Dow 30 stocks is GE. Since GM and Citi are being removed, we should see a little more volatility in the index simply because the new stocks are alive and not flatlined near zero. CSCO rose 5.4% yesterday and pinned its upper Bollinger band.

So, how to make money at this point in time? Hopefully everyone has a portion of their portfolio in gold. I do, but my mantra is not to overdo it as that trade can reverse quickly. Me, I’m just sitting patiently waiting for a good short entry. We may be getting close, but McHugh believes that we have begun wave c up of B up and that there’s an inverse H&S target of about 1,050 on the S&P. I don’t like his inverse H&S, never have as it does not have a right shoulder. We simply performed a rocket shot off of 666, leveled out and created a triangle and now are rocketing up and out of the triangle… abc.

The short term stochastics are WAY overbought, and prices are ABOVE the upper bollinger. The daily stochastics are reaching overbought AGAIN.

Below is the SPX for the entire bear market... note that we made a new high for the first time, that makes this area a very important one technically (neither the DOW nor Transports have made a new significant high):

I think this is the most dangerous thing that could have happened to the markets and the economy. It’s NOT healthy and is likely to end in tears. Of course timing is everything and the bulls are crowing as they always do when prices are rising. Many of the same old tired lies are being told again and people believe those lies again. That’s what bear markets do.

I see that Peter Schiff is declaring victory… believing that the bonds down, dollar down play, like he forecasted, is happening now. He’s claiming the ride down was the sucker move and this is the real deal! Okay Peter, bask in it while you can. Timing is everything.

Since I feel like I’m just repeating myself, I don’t really have a lot to add this morning. I have a terrific Martin Armstrong article coming out later today entitled, “Is Democracy Dying? The REAL Leviathan – The Power Cleverly Hidden Behind Politicians.”

Ha, ha, that’s right up our alley, can’t wait to read that one myself, I’d say Armstrong and I are pretty much on the same page in that regard only he’s had more, unfortunate, direct experience with it.

Okay, have a great day. I know many of you feel like I do!

Peter Frampton - Do You Feel Like We Do:

No rule of law.