Thursday, July 16, 2009

Morning Update/ Market Thread 7/16

Good Morning,

Futures are close to even after being down last night and then topping again in the 933 area:

The dollar is down and bonds are up slightly.

JPMorgan posted a $2.7 billion profit, and boy, does that just piss me off! CRIMINALS are continuing to steal taxpayer money, while they control they government, hide their toxic waste, and rake consumers over the coals with outrageous fees. Let’s just say that between them and Goldman Suck’s bonuses, that I’m of the opinion that their karma is going to catch up to them in a way that won’t be so pleasant down the road and it will be deserved.

One Tin Soldier – Coven:

And we have to suffer through listening to Paulson testimony today – a Teflon soldier. The only testimony I want to hear from Paulson is at his criminal trial.

It looks like CIT will not be getting bailed out by the government, now there’s a tin soldier that won’t be riding away come judgment day. This will cause losses elsewhere as they were active in the derivatives field. I don’t know where and it may take a while to find out, but it looks like CIT will wind up in bankruptcy where they belong instead of becoming another money laundering operation for the central banks. Must not have been able to funnel enough cash through them or they would have.

Jobless claims came in much lower than expected at a still awful 522,000 for the month. Continuing claims fell as well, but the BLS and Econoday actually offer up an excuse for the decrease:
Substantial improvement, but improvement tied to seasonal adjustments, is underway in jobless claims where initial claims fell 47,000 to a lower-than-expected 522,000 in the July 11 week (prior week revised to 569,000). The four-week average is down 22,500 to 584,500. Continuing claims really fell, down 642,000 to 6.273 million. But the Labor Department is warning that results for both initial and continuing claims are being affected by prior layoffs in the manufacturing sector, layoffs that are largely seasonal and that happened earlier than usual this year. Stocks and commodities popped higher, but only briefly, in initial reaction to the headline decreases.

You mean that there are still manufacturing jobs? LOL, where? Please read Point's update below regarding the "ADJUSTMENTS."

Not to worry, there have only been 1.5 million foreclosures in the U.S. this year:
NEW YORK ( -- The foreclosure plague is not going away -- it's only getting worse.

A record 1.53 million properties were in the foreclosure process -- default notices, auction sale notices and bank repossessions -- during the first six months of 2009. That was 9% more than the previous six months and 15% more than the same period of 2008, according to a report released Thursday by RealtyTrac.

There were a total of 1.91 million filings resulting in 1 out of every 84 U.S. properties receiving at least filing in the first half of the year. Banks repossessed 386,800 properties.

"What this means is, despite the intensity of the efforts on the part of government and lenders we don't have a handle on foreclosures yet," said Rick Sharga, a spokesman for RealtyTrac.

TIC flows (Treasury International Capital) were NEGATIVE by "only" $66.6 billion (see that number???) with foreign private TIC flows negative by “only” $82.2 billion!!! Nothing to see here, move along…

That’s nice… we are running structural deficits and people are pulling money from the treasury, not giving it to them. So here’s the question… who is buying up all the debt??? There is more here than meets the eye, remember that they are claiming that indirect bidders are snapping up treasuries… oh really? Could those indirect bidders actually be government surrogates? I’ve been wondering this for quite some time. Wonder why the Fed doesn’t want a REAL audit? There’s smoke here, tons of it.

I’ve been detailing the collapse of the bond market and despite the rally of the past few weeks, is down substantially since the beginning of the year – as in collapse. Well, TLT is has now given up a good percentage of the recent gains:

HUGE gaps all over the charts from yesterday. Here’s the DOW with one of the smaller gaps. Huge move and on higher volume:

The Transports also made a huge move on higher volume, leaping over the 50 and 200 moving averages. Note that the DOW Industrials made a new high, but the Transports have not:

Note the double top at 933 on the SPX. It topped out there again overnight.

The VIX diverged against the market yesterday, watch it closely today:

McHugh said last night that he believes we have started wave c up of B and that the evidence for that is overwhelming. And what a ride the past three days have been. Two 90%+ days in the past three, yesterday was a 97% up day, buying panic! McHugh stated that he thinks the upright H&S pattern is not going to play out because it was too obvious and people were talking about it on CNBC. Thus he thinks the inverse H&S is now more likely and it has a target up in the 9,700 area of the DOW or 1,050 area of the SPX… maybe, but I sincerely doubt it.

Now, on the other extreme, Denninger said that he shorted the hell out of the market after the close yesterday (that would be appropriate looking at CIT and the devilish numbers of the TIC data).

I fall in neither camp! Sorry for the non-commital, but I want to see 956 fall to declare the H&S pattern dead and to fall in McHugh’s camp, and conversely, I would want to see a fall back below the neckline at 888 to be in Denninger’s bearish camp. But you know me, of the two I would favor Denninger being correct. They both know and believe that the fundamentals of our economy are cooked and on that point we are all in agreement.

Philly Fed data comes out at 10 Eastern…

Have a good day,


One Tin Soldier: