Tuesday, December 29, 2009

Morning Update/ Market Thread 12/29

Good Morning,

Once again stocks were pushed up overnight. Below is a snapshot of the overnight ramp job that really began just prior to the close yesterday:

Just a reminder, but the markets are no longer free. This means that at any point those with enough money and enough computers can move the market at will. Indeed, the underpinnings are rooted in the debt markets where the government has decided to step in and simply manipulate the markets.

The dollar is down, bonds are about flat, oil is higher having now broken out of the top of its down slopping channel and priced above $79. Oil has gone basically straight up ever since Abu Dhabi agreed to step back in and bail out Dubai. This is exactly what I thought would happen as the move downward in oil was the investment banks playing with the Arabs. Note that now that their debt is being covered that the price is going up regardless of what is occurring in other markets. That’s called total and complete manipulation and it’s also called economic warfare, a favorite game of central bankers the world over, and a great reason to support Freedom’s Vision.

In data released this morning, both the worthless Goldman ICSC and the Redbook showed roughly the same level of gains in retail sales as the week prior. No, I don’t believe their data, nor do I believe some of the retail numbers I’m hearing about this year’s Christmas shopping season. I had a reader write in yesterday who works at Wal-Mart, sees a very slow sales season compared to seasons past, and simply doesn’t believe the numbers being bandied about, such as he heard a report that overall retail sales were up 3.5% this year.

He pointed out that as the dollar goes down that the retail sales figures would be overstated by a like amount. True enough. But as I pointed out, the truth is that in the past year the dollar is down only 2.5%. I think an even larger problem in the reporting of numbers is substitution bias. Let’s say that a Wal-Mart store did the same exact amount in sales this year from last and that the dollar had no change too. If 10% of the retailers went out of business, then if retail sales overall are constant then Wal-Mart sales, and others, should pick up the business of those who went out of business and their sales should be higher. This is just one of the reasons that I do not trust their data and I look to the far more reliable sales tax data.

Also released this morning was the Case-Schiller home data for the month of October. It showed basically no change, so I guess I'll have to post this chart one more time.

Consumer Confidence is released at 10 Eastern.

I’ll be watching the TNX and the RUT today as they both cast out potential reversal hammers yesterday. Keep in mind that the target is 1,200 on the S&P, everyone currently has their eyes on it.

McHugh brought up a good point regarding the large firms desire to hold gains through the end of the year. If they wait to book profits until next year, and there were profits this year, then they delay their taxes for a year by waiting to sell until January.

There’s a 5 year auction this afternoon that needs to be watched as well, just a part of the $175 Billion in government debt auctions occurring this week.

Joe Walsh - Life of Illusion: