Tuesday, April 20, 2010

Morning Update/ Market Thread 4/20

Good Morning,

Equity futures are higher again this morning, the dollar is slightly lower, bonds are higher, oil and gold are also both slightly higher.

There is no meaningful economic data released today, we’ll see MBA Purchase Applications tomorrow and then we’ll get some more data going into the end of the week including PPI and Existing Home Sales.

Goldman stock is slightly higher after they reported earning $3.5 billion or $5.59 per share. Yeah, that should make you angry. How do they earn that kind of loot? By manipulating the markets, by selling derivatives all over the world, and by marking their own assets to whatever value they feel is necessary to make their bonuses sufficient.

Just look at the billions that have been reported by the “banks” so far this earnings season, it’s staggering. Just remember that all those false earnings can easily be reversed simply by changing accounting rules. They totally play games with the stock and bond markets as well, and everything seems to be okay as long as they get their way with the politicians, however, the day they are meaningfully attacked, look out, they will pummel the markets again in order to get their way.

Yesterday I listened to a podcast by Mark Hanson on what’s happening with real estate. Terrific interview, it will leave you with no doubt that there is more pain coming down the pike:

Mark Hanson on King World News

It looks like about half the flights in Europe have resumed, but the volcano is still spewing ash off and on. Evidently that chain of volcanoes has a history for extended and chain reaction eruptions. This may be a story that plays out for quite some time, if so it will continue to impact the transports.

Yesterday’s positive market numbers diverged against the market internals which were almost all negative. New highs fell dramatically, the McClelland worsened, and decliners outnumbered advancers. This is typical of corrective types of moves, not moves in the primary direction.

The DOW is not too far from making a new high although the indices all produced what appears to be Head & Shoulder patterns that look nearly complete. Should the DOW rise to new highs, its H&S pattern would be invalidated there, of course, and that is typical for this paper/ false accounting rally of the past year. Bearish patterns seem to magically blow up and bullish ones confirm. We’ll see, it hasn’t made that high yet.

Below is a 10 day, 10 minute chart of the SPX showing the Head & Shoulders pattern:

The Asian markets managed to put in a small positive number last night, but the previous session tripped a new sell signal for both the Hang Seng and the Nikkei. The Hang Seng Point & Figure diagram is below, the bearish target is about another 5% lower. That type of move would definitely affect world markets.

The P&F diagram for crude oil also tripped a bearish target of $78 a barrel, that reverses a prior signal that was looking for an oil price north of $100.

That’s about all I have for today, the financials generate false profits, they use their phony money to buy one another’s stock and drive the markets higher to make even more false profits. Quite the virtuous cycle they have created for themselves. Goldman’s reputation, however, is now so soiled that candidates are returning donations from them. LOL, how long do you figure that will last?

Goldman Donations Spurned in Illinois Campaign for Obama Seat

Styx – Renegade: