Morning Update/ Market Thread 7/7

Good Morning,

Equity futures rose sharply on the ADP Employment Report this morning, yet the dollar is up, bonds are down, oil is up and looking to retest $100 from below, gold & silver are higher, and food commodities are mixed.

Again today the dollar is testing the upper limit of the descending wedge, and it is moving in the oppostie direction expected for a rising equity and commodity market today. When it breaks this triangle and the boundary of that descending wedge then we'll have a good clue as to the medium term direction for stocks:



The ADP Report came in at 157,000, a sizable jump in private payroll data for June over May’s 38,000. While the ADP report does have a positive correlation with the Employment Situation Report that comes out tomorrow, it also has large misses yet is used to set expectations for Friday’s report.

The consensus for tomorrow’s report is for 110,000 nonfarm jobs, and 125,000 private payroll jobs. Each month in the past year has produced larger “Birth/ Death Model” additions, and in June of last year that model added 131,000 phantom jobs, so it’s certainly possible to create enough fictional digits to claim job creation when in fact there is none, and has been none for the past decade.

Weekly Jobless claims came in at 418,000 for the past week, this is down from the prior 428K (revised higher of course), but obviously still well above the psychological 400k mark yet again… and again… and again. Month after month, year after year of job shedding in the real world, yet here’s Econohope:

Highlights
Incremental improvement is the conclusion for weekly claims data, headlined by a 14,000 decline for initial claims in the July 2 week to 418,000. The improvement is offset slightly by an upward revision of 4,000 in the prior week to 432,000. Results for an unusually large number of six states had to be estimated due to the July 4 holiday while Minnesota shows a 2,500 rise related to the state's government shutdown. The four-week average is down 3,000 to 424,750 yet, over the last several weeks, shows little change from levels in June.

Continuing claims for the June 25 week fell 43,000 to 3.681 million. Continuing claims have been slowly trending lower with the four-week average of 3.705 million down about 20,000 from the month-ago comparison. The unemployment rate for insured workers is down one tenth to 2.9 percent.

Initial claims have been steady at a stubbornly high level above 400,000 which doesn't point to robust results for tomorrow's employment report. Yet this report is a slight positive for the economic outlook and also helps to confirm strength in today's ADP report.

Amazing how long they can keep the positive façade on employment, here’s a reality check:



Please. We’ll know the true bottom is in when Econoday stops calling the bottom. Also, again I read in the Puget Sound Business Journal an article today calling a(nother) bottom in the real estate market – this comes only two days after another one of their articles describes how quickly price is still falling. Again, it’s hard to believe the fantasy created by the media that surrounds the captured commerce in this country. Obviously everything revolves around the corporation and the health thereof, not around the people and their economic or other wellbeing. This capture is definitely a huge part of the problem, most people’s reality is being spun by media whose interest is their own profit.

Morning Update/ Market Thread 7/6

Good Morning,

Equity futures are lower this morning with the dollar higher, bonds higher, oil higher, gold & silver significantly higher, and most food commodities lower.

Note the nice bounce in the dollar right off support. Again, the break of this triangle will tell us the mid-term direction to come:



The conflicted Mortgage Banker’s Association reported Purchase Applications supposedly rose by 4.8% in the past week, but that Refinancing Activity fell by an unbelievable 9.2% in just the past week alone. No, I don’t believe swings of that size are real, they are a product of the MBA’s conflicted and convoluted reporting techniques. Here’s Econogullible:

Highlights
Up 4.8 percent in the July 1 week, the purchase index ended a soft month on an up note. The gain came despite a big rise in mortgage rates that the Mortgage Bankers Association attributes to strong economic data late last week together with the end of QE2. Rates jumped in the week led by a 23 basis point rise in the average 30-year mortgage to 4.69 percent. Refinancing activity dipped sharply on the rise in rates with the refinancing index down 9.2 percent.

Whatever, anything the MBA says regarding their own industry is not believable and is not to be taken seriously.

The Challenger Job-Cut Report shows an increase in mass layoff announcements, rising from 37,135 in May, to 41,432 in June, an increase of 11.5% in the month:

Highlights
Layoff intentions remain subdued according to Challenger's count which comes in at 41,432 in June vs 37,135 in May and vs 39,358 in June last year. At 10,176, layoffs in June were heaviest in the government/non-profit category.

The non-manufacturing ISM is released at 10 Eastern this morning.

Morning Update/ Market Thread 7/5 - Not so Independent Edition…

Good Morning,

I hope everyone had a happy Independence day!

Equity futures are down slightly this morning, the dollar is higher, bonds are higher, oil is higher, gold & silver are significantly higher with gold so far refusing to fall beneath the $1,500 an ounce mark, and most food commodities are also higher.

The dollar has been forming a very clear triangle, and today it is bouncing off lower support. Again, the direction of break from this triangle will tell us what the next trend for equities and commodities will likely be:



Last week’s bounce in equities was very bullish with the weekly candle erasing the past two weeks of decline, and placing the major averages above their respective 50dma’s once again. That said, they are also over their upper Bollinger bands and in overbought territory. Also remember that the full version of QE2 is now officially over and the continuing version of QE3 does not have the same horsepower behind it (that we know of).

Factory Orders are released at 10 Eastern this morning. The rest of the week is fairly light data wise, but the Employment Situation Report for July is released Friday morning.

Below is a chart from Martin Weiss showing the Greek 5 year default risk still climbing even after the second “bailout.”



Of course it was no bailout at all, what is was is the exact same thing as throwing a drowning man a big chunk of concrete – gee, thanks for the help! Part of their bizarre attempt to kick the can was to force “rollovers” of big portions of their previous debts whether agreed to or not by those holding said debt… and that, is what is otherwise known as a default. Amazingly, the ratings agencies picked up on this not so little fact, that you can’t just change the terms of a contract unilaterally without deserving a default rating.

It’s still amazing to me that after all this time we collectively still can’t acknowledge the reality of the situation and then truly deal with it. The impossible math is glaringly obvious to even the most casual observer. What this says is that we are pressing on regardless because of special interest capture of government. It is complete and it is total. Proof of that is to even consider for one moment appointing Jamie Dimon, the CEO of JPMorgan, to head the Treasury Department. If they do that, then the shift to corpocracy/ kleptocracy will be complete. There’s really only one step worse, and that would be someone like Dimon assuming the role of President – not that he isn’t effectively already in that role.

And the tragic truth of the matter is that these sick narcissist figures like Dimon are literally destroying many, many lives, both economically and physically. The tragedy that is Fukushima is yet another example of special interest capture that is literally going to cost thousands upon thousands of lives. The cover-up and lies emanating from Japan are tsunami-like in proportion. The NRC is complicit and will never do the right thing until forced.

I hope everyone realizes that you are not living the “Independence” that is being spun at you. Be careful WHO and what you pledge your allegiance to.

Weekend Open Thread...

Happy 4th of July Everyone!

...Now, if we just could remember the principles upon which freedom is based.

Morning Update/ Market Thread 7/1

Good Morning,

Equity futures are creeping higher again this morning as we launch into a new quarter and new month. The dollar is higher, bonds are higher, oil is lower, gold & silver are making sizable corrections lower, and most food commodities are sharply lower as well.

Confused over the possibility of a significant decline in Quantitative Easing, all whilst massive money printing is still ongoing, the dollar has etched out a triangle as has the schizoid Euro. Below are daily charts of the dollar on the left and euro on the right. The euro ran into resistance at the same time the dollar hit support within that triangle, and thus for the equity trend to continue we need the currencies to bust out of, and run, from those triangles:



Of course “injecting” another $124 Billion into Greece will work out peachy, just like the last iteration of print money from nothing, take real assets and productive people’s efforts, robbery. I’d say that it will work out the same as last time, but that’s not the way debt works, it will work out worse than last time because the effects are cumulative, just like the nuclear hot particles we are all consuming.

Speaking of hot particles, if you haven’t heard Arnie Gunderson’s latest interview yet, you should. It’s an hour long, but worth it: Arnie Gunderson Interview

Motor Vehicle Sales are reported throughout the day today, “Consumer” Sentiment, Construction Spending, and the Manufacturing ISM will all be released at 10 Eastern this morning. Of course we’ll report on these inside of today’s daily thread.

M2 money supply was reported yesterday as gaining $30 Billion in the week, this is up tremendously from the previous week’s $11.7 billion (which is still a ton).

Looking at the money supply charts, the St. Louis “Fed” is actually doing a better job of breaking out the component money supply parts. They are also finally including explanations about how they calculate each chart. I noticed that they broke out Small Time Deposits and that when they do, it produces an M2 Minus chart that clearly shows the parabola nature of the “Fed’s” Ponzi debt backed money:



All parabolas eventually collapse, this one will be no different.

According to the “Fed,” “The small-denomination time deposits component of M2 includes time deposits at banks and thrifts with balances less than $100,000.” That would be pretty much everyone in the middle-class and lower, right? So, let’s take a look at just the Small Time Deposits component of M2:


Straight up, then straight down. Note that the straight down part is still ongoing. I think that says a ton about the winners and the losers of “Quantitative Easing,” and about corporate capture of government in general. Ehhh, be quite, swallow a few more hot particles, and get back to “producing,” whatever that means in America these days (I think it’s going to mean taking care of a lot of cancer patients about a decade from now).

Just as a refresher, here’s the current Base Money chart:



And here’s the hot money effect on the M1 Multiplier which is setting new lows:



This latest rally is one to be careful of in my opinion. The market is already very overbought with the major indices all now above their 50dma’s, but also well above their upper Bollinger Bands. Of course the difference between now and just a week ago is nothing but more debt for Greece, and I can thus guarantee that we’ll be revisiting the debt issues again shortly, as in very shortly. Note that the time intervals between debt driven events are growing shorter and shorter, the result of exponential impossible math.

Below is a daily chart of the NDX on the left and Russell 2000 on the right. Both have formed pretty clear Head & Shoulder’s patterns, the right shoulder is now formed and thus I would not be surprised by a turn back down to the neckline soon. Of course exceeding the top of the Head would nullify this pattern, but there it is: