Market Talk / Jan. 22 - 28

[NASAguy]

Energy is going to be the issue that breaks us. I don't know about everyone else, but my household cannot take $3.00 a gallon gas for any length of time and NOT change what we spend money on. I drive too much. Just going back and forth to work and to town I put 40K on vehicles per year. I'm not alone, we drive a lot in this country and our distribution system is based on ground transport for the bulk of movement.

If Iran affects the amount of supply, or changes the current baseline and starts selling oil in any currency but USD, we are going to have a long summer with very high energy prices and they will NOT come back down.

 

[NASAguy]

I agree with the savings issue. I read an article that stated most mortgages in the past 3 years were the "interest only", and sometimes less than that for the first few years. Everyone was banking on homes going up 10% per year.

I hate to think the bulk of people in this country are really that dumb, but I think that may be proven in the next few years.

A friend of mine in California told me every Sunday the newspaper in LA states the amount of money that people are "upside down" in their current mortgages. Apparently it is climbing like a rocket. It will only be a matter of time and the crash will be horrible.

 

[NASAguy]

Europe dropped after the GDP annoucement. Still positive, but they all dropped.

 

[Wizard]

I read my post concerning Spaf's crude chart.

I did not mean anything by the tone towards him. Nothing at all.

Spaf is just listening to the talking heads on TV that keep moving the price up. If you follow the market MSM has said $40 would be the death not $30. Then $50 not $40 then $60 not $50 then $70 not $60.

$30 is death to the economy. Dr Greenspan stated that himself when crude passed $30 the first time-years ago. You know the same speech where he said "Crude over $30 is only a temporary phenonom"? Yeah, that one. Two weeks later he was out saying "interest only mortages are the way to go".

Listen to those spinners at your own risk. .

I am permaneutral. I just call it the way it is.

 

[Wizard]

I agree with the savings issue. I read an article that stated most mortgages in the past 3 years were the "interest only", and sometimes less than that for the first few years. Everyone was banking on homes going up 10% per year.

I hate to think the bulk of people in this country are really that dumb, but I think that may be proven in the next few years.

A friend of mine in California told me every Sunday the newspaper in LA states the amount of money that people are "upside down" in their current mortgages. Apparently it is climbing like a rocket. It will only be a matter of time and the crash will be horrible.

1933 we were the manufactoring superpower of the world.

Now we the superpower of exporting debt and jobs.

If you know anything about economics, that is the same as saying

"We are in a hole, we just got to dig ourselves out".

 

[NASAguy]

I agree. However it will be painful (by todays standards) because we now have to compete with the entire world and most of it can produce items cheaper than we can.

Years ago the economy changed in this country from farming to industry and poeple moved in droves into the cities for work. Same issue today, but instead of moving from farms to cities, we now move from country to country with the work.

It will be a hard lesson for some. However, even during the Great Depression people became rich if they knew how to make a good product. Maybe we can do it again.

And before anyone jumps on that: NO- I am not forecasting a depression. Slowdown........ maybe. People have to money in order to spend it and if it is all going into keeping a house to live in and the gas tank everything else becomes secondary.

 

[Birchtree]

Entice me - I'll bite

Dear Birchtree,

As a Power Rewards cardholder, we are pleased to offer you another wonderful savings opportunity. Use the enclosed balance transfer checks to consolidate and eliminate your outstanding balances and you'll save with an incredibly low variable Promotional Rate that's a FULL 2% below the Prime Rate, currently 5%APR. And the savings will continue for the life of the transfer. Please note that you will lose this promotional rate if you exceed your credit limit, close your account, or are late with a payment. All paymenys you make will be applied to the lowest APR balances first.

With the release of the recent GDP - my exposure may be 5.25% and perhaps even trending lower as a variable rate. There seems to be plenty of flexability in our economy.

IMHO as long as the 10 year rate remains below the 7% level, it has always had a positive effect on stock prices. Stay large - caps for a better day.

Dennis

 

[clester]

The S and I funds have broken out to the upside.
C fund is climbing slowly back up.
I'm in S and I funds now. Do I let them run? or do I take the money and run?
Hmm.

 

[Birchtree]

Courage is all it takes - earn your stripes

Clester,

You have to develope the mind set that BULL markets do not like company, the market will do everything it can to make the majority gun shy and keep the bears from recognozing the prevailing trend.

Dennis

 

[Birchtree]

Finally some BULL Character has arrived

Growth appears to be leading value from the summer lows, and this is happening for the first time since the initial kick off - 2003.

Now we need volume and more volume for confirmations - how about a 3 billion share day.

Dennis - permabull #2

 

[Greg]

Last Week Returns Jan 20 - 27
G-fund 0.09%
F-fund -0.56%
C-fund 1.82%
S-fund 2.61%
I-fund 3.51%

 

[Spaf]

Daily Yak: The Crude Numbers

Hey Wiz!

The crude marker numbers that I post come from the market itself. Basically, below 60 the market acts on it's own. 60-64 the market seems to feel pressure to make good advances. 65 and above is where I see the market make reactions to oil.

Do I like the spin on oil. No!

If you think I should adjust the markers, tell me! Spaf

 

[ATCJeff]

Sand Oil

Saw a interview/doc on sand oil the other day. Not sure who the person was but they were in the oil industry and they said the days of $50/barrel are over. Wish I had more info to share.

Jeff

 

[Show-me]

We're not out of oil, just cheap oil.

Saw a interview/doc on sand oil the other day. Not sure who the person was but they were in the oil industry and they said the days of $50/barrel are over. Wish I had more info to share.

Jeff

T. Boone Pickens big oil man.

 

[Birchtree]

New recovery highs everywhere

On Thursday the NYSE breadth MCSUM which had been moving sideways bounced to a new recovery high of +547. On Friday the NYSE breadth MCSUM closed at a reading of +731 which is now getting close to the longer term declining tops line of three years duration. There is definitely something good getting ready to happen - just provide the volume. There is a global uplifting that seems to be taking place many indexes have placed bottoms above bottoms on their individual patterns. I find the potential explosion some what rather exciting. And when volume finally catches up to what the breadth of the market suggests - please stand back for your own safety. We are destined to have a long lasting and powerful price advance considering the current price pattern structures that have been quietly building while everyone concentrates on foreign markets.

The NYSE breadth MCSUM closed at a reading of +731, it only has to go past +750. Never short a dull market.

Dennis- permabull#2

 

[Spaf]

End of the weekly thread

Will be starting a new market talk thread.

Thanks for the posts!

Spaf