Market Talk / March 26 - April 1

[Spaf]

The Kingdom of TSP
Sunday-Weekly
Early Edition
March 26, 2006​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak.............................Last week was fairly flat and cautious. The bears are saying watch-out. The bulls are saying wade-in. The market, it's on the up-side waiting.
Other Yak...............................Vestors are waiting word from the Cartel (FOMC) on Tuesday. When will the rate increases be ending, is the question?
Jester Yak..............................Will Tuesday be terrible or terrific?

Doodles:
Socks [$SPX] Closed at.............1,302.95, dn -4.3, for the week.
Volume (CMF) (money flow)........+0.033, flat.
Averages (MACD) (trend)...........+6.665, flat.
Momentum (S-STO) (signal)........81.96, increasing.
Strength (RSI) Overbought/sold...[70] 58.73 [30]

Lube (NYM) Closed at................64.26, dn -0.04, for the week.
Oil Markers..............................<64= ok, 64-69= worry, >69= panic.

Tea Leaves:
Charts & Stuff..........................Green with caution: The break above 1297 [$SPX] has been flat.

Tin Box:
Position...................................25G, 00F, 25C, 25S, and 25I
Stops [$SPX]............................Alert: NA, Trail: 1,300

TSP (week ending)......G=11.27..F=10.68..C=14.20..S=17.60..I=19.12
....(1 week past)........G=11.26..F=10.68..C=14.25..S=17.48..I=19.15
....(2 week past)........G=11.25..F=10.62..C=13.96..S=17.07..I=18.50
....(3 week past)........G=11.24..F=10.65..C=14.02..S=17.36..I=18.56
....(4 week past)........G=11.23..F=10.69..C=14.04..S=17.31..I=18.60

 

[GLENNB]

:d :d I Am 100% S Fund,dow Going To Alltime High,although I Will Exercise Extreme Caution The Week Ending April 14th, In The Past Two Years Stock Funds Are Down 2-3% The Week Prior To Tax Deadline,into G-fund On April 8th Cob,and Back Into S On Cob Of The 14th Of April,investors Must Sell Off Some Stocks To Pay The Tax Bill That Week, Those In I-fund Beware Of Fx On Thurs 23 Mar,return Was Dragged Down -.767% Do To Yen And Euro Going Up Against Dollar,and Do Not Sit In G Fund For More Than 1 Week Unless You Know Stocks Are Still Going Down,recession Ect.. You Dont Earn In G-fund

Have A Good Rally

Glenn Bartel:d

 

[GLENNB]

Also ,id Like To Get A Thread Going So We Could Get An Emerging Markets Fund Into Our Tsp,it Will Take About Six Months, There Is Emu On Msci Website,an Emu By Years End,its At 12% Return Ytd For 2006,and We Already Bank With Barclays Who Is The I Fund Manager,post Threads To Start An Emerging Markets Fund In Our Tsp

 

[Birchtree]

Check this out if you are bullish - if not you will find it depressing.

http://www.garzarelli.com/press - read the New York Sun article by Dan Dorfman - hit on the press. Wizard, you remember him, probably another one you didn't like.

 

[Birchtree]

Holy Mackerel Andy

Look at Nicky run - I'm ready for a hot one tomorrow.
From a TA:
The small caps are coming alive again and exhibiting very favorable net positive money flows. The broad based RUT small cap component cumulative A/D line has decisively broken out of its resistance trend line across its December 2004 and August 2005 A/D line tops. The RUT component $ weighted UD line and various MCOs are exhibiting very strong relative strength compared to the larger cap money flow indicators. Strong liquidity suggests the three year old bull is not ready to rollover quite yet.

Robo,
The NDX was up 9.08 points on Friday during a reasonably quiet day setting at 1679.81. The level of 1690 should be a snap. I think we catch Henry this week.

Dennis

 

[Quips]

another clone

Garzerelli, like Kudlow, is just a clone in my opinion.

But I agree with you on one thing Dennis, companies in the S&P 500 make a goodly part of their profits from overseas operation. It doesn't make sense to discount something like that and still favor the I fund way too much.

 

[tsptalk]

Check this out if you are bullish - if not you will find it depressing.

http://www.garzarelli.com/press - read the New York Sun article by Dan Dorfman - hit on the press. Wizard, you remember him, probably another one you didn't like.

The link wasn't working. Try this one ...http://www.garzarelli.com/press.php

 

[Wimpy]

Louis Rukeyser Guest Panel and Celebrating The Retirement Letter's 25th Anniversary​

Lou and I share a laugh over Elaine Garzarelli's "bullish indicators"​

I was a guest panelist on the Louis Rukeyser panel celebrating the 20th anniversary of the InterShow Money Show at Walt Disney World, Florida. The event took place on Saturday evening, February 7, and the other panelists were George Roche, president of HillsdaleCollege, Charles T. Maxwell, investment manager at Loewenbaum & Co., and Don Rowe, investment newsletter adviser.

Before the panel began, Lou spoke and told a funny story about Elaine Garzarelli, the financial guru. Lou noted that Elaine was famous for being bullish about the stock market and would always being her interviews by saying, "Lou, my indicators have never been more bullish..." Once at a conference before a live audience, Lou said she showed up late on a panel and so, while waiting , Lou said to the audience he was sure she would begin, "Lou, my indicators have never been more bullish..." When she appeared, Lou asked her where she thought the market was headed. Sure enough, her reply began, "Lou, my indicators have never been more bullish..." She wondered why the audience laughed.

After his speech, Lou came over and began his panel. When he came to me, he asked, "So, Mark, where do you think this market is headed?" I replied, "Lou, my indicators have never been more bullish..."

http://www.mskousen.com/Speeches/rukeyser.html

What Did Smart Money Do In the 1929 Crash and Aftermath?​

During the same bear market period smart-money moved from the plunging equity markets (i.e. financial assets) to hard asset investments, like Homestake Mining - which is used heretofore as a surrogate for all gold stocks.

The stock price of this gold mining company soared relentlessly upward during the entire bear market. Homestake Mining stock rose continuously from $80 in October 1929 to $495 per share in December 1935 - which represents a total return of 519% (excluding cash dividends) during the devastating bear market period.

Contemplate and appreciate the monumental difference in investment returns during a serious bear market. Smart-money invested $10,000 in Homestake Mining (hard assets) in late 1929 - which increased in value to almost $62,000 by December 1935. This represents a compound rate of return of 35% per year in appreciation alone!

It is meaningful to note that in late 1929 the value of Homestake Mining was about $80 per share. Moreover, during the next six years Homestake Mining paid out a total of $128 in cash dividends. In fact the 1935 dividend alone reached $56 per share. That's almost a 70% dividend yield payout (basis 1929) in only one year! Indeed, hard asset investments (gold mining shares) were islands of economic refuge during the grueling years of the Great Depression.

Unfortunately, those innocent souls who remained invested in stocks - and had a buy and hold strategy - saw their initial $10,000 investment slowly dwindle to only $3,600 by late 1935. This represented a devastating capital loss of almost two-thirds of their investment savings. T H A T'S R I G H T! The hapless naive investor with a buy and hold strategy in financial assets lost the greater part of his original stake. Pathetically, he could ill-afford to risk - let alone lose - his precious capital during the many long despairing years of the Great Depression.



...It is a nightmarish thought for the Buy-N-Hold advocates to take careful note that it took the next 25 years for a 1929 investment to break even! Not even Job of the Bible would have had the patience to wait.
http://www.gold-eagle.com/editorials/great_crash.html


----------------


Comment: Vronsky makes a valid and important point. Most of the current crop of investment gurus have never experienced or considered the possibilities of an economic collapse similar to the crash of 1929. Looking at a DJIA chart of the 1929 crash suggests that some really naïve people were buying from the high of 385 all the way down to 45. Many who bought at the very top of 385 didn’t break even for 25 years. Can you imagine anyone touting the benefits of ‘dollar cost averaging’ all the way down from 385 to 45 and then holding those losers for the next 25 years? It’s insanity…especially when the undervalued alternatives are so glaringly apparent.

Like the engineers and owners of the Titanic, many feel this economic ship can’t be sunk. If there is any indicator suggesting an economic iceberg is ‘dead ahead’ and hopping in a lifeboat might be a prudent strategy, it is when the Elaine Garzarellis, of the investment world, open their interviews with, "Lou, my indicators have never been more bullish..."

 

[Birchtree]

Here's a little afternoon delight

Wimpy,

Check this out: http://www.weedenco.com/welling/Downloads/2006/0806_GP_Prechter.pdf

 

[Wimpy]

The Perils of Economic Ignorance

By: Dr. Ron Paul, U.S. Congressman

March 27, 2006



​

Last week in this column I wrote of a perfect economic storm facing America, caused by a federal government that spends, borrows, and prints so much money that our dollars are eroding in value at an alarming rate. Year after year our federal government spends beyond its revenues, prints new money to pay its debts, and borrows hundreds of billions abroad in the form of Treasury obligations that someday must be paid. With too many dollars and debt instruments in circulation, and no political will in Washington to cut spending, we've created a monster. Our perceived prosperity depends on keeping the great debt and credit engine pumping, but the only way to attract new lenders to fuel the engine is higher interest rates. At some point one of two things must happen: either the party in Washington ends, or the supremacy of the dollar as the world's reserve currency ends. It's a sobering thought, but a choice must be made.​

http://news.goldseek.com/RonPaul/1143475233.php

 

[Birchtree]

I noticed a good many participants showing no fear today and stepping up into the breech - probably thinking they would get in at lower pricing. No matter - just stay awhile and make some money. All it takes is courage and you will be rewarded.

Dennis

 

[Spaf]

Daily Yak

The Kingdom of TSP
Daily Edition
March 27, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak..............................Socks mixed! NASD gains some. Waiting for the Cartel talk on Tuesday.
Other Yak................................Lube down 10 cents.

Doodles:
Socks [$SPX] Closed at..............1301.61, dn -1.34
Volume (CMF) (money flow).........+0.030, flat.
Averages (MACD) (trend)............+6.454, flat.
Momentum (S-STO) (signal).........79.27, flat.
Strength (RSI) Overbought/sold....[70] 57.60 [30]

Lube (NYM) Closed at..................64.16, dn -0.10
Oil Markers................................<64= ok, 64-69= worry, >69= panic.

Tea Leaves:
Charts & Stuff............................holding pattern

Tin Box:
Position....................................75% Stocks
Stops [$SPX].............................Alert: NA, Trail: 1300

 

[Birchtree]

I want to do it vicariously

Robo,

I want to see Henry go to 100% short so I can participate vicariously with him in the danger while I sit on my couch.

Let's see if the NYSE 10-day differential of new highs vs new lows does a breakout of its declining trend line from January 2004 - that would be a teaser. I appreciate the fine information, thanx.

Dennis- wonder if this conversation will draw anyone in particular out of the wood pile?

 

[Spaf]

Daily Yak

The Kingdom of TSP
Daily Edition
March 28, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak..............................Cartel signals the possibility of more rate hikes. Disappointment! Socks fall.
Other Yak................................Lube up to 7 week high on concerns about foreign production and trouble.

Doodles:
Socks [$SPX] Closed at..............1293.23, dn -8.38
Volume (CMF) (money flow).........+0.074, increasing.
Averages (MACD) (trend)............+5.547, decreasing.
Momentum (S-STO) (signal).........71.70, decreasing.
Strength (RSI) Overbought/sold....[70] 51.00 [30]

Lube (NYM) Closed at..................66.07, up +1.91
Oil Markers................................<64= ok, 64-69= worry, >69= panic.

Tea Leaves:
Charts & Stuff............................Red

Tin Box:
Position....................................75% Stocks
Stops [$SPX].............................Alert: NA, Trail: (broken)

 

[Rod]

Wow... not a lot of chit chat on here today.

We'd think we would at least have some "bears" on the prowl around here...

I've the feeling they will be coming out of hibernation soon enough, though.

God Bless

 

[Wheels]

Wow... not a lot of chit chat on here today.

You're right. It has seemed very quiet for a couple of days. Makes you almost wish Greg was around (I said almost)

Dave
<><

 

[Birchtree]

I'm giddy under $14.00

Got some dollar cost contribution arriving at the end of the week - sure would be nice to pay under $14.00 for the privilege of accumulating more shares of the under appreciated C fund. I heard that...to me it's a small silver lining.

The Fed is not my friend and everything they say should be looked at through a jaundiced eye. In May 2000, Fed policy makers suggested they expected to continue raising rates. That May meeting was , in fact, the last rate increase that year. By early 2001 the Fed was cutting rates. I believe they are done. These boys talk clarity but prefer to promote uncertainty. I plan to ignore them.

Dennis

 

[TiCKed]

Ok, I'm no financial genius, (and I'm sure I have plenty here to back me up on that ), but what in the world did people EXPECT to hear from the Fed today? Wasn't the statement released pretty much the most likely?

Bet we get it all back tomorrow.....(Is my lack of genius showing again? )

 

[Wheels]

Ok, I'm no financial genius, (and I'm sure I have plenty here to back me up on that ), but what in the world did people EXPECT to hear from the Fed today? Wasn't the statement released pretty much the most likely?

Bet we get it all back tomorrow.....(Is my lack of genius showing again? )

I'm with you. The market sold off on one key phrase, " Some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance". But to me they could just as easily have been saying here, We may need to raise rates but probably not.

Dave
<><

 

[Birchtree]

Exactly - nervous traders were looking for some form of transparency and there were no word changes - no clarity. So I say they can kiss my grits - I move forward regardless of what they continue to do in the future. I smell the bull manure of a prolonged secular bull mega trend and I'm a long for the duration.