Market Talk

[cowboy]

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The Technician wrote:

Looks like todays action has pertered out......I'm thinking they are going to support tomorrow mornings action and then cash out some in the afternoon.....after our buddy Greenspun has had his say......:X

Any thoughts on that?

The Technician:dude::zz

Now that the market has held and finished through maybe tomorrow will peter out.Ol Greenspun really hasn't done much of late to bother anything and it is hard to say what will or will not happen. I do know the US funds went up for 2 straight days and if you look at C it didn't rise any higher than it was this morning.

 

[Guest]

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Most hedge funds see US stocks falling more in May
Mon May 2, 2005 05:28 PM ET
BOSTON, May 2 (Reuters) - Most hedge fund managers expect the U.S. stock market to slide further in May after losing ground in April, new study released on Monday shows.

http://us.rd.yahoo.com/mymod/hdln/z/af/sty/SIG=144idnonf/EXP=1115166115;_ylt=AjHx9S.eqSMNoVHg2_pNAp4E1vAI/*http%3A//yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh32978_2005-05-02_21-28-05_n02294683_newsml

 

[Mike]

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The economy has not entered "stagflation" - high inflation / high unemployment.

The national unemployment rate is hovering just above 5%. Annual inflation isn't that high (yet), either.

In the early '80s, we were in double digits for both - that is stagflation.

 

[The_Technician]

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Mike,

I guess if you consider what is relative in the current economy, stagflation could exist. I don't think its imperative that we have to have double digits numbers for stagflation to exist, just that we have the unemployment orlower wages of employment to meet the current high expense to do anything.....

I don't know about u, but its getting more and more expensive at a accelerating rate over the past year or two to do just about anything from working on your home, getting car repairs, paying insurance/taxes, to playing golf :?.....far outpacing income increases.....that is stagflation in my book and its not in double digitsas of yet in the fed's books....but since when has the fed been on time with anything.............

It is well known if you follow business, that business is more concerned with making hugh profits.....employee income/benefits costs are reduced as well as product costs accelerate up to make that happen....I just don't know how much longer people can keep up with the way its has been going for the last several years.....

I wish the market would go ahead and make its defining move.....I'm tired of waiting myself....and anxious to get investing again....

The Technician

 

[Mike]

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The word "high" is extremely important here, because stagflation requires both unemployment and inflation to be high. Obviously, that's a word of comparison, and what these are being compared against are the historical numbers.

Current unemployment is low by historical standards - roughly 1% below the average. The current rate of inflation - though worsening - is still about on par with the historical norm, in spite of the idiotic Fed's monetary policy over the past three plus years. They should never have dropped the overnight rate below 2%. So, to put it simply, the trend is negative, but the overall numbers remain pretty good. 3.1% GDP growth is about average, as well. The fact that we managed that with $50 oil speaks volumes about the resiliency of the economy.

As for me, I'm not being adversely impacted all that much by current events. An extra $20 per month in gas expenses isn't really going to matter that much in my budget. I'm not impacted by property taxes either, since I live in an apartment (since the tax is spread equally among all the tenants, its impact on any given person within the building is minimal). My rent has only increased 2% since 2002... probably related in no small way to the housing boom as companies struggle to retain / attract renters.

 

[The_Technician]

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I sure your personal impact is small, but, I wonder what the percentage of the population lives in apartments and how much do they drive the economy???

Most economist know that when homes are sold, so is every thing else to go with it.... you have to fill up that home with lots of furnishings and the other stuff.....and don't forget the garage.....

Today's outlook on the upcoming day

http://money.cnn.com/2005/05/03/markets/oil.reut/index.htm

presents another view of the economy.

 

[The_Technician]

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Here is some more on economy and possible stagflation or current stagflation lite....as they call it....

http://money.cnn.com/2005/04/28/news/economy/stagflation/index.htm

 

[The_Technician]

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Hmmmm,

If you read my post on my daily data yesterday...Ijust looked at it for todayand we seem to be going in the negative direction for the next few days.....and I can't tell how severe we might go negative...d$%#! market......its kinda like something you want to get rid of but can't.:X

Yesterday stretch us out to the positive alot....

:dude:

 

[Mike]

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The Technician wrote:

I sure your personal impact is small, but, I wonder what the percentage of the population lives in apartments and how much do they drive the economy???

http://www.nmhc.org/Content/ServeContent.cfm?IssueID=77&ContentItemID=1828

15% of the population rents in an apartment building with 5 or more units according to this source.

As for how much they/we drive the economy, I would say we drive it just as much per capita as anyone else does.

 

[Dave M]

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"Stagflation" refers to STAGnation and inFLATION. That is, an economy that is not growing yet is experiencing increasing wages and prices. Our economy is growing nicely.3% is excellent -- carry it out 10 years and your GDP is 1/3 larger.

I agree that prices are rising but speaking just for myself, so are wages. My house payment consumed 60% of my take-home 5 years ago when I bought it; now it is down to about 30%. Partly that is due to refinancing at a lower rate, part is due to wage increases.

What I remember is the "Misery Index" -- the sum of inflation rate plus unemployment rate. This was running around 20 or 25 percent in the 70's. Pray to your personal deity, this never returns.

Now then, what about the Fed meet? I have 30 minutes to jump or stay!

Dave

 

[The_Technician]

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Dave M wrote:

"Stagflation" refers to STAGnation and inFLATION. That is, an economy that is not growing yet is experiencing increasing wages and prices. Our economy is growing nicely.3% is excellent -- carry it out 10 years and your GDP is 1/3 larger.

I agree that prices are rising but speaking just for myself, so are wages. My house payment consumed 60% of my take-home 5 years ago when I bought it; now it is down to about 30%. Partly that is due to refinancing at a lower rate, part is due to wage increases.

What I remember is the "Misery Index" -- the sum of inflation rate plus unemployment rate. This was running around 20 or 25 percent in the 70's. Pray to your personal deity, this never returns.

Now then, what about the Fed meet? I have 30 minutes to jump or stay!

Dave

Correct me if I'm wrong....when interest rates went up last month....the dollar value climbed....therefore the I Fund Dropped......

The funds have been rising and dropping in sync right.......that means the S and C funds will drop.

Bonds will not be a good deal either.....due to inflation, bonds yields are reduced.....

G Fund is the place to be...

:dude:

 

[Dave M]

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Well, I have seen no 'bad' news today, and the index has just inched nto positive territory, so I added another 10% to the pot. "Reinforce success" that's the military's maxim.

Dave

 

[The_Technician]

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Mike,

Maybe homeowners buy more to support their home.....like long term dishwashers, dryers, clothes washer, vacumns, lighting, water heaters, lawn supplies (tools and fertilizers-etc.) Shop items, tools etc. just to mention a few....I would say that homeowners buy a bit more.....I know this much....I can't move as easily as I use to when I was in an apartment....I have alot more to move.....

Then kids come into play.....do you have any....? Most homeowners have them and pay thru the nose for their items also.....maybeI should start a new term....Kidowners...could go along way since some people want parenthood out of the society.....

:dude:

 

[Mike]

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Unless you have statistics to back up your claims, I'm not going to buy into the assertion that home owners spend more money. So what if they buy lawn mowers and appliances? I might be using that extra money on a high powered computer, a new tv, a new car, better clothes, going out to eat, traveling, etc. If we both spend $2000, what difference does it make as to what we spend the money on?

I would also like to take this opportunity to point out that home owners contribute more negatives to the economy than apartment renters - who happen to be people more likely to use mass transit and live reasonably close to their jobs - and thus don't tie up the roadways and pollute the air while sitting there waiting to move in rush hour traffic.

 

[mlk_man]

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Sure hope that was just a knee jerk reaction just now....................:shock:

 

[The_Technician]

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Dang thing is like an old mule....stubborn...won't move...

How about giving that mule an old cowboy kick Cowboy!! Maybe we can get it started.....

:dude:

 

[The_Technician]

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U know...seeing I have been getting data indicating next week around the 14th....the market could just stay in limbo until then.....I know from past experience my data is pretty accurate.....but you never know when you're looking at the monster eye to eye....I would of thought today would have made some sort of sway in market sentiment.....

I guess we will see.....tomorrow will be interesting.....:%

Stay vigilent, bears out there in them woods...o I think the bulls are all tied up!!:u

The Technician :dude:

 

[Spaf]

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The Kingdom of TSP

Daily

Market News, Doodles, Tea Leaves & Yak Date May 3, Closing


Market News.

News: Possie pursues escaped energy horseman (Krude). Kingdom constable expects to have Krude in the can.

1PM Possie nabs Krude at 49.50 falling $1.42.

Also. Dollar general chief says gang up bet by a quarter. Also thinks Fed has canned inflation horseman (Kost).


Doodles and Tea Leaves.

Doodles: S&P at1161.17 dn -0.99
CMF money flow at -0.035, rising.
RSI strength at 48.1, falling.
MACD moving averages at -6.91, rising, crossing bullish.

Tea Leaves: Market in celar, but door is open.


Yak.

Remarks:Holding 40/60. In choppy markets don't forget your Pepto-Bism.

Regards, and be careful! Spaf

 

[nnuut]

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Check it out!

Breaking news":^

But stocks and bonds both rallied in the last five minutes of the session, amid reports that a key sentence had accidently been deleted from the statement.

The sentence, "longer-term inflation expectations remain well contained," did not drastically change the basic message -- that rates will keep rising, that inflation pressures are growing and that the recent slowdown in the economy is not going to change the pace of rate hikes.

However, the sentence did seem to imply that maybe "the Fed is not as worried about inflation as had been thought," said Stephen Stanley, chief economist at RBS Greenwich Capital.

"If that's the case, that's good for both the stock and bond markets," he added. "And so you saw both react in a way they might not have had the sentence originally been there."

Maybe Tomorrow!!!:l

 

[Spaf]

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The Kingdom of TSP

Market Shifts

The Fed gave a business as usual talk. Adding that inflation (Kost) was contained.
Supplies of oil is good and energy (Krude) was in the can.
Interest rates (Rat) is not good, but measured as the Fed yaks.
Earnings from companies (Earnie) is good and humming along.

The market seems to have hit bottom, in the celar, and the door is open. At least there is some light!

Attached is a chart of the S&P ending today (05-03):

We had a double bottom "W" and didn't break the lower low.
We are below the 50 day MA, and on the 20 day MA.
The Parabolic-SAR has been showing buy stops.
The MACD is starting to curve upward.
RSI (strength) is fairly midway, neither over bought/oversold.
The slow stoch has turned positive.

Technical indicators (doodles) are giving positive signals. Fundamentals (economics) also seem fairly positive [so long as they keep that Krude horseman in the can].

Might have to change allocations. Currently 40/60 (40G, 60 stocks) and go 0/100. Lets see, large caps are good, and small caps have had a recent good response, and a off set in the I-fund, is not bad. Considering 40-40-20. Will probably make a tentitive transfer for tomorrow and hold or fold depending on the AM market.

Rgds, and be careful! Spaf