 |
 |
Dallas, TX
December 15, 2009, 08:00 EST |
 |
Dr. Joe Duarte's Market I.Q. |
 |
 |
|
|
 |
The Internet's Intelligence Digest
Intelligence, Market Timing, And Trading Strategy For Traders and Investors
|
|
Jobless Poll Shows Degree Of Unhappiness In U.S.
|
|
|
 |
 |
What's Hot Today: |
|
U.S. stock index futures were pointing to a slightly lower
open on Tuesday. For the second day running, 1100 on the S & P 500
is important support. The Fed's last meeting of the year and a busy economic
calendar could be market movers.
Today's Economic Calendar:
- FOMC Meeting Begins
- ICSC-Goldman Store Sales 7:45 AM ET
- Producer Price Index 8:30 AM ET
- Empire State Mfg Survey 8:30 AM ET
- Redbook 8:55 AM ET
- Treasury International Capital 9:00 AM ET
- Industrial Production 9:15 AM ET
- 4-Week Bill Auction 11:30 AM ET
- 52-Week Bill Auction 11:30 AM ET
- Housing Market Index 1:00 PM ET
News For Thought
CT Scans can lead to cancer. According to The Wall Street Journal, citing
multiple medical studies: "One of the studies, which examined more than 1,000
adult patients at four hospitals, projected that the dose of radiation received
in a single heart scan at age 40 would later result in cancer in 1 in 270 women
and 1 in 600 men. Risks were lower for those who received a head CT scan: 1 in
8,100 women and 1 in 11,080 men would likely develop cancer from the radiation,
the study said." Another study "analyzed data from several databases and estimated
that 29,000 future cancers could be related to CT scans received in 2007, with
the greatest number of cancers projected in the abdomen and pelvis." The risk,
according to one study was higher in young people.
Arsonist throws Molotov cocktail "like" device into Ohio city Hall. According
to AP: " Federal authorities seek an Ohio man believed responsible for starting
an arson fire by throwing at least one fire-causing device through the windows
of a city hall in north central Ohio. Police Chief Phil Messer says something
similar to Molotov cocktails started the small fire and set off sprinklers that
caused water damage at Mansfield City Hall shortly before 1 a.m. Monday. Special
Agent Kim Riddell of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives
says authorities seek 40-year-old Kevin D. Dye on a warrant charging aggravated
arson and manufacturing a dangerous ordnance."
TARP Bailout institutions bail out of TARP. According to Forbes.com: "For
months, Wells Fargo insisted it would repay its $25 billion worth of federal
bailout funding in a way that wouldn't dent existing shareholders. Its priorities
seem to have changed. The San Francisco based-bank said late Monday it would
sell $10.4 billion in common shares to refund the money given it under the Troubled
Asset Relief Program. The dilution to existing shareholders, the largest of which
is Warren Buffett's Berkshire Hathaway ( BRK - news - people ), seems to be less
troublesome than being the only major bank left under the government's thumb." The
change of heart was coincidentally announced on the same day that President Obama,
in a White House meeting, referred to bankers as "fat cats."
|
|
|
Jobless Poll Shows Degree Of Unhappiness In U.S.
|
|
 |
|
Yet Another Poll Suggests Popular Discontent Is Nearly Palpable
|
 |
|
|
President Obama is calling for "fat cat" bankers to lend more money to small
businesses. But inside the beltway, there are a whole lot of deaf ears. That's
why the results of a CBS News/New York Times poll are important as they document
the reasons for the freefall in the president's popularity.
Americans have built their lifestyles based on their jobs. That's why rising
joblessness has led to a significant change in behavior and a stubbornly weak
economy. According to the New York Times: "More than half of the nation’s unemployed
workers have borrowed money from friends or relatives since losing their jobs.
An equal number have cut back on doctor visits or medical treatments because
they are out of work," and echoing a sentiment expressed in this space on 12-14-09 "Almost
half have suffered from depression or anxiety" while "About 4 in 10 parents have
noticed behavioral changes in their children that they attribute to their difficulties
in finding work."
Think about it, people who were doing o.k. a year or two ago are now borrowing
money and skipping important aspects of health care, while they watch their children
become affected by what has transpired in their parent's life. It's as if you
were in the audience watching some kind of soul searching art film. In other
words "Joblessness has wreaked financial and emotional havoc on the lives of
many of those out of work, according to a New York Times/CBS News poll of unemployed
adults, causing major life changes, mental health issues and trouble maintaining
even basic necessities."
That this poll is finally noting this, which this scribe has noted repeatedly
for months in his other life as a physician says two things. First, the mainstream
press is always late to the party. But second, they eventually get there, and
when they do, if they can sense that a story has legs, they'll get behind it.
And that may be where we are, and why even some Democrats in Congress are fighting
the hugely expensive health care "reform" package, which is likely to have dire
consequences on the U.S. economy, with its expected mandates, hidden taxes, and
other measures which are more likely than not, to continue to depress the employment
situation in the U.S.
According to the report: "Roughly half of the respondents described the recession
as a hardship that had caused fundamental changes in their lives. Generally,
those who have been out of work longer reported experiencing more acute financial
and emotional effects."
And here are more poll results:
- "a quarter of those polled said they had either lost their home or been
threatened with foreclosure or eviction for not paying their mortgage or
rent."
- "have received food stamps" while "More than half said they had cut back
on both luxuries and necessities in their spending."
- "Seven in 10 rated their family’s financial situation as fairly bad or
very bad."
Yet, it's much more personal than the statistics reveal as "the impact on their
lives was not limited to the difficulty in paying bills. Almost half said unemployment
had led to more conflicts or arguments with family members and friends; 55 percent
have suffered from insomnia."
And here's is where it gets political. According to the poll: "There was a pervasive
sense from the poll that the American dream had been upended for many. Nearly
half of those polled said they felt in danger of falling out of their social
class, with those out of work six months or more feeling especially vulnerable.
Working-class respondents felt at risk in the greatest numbers."
So as the health care debate continues those in Washington should consider this: "Nearly
half of respondents said they did not have health insurance, with the vast majority
citing job loss as a reason, a notable finding given the tug of war in Congress
over a health care overhaul. The poll offered a glimpse of the potential ripple
effect of having no coverage. More than half characterized the cost of basic
medical care as a hardship."
And here are some other interesting results. Folks are changing professions.
In two worker families, the one spouse that remains employed has taken on more
hours at work if possible. People are experiencing pay cuts.
So who's to blame? According to this poll: "In terms of casting blame for the
high unemployment rate, 26 percent of unemployed adults cited former President
George W. Bush; 12 percent pointed the finger at banks; 8 percent highlighted
jobs going overseas and the same number blamed politicians. Only 3 percent blamed
President Obama."
Yet, if you look hard enough, you can find a poll that tells you the complete
opposite. According to a 12-10 poll from Gallup.com: "Americans continue to rate
their lives as well as at any time since measurement began in January 2008, according
to the November update of the Gallup-Healthways Well-Being Index. The Life Evaluation
Index, which reached the 50.0 threshold for the first time in October, finished
November at 49.5, up more than 16 points since its low point of 33.1 last November." Go
figure. What a difference four days, and a different polling sample can make.
Conclusion
We may be experiencing one of the most polarized periods in American history.
If you have a job, you're probably feeling a whole lot better than those who
don't. Yet, even that is nebulous. According to the results of a November poll
from Gallup.com: "working Americans reported their most negative responses yet
in their work environments. The Work Environment Index declined to 48.1 in October,
its lowest level since measurement began in January 2008. The Work Environment
Index has dropped more than five points since spiking to the high of 53.3 in
October 2008, at the onset of the global economic collapse."
So which one is it? Are American's unhappy because they are employed, or sad
because they are employed? And what is the potential fallout from all this going
to look like?
Will it lead to huge turnover in Congress? Will it cost the Democrats their huge
gains over the last four years? Or will the ever negative Republicans pay the
price?
And does any of this matter to the financial markets?
The answer is clearly a tough one to arrive at. And it may be that any answer
may be limited, both by time and scope, meaning that it may only be applicable
in a very narrow way, and for a limited time.
Only some things are somewhat clear. A whole lot depends on what happens with
the health care legislation that is being shaped in Congress right now. If whatever
passes, barring a failure, doesn't fix the perceived problems, the demise of
incumbents on both sides of the aisle could be significant.
From a market standpoint, that may be a good thing, as any kind of consensus
from politicians will be hard to arrive at, which means that those of us who
actually work for a living may get a reprieve, until of course the new guys figure
out the game and become like their predecessors, greedy, tone deaf, and cynical.
Know when to sell and how to make money when the market falls. Get a detailed
trading plan in your pocket. Read Dr. Duarte's All NEW Books "Market Timing For Dummies." and "Trading Futures For Dummies." The Trading Manuals for
All Seasons. Also Available As Kindle Books. |
|
|
|
|
Market Moves - Stock Of The Day
|
|
|
|
Diamonds Trust ETF (NYSE: DIA) Delivers Early Christmas Present
|
|
|
|
|
The Diamonds
Trust ETF (NYSE: DIA) is knocking on new highs from the
March bottom as the Russell 2000 ETF (NYSE: IWM) is showing
some signs of improvement.
Chart Courtesy of StockCharts.com
Large cap blue chip stocks, such as those in the Dow Jones
Industrial average are still acting well, despite the overall
volatility of the market.
That's because money is still moving into large cap stocks than small stocks.
What's interesting, though, is that the small stocks are starting to show some
improvement.
The key to the improvement in the small stocks could well be the action in the
dollar, which many investors in small stocks seem to be betting on as having
made a bottom.
The way this relationship normally works, is that large multinational companies,
such as the ones in the Dow, do better with a weak dollar, as they book more
sales overseas. During those periods, small companies, whose sales are more dependent
on the U.S. tend to lag.
Yet, the improvement in the small stocks, which roughly corresponds to the dollar
starting to move sideways, may be a good signal for the stock market as we head
into 2010. It's hard to get too negative if the dollar steadies out and the small
stocks join the big stocks in a continuation of the current rally.
|
|
|
|
Technical
Look at the Market |
|
|
|
S & P Nears Recent Highs Again - SPY ETF Remains at 4-stars
|
|
|
|
|
The S & P
500 rallied to within 5 points of its recent highs near
119. This is constructive, especially since the volatility
bands are still shrinking, a technical configuration
that suggests a big move is coming.
But the market is still torn between two major influences. That means that traders
have to choose between the positive seasonality of the Christmas holidays, or
the political uncertainties of the moment. That's a tough call, which is why
the market is going nowhere.
So the technical aspects of the market are increasingly important, and that's
why the volatility bands are very important to keep an eye on.
The bottom line is that it pays to be careful.
Summary of Start Rating System
We are adapting our star based rating system to the S & P SPDR ETF (NYSE:
SPY). In this section a 5-star rating for SPY is a signal that down side risk
is very low and that the chances of a further rise in prices are greater than
those of a fall. A 4-star rating Means that the risk is less attractive but that
the odds of a rise in SPY still outweigh the risks of a fall.
A 3-stars rating on SPY suggests that the odds of a rise and a fall are even.
2-stars and 1-stars suggest that down side risk is on the rise.
In no way is this star rating system intended as a series of buy and sell recommendations.
The system is intended as a guide to the general trend of the market and the
S & P SPDR ETF.
Star ratings can change rapidly based on the market's action. Followers of the
ratings should review them on a daily basis.
Star Ratings for S & P SPDR ETF (NYSE: SPY) - updated 12-8-09
S & P SPDR ETF (NYSE: SPY), 4 stars on 12-1-09 - closing price 110.84. Closing
price on 12-14-09 111.87. Short term support is at 109.57. Resistance is at 111.74
and is being tested. A sustained move move above 111.74 would raise the rating
to 5-stars. A move below 109 would drop the rating to 3-stars.
Chart Courtesy of StockCharts.com
Chart Courtesy of StockCharts.com
|
|
|
| |
|
|
