Bernanke Slams QE3 Hopes; Why is Oil so Expensive?

#147: Oil Price Shock! GOP Primaries! Pensions! Rebalancing!

Sunday Oil Shock Randomosity

• The big threat to the world the past week is skyrocketing oil prices.  Always something to worry about, right?  Here is a column from Marketwatch. A big batch of economic data this week is likely to show the U.S. remains on a modest growth path — but rising oil prices threaten to block the way.
• Oil rattling Wall Street’s nerves. “Either we are going to have resolution to the geopolitical tensions in Iran or we’ll continue to be concerned about disruption in supply and watch it rise,” said Art Hogan, a managing director at Lazard Capital Markets.
• But say, isn’t the market near all time highs?  Here is the monthly chart on VTI, the total stock market index.  Looks near the highs to me.  (Ignore the MA trendlines).

• Of course, you could say “hmm, maybe it’s time to sell…”  No one would blame anyone for playing the secular bear market angle here, and suspecting that the next move is down.
• Rising Demand for Oil Spells More Price Pain.  Analysts warn that oil could become even more expensive in the second half of the year as supplies struggle to catch up with rising demand.
• Meanwhile, President Obama mocks drilling for oil in yesterday’s weekly address.  Not only has the President killed the Keystone XL pipeline, but Senate Democrats killed another attempt to open ANWR. 
• With regards to ANWR, we won’t have a drop of oil for up to 10 years!  (That’s what they said in 2003.  Hey, 2013 is right around the corner and we need the oil!)
• But Obama’s energy plan is to run cars on algae and to tax oil companies.  Yeah, LOL.
• Remember when Jimmy Carter asked his daughter, Amy, about nuclear war?  Maybe President Obama should ask his daughters what kind of fuel we should be using for cars.

Selling Some High Beta Stocks to Reallocate

Reallocating to lower beta stuff.   Still 80% long, just cutting NDX and going to boring preferreds and utilities.

#146: Stocks pullback from 13000; Oil Up; Iran and Israel; Google Glasses

Presidents Day Randomosity

• Payroll tax cut, meet $4 gas. The sad reality is that a lot of the payroll tax cut is going to the gas pump.  That means Big Oil Profits!  At some point, expensive fuel will impact the economy.  I don't think $4 is the number, but maybe $5 or so.
• The market sure seems flat today.  Oh!  It's closed!
• Wasn't Greece supposed to be resolved today, Monday?  Er, not yet.  The market is rallying anyway, as if it isn't as important as economic growth.  Yet, you know everyone is looking at Europe to see if this is going to be resolved.  So Europe and Greece continue to be a dark cloud overhanging an otherwise good looking market.  A chink in the armor, if you will.  The remaining issues?  Reducing the debt load and cutting spending.
• By the way, as oil heads to 9-month highs, Iran announces it is cutting exports to Europe.
• Rose Cliver passed away.  Who?  Rose Cliver.  She was a survivor of the 1906 San Francisco earthquake.  She was 109.  Wow.
• "We're all Knicks fans now" - Richard Nixon.  But seriously, bad paraphrases aside, who isn't cheering for Jeremy Lin?  The NBA needed a hero, and here he is.
• Foxconn!  Yes, ABC goes inside Foxconn, where iPads and 40% of all electronics are made.  The big news is that Foxconn workers are getting a raise.  What does that mean? Is it good news?  Will the price of your iPad increase?  Will Apple and others move the jobs to Vietnam or somewhere else?  Something to keep an eye on.  Labor costs are often the most expensive part of what we buy.  Keep an eye on it, that's all.

Thursday Randomosity

• The Nasdaq is at 11 year highs.  Really.  It was December 2000 the last time the Nasdaq was at these levels.  The dot-com era!
• Meanwhile, oil surged to over $102 a barrel.  With the US economy improving, there is more demand for oil.  Pay up!  This is something to keep an eye on going forward.  Yes, the freeways are crowded with folks who have more money in their pockets.  But the economy is vulnerable to oil shocks, right?
• In the battle of charitable giving, Rick Santorum gave 2.2% of his salary to charity.  Not as big of a percentage as Mitt Romney.  For those keeping score. You know who you are.
• Did you see that manufacturers want more workers, but they just can't find skilled workers.  I wonder if the workers are at home on unemployment waiting for the benefits to run out before looking for work?
• 11-year highs for the Nasdaq.  12/2000.  It seems like only yesterday.  Heck that was before Peyton Manning had any of his neck surgeries.

Market Rips Higher on Economic Data!

Another good day to ignore the Black Box! Stocks went higher on "positive economic data" today, combined with lowered tensions in Greece and a potential European resolution on Monday.  

The US economy saw initial unemployment claims fall to the lowest figure in 4 years!  Housing starts and building permits exceeded forecasts.  The PPI was tamer than expected, coming in at .1%.  This is all good news for President Obama in a re-election year.  Who wants to run against a recovering economy?  Maybe it is all pumped up by stimulus dollars and low interest rates, but it is what it is.  Folks are feeling better about things.  And people vote their pocketbooks, right?

The Greek bond redemption in March is getting closer.  Greece needs some bailout money.  It seems like this is an ongoing crisis, but the world is hoping that there will be some resolution next week.  Europe was trading down today, but the US markets seemed to be unfazed by any concerns.  Today, anyway.

So far, the Black Box has generated about 4 sell signals since January.  The market continues to move higher despite the red sell arrows generated by the Black Box.  It's not unprecedented.  Just last January-February it did the same thing, and the last time it was right heading into a March low where it nailed the low with a buy signal.  The market curiously looks a lot like last year.

I remain 80% long, and mostly in high-beta stuff in the Nasdaq and small caps.  I thought about selling this morning, but decided not to react just yet.  The market top tends to be a process more than a single event.  Part of the process could be volatile days where the market starts to move back and forth without making new highs.  Maybe we're starting that.  Even if that's true, there usually is a double or triple top in the process.

***

Lin-sanity.  The New York Knicks are 7-0 since Jeremy Lin started playing as a starter, right?  Last night the Knicks pasted the Sacramento Kings.  The local newspaper had an article about the Kings strategy for shutting down Lin.  Apparantly, the strategy was to get behind by 30, so that the Knicks would take Lin out of the game.

It worked, and the Kings only lost by 15.

Nice job.

Kellogg to buy Pringles

I don't know if this purchase makes sense, and I wouldn't be surprised if $K comes out with a mini-Pringles cereal or something. But do you remember the first tie you tried a Pringles? I remember being amazed at the perfect shape. But I hated digging out the chips in the container once about half were gone. You'd have to tip the can, and once you tipped it back the chips never went in straight again.

Later in life I looked at the nutrition label and never had another one. WHOA! Look at that fat content!

But definitely a great chip. Probable not a great cereal idea, fwiw.

posted from Bloggeroid

Sell Signal on the Black Box

As discredited as the Black Box has been the past month on the ramp up, today it generated a sell signal.  It had a similar pattern in early 2011 – as has the market.

Just saying.

I haven’t decided what I’m going to do yet.  Tempting to take the gains from the amazing market run since October.  Very tempting.

Greece! And the Payroll Tax Cut

It's just Greece affecting stocks. Nothing else matters.

Anyway, a potential deal on an extension of the payroll tax is in the headlines. How will that be paid for? Another $100 billion in debt. Why didn't they do that last time instead of adding a fee to new mortgages? If deficits don't matter, charge it all and spread out the cash advance to the 99%!

Stocks are mostly down as I type with the Nasdaq up a tick. So we will see how that last trading hour goes.

Which reminds me of my snafu yesterday when I blogged about the market being down. For some reason the last quote I had on my iPhone was of a negative day. Must have dropped the data connection in the last half hour! Yesterday was bullish as buyers surged in.

Will that happen today???

#145: China Buying Euro Debt? Petes Coffee; Apple Dividend? Obama 43.4% Tax on Dividends?

An Every Other Day Thing

Friday down. Monday up. Tuesday down. Wednesday ...

So, is this now an every other day sort of thing? Looking at Japan ripping to the upside on the news that China may buy some Euro debt, maybe the US market heads up tomorrow.

No chance to catch it. The way things go it will gap up and flatline the remainder of the day!

No change in my positions. 80% long and mostly in NDX and small caps.

Gas Prices on the March

The economy is improving. Company profits are increasing. Job numbers are picking up pace. Add them all up and what do you get? Rising prices at the pump!

Seriously, have you noticed that the traffic is picking up in your city? Seems that after a two-year lull here in Sacramento, I'm running into more traffic jams on the commute. I've noticed that the waiting lines at my favorite restaurants are longer, too. Things are getting better, but that means we're going to need more fuel. Higher demand will translate into higher prices.

None of that was today's business in the stock market. Stocks recovered most of Friday's losses...

posted from Bloggeroid

Another Up Day (so far)

Maybe one of the reasons the market keeps going up is because everyone is telling us that it can't keep going up without a pullback.
Looks like the Greece news is also helping. At least here. Have you seen the riots in Greece? Once the government hands out benefits, this is what happens when the government tries to reduce benefits.
Nice day for the market.

#145: Whitney Houston; Dow 15,000; President Obama's Budget

Blame Friday's Market on Greece!

The market finally had a sell off on Friday, and Greece gets the blame as the reason du jour. But the market was rallying up even with the uncertainty, so maybe it was just time for a pullback. The market has had quite a run without selling, and eventually it tends to pull back to the moving averages. That could be where the buyers re-emerge.

Other news going around...

• Whitney Houston dies at 48. Another example of what drugs eventually lead to. It is very sad and tragic, but not surprising.


• Good day for Mitt Romney in the GOP primaries. He is rebounding following the earlier losses to Rick Santorum.


• I watched Rise of the Planet of the Apes, and actually liked it. Was the final fight scene on the Golden Gate Bridge a little much? Probably.


• So many folks have been anticipating a market pullback for so long. Yet, we're told everyone is too bullish. Business as usual!

posted from Bloggeroid

#144: Obama Phones for the Poor, Diamond Foods, First Solar, KB Homes, David Rosenburg

#143: Peyton Manning, Nokia, Diamond Foods

#142: Barkley Loses $100K, Santorum Wins, Oil, Keystone Pipeline

Blame Today on Greece, Not Wes Welker

Back to your regular program today: Blame the market jitters on Greece! But how bad was today? The market broke down at the open, but then spent the rest of the day trending upwards and closing near flat. Heck, I was watching SPY at the close and it even flickered green a bit!

After a huge week and a huge Friday, the market held up well today.

Meanwhile, everyone is looking at Greece to cut spending and such. You know the drill. Talks were suspended on Monday, and scheduled to resume on Tuesday. I wonder what would happen if Greece actually got their act together and a final deal was announced? Imagine that news flow out of the picture. We could actually move on to something like "War with Iran" worries or something!

posted from Bloggeroid

#141: Super Bowl Recap, Stocks Flat, YUM Brands, Oil Prices

The New York Giants Win!

The Giants beat the Patriots, and the Super Bowl indicator suggests 2012 will be a good year for the stock market!

The Super Bowl was a great game today. Wes Welker gets the blame for missing a tough catch, but if the Patriots would have won with that last drive, Ahmad Bradshaw would have received the blame for not kneeling down at the 1-yard line. The game was that close. Twitter says that if the teams played a rematch, the Patriots would be favored by 2.5.

The commercials were so-so. The halftime show was lip-synched. And who wants to discuss the hygiene issues with the Super Bowl trophy as it was slobbered all over on the way up to the stage?

Now back to the important things. The stock market is on a nice run. Mitt Romney is on the way to the GOP nomination. The Lakers still haven't traded for Dwight Howard. Spring training opens up in a few weeks with pitchers and catchers reporting.

On with the show!

posted from Bloggeroid

Black Box Update!

Oopsie, the last sell signal on the Black Box is no good!  Here’s the picture:

I remain about 80% long, and in high beta stuff.  We are still in the favorable season.  The first of the month strength played out.  February tends to be the weakest of the months during the favorable season.  There is also a lot of euphoria in the market right now.

It will be interesting to see how the eventual pullback plays out.

My Super Bowl Pick: New York Giants

I took the New York Giants and the 3 points, plus the under 55 points. I parlayed them. I took the money-line on the Giants to win straight up.

Bottom line is that I think the Giants are better than the Patriots. The Giants have a better defense. Defense wins championships. The Giants have a better running game, and both Bradshaw and Jacobs are healthy. The Giants have better receivers - maybe the best trio in the game. This can be a ball control offense. Manning has done well against the pass rush. Of course, the Giants were a little inconsistent in the middle of the season when the injury bug hit them, but they are at full strength and have momentum.

The Patriots have better tight ends, but Gronkowksi is hurting. Don't overlook the impact Gronk has in this offense - especially near the redzone. The Patriots running game has been weak. The defense is weak. Do the Patriots have a deep-threat wide receiver? Tom Brady is a great quarterback and Wes Welker is great underneath the coverage. Brady can look off his game with a good pass rush.

On paper.

The reality is that the game will come down to turnovers and penalties. At this level, both teams can win. The Giants will need to pressure Brady. The Patriots will need to get to Manning. The key to winning this game is messing up the other team's quarterback and not making the mental mistakes.

Nachos? Taquitos? Brats?

Be careful with the alcohol. Nobody wants a DUI tomorrow. Be safe.

posted from Bloggeroid

The Eleven Year High

Yes, the Nasdaq is at an 11-year high . What about the other indexes?


The Dow is 4-yr highs. The SP500 is at 6-month highs.

It's an interesting spread. The Nasdaq fell so far (and so fast) from its 2000 highs. The flight from risk, high-tech, and bubble stocks decimated the volatile index. Now we are seeing folks favoring high-tech stocks. Are people getting more comfortable with risk?

I received an email last night from a former coworker. We worked together in the late 1990's at a high-tech firm. At the time, conversations were about the kind of stocks we were in. Everything was tech! Everything was IPOs, and even some penny stocks. Everything was working and the profits were rolling in. We even talked at the time that there was no way it could last, but one never knows how long the trend will last. (Except for the Black Box, of course).

In the email, my friend said "It feels a lot like 1999."

The fish are biting. Folks are buying risk. The social networking stocks seem to be the B2B and internet stocks of 1999-2000.

We do know how this ends. We just don't know when it ends. Hopefully, those of us who have been through this before won't be afraid to take profits - even if that means we don't get out at the top tick.

posted from Bloggeroid

Nasdaq at 11-year High

The Nasdaq is at 11-year highs. 11 years ago. Dang. That was 2001 for goodness sakes.

Big rally in growth and small caps today. The reason du jour is the drop in the unemployment rate. Of course, we know that those numbers are all smoke and mirrors, like the 2011 San Francisco 49ers. The number of people looking for work actually fell, so the unemployed number looks better.

But it is the headline number.

Feels good to see the perceptions improve. Pessimism sucks!

#140: Super Bowl Pick; Bernanke; Growth vs. Dividends; Facebook

Bernanke Says to Keep on Spending!

Ben Bernanke warned about cutting spending today. With the economy growing at 2.8% and jobs numbers showing some big cuts (as blogged earlier), it does feel like the economy is a little on the fragile side.

Yet, the stock market is a discounting mechanism for the future, right? And we've had a really nice rally the last few months. We are beginning to see some faith in the markets as folks are shifting from the Dow stocks to the Nasdaq stocks. The biggest IPO in the universe is on the horizon.

Why is Ben worried? He has promised to keep rates low until mid-way through Obama's 2nd-term, 2014. He is warning the government about reducing deficit spending. It's almost like Bernanke is telling us that the economy is running on smoke and mirrors and stimulus at this point, huh?
posted from Bloggeroid

Good News! Big Job Cuts!

Are big job cuts good news? But don’t panic -- Experts say the new data is not only expected, but possibly even promising.

So let me be the first to congratulate all of you who lost a job last month.

The gist of the article is that these job cuts aren't as severe as previous years' January job cuts. Well some previous years. I think it is a game of cherry picking previous Januaries and finding data that is more severe than January 2012.

Anyway, if you just signed up for unemployment you must be one of the lucky ones.

...And the Market Went Up Anyway

One story says that stocks rose because of good manufacturing data. Another story says oil prices sank because of mixed US demand for crude.

Hmm... If US demand for oil is dropping, that's a sign of the economy slowing down. We use less oil and gasoline when we're hunkerin' down. On the other hand, if manufacturers are makin' stuff, it's because they're seeing increased demand.

Anyway. Maybe people just felt like buying stocks today. When the trend gets going, it's a bit contagious. Good news is bought. Bad news is bought. The mid-day declines are bought. The morning dips are bought.

And social network IPOs will really be bought.

Facebook, or $FB as we'll all be calling it soon, will IPO in the near future. Get your limit order in now. GTC! There are a lot of fishermen (and fisherwomen) on the pier throwing their lines out trying to catch a ride on this IPO. I might even join them. It's too tempting not to, right?

posted from Bloggeroid