Stocks & Equities

While You Where Sleeping

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Posted by David Rosenberg : Gluskin Sheff

on Tuesday, 17 April 2012 08:07

  • Its a broadly mixed start to the day. Asian equities are down yet again, even in the face of a bigger-than-expected rate cut out of India
  • On the data front, the German ZEW investor index improved in April - both the current conditions and expectations components picked up nicely.

Another deja vu?

  • The 'Sell in May and go away' mantra worked so well in the past two years that it can't be ignored

The rain in Spain is not contained

Even with the ECB buying more Spanish Bonds, the problems within Spain have obviously not been solved

One dismal U.S. macro backdrop

  • It's so easy to get caught up in the high-frequency data flow that it is not difficult to lose sight of just how bad it is out there. 

But retail sales hang in

  • The consensus on March retail sales was for a 0.3% gain but instead we got +0.8% and the gains were fairly broad based
US retail_041612

April data bring on some showers

  • It's merely a diffusion index, but the New York Fed Empire Survey did disappoint in a major way

Nothing loonie here

  • Despite the pullback in global investor risk appetitie and faltering commodity prices, the Canadian dollar has managed to remain at par against its strong 'safe haven' U.S. counterpart

Getting high on yield Conference

Many readers have heard me discuss the vitures of a S.I.R.P. strategy. We continue to believe in well thought out S.I.R.P. investments and my colleague Reno Giancola and I will be discussing investment strategies and investment ideas as a conference May 31st at the Design Exchange in support of Mount Sinai Hospital. 

Great Opportunity below:

I subscribed to a Free 7 Day Trial to David Rosenberg's great Breakfast with Dave daily report so that you can piggyback on the trial. Just put in my username and password below and try it out! I have read it for years and really like the full report (the above "While You Were Sleeping" is just a minor part of the daily letter) it so see what you think. Only 3 more days on the trial but every report that's ever been issued is available by putting in my email address and Password. Regards Robert Zurrer Editor-Moneytalks.net  email - zurrermoneytalks@shaw.ca or zurrer@shaw.ca

Dear reader,

As one of David Rosenberg’s long-standing followers, we have set up a free no-commitment seven day trial with full access to all reports using the new platform. All you need to do is login using the details below:

Website: http://research.gluskinsheff.com
Email address: zurrer@shaw.ca">zurrer@shaw.ca
Password: 87417799


Should you choose to purchase a subscription, login to the Gluskin Sheff Research platform, go to My Account on the top right, click My User Profile, select Subscription Status on the left hand side menu, click Change/Upgrade Subscription, and follow the instructions to complete the upgrade.

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Stocks & Equities

Does Another Cruel Summer Lie Ahead For Stocks?

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Posted by Eric Parnell

on Sunday, 15 April 2012 17:30

By: Eric Parnell 

The stock market has made one thing abundantly clear in the early days of the second quarter: It still cannot stand on its own at current levels without the continued support of additional stimulus from the U.S. Federal Reserve. And with the latest Fed stimulus program set to end in June, it may be shaping up to be another cruel summer for stocks.

It all began on April 3 with the release of the latest Fed minutes from the March Open Market Committee meeting. Although nothing was included or discussed that we haven't already heard from the Fed many times before over the last several years, the market decided that the key take away from the latest minutes was that no further quantitative easing would be coming from the Fed any time soon. Stocks (SPY) immediately recoiled on the news, sliding lower for the remainder of the holiday shortened trading week. Then came the disappointing employment numbers on Friday and the uneasy response by investors once the stock market reopened early this past week. All of the sudden, the additional Fed stimulus that so many had concluded was off the table merely one week earlier was all of the sudden back on once again.


403065-13343774054316201-Eric-Parnell origin


Stocks & Equities

Be Careful

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Posted by Richard Russel of Dow Theory Letters

on Friday, 13 April 2012 08:16

Via Richard Russell of Dow Theory Letters - Title: "Be Careful"  With This Stock Market

These stock and bond markets may not make us happy, but we might as well get used to them, because they're all we've got!

I've had a lot of time while in bed to watch TV and particularly Bloomberg. And I note that 90% of the time the so-called experts try to predict the path of the stock market by the way the current news is going. If the news is getting better and unemployment is looking brighter, then the stock market "should" be rallying. If the European picture is darkening, then the market "should" be shaky to weak. Follow the fundamentals, not the market!

So far, the stock market isn't giving off any definitive hints as to what it's doing or which way the trend is heading. I study my PTI, and its last trend signal was bullish. But as you may have noticed from the recent point and figure chart, my PTI has not been climbing to new highs. Instead, it's forming a column of descending metrics, although it has NOT yet issued a clear bear signal.

Lowry's Selling Pressure Index is still above their Buying Power Index, a formation that always bears careful watching. Joe Granville's on-balance-volume statistics remain bearish as does Joe, and I always take Granville's work seriously. My astute friend, A. Gary Shilling, is bearish because he thinks US consumers have exhausted their buying power.

Actually, the reason I so frequently talk about Lowry's and Granville is that they are about the only two who stick strictly to technical analysis of the stock market while putting the market first and ignoring all the news of the day and the much-talked about fundamentals.

I note that the futures in the Dow are almost always the opposite of the way the market has closed. If the market closes down, the futures are usually higher, and the opposite is true if the stock market closes higher. BUT, if the market closes higher and the futures are higher, it usually means that next day will be a positive day.

This is a grinding back-and-forth market, one that is better to watch than to play.

Large-metal-safety-sign-saftey-first-be-careful-1443-provided image


Stocks & Equities

Minefields that can Blow-up Global Stock Markets in 2012

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Posted by Gary Dorsh via 321Gold.com

on Thursday, 12 April 2012 10:55

Nowadays, it seems as though the market is always teetering on the knife’s edge. Depending upon which way the wind is blowing on any given day, or what chatter is coming across the newswires, markets around the globe are moving at lightning fast speed. Sentiment can change instantly, with the release of unexpected economic data, market movements, or surprising actions of central bankers. The effect of high frequency trading (HFT) has turned the decades old profession of investing into a high stakes gambling operation, and more characteristic of commodity trading. Such erratic behavior on a daily basis makes it difficult, if not impossible, for analysts to formulate a long-term view, and for investors to maintain a long-term, “Buy and hold” position. “As soon as you think you’ve got the key to the stock market, they change the lock,” said long-time market guru, Joe Granville.




Stocks & Equities

S&P 500: Range Contraction Indicator Suggests A Deeper Correction

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Posted by Seeking Alpha

on Thursday, 12 April 2012 03:50

On Tuesday the RCI (Range Contraction Indicator) closed at 1.125% for the cash S&P 500.

As mentioned in Monday's article, when the RCI closes back above 1.1% (after first closing below 0.9%), it suggests continuing daily range expansion - which usually, but not always - is associated with strong bearish moves.

Again this is an indicator, not necessarily an entry signal. But if asked where should a stop be placed if one were to use it as an end-of-day short entry, my answer would be either just above the high of the day in which the signal was generated (today's high of 1383.01); or for a more lenient stop, above the recent high (above the 1422.38 high).


As far as downside objectives, the 1286 to 1293 area figures prominently. From Tuesday's close of 1358.59 down to 1293 (the first significant support point), this would be just under a 5% decline - still a very reasonable correction given the near exponential rally from the mid-December lows.

The October 2011 high was 1292.66, and a confluence of retracement levels arrive from 1286.41 to 1290.52:

1290.52 = 50% retracement of the Nov11 low to the recent high.

1289.59 = 38.2% retracement of the Oct11 low to the recent high.

1286.41 = 61.8% retracement of the Dec11 low to the recent high.

The only Fibonacci retracement level that I feel has more significance than a flip of a coin is the 50% level. But when a number of retracement levels as well as other technical points cluster around a particular area, then that reoccurrence and reinforcement becomes noteworthy.

The S&P correction can certainly segue into a uniformly bearish trend and trade lower than 1286, but for now this level is one of the most significant near-term objectives/support level.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.


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