friday update

SHORT TERM: market ends mixed on Q2 GDP, DOW +17
Overnight all the Asian markets were up for the second day in a row. Europe opened lower and closed -0.50%. US index futures were higher overnight and at 8:30 preliminary results of Q2 GDP came in better than expected: -1.0% v -6.4%. This is the first time since 1949 that GDP has contracted for four quarters in a row. The markets gyrated on the news, opened at 985 and rallied to SPX 993 in the opening minutes. At 9:45 the Chicago PMI was released: 43.3% v 39.9%. The market pulled back, despite a drop in the USD, to SPX 983 by 10:00. This pullback from yesterday’s 997 high is another one of those mini 13-15 point pullbacks since this rally began at SPX 869. And, just like the others the market stabilized and started to move higher. By 3:30 the SPX retested the high for the day at 993 before pulling back some into the close. For the day the SPX/DOW were +0.15%, and the NDX/NAZ were -0.40%. Bonds gained one full point, Crude rallied $2.15, Gold rose $15.00, and the Euro moved higher as well. This is the second day in a row that bonds rallied with these other asset classes. Support for the SPX remains at 961 and then 935, with resistance at 990 and then 1018. Short term momentum remained around neutral all day. Interesting day with the surprising improvement in Q2 GDP, decline in the USD, rally in Gold, and the sideways movement in the stock market. Will review all the charts over the weekend. Enjoy your weekend!
MEDIUM TERM: uptrend
LONG TERM: bear market

About tony caldaro

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18 Responses to friday update

  1. Jman says:

    Gold seems about ready to make that surge to 1000 finally!


  2. tony says:

    Exactamente S2 …


  3. S2 says:

    I read an interesting financial article this week in the Orlando Sentinel. I heard some of its points discussed today in the news, but I don\’t think it\’s widely known yet. Basically, it says that banks are intentionally delaying many foreclosures to collect more fees often at taxpayer expense (again!). This is sadly not a joke! Delinquency fees are usually 10-15% of mortgage payments and late charges (yes, this is in addition to delinquency fees…go figure) are often 30-40% of mortgage payments. Then, throw on servicing and other fees leading to a grand total of 150-160% of the original mortgage payment being tacked onto the loan. Why would they do this since you might think it does them no good with underwater houses? Let me count the ways…1. Ultimately, when the home is foreclosed with inflated expenses, the bank gets to write off tons more expense and debt which magically helps them avoid paying even more taxes.2. Delaying the write-offs allows the bank to maintain fictionally high appraisal values and thus avoid raising more money for capital reserves, avoid freaking out investors and basically avoid going bankrupt.3. The new government programs pay the banks a percentage of any principal write-down or lowered payment and allow forebearance of a chunk of the loan all while paying annual servicing reward fees. So, banks can pile up the expenses for 6-18 months instead of foreclosing, then get paid a small percent by the government to write those expenses off not to mention the additional tax benefits of write-offs mentioned above (double dipping) and then get paid annually by the government to stall loan problems as the artifically low interest rate rises over 5 years and balloon forebearance payments come due in 15-40 years. Essentially, the government program fees are not nearly as good as the fees banks can pile on in pre-foreclosure, so banks are trying to get the best of both worlds. They are using our bailout dollars to stay alive while piling up fictional mortgage expenses that will lead to massive tax write-offs which will be additionally tax-funded through government programs. The bank big wigs win either way. If housing recovers or stabilizes (highly unlikely), the slow bleed of foreclosures, write-offs and government programs will allow them to continue to cook their books while milking taxpayer money. If housing tanks, their ultimate tax write-offs will be even greater and they\’ll get bailed out by taxpayers OR they\’ll go bankrupt but will have forestalled bankruptcy by a couple years thus raking in millions more in bonuses needed to carry over their mansion payments during the depression.


  4. tony says:

    Hi NE,Gold looks prepared to make that assault on $1,000 and beyond.Expecting an uptrend confirmation soon. This should be Int. 3 of Major wave 3.The recent low looks to have ended wave 2 of Int. 3.Watch Silver, it\’s leading.


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