tuesday update

SHORT TERM: US markets remain closed, DOW (YM) +68

Overnight the Asian markets lost 0.9%. European markets opened higher and closed +1.1%. US index futures declined further overnight, but rebounded into the early morning close: SPX (ES) +8.5 and NDX (NQ) +11.75 from yesterday’s close. US cash markets remain closed due the aftermath of Hurricane Sandy. Markets hope to open tomorrow. At 9:00 Case-Shiller housing prices were reported higher: +2.0% vs +1.2%. Bonds lost 4 ticks, Crude rose 35 cents, Gold added $3, and the USD was lower. Most of these asset prices are now about unchanged from friday’s close. Tomorrow: the ADP index at 8:15, and the Chicago PMI at 9:45. Be safe!

MEDIUM TERM: downtrend highly probable

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

About tony caldaro

Investor
This entry was posted in Updates and tagged , , , . Bookmark the permalink.

51 Responses to tuesday update

  1. rc1269 says:

    looks like an intermediate bullish rebounce/reversal could be starting here

    Like

  2. H D says:

    Nice Fractal- same price, pattern and time as Friday :mrgreen:

    Like

  3. Lee says:

    Thou Thinkest too much

    Like

  4. torehund says:

    I liek the Rut as it seems to make a bottom after the ABC plus pop and descent. Roundish end to misery ?. Nikkei also strong as expected. I see some small cap pharmas on the run, ARWR is a scoop here post good news on Hep B treatment…

    Like

  5. rc1269 says:

    I think the US might be the only market that can rally after a natural disaster

    Like

      • rc1269 says:

        mornin Tony. we got a couple unexpected days off! we were semi-officially closed yesterday in credit-land. gonne be very quiet again today though since much of our counterparties will be lucky to get into the office, even if they happen to be open today.
        generically though things are firm this am, with equities.

        Like

      • tony caldaro says:

        agree should be a quiet day

        Like

    • tommyboys says:

      Europe rallied yesterday…

      Like

      • rc1269 says:

        but europe didn’t have a natural disaster. i meant US mkt rallying after the US has a natural disaster. heck we even sold off when Japan got a tsunami. but when we get one… ahhh let’s buy anyway! go America

        Like

      • tommyboys says:

        These disasters are generally a posiive for economies. After every severe hurricane in the US our markets have been up 3-6% 90 days later. Further they are generally a stimulus for every economy all over the world as the repair provides employment and the manufacture of goods.

        Like

      • tommyboys says:

        All the media reports is how many restaurants etc will not be getting back those lunches and how bad this is for the economy. You never hear about how many flashlights, batteries, bottled water and generators etc… get sold that NEVER would have been without the disaster – let alone the stimulus of the clean up and repair that goes on for months…

        Like

      • rc1269 says:

        Tommy, I couldn’t disagree more. That’s a view that I hear from street strategists as a way of arguing the bullish side every time there is a disaster. The facts do not support that view, however. I agree that you will see short term spending on goods and services that would not have been purchased otherwise. But that’s only half the story.
        Expenditures on rebuilding is not the same as growing or investing. We need to spend just to get us back to the same level of economic production and/or wealth we were at before the crisis. Maybe it’s easier to understand on a smaller scale. Let’s say your house gets hit by a tornado and half of it blows away. Let’s say you have $100k in savings. Now, rather than spending any of that $100k on new investments or incremental purchases, you will have to spend some (or all) of it rebuilding your house to be back where it was. Now when you’re house is rebuilt, you are back to square one but minus $100k. Would you project that your future spending and investment activities will be higher now that you are broke or when you had $100k in the bank? No. In essence, natural disasters create a negative wealth effect. Spending at LOW and HD goes up today, at the cost of your wealth today and spending tomorrow.
        If you know of one, I’d like to see a legitimate study that suggessts replacement spending is stimulative and proves out the net positive long term economic benefits of disasters.

        Like

      • tommyboys says:

        ANY spending is stimulative in an economy 70% driven by spending…

        Like

      • tommyboys says:

        Here’s an old article referencing this subject w/charts. Of course individually (stock) speaking you’re better off selling insurers and buying the HD & LOW arena, but net net there is a benefit longer term.

        http://www.investmentu.com/how-the-stock-market-is-affect-by-natural-distasters.html

        Like

      • rc1269 says:

        if your time horizon for the life of an economy is 1-2 months, you are absolutely correct. in the real world, that’s incorrect. but clearly not worth the time debating the matter here; you’re welcome to believe what you like. cheers

        Like

      • rc1269 says:

        Tommy, all of those charts show a drop to new lows after the initial rallies. So don’t see how that’s evidence of long term stimulative behavior. And I would hardly call a one page article on “Investment U.com” with some SPX charts and a couple lines drawn as a “legitimate” study showing the economic benefits. But it does help explain how and why much of the investing public can get so misinformed about a host of economic concepts.

        Like

      • tommyboys says:

        There have been many more studies supporting the stimulative effect. Bottom line is markets have been 3-6% higher a couple months after disasters. This varies depending on whether we were in a bull or bear of course. Interesting these events more often than not occur near market bottoms which begs the question whether markets actually predict these events. Not gonna comment on that.

        Like

      • rc1269 says:

        “Bottom line is markets have been 3-6% higher a couple months after disasters.”
        Never disagreed with that notion; my comments were only with regards to economics, not the market. Interesting notion about the prospect of markets predicting them though. Perhaps our collective psyche has greater intuition than we give ourselves credit for!

        Like

      • tony caldaro says:

        Perhaps our collective psyche has greater intuition than we give ourselves credit for!

        correct!

        Like

  6. M1 says:

    Back in may I suggested the following pattern. And we got an “endless” QE3.
    OLD DOW
    1932 low – 1938 low = 6 years
    1938 low – 1942 low = 4 years
    NDX
    2002 low – 2008 low = 6 years
    2008 low – ?

    Like

  7. CB says:

    thanks Tony. seems like we’ve had a nice retest with some +d in the futures ..markets like reconstruction spending, don’t they ?.. http://screencast.com/t/50Uk85evlBf

    Like

  8. tony caldaro says:

    Much closer to a confirmation

    Like

  9. pbnj123 says:

    Tony
    I noticed you chanced the “tone” in the Medium Term comment – what made you change that from yesterdays “down trend likely underway”?
    Just curious – thank you
    Cheers

    Like

Comments are closed.