Latest Posts
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Finance 0
General Electric Has Plenty More Downside Potential
In case you missed it during the many instances I mentioned it here and on Twitter, I contracted a virus. Mercifully, it seems to be on the wane (hurray, Tim’s immune system!) but while I was in the throes of my illness, I did something I hardly ever do, which is turn on CNBC (the total amount of television I watch in a year is probably a few hours, at most, and I only vomit my way through CNBC viewing during Fed announcements). Anyway, the topic of discussion was General Electric (GE), which is my largest non-ETF short position. I took this screenshot earlier today, although I think it fell lower… I didn’t catch the name of the s... -
Finance 0
Large Head & Shoulders
“Patience, persistence, and perspiration make an unbeatable combination for success.” – Napoleon Hill The wild swings continue on relatively low volume with traders taking this week off for the most part. There isn’t much to talk about but it does looks like we may get a deeper correction at the moment with a nice head and shoulders pattern on the Nasdaq, but we should get a better read on that judging by Friday’s close. SPY has to close the week above 241 to stay in its range or risk a drop to 238.... -
Finance 0
The Homebuilder Stocks Have Really Underperformed
We check out the Homebuilders and how they have performed both in terms of Revenue Growth and Stock Prices over the last five years in this Housing Market video. Given the backdrop of historically low interest rates and home prices back at the highs, homebuilding stocks have lagged the overall recovery in the housing market since the subprime housing crash. Moreover, given the extremely accommodative monetary policies that have juiced up all stock prices, the homebuilders have underperformed the broader market, and dramatically underperformed the technology stocks. It is quite evident that we are in the midst of a technology driven economy an... -
Finance 0
E Crude Oil Futures Market Recap
Yesterday we saw a pretty sell-off in Crude oil. Today the inventories number came in, one day later due to Tuesday’s holiday. I do not need to write much about the inventories as a picture can tell you more than a hundred words: We will take a look at the COT data with Quickstrike which is available on the CME Group’s website. Looking at this graphic, we can observe an increase in the managed money short positions. Actually, I do not give any attention to the inventories or the COT numbers in my analysis but I thought it would look good in this post. One thing to point out from today’s particular session is the timing. More... -
Finance 0
What Does The Illinois Budget Crisis Mean For Your Bond Fund?
A recent Capital Economics (CE) report shines an unforgiving light on Illinois’ ongoing budget woes—and what it finds isn’t pretty. The crisis, which has affected every level of government in the state, is a cautionary tale for not only public spending run amok but also independent investors taking too large of a risk by seeking high yields. The Land of Lincoln’s credit is already the lowest-rated in the union and, until recently, its debt came precariously close to being downgraded to “junk.” Were this to happen, it would become the first state ever to receive such an ignoble rating. The state’s 10-year bond yield has soared in... -
Finance 0
Paccar Rallies After Analyst Says Truckers A Bit More Optimistic
Shares of global truck maker Paccar (PCAR) are rallying against the grain of a declining broader market after a positive note out of UBS. UBS TRUCK SURVEY: According to UBS’ latest survey, trucking companies are “incrementally more positive.” Approximately 55% of the respondents see business conditions improved over last year. Approximately 70% of the survey respondents also see freight demand to improve in the second-half of the year with around 75% expecting truckload capacity to tighten over the next 12 months. About 80% see used truck prices to increase or remain flat in the second half of 2017. “We think the combi... -
Finance 0
2nd Quarter GDP Estimates From ISM And Markit
On July 3, we discussed the divergence between the Markit and ISM diffusion indexes for manufacturing. Today, let’s look at ISM Nonmanufacturing vs Markit Services. Real GDP If the economy was indeed growing for 95 consecutive months (Nearly 8 Years), the above chart would not look like it does. For the first quarter, ISM estimated 4.3% GDP growth. Today the ISM says “The past relationship between the NMI® and the overall economy indicates that the NMI® for June (57.4 percent) corresponds to a 3.3 percent increase in real gross domestic product (GDP) on an annualized basis.” Markit Services PMI IHS Markit U.S. Services PMI™ –... -
Finance 0
Why Is US Economic Growth Slowing?
I read a common narrative these days about how the US economy is slowing because it’s weakening, becoming less dynamic and less productive. I’ve countered some of this over time by arguing that yes, we’re slowing, but we’re just normalizing and actually stabilizing (in other words, the idea of “secular stagnation” is another case of short-termism). That is, if you look at the historical rate of growth you’ll find that the past 75 years were an outlier and that we’re just reverting to the mean. But I would also argue that there’s something else going on here. It’s not just that the US economy is slowing because 2-3% is a ... -
Finance 0
Has The FTSE 100 Topped?
Having seen the FTSE 100 fall over 200 points from its June 2nd highs, the index breaking decisively lower today is setting the scene for this selloff to roll on. However, with several interior resistance levels remaining in play, how far is the index is set to fall? See below, for Faraday Research’s view on this point. Head and Shoulders The index breaking below the ascending neckline of a well-established ‘head and shoulder’ pattern last month is key. This reversal pattern confirms the bearish backdrop for the index and provides the foundation for any FTSE 100 short. Of course, we must stress that the index remains in a longer-term... -
Finance 0
E EC Second Quarter Review And 2017 Second Half Preview
The bull market is intact with the S&P 500 rising 2.5 percent in the second quarter. Technology stocks continued their leadership as reflected in the Nasdaq’s 3.9 percent gain. As strong as the domestic market has been international markets were better still, aided by a falling dollar. Most of the stock gains came in the first two months of the quarter.In June, roles reversed as the lagging areas (healthcare, financials, steel, etc.) led while the high-flying technology stocks retreated. Until the June reversal market participation was quite narrow. A handful of big-cap tech stocks (Apple, Facebook, Amazon among them) have dominated t...
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