Friday, November 20, 2009

Day 2 of Market Timing Strategy

With a 84% win ratio in 12 years and was a winner the last three occurances. See my previous Blog posts for the entry signals results. On Day 3 ( Monday) if the other conditions are meet then BUY at the Close.

" And the Sea will grant each man new hope".... This weekend will travel to the islands for some great scuba diving in the warm tropical waters of the Caribbean Sea. Bon Voyage ! Will be trading from the Hotel room, lol.

Market Recap:

An absence of stimulating economic data releases, Dell's significant earnings miss - now called a 'debacle', and of course the suddenly strengthening US dollar served as a drag for the equity market today. The S&P 500 saw its first weekly loss for the month. A number of additional bearish factors came from overseas, putting further pressure on the markets: The possibility Asian policymakers might impose capital controls; the European Central Bank's hint of withdrawing liquidity (i.e., phasing out stimulus programs).

This week's most troubling economic news came from the housing front where we learned about an unexpected decline in housing starts and a significant increase in mortgage delinquencies. This has reignited concerns about the sustainability of the current economic recovery, and has investors worried, the stock market rally since March may have been overdone.

Recent Data:
Last week's 30-Yr Bond Auction didn't go so well. It had a poor bid/cover ratio and theTreasury was forced to issue the bonds at a higher interest rate than planned.
Import prices were seven times higher than last month's import prices largely due to the falling US dollar.
Consumer sentiment was awful - coming in much worse than last month and much worse than expected. The weakness is rooted in the still contracting jobs market, which won't be improving any time soon.
Mortgage applications plummeted in the last week.Mortgage brokers are unable to execute fradulent contracts due to stricter regualtions.Many are quitting their profession.
Weekly jobless claims are still ABOVE the 500,000.
Retail sales improved. Hmm, the odd thing about this is that States are not reporting better retail TAX collections. Are the retail sales data tainted/rigged now too? probably...
Empire State (NY) Manufacturing data was absolutely horrid ! - much worse than expected.
Industrial production was really bad - much worse than expected.
PPI core data showing deflationary signs, which scares the Fed. CPI was as expected.
Housing market index was worse than expected. Housing starts were much worse than expected.
So this is the data. It is all true and yet the market continues to rally because...wait for it...the US Dollar is dropping. When did it become fashionable and BULLISH to trash one's own currency? When did a lower standard of living become B-U-L-L-I-S-H ?
Aint it grand?
Next week should see light trading because of the upcoming Thanksgivings Holiday. The week however has a loaded economic news calendar with reports scheduled on home sales, unemployment numbers, consumer confidence data, revised GDP numbers, and more.

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