Technical Data

Technical Data

 

The market has been hammered lower eight straight days, until today.  If Wednesday had closed with even a miniscule loss it would have matched the worst consecutive losing streak since 1978.  With that in mind, Fraud Street bought the dip with a vengeance and thus avoided all of the bad press and the sure-to-follow Jimmy Carter “malaise” comparisons.  
 
Is this a support level?  Although one never knows for sure and there is a great deal of news coming out soon (read: Italian banking crisis and Fri Jobs data) we may get some support Thursday.  A major level of technical support that I mentioned on CNBC today was 1240.00 in the S&P.  While the market traded through it, it eventually held and led to a strong reversal with a positive close. Moreover, ES (mini) volume was 52% higher than the recent average and closed with net aggressive buyers over sellers…even if it was only +0.22%.  
 
If you wanted good news, that’s about all I’ve got and I don’t know how long a technical bounce will last.  If it can hold together for more than a few hours and the market ignores the sure-to-be bad Jobs Report on Friday, it just may pop back to the 1295.00 / 1300.00 levels.  A rally beyond there seems unlikely for the following reasons; fundamental economic news is awful, European banking crisis will soon be headline risk again, the S&P broke all of its higher support levels, the major indices have all closed below their respective 200-day MAs, and the S&P futures chart has finally broken the MAJOR channel going back to The Bernank’s intervention policies that began in 2009 to rig the market.  Of course, this last point will be more influential if it has a weekly close under said channel.
 
Speaking of The Ben Bernank, don’t worry about the markets too much, he’s your ally: he does not believe in free markets and will soon undertake QE 3 to force the markets higher.
 
Trade well and follow the trend, not the so-called “experts.”
 
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters. 

 

   

larrylevin@tradingadvantage.com  Trading Advantage              (888) 755-3846      __

Downgrade

Downgrade?

 

Below is a good video clip of The Kudlow Report in which Larry Kudlow interviews S&P’s global head of sovereign debt ratings – David Beers.
 
http://video.cnbc.com/gallery/?video=3000035313
 
This video clip was recorded before Speaker Boehner released at updated version of his plan to raise the debt ceiling and cut spending.  In short, his plan is to “cut” an average of $91.7 billion a year for 10-years totaling $917 billion.  
 
Of course almost all of it is back-end loaded, whereby only $22 billion will be cut in FY2012…but the deficit will be $1.7 TRILLION!  
 
Oh, but the plan also requires Congress to draft plans for additional $1.8 trillion in cuts, umm, sometime in the future.  Yeah, right!  Like that will happen.
 
If I were David Beers, my response would be: Epic Failure boys & girls.  You’ve been downgraded.
 
 
Trade well and follow the trend, not the so-called “experts.”
 
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
 
 

  

 

   

larrylevin@tradingadvantage.com Trading Advantage             (888) 755-3846      __

A New Low

A New Low

 

Congress is doing a bad job.  You know where I stand on that clown-posse, but as it turns out most Americans agree with me.  In the following article we read about the Rasmussen poll, with a few highlights below.
 
Congressional Performance
http://www.rasmussenreports.com/public_content/politics/mood_of_america/congressional_performance
 
Voter approval of the job Congress is doing has fallen to a new low - for the second month in a row.
 
Just six percent (6%) of Likely U.S. Voters now rate Congress' performance as good or excellent, according to a new Rasmussen Reports national telephone survey. Last month, Congressional approval ratings fell to what was then a record low with eight percent (8%) who rated its performance good or excellent.
 
Sixty-one percent (61%) now think the national legislators are doing a poor job, a jump of nine points from a month ago. 
 
Most voters don't care much for the way either party is performing in the federal debt ceiling debate. The majority of voters are worried the final deal will raise taxes too much and won't cut spending enough. 
 
Only 11% of voters believe this Congress has passed any legislation that will significantly improve life in America. That ties the lowest ever finding in nearly five years of surveys, last reached in January 2009. Sixty-nine percent (69%) think Congress has not passed any legislation of this caliber, a six-point increase from June and the most negative assessment ever. Nineteen percent (19%) are not sure.
 
With divided control of Congress, neither party's voters are very happy. Eight percent (8%) of GOP voters give Congress positive marks, compared to five percent (5%) of Democrats and six percent (6%) of voters not affiliated with either of the major parties.
 
No doubt people are upset but who wants to bet me that most of these clowns will be reelected?  
 
Trade well and follow the trend, not the so-called “experts.”
 
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
 

  

 

   

larrylevin@tradingadvantage.com Trading Advantage             (888) 755-3846      __

The Ben Bernank

The Ben Bernank

Wednesday’s tragic financial comedy came the way of Ben Bernanke and his testimony to the US Congress.  In this testimony he said three important things; gold is NOT money (what it is, he did not say), QE3 is on the way, and that the Federal Reserve’s QE program has been a “PROFIT CENTER for the Treasury.”  The two statements and the QE3 proclamation are all ridiculous; however, the “profit center” comment is the most absurd.
 
Have you thought through just what kind of relationship there is between the Treasury and the Fed?  First, when the Treasury auctions bonds that are purchased by hedge funds, pension funds, or individual citizens, the purchaser uses his own funds to buy them and the Treasury pays him a rate of return for the use of his money.  This is the way it is supposed to work; however, things get dicey when the Fed is involved.
 
When the Fed buys Treasuries it isn’t using cash on hand today from last quarter’s profit.  It is conjuring up money out of thin air in order to pay for the bonds.  When Bernanke was recently asked about this (not today) he said it wasn’t money printing.  When asked where the money came from he smiled and said “from the Fed,” but it wasn’t money printing.  When pressed again and asked if the money was on the books the prior day to pay for the multi-billion bond purchase he said no; it was indeed counterfeited for the purchase.
 
OK, we know that the Fed counterfeits money for these purchases (oh, and by the way, I DO understand that when a government prints money it is not actually counterfeiting but I don’t care – I will continue to use that analogy) but why was today’s statement laughably absurd?  It was ridiculous because the Fed does not pay for bond purchases (QE) with its own money, it prints this money at a cost to the American people (read: INFLATION).  Moreover, the Treasury pays the Fed the interest rate on the bond then the Fed remits that same interest payment back to the Treasury.  And that’s a “profit center?”  Are you kidding me?  That’s a circle jerk!
 
How in the hell can that be a “profit center?”  
 
If you’re married and your wife sells you a bond so she can go shopping, and you pay her with the kids Monopoly money, then she gives you some bucks from the money she “saved on sale items” for the cost of borrowing the Monopoly money, and then you “remit” those dollars back to her…was that a f%$!#* “profit center” for her?  NO!  It is a financial f%^$!#@ circle jerk that most people do not want to even understand.  
 
“Bernanke is on TV?  Who is that guy?  I like his beard though, whoever he is.  Is TMZ on yet?”  Sadly, the average slack-jawed voting yokel is like this.
 
Here come the bears again.  If you have NOT watched this whole video, please do so now.  If you HAVE watched it, please view it again since it is relevant another time with today’s testimony of The Ben Bernanke.
 
Oh yeah, and he has a nice beard.
 
http://www.youtube.com/watch?v=PTUY16CkS-k
 
 
Trade well and follow the trend, not the so-called “experts.”
 
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
 

  

 

   

larrylevin@tradingadvantage.com
Trading Advantage
(888) 755-3846__