(Weekend ingerletter.com excerpt; with technical analysis primarily via video only.)
Gene Inger's Daily Briefing . . . for Monday May 24, 2010:
Good weekend!
The ‘flash crash’ . . . wasn’t a fluke we contended weeks ago; and argued that these levels would be ‘revisited’ after a sharp rebound. They certainly were, and Expiration Friday’s action (highly predictable with downside follow-through before called-for but temporary bounces, as I outlined intraday to our MarketCast members, as well as in the prior night’s remark with respect to what might happen before a 3-day German holiday weekend), was not (yet) the ‘critical juncture’ some technicians will contend.
Actually there is little reason not to expect continuity of everything I’ve outlined these past weeks following what we quite clearly were confident was a ‘distributional dome’ during March and April; which we also noted meant that ‘the longer a distribution is, the harder and faster the break’. It is why (just before the high) we issued and stuck with a ‘crash alert’ rather than just a conventional decline forecast. What comes next will be outlined in the weekend ‘technical’ video that accompanies this Daily Briefing.
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Daily action . . . will simply point you to the video, and summary of the week’s earlier comments (both text and multiple videos), which outline what was expected; occurred very much according to our plan announced two months ago for a ‘May crash risk’ as well as much more on a monetary and fundamental basis (not to forget that 4 Carrier Battle Groups are being assembled in or near the Med and Persian Gulf, starting with the USS Harry Truman Battle Group which left Norfolk today to reinforce a group led by USS Eisenhower, on-station in the region). We congratulate the Administration for making the tough decision (about time) to reinforce our ability to protect our troops in Iraq, and to deflect any further mischief by the renegade regime that is still in Tehran.
At the same time this ‘float plan’ will at least position greater Forces relatively nearby, in-event conflict arises with North Korea, as it’s clear (as noted long ago here) that a North Korean torpedo sank the South Korean frigate. North Korea is likely counting a bit on our depleted resources and finances with two war theatres ongoing; as is Iran; so any miscalculation by the enemy about Western resolve, increases risk. That’s at least part of why Sec’y. Clinton is in China with several advisors in the Middle East.
Market strategy overview: this has been one of the best 2 weeks periods in recent trading memory; and for those properly positioned has been essentially fabulous (for those who aren’t well..you overstayed a very tired old rebound in a secular bear that was rocky for weeks, and obviously in distribution through late March and April by all the technical patterns I discussed at the time, or conversely you listened to nonsense about melt-ups and the like, that actually didn’t exist at all, even before then. Selling in size was going on during the long distribution, which is part of why our market held a while longer than foreign markets, including China, which broke months earlier).
Unlike those who are glad this week is over (they call it an excruciating train wreck of course) rather than acknowledging that they were clueless as to what was transpiring in the weeks prior including insider selling in the very stocks some pundits were trying to ‘push’, which made me wonder about the motivations of the perma-optimists who only acknowledge a decline after it occurs), then sound like they expected all of it (so they blame policies, which are defective, or anything other than failing to look at a message of the market which had screamed distribution not buying, for many weeks); I can only say that it was a fantastic week, and we warned it could take ‘until May’ for the breakdown in earnest, for over two months. Why May? Well, members know why.
In any event, if I weren’t tired from properly navigating this obstacle course, I’d wish it was not over (the week that kept on giving gains); but since it is, we’ll look forward to the new week as outlined in the video, and in some remarks already written which I’ll only summarize from each preceding day this week; within an ongoing ‘crash alert’:
A ‘sovereign deleveraging’ panic . . . gathers steam in earnest. This is what we’ve written and spoken about for the past two months, as the primary impediment to any sustainable global recovery (‘sovereign debt’ and the austerity needed to combat it in opposition to the ‘pushing on a string’ crowd’s approach), not to mention China, as we did last night. That it wasn’t is further affirmation of the ‘de-risking’ that continues essentially on a global basis. (More on this subject in the full reports via the archives.)
A ‘conditional growth hypothesis’ is what China operates under these days. At the heart of this is China refusing to budge on currency (that normally would be an issue) because they are frightened of lower growth rates in that society; so any cooperation on currency and similar, is conditional upon ‘proven’ maintenance of growth efforts. It dawns on them that what’s going on with Europe is the form of Ponzi Scheme that in China they have avoided (while manipulating trade policies and currency to their own needs only; in a protectionist way that those elites who gave them our wealth initially, and our manufacturing base, seem to not wish to address). What they won’t avoid is a different kind of upheaval, if they don’t deliver growth (as we discussed at length).
Overall, the ‘world’s credit overhang’, with no demand for money, is a little realized additional factor in this market; but one we’ve repeatedly noted (ie: little demand for money by small or even large businesses, because they’re guarding capital carefully, and do not desire hiring additional employees unless absolutely essential as noted). I think this is part of the ‘new normal’, and offsets the delusional analysis by those who contend that ‘real’ (not make work or excess government hires) jobs growth exists in any substantial way (eventually but not yet). Those who say we risk ‘aborting’ a great recovery’ don’t get it; this is a different situation (as we expanded upon yesterday). (It is fair to say that the present Administration continued the failed policies of the past in the monetary over-stimulation arena; but also fair to say they didn’t embrace fiscal or monetary restraints; merely talked about doing so…and then belated reform efforts.)
In the meantime there will be massive debt restructurings, and the duration of overall difficulties is extended because of, not in-spite of, the misdirected stimulus and the perseverance of governments here and abroad to base this on a ‘reflation’, after we already used most available borrowing power under the prior Administration efforts. I also noted; that nobody has unwound the ‘toxic derivatives’ substantively as of yet.
Also we do entirely support ‘standardization’ for market participants playing under the same rules. While this absolutely has something to do with the decline (we warned of course that de-risking has to do with unwinding leverage and what can’t be shorted) it is essential for investor confidence to return to conventional long-term conditions that we should all aspire to see (we’ll have even greater comfort trading market swings, in the knowledge that our tax dollars aren’t being used to manipulate artificial extension runs or other nefarious computer-controlled ‘tricks’ that the majority have no access it appears to, and diminishes confidence as investors worry they won’t get fair prices). I want to see adequate liquidity, ‘real’ net capital requirements for the industry restored too, and transparency (vs. back-handed or off-market trades, also called ‘off-Board’).
This should have no effect on swings or uncertainties which will remain; but it will sort of undo the elitist attitude in a certain crowd that they can self-direct the whole market whereas we seek individual investor and mid-sized portfolio manager empowerment.
I agree that the tax changes and so on, as being imposed plus, restrict capital at just the worst times; and that there is a grassroots rebellion by Americans who ‘get it’. At the same time there will be ‘actual’ change (not just some that play well to the mass of the population, but actually undermine their fiscal and financial future) but like I’ve said, it’s a ‘process’, and will take time. Either that plus policies need more revisiting.
Furthermore you have North Korea threatening ‘all-out war’ now; which is precisely a situation they calculate the United States cannot afford nor permit amidst this chaos. I fear there’s a risk of miscalculation on their part, which could actually start a hot war. Then I consider their conspiratorial allies in Iran and the terrorists in Lebanon, and I’m wondering if this is a part of what indeed replicates another era; leading to wider war. (Plus the multi-carrier battle group deployments put ‘force’ in that region if needed.)
Bottom-line: as I have argued for the last three months; the longer a distribution (at no time was there an uptrend in recent months; there was a rotating distribution chop at best, with underlying insider selling and professional bearish posturing while most of the advice they peddle or ‘volunteered’ to the public was self-serving or delusional) .. the longer the distribution, the harder the fall when you break. That’s a part of what we called for in this continuing ‘phase 2 of the Depression’ part of ‘The Inger Winter’
Again I argue that government, through deception and false statistics, massaged this too high and increased a likelihood of what we’re seeing now being (redacted here).
A political upheaval will also occur this Fall, and that’s just part of the fallout as well; a likely benefit for those who believe in proper oversight and regulations, but not insane extremism (of the left or the right) and embrace hard work and fiscal conservatism.
(Macro) action . . . is simple. Having proved the 1000 point ‘flash crash’ drop was no fluke (as I contended that very day after a bit of assessment) but a preview of coming attractions, in line with our forecast (months ago) of our April ‘crash alert’ for May.
Bottom line: stay short or stay out (as argued before the market started unwinding), because we recognized a ‘dome’ of distribution that in no event was ever a melt-up in the wildest stretch of optimistic delusions, as fools who don’t understand ‘swing rules’ or other appropriate approaches to markets believed; or perhaps they were helping their pals distribution, since we know the market was under a distribution and insider selling, not buying, while the majority in the financial media contended the opposite. They were wrong I said then, and they are wrong now, if they think we’re at ultimate lows. I’d also promised you they’d switch from absurd delusions of optimism just two weeks or so ago to pessimism, and forget what they told you to do so recently. Right again...
(This mushrooms the situation into what will lead from forecast Deflation to Inflation; but not yet, and as the time comes we’ll position for that as best able (I already know what generally is planned; but can I rest my fingers). Enough for tonight (plus thanks for sharing with your brokers and managers how hard we worked to prove technical, fundamental, and psychological ‘facts’ as a very powerful establishment either lied, was naïve, or distorted the real goings-on for the most part; as for now, we welcome new members to the site and thus thank you for sharing an understanding of what I contended during the distribution, not to mention volatility envisioned forthcoming.)
(This is all abbreviated) because this was crucial in terms of investors understanding what was going on. It’s been a fabulous week so far but only if you heeded concepts and if nothing else; protected retained assets. For sure it reminds me of the analysis we gave in 2007 and 2008; those were not straight down markets until the end. This one is closer to the beginning. That’s why (thinking how it might go), at that time I called it a (then-forthcoming) ‘epic debacle’ and panic. Both were correct judgments.
This time I simply issued a ‘crash alert’ in advance last month with a bias for May for it to occur. The use of the term ‘crash’ suggested this would occur quickly; not slowly over two years like last time, and of course unwind the stupid extended rebound very fast (it was not initially stupid; it became that as they tried to convince us it was global recovery and sustainable at a rate sufficiently to offset debt issues; as some still do, which it wasn’t, isn’t, and clearly won’t be at this time..period). This will still however be a ‘process’ after a crash phase ends. Big players were selling big while their pals in the media were often urging confidence and bullishness; with no basis for that.
The ‘war against incumbents’ . . . may only be a backdrop to the markets, but very clearly reflects the mood that wants to see fresh blood (meaning fair and reasonable ideas) prevail in politics. This is America’s way of addressing ‘change’, thought-by-some to be reflected in the election of Barack Obama, but was quickly replaced by realization that ‘Chicago sausage’ politics were playing a policy role while financial strategies were essentially a carryover from the Bush Administration (the idea that I just took a political view will not be the case, as I didn’t say a word about a Marxist trend or any of that). What I am saying is that ‘fiscal responsibility’ is what America’s people wanted, did not get, but demand from their elected officials. I don’t think they give a darn which party (even a tea party) congressmen come from, quite frankly. (I also think Obama gradually realizes his 1st year’s foreign policy naiveté a bit finally. There’s just been unreported Fleet deployments and heavy buildup to Israel; finally.)
(This gets into strategy) and I don’t disagree that I may be early in mentioning it, so by no means am I taking off the table my downside ideas; but it’s getting crowded (in advance of Friday we wrote this), which has something telling me it’s wise not to get swept-up in breakdown excitement with the masses. That means remaining bearish but (for the moment per Thursday’s ideas) nibbling at profit-taking on the downside spikes, rather than cheering and yelling (the equivalent of a bull’s moans)..for today.
Sure, because we were right on the spot two-three weeks ago, with increasing shorts or going long Volatility, our proportional downside gains likely exceed what others are seeing; and that was the goal at the time. So maybe we become fairly cautious, with respect to the downside extensions a little early too; but ‘harvesting time’ does occur, at least with portions of profits. Again, I hesitate mentioning this with a unanimity now increasing of course with respect to ‘extreme’ negativity; but back off just a little tad (I wrote this portion Thursday evening, ahead of Friday morning’s short-term washout).
Now, you can get Volatility up into higher levels (not often and not for long); but don’t forget if you’re playing that, rather than more conservative ETF or Index approaches (means nothing to investors reading this, but is pertinent to traders which typically we don’t try to address in the Daily Briefing often, but so many are getting excited about playing the downside, we have to urge just a touch of calm as so many think that just making it on the downside is a cakewalk from here….may occur, but not a cakewalk and that’s especially so if you’re dealing with anything that is effected by ‘contangos’).
Bull back in a China Shoppe?
With everyone understandably focused on Europe, let’s not forget that China needs a lot of production and shipping capacity (and that they have in abundance) but without adequate demand, that’s problematic. We already know that a ‘double dip’ recession in the U.S., and a period of austerity in much of Europe, will strain demand for China made goods. And we also know what happens to their ‘bubbles’ if growth rates slow.
So; is that still an emerging market which can further submerge? Why not; as most of the world is convinced that China, India and Japan will pull ‘us’ out of problems, we’re not so sure at all. Actually we are pretty sure; it will not play-out that way. Period. The Chinese have made great strides and will grow over time, to be sure (education there is emphasized more than here; not to even get into which country is more Marxist in their teachings at some levels, which pathetically include even higher education that’s almost seditious, because of brainwashing kids at the expense of America’s totally impressive industrial and private-initiative heritage; but don’t get me started on what’s going on or who doesn’t want our youth to be motivated to excel, as is traditional or desirable, while of course social responsibility and compassion must be a focus too).
In any event; with all this Eurozone focus, people are forgetting how China really has craved profit, in a way that ought to provoke books and articles comparing them to an old era of ‘robber barons’, while the (Marxists?) prefer you think those were American exclusives (perhaps they were; but they exist today, only on the globe’s other side). If there is a dramatic collapse of China’s growth, they sure won’t be loaning us money if you think about it; so there IS a direct correlation to what happens to our markets too.
(Other) action . . . sees short-term conundrums with all these new regulations, and of course sovereign playground where people are nervous about an ECB intervening and giving us a ‘flash rally’ even if we get another ‘flash crash’ thereafter, is daunting.
Another reason I suspect (Thursday’s) freneticism will be replace by (reserved for our members). This is precisely what has ‘hedge funds’ going nuts a bit more than per-usual, and is codified in the latest general expression of ‘de-risking’ as forewarned.
(A discussion of calls or puts, depending on what one is trying to accomplish, so as to minimize ‘contango’ effects was provided and is available in the prior night’s archive.) I emphasize because there are a myriad of ways to hedge or protect directionally, it is inappropriate for me to suggest or comment much on individual strategies. Let us just say that, to those who hear media types in the options or futures business, trying to get people excited about the ‘products’, those are typically things they are selling, it should be noted, and therefore they get into trading complexities which aren’t entirely necessary if one wishes to hedge or protect in less complex or less expensive ways.)
With that ‘hint’ (and again remember not every day has to be a decision; and there is a process of ‘scaling-in or scaling-out’ of ‘what works’), let’s consider that what would be perfect would be immediate further breakdowns (after today’s test of the 200-day) in the S&P, culminating with a sort of panic washout on Friday (which could easily go the other way then [up] for hours; too sensitive and lots of de-risking may actually set this up, as hedgers try to get out of nicely-labeled efforts to have it both ways (which they’ve had for too long, and don’t want you to be aware how it’s done, that I assure you has a lot to do with some things we’ve touched on again in recent weeks), which can then result (after they’re finished with the panic readjustments of their holdings) in a period of (redacted forecast). Doesn’t matter what the price level will be for the S&P or Dow; just levels of Volatility (more), but again I’m probably early discussing it.
(In this regard I think we’ll see much more next week than the remainder of this week; so stay tuned in that regard. It will be hilarious if they can’t hedge accordingly easily; because then the market could respond by working its way to realistic levels, with less interference…. And yes, we’d like to thank Germany, in-part, for Wednesday. I think I’ll have a nice glass of gewürztraminer this evening in their honor; why not?)
Negative feedback loops and all the worries notwithstanding; its times that excite the after-the-fact analysts and pundits that tends to get me to contemplate slowing down; at least momentarily. But on the other hand, I don’t dispute anything I’ve said before with respect to where general market levels should be; just (patterns) by which they get there. In that regard, let’s review a few prior remarks, then tonight’s two videos (one of which is focused somewhat on Volatility, about which I won’t unduly expand).
P.S. Don’t forget expectations of new Greek riots on Thursday; possible market note (again; this was written Wednesday before the riots and the washout and so on).
Market ‘depth’ evaporated . . . Tuesday afternoon; causing us to issue 3 bulletins to warn traders and investors that nobody in their right mind would buy securities ahead of Wednesday’s opening. At the time we were already short from a morning rally, as you might suspect. What we were emphasizing was that all rallies would be false and abortive (just the opposite of what most firms’ squawk boxes were crowing about that morning while we were shorting strength… and Wed., after-the-fact, one network was livid about the poor prior recommendations out of Goldman, though I won’t say if that is a firm I was referring to the other night), with the market actually challenging points near the lows of Monday, before this was over. The focus now is (redacted ‘crash’).
After (Tuesday’s) close the SEC did their own version (with 10-day comment period); which starts unwinding I suspect of all such ‘hedged trades’ in the U.S. immediately. If so (this is impossible to gauge, but the direction should be down, not up; without a particular concern on our part, since we’re already short on the ‘flash crash’ rebound, and then put the shorts [or comparable] back on at the S&P 1170 level as you know, a cratering of extraordinary proportions -in theory (hard to say before Europe opens) you will take several hundred points off the DJIA ..oh immediately. (Details redacted.)
I must emphasize that IF we actually drop 300-500 Dow points right now (meaning it could occur in the next 2 or 3 days), that would be the idea I had last month of a 1000 point give-or-take decline from the high of that ‘distribution dome’ I called it; while fool types or crazy pundits were cajoling investors to buy, while internal distribution was in my opinion evident (remember when I said I looked at sector charts, weak Financials, and techs, etc., and could NOT understand what the heck they were looking at with a view of the market, unless it was just marketing or helping their pals extricate stocks).
Well this has a point; a market that draws ‘no distinction’ between companies doing well (HPQ) or companies that are acknowledging slowing (CSCO) is not a market that makes no sense. Any anyone with experience saying that is engaged in games. (This was written Monday or Tuesday of last week; then certainly the drop followed.)
We gave a ‘crash alert’ weeks ago; we did not remove it even with the forecast rally off the ‘flash crash’, while saying very clearly you would see those levels again and it was NOT a ‘glitch’, fat finger, or any of that stupidity which was trotted-out to cover a revelation of what HFT (high frequency trading) can do with respect to rapid volatility.
This is the same crash; it’s a process, not one-day event. Nobody understands that; or they don’t reveal why. That’s why I gave a comparison to 1987 (details enlighten a new member; so no reason to further educate those who aren’t); just a can ‘kicked down the road’ as they buy time for desperate last minute distribution while telling investors that it’s safe to invest (based this time on a recovery ‘as if’ the 2nd half will repeat the 1st, which it won’t; not to even mention the submergence of emerging markets or of what we called the Eurotrash..again no offense to gypsies..we’ve been bullish on the U.S. Dollar all year you’ll recall). I even one night (near the high of the rebound) suggested as it was the Anniversary, that we focus on what happened to the Hindenburg. (Youngsters please read your history and you’ll find it was sort of like the Titanic; went down slowly at first, with some complacency, later all was lost in a short period of time…as in all at once.) (That was my intro that night.)
Government may indeed (reserved discussion of their role). That era is gone; most Americans are decent people who are neither left nor right; but compassionate and not hateful. They also value their freedom; as opposed to a growing governance and taxation approach that imperils basic rights and teaching systems too-often ignoring our Forefathers, our Constitution, and our Bill of Rights, not to mention the Federalist Papers. It’s part of the dumbing-down of America’s youth; so it’s all our jobs to make sure they don’t get away with it. That of course means neither semi-Marxist nor those evangelical teachings either; but emphasizing the importance of our freedoms, which includes separation of church and state, plus encouragement of individual initiative in the private sector, rather than reliance on ‘uncle doing it for us’.
They spend like crazy; they tried to restore with ‘free money’ and ‘official’ low rates; in essence the era was a throwback to a former reflation effort, which we warned could not succeed, albeit it could buy time (and it did!). In 2002, for the first ‘great reflation’, new members should know we were totally bullish, more so than anyone really, and stuck by my upside guns for a solid 4-5 years; rightly after calling the secular 2000 top. I think you might ask does that mean ‘this time is different’. I do hate the term but yes it is. It’s worse now, as the borrowing capacities are really hampered because of the misdirection in stimulus funding we identified, not just because of a political bias, but because of what was best for the USA. That’s the only reason we pointed it out.
The industrialized nations of the world, carrying unimaginable and growing burdens of debt, are not going to be able to get out of this mess without savage reductions in living standards over the coming years, not months. If we don’t have cheap energy it will be even worse (Oil is particularly an enigma now because aside lower demand, a degree of ‘risk premium’ has to be factored-into pricing as well, which limits the floor.
Do not believe the nonsense about Iran shifting nuclear materials to Turkey; already they followed-that-up by saying they’re increasing the number of centrifuges in use; heaven forbid mainstream news networks report what’s actually going on just now.)
Essentially we’re at the leading edge (not trailing edge as those arguing recovery that is orthodox and conventional as underway) of a long descent, from the heights of the past, and the profligate lending and spending I warned of for years, while bullish at least 80% of the time, but warning that the ‘piper had to be eventually paid’. We saw what was happening in early 2007, and concluded that time was rapidly arriving (our reversal to an ‘epic debacle’ forecast that year, for reasons you well know by now).
Given the ‘multiplier effect’ (of interest-on-interest as rising deficits, with considerably shrinking income including tax revenues provides, at virtually all levels of governance unless rates are jacked-up to such onerous levels that is truly politically and socially unpalatable..aka the EU as an example) you do NOT have the luxury most politicians typically presume about not having to confront this until the ‘outlier’ years (say 8 or 10 ahead of us); and in fact could double (or worse) the Federal deficit within four years (or so). To address that requires immediate remedial actions, and that has untoward potential effects not only on the level of governmental services but the ability of what is presumed; a necessary forthcoming (reserved forecasts related to the future).
America’s once-broad tax base (they don’t tell you the truth about who is paying and they don’t tell you the truth about unemployment levels overall, or that around 40% of the middle class making under $50,000 during the 1990’s is now unemployed; that is a horrific destruction of the American middle-class, which is what had contributed to a fantastic admiration of the United States throughout the world, no matter what else is heard; because there is no nation in the history of mankind that built a larger middle class, without (reserved comments as we can’t review the overall likely finish here).
Further, it contributed in my thinking to a perception that they could simply continue this, and leverage artificial debt even more persistently, at the expense of forgetting that even Keynes (who is still dead as I say, and unable to explain what I am quite absolutely sure about) never suggested the use of such stimulation to be other than for temporary measures, and by creditor not debtor nations. What has been done in his economic name has proselytized history in a way that threatens to lay-prostrate our society if we don’t get back control fairly fast. I said this for a long time; just look.
(The specificity of market price levels I have in mind has regularly been via videos.)
Hats-off to most Americans who like proverbial ‘sleeping giant’ (aka ‘Tora Tora Tora’) ahead of Pearl Harbor, have really awakened to the challenge; and for once in their life, not accepted government word for such matters. Perhaps realization (especially by citizens who are employed; in fact some joke about Tea Party participants being older and not broke, but that’s just a good thing; it means they can pay their bills, but realize) what government is trying to do in terms of pulling the wool over all our eyes, and they just won’t take it any more. That makes them patriots not radicals.
With about 130 seats up for grabs in Congress (and both parties on the ‘outs’ while a cynical politician or two try to impugn citizen activism with a quality of radicalism or of bias; the truth may be that these are the normal Americans, and that the radicals may be those trying to convince the rest of us that they know best), this gets interesting as this very year progresses. There is no way for stock market volatility to settle-down in this environment; so if nothing else that should make it spectacular for trading moves.
Debt impairment . . . is the concern; not earnings and recovery optimism as prevails, at least among the delusions of those who see a sustainable economic recovery with no contractions to test the mettle of the turnaround efforts domestically or worldwide.
I have called this a controlled Depression since forecasting it over three years ago; that the Fed and Treasury would facilitate systemic stabilization, but not much more. I regret to inform you that we were and continue correct. It dovetails in that businesses and even municipalities (we know of two) who concurred with our specific expectation back then, circled their wagons, harbored their cash, and properly rode-out the storm. Now that the market broke as forecast, watch and see these guys ‘flip-flop’ in a panic.
Conclusion: stabilization efforts notwithstanding; overall recovery and deleveraging conditions will prevail (not may prevail) through this year, and probably into next year as well. Intervening market rallies do occur (some fairly wild), but of limited duration, at this point. If other developments unfold that could change prospects we’ll evaluate.
Further points: nearer-term issues to contend with; mostly ongoing macro aspects (new in red):
- Germany is washing their hands of peripheral Europe it appears; which is understandable;
- Early this year we wrote to look for eventual Euro ‘parity’ with the Dollar (redacted here);
- If an additional volcano in Iceland decides to ‘blow’ now; (redacted implicatios explored);
Further bullet points provided members; please visit ingerletter.com site for details.
MarketCast (intraday analysis & embedded Daily Briefing audio-video). . . remarks forecast substantive failures by markets; particularly as 2010 evolves (whether just as a correction of a worse case remains to be assessed). Remember back in early 2007 we denied the 'liquidity' momentum as a canard; believing housing only the first asset bubble to deflate. We then outlined structured investment vehicle failures; banking issues, the confluence of asset deflations, and more; continuing with interruptions per projecting long ago: 'a perfect storm'. New sets of storm clouds are quietly gathering.
As the debt bubbles continue to deflate, alternating tradable moves continue from a trading perspective. Against that backdrop retaining a macro (adjusted) Sept. S&P 1600 +/- short irrespective of interim oscillations. Technical analysis via video follows.
Daily Briefing Technical-Corner MarketCast Videos
Bits & Bytes . . . provide investors ideas in a few stocks, often special-situations, but also covers primary technology issues (needed for assessment of general factors in tech, or as compelling developments call for) that are key movers in the NDX, SOX or S&P, plus ideas ingerletter.com thinks might merit further reflection. (Individual stock comments generally are provided in video overviews only; occasionally I'll have some thoughts here; however increasingly most all analysis is via video, as it should be.)
Minor note: the Rochon group in Dallas launched the IV-7 (Pure) marketing campaign to the Nation today, earlier than previously announced June 1 estimated launch date. That’s generally a plus; suggests inventoried product and sales teams adequately assembled to commence direct marketing programs. (Rochon, as former CFO and then CEO of Mary Kay cosmetics has experience [etc.])
As to the underlying ‘disruptive’ additive (SDC) from Pure Bioscience (PURE), I’ve remained (and do remain) optimistic about the broadening product base over time as well as the behavior of the shares (which relatively speaking have hung-in very well in this volatile market, and unfortunately haven’t given much of an entry opportunity for new members who may be trying to accumulate or others desiring more on larger pullbacks, which have been quite limited and on lighter volume than the rally phases).
Of course for those desiring to participate (portion redacted). In the longer run we’re interested in ‘baby wipes’ (not off the table some say), as well as ‘deodorant’ such as from Nivea (currently for sale in England and Europe), and a desired product (under an FDA-granted treatment IND) which is being developed by Pure and tested by a firm in which Cleveland Clinic has equity positions; which is the new ‘hand sanitizer’, expected to compete with the likes of Purell. It should be noted that ‘food handling and processing’ uses can now be marketed. I only regret that it wasn’t available months ago when the last outback of contaminants made people sick or worse; so we’re hopeful this will be a very lucrative area.
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Comments are interpretative speculative postulations provided 'as is with all faults' and all risks with no assurance about future performance of anything (markets or stocks) in any way whatsoever. Personal necessity, irrespective of opinions, may require buys or sells deemed necessary, without prior notice.
In summary . . events continue reminding us of risks Allied fighting forces face, given continued attacks on free peoples, by elements including organized terrorist forces in various countries and the world’s oceans. Addressing terror threats continues, while domestic issues absorb us more while we must focus on U.S. economic stabilization.
Over 3 years ago I commenced projecting an 'accident waiting to happen'; affirmed historically after long-duration periods of free money (Gilded Age mentality). Now a market may struggles with failing over-extended rebounds as the world restructures.
Though enormous efforts have avoided systemic disaster on the banking front; there is no equivalent rescue of the overall economy besides perception; nor restoration of engines for sustainable growth. People are adjusting to lower expectations; which will never be a favored approach to American life. Actually we don’t see it as permanently alternating the future; but we still have major adjustments to work-through. That’s the reason we warn about chasing rallies; not to mention major ‘commercial’ adjustments as are ongoing. And as I clearly forewarned; visible big storm clouds were clustering.
Enjoy the weekend!
<h2 style="">Gene</h2>
Gene Inger,
Publisher
~Gene Inger’s Daily Briefing™ (The Inger Letter daily analysis on www.ingerletter.com)
~Gene Inger’s MarketCast™ (Intraday audio updates emphasizing S&P futures and market action)
Updates about 10 minutes after: the opening bell, 10 a.m. ET, noon, 3 p.m., with a nightly final issued at approximately 8 p.m. In times of volatility, an additional interim report update is frequently provided.
Range of Inger & Co. service details (current as of January, 2009):
Gene Inger's Daily Briefing™. .posted nightly by 9 pm on www.ingerletter.com. Analysis and chart forecast of short-term market conditions. Posted with text and streaming video each evening. Focuses on events of significance, plus potential monetary or psychological impacts & focus on next day action.
Gene's Daily Briefing™. . available at $159 quarterly, at our site or via the California office. American Express, Visa & MasterCard accepted; and are auto-renewed quarterly, unless otherwise instructed by the subscriber. 'Inger Seven' at $26 weekly provides access to that week's Dailies only (one-time trial, which is from Saturday-to-Saturday only). A Secure Server is used. If preferred, DB's may be ordered through our office by phone or via mail. Daily Briefing subscribers select user name / passwords at the site; while 'Inger 7' is issued automatically. Subscriptions are licenses to read or view; not redistribute.
(MarketCast members receive complimentary Daily Briefing access. Daily Briefing only members, may upgrade to full MarketCast 'flash-based' video intraday service at any time. Tech support staff doesn't assist upgrading; please email ca.office@ingerletter.com or call Lynn or Laura at our California office. As of 2008 all comments are digital video with charts; the era of audio-only comments is historical.)
Gene Inger is essentially one of the few remaining (post-modern) Inquiry Analysts. Inquiry Analysts, as a definition; combine technical, fundamental, monetary and market psychology perspectives, vs. just a mere assessing of retroactive or current markets. The focus is: staying up-to-date interrelating a slew of current and prospective events, identifying trends or probabilities; goal is making tactical or strategic suggestions, as to how to best take advantage of markets or sectors. That's especially so in disruptive or revolutionary changes, that go beyond evolution of existing knowledge; plus economic, structural, or in certain scenarios, geopolitical influences that may impact markets beyond conventional perceptions.
Gene’s been quoted over the years in Barron’s, The Wall Street Journal, Investor’s Business Daily, major newspapers (New York and LA Times etc.); financial websites and radio stations etc. He has been a guest on CNN, PBS, an original CNBC market maven, and is the daily financial TV pioneer. Investors focused on the overall picture should subscribe to Gene Inger’s Daily Briefing posted at our website. Pattern ideas are postulated in the Daily; while intraday guidelines are provided via intraday MarketCast video commentary (email link sent to Adobe™ Flash streaming video; no downloading).
Gene Inger's MarketCast™ . . enables intraday views of pattern evolution given rapid changes in this era's ongoing economic, psychological, and geopolitical volatility. MarketCast is primarily intended for short-term traders in S&P futures, in technology, or investors concerned about T-Bond and the Dollar markets, as well. Current analysis along with postulations for the next trading day's action is provided.
MarketCast is the primary intraday service: $390 / quarterly. MarketCast is updated after the opening bell; at 10 a.m. ET, 12, 3 p.m. (or pre-announced on prior remarks during volatile activity), with nightly video embedded within the complimentary Daily Briefing access. Distributed via email links in Adobe™ Flash format; plays in any popular browser; equally in PC's or MAC's. Streaming video; no downloads.
Active investor/traders: please contact Laura, Lynn or Alan in our California office at (805) 496-6441 (Pacific Time hours) to ask questions, establish service, or via email: office@ingerletter.com. Our webmaster doesn't assist MarketCast orders. Our California main office coordinates MarketCast services. Orders may be charged to major credit cards. International customers: checks in U.S. funds or foreign bank drafts on U.S. correspondent banks acceptable, should you prefer to order by mail.
Subscriptions are non-discountable or refundable. Electronic distribution is evolving technology; so we refine service conservatively over time (2008 is a major upgrade to high-resolution streaming video). In rare events affecting Gene's scheduling, we endeavor to issue text comments, or preannounce if able. Unforeseen events or natural disasters may occur; extensions are automatically provided. Gene tries departing natural disasters in advance, as ahead of hurricanes, to ensure continuity of service. As of 2008 virtually all comments are in video, with charts; the era of audio-only commentary is historical.
Requisite disclaimer: Trading in securities of any type may not be suitable for all individuals. Futures or options can entail risk and volatility, versus investing. In our view, futures or options aren't investments, but speculations. Decisions are always solely a responsibility of, and at the discretion and risk of any trader. Discussions, or guidelines, in stocks & futures, are structured solely for purposes of giving shape and flow to our work. Patterns should be considered as guidelines only; to compliment your own or other good judgment, or that of your financial advisor. Market or economic forecasts are intended to be of a general nature, and should not be taken directly as a recommendation to buy or sell referenced securities, debt instruments, or futures contracts. To consider doing so; please consult your own broker or professional to determine suitability. No commentary is to be considered an offer to buy or sell securities. While we may own securities discussed, it's our custom simply to provide ideas; not to buy or sell stocks mentioned in opposition to directions projected, and to provide reasonable opportunity for subscribers to contemplate our ideas; unless fast market conditions do not provide sufficient time as sometimes is the case. If we do own an initial position, we'll say so. We do not sell on our initial coverage, unless a stock runs-up quickly, and then we say so; nor do we usually short anything, also unless referenced in our commentary. We also explicitly caution against chasing stocks after initial discussions.
Most strategies are short-to-intermediate in nature. Many traders who prefer equities to trading S&P's, will find similar moves among major tech stocks, that often can be treated as surrogates, or may consider utilizing 'mini' S&P, Dow, or the well-watched QQQ's. There's never a direct or indirect marketing relationship between our firm and any brokerage, hedge, mutual, advisory or financial PR firm. Right or wrong; our thinking is totally independent. We should be considered an independent resource; merely to supplement your own work and due diligence. Good past performance cannot be said to be an assurance of future results.
Intraday videos are confidential for use of subscribers to Gene Inger's MarketCast™ service. If you are the addressee you may view, but not regularly copy, forward, or disclose any part. Comments are Mr. Inger's observations at time of recording; thus not intended to constitute specific investment advice. Investment decisions are solely the responsibility of each investor. If you have received any communication or message in error, please notify office@ingerletter.com as well as the sender.
Internet communications cannot be guaranteed to be timely, secure, error or virus-free. However, all messages are sent in the Adobe™ 'Flash' video format, is simply a perfectly safe link to the streaming video on a Server. The sender does not accept liability for any errors or omissions, as well as any market decisions. Mr. Inger's market analysis makes a best effort to interpret events, technical factors and fundamentals from his perspective, and are intended to augment the information from which an investor makes his or her decisions, but not replace the responsibility of each investor entirely for their own decisions.
E.E. Inger & Co., Inc., its officers and staff, shall not be liable for decisions made, or taken by you or others, based upon reliance on information, or material published by our resource services. All information provided is to be used, considered or evaluated by investors or readers, on an 'as is with all faults' basis. Finally, we fully respect subscriber privacy (as our own); reader names or email addresses are never rented or made available to any party for any purpose; period. We've never rented mailing lists in 38 years since first starting the Letter, the heritage for all services; it's Daily Briefing successor; or video MarketCast comments.
Office address:
E.E. Inger & Co., Inc. (The Inger Letter)
100 East Thousand Oaks Blvd.,
Suite 227,
Thousand Oaks, CA 91360
~ Telephone 805.496.6441 ~
E-mail contacts:
Website tech support or password activation questions (not MarketCast):
tom@ingerletter.com
Alan or Laura Raphael for MarketCast or office questions; email:
office@ingerletter.com
Mr. Inger (if needed; not for website tech support please) directly:
gene@ingerletter.com
© 2010 E.E. Inger & Co., Inc. All rights reserved. Reproduction in any form without permission prohibited; brief excerpt quotations are allowed, providing full accreditation with web-link or reference to our website is concurrently included.
Copyright© 2010 The Inger Letter- Daily Briefing™ & Gene Inger's MarketCast™. All rights reserved.
