DURABLE GOODS ORDERS
Orders for Durable Goods
Rise, but Global Concerns Lurk (by Reuters –as reported in the NY Times)
Published: June 27, 2012
“Orders for
durable goods rose 1.1 percent last month on strong demand for transportation
equipment, the Commerce Department said Wednesday. Economists had expected
orders to rise just 0.4 percent.” Full
story at…
This was widely reported
as good news and the markets reacted as such, Wednesday; but the rise was only
due to stronger than expected transportation orders. Taking out transportation, orders have
declined (year-over-year) since early 2010 when they were rising at a rate above
20%. Of course back in 2010, the orders were
compared to the prior year when the US was exiting recession so this news isn’t
terrible. It just isn’t cause for
celebration.
US BORROWING RATES
From
YAHOO Finance, BREAKOUT: “On August 5th
of last year ratings agency Standard & Poor's downgraded the credit rating
of the U.S. Federal Government from AAA to AA+. Though widely telegraphed the
news sent stocks tumbling with the benchmark S&P 500 index dropping 6%.
Despite vows at the time to change their profligate ways, the U.S. has, if anything, gotten even more fiscally reckless in the nearly 11 months since the downgrade, raising the questions as to whether or not the existing AA+ rating is at risk. Robert Prechter of Elliott Wave International says such another downgrade is "pretty likely, eventually" but regards ratings changes as the least of America's problems.” Interview at…
The risk here is that US
Borrowing rates will go up creating more problems that Prechter called a “debt
implosion”. Prechter said, “We’re headed
into another period of pessimism. People
will be afraid of debt.” Period of
pessimism? That may be a euphemism for
market crash.
Today's Health Care ruling
(it's Constitutional) won't help the debt problems since the CBO (in its most
recent analysis) said that the law "would amount to a net increase in federal
deficits of $226 billion" by the end of 2019.
MARKET
Thursday, today,
the S&P 500 was down 0.2 % to 1329.
The VIX rose 1.3% to 19.71.
Stocks had been down a lot
more, but recovered from 2:30 until the close.
The only reason I found was speculation based on the news that
Chancellor Merkel (Germany) canceled a press conference in the afternoon and
there were rumors of a deal to fix Europe…again.
NTSM
The NTSM analysis is HOLD
again today, Thursday.
Our last important signal was
on 9 May 2012 when the NTSM analysis signaled sell. Currently the market is about 5% lower than
when I reduced stock holdings on 10 May.
MY INVESTED POSITION
I remain out of the market…
I reduced my stock holdings
to 30% (0% in stock in the 401k) at S&P 1358 after the SELL signal on 9 May
2012. (See the page “How to Use the NTSM System” – the link is on the right
side of this page). I cut my stock
position to 15% on 17 May in order to maintain a 10% gain in a
trading/longer-term position I had in the QQQ.
