Bill Cara’s Blog for Apr 18, 2012
CTA Trading Desk Morning Report
[7:00am ET] Good morning, Geoff here.
A combination of good news from Europe, US economy and earnings lifted the market into a short squeeze.
As long as Spanish bond yields remain under 6% or so, traders won’t be too worried about Europe for the immediate future so the US earnings season will take center stage. As I have mentioned before, we shall see if companies have the continued ability to cut costs in order to improve profits.
Yesterday, technology and energy stocks performed very well. That was a good sign for the market, we shall see if they can continue to have relative strength.
For our part, in appropriate accounts, we bought a few technology stocks and material stocks and immediately placed sell-stop orders on the 5 buys. They are working out so far, but I’m still very cautious this market.
This morning I see that 55% of Citigroup’s shareholders voted against outrageous executive pay packages. The vote won’t force a change in pay, but it is the first time this has happened and hopefully sends a message to Wall Street, but I doubt it.
Lets see if we can get some follow through today in the equity market.
Gold is coiling and should it break to new lows, that should be the final climax low and should be bought, imo. We should have confirmation of direction in the next few weeks.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||16.98 (0.82%)||Components, Chart, More|
||7.10 (0.31%)||Components, Chart, More|
||49.90 (1.52%)||Chart, More|
||46.95 (0.69%)||Components, Chart, More|
||3.33 (1.06%)||Chart, More|
|^OSEAX||OSE All Share||475.60
||1.59 (0.33%)||Components, Chart, More|
||4.61 (1.38%)||Components, Chart, More|
||27.46 (0.44%)||Components, Chart, More|
||17.67 (0.31%)||Components, Chart, More|
||2.20 (0.24%)||Chart, More|
||4.53 (0.31%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||722.63
||1.65 (0.23%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad’s Catch of the Day
Kaimu’s Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report
Jeff Borsato’s Hidden Truth
The Rain in Spain…
What we need right now is another article that attributes early morning euro weakness to “concerns over Spain”, followed by late day euro strength attributed to encouraging talks by EU members over the fate of spain.
Lather, rinse, repeat.
This all makes for great filler, plugging up the airwaves providing traders with the impression that markets move based on media claims. Up one day, down the next…
The problem is markets move up one day alot and down one day a bit. Over time the market rises, and the opposite when gains are out-paced by daily or weekly losses. The short time frames tend to dominate the headlines in the mass media, yet the vast majority of those viewers are not short term day-traders but long and medium term investors.
This type of information imbalance is akin to civilians in New York hearing daily patrol reports on Afghan troop convoys. For the typical citizen, their curiosity of the war in Afghanistan consists of grand strategic questions (How many troops are stationed there? What is the overall goal and time frame?) as opposed to tactical ones (What flight path do support convoys fly in Hemland Province? What is the munition situation like for the 2nd Marine Battalion?)
On a daily basis, the bulk of data spit out on TV, Radio and the net is of little or no material value to the bulk of investors. Why would that imbalance persist?
Because it’s cheap.
Daily news casts and the 24-hour news cycle demand a constant inflow of information, even if it is the same news just reported over and over with a few minor changes. When speaking of broad economic trends, a big down day in markets can be tied to broader macro-economic “concerns”. We virtually never hear of who exactly is expressing these “concerns” but like the media’s love of citing “unnamed sources” and “senior officials”, it seems enough these days to simply claim there are “concerns” about the economy of such and such regions.
When there will ever not be “concerns” about the economy is a mystery, we need better context and stronger analysis of what is actually taking place. Expressing “concerns” is at best a platitude.
Geoff’s daily take on the markets gives the community both context and timing as most of our readers are actual traders that require both long and short term data. This is context. CNN MONEY, CNBC, MSNBC, BNN etc provide so much filler, the good analysis that does occasionally appear gets lost in the shuffle.
On a similar note:
This piece by Peter Grandich reminds me that all is not lost in the world of Mining newsletter writers. Peter Grandich has always struck me as an honest and candid reporter of all things jr. mining. I enjoy the fact that he openly admits the situation is dire in the jr. market, and that his losses render him uncertain if he should even give opinions on the matter. The last point alone makes him stand out from the crowd of newsletter writers endlessly declaring “the bottom is in” for the jr. resource market.
I’ve said it before, and I will have to say it again:
This gold bull market is still intact, despite what some short-term oriented traders claim. We have seen months and quarters pass over the last 8 years with nothing but down-trend lines to watch before gold prepared for it’s next highly doubted advance. The wall of worry remains solidly in-tact and in spite of price weakness this week, I see nothing new to signal the end of this bull-market.
The junior market is a different animal, and requires some analysis beyond promotional claims by the dealers themselves. Why the junior market is lagging is too specific of a question. One might ask “why are gold stocks, and most resource stocks for that matter lagging?”. I don’t know, and neither do the vast majority of rent-seeking analysts and brokers who’s only goal is to sell them to you in hopes of a great story.
Good luck out there gang, stand fast.