Best of the Week
Most Popular
1.Will UK Interest Rate Rises Crash House Prices? - Nadeem_Walayat
2.Full on Crash Alert for Major World Stock Markets... - Clive_Maund
3.Gold And Silver Market Bottoming? Big Rally Imminent? Reality Check Says NO - Michael_Noonan
4.The Coming Silver Price Rally Will Outperform All Previous Ones - Hubert_Moolman
5.The Trigger For The Upcoming Stock Crash - Harry_Dent
6.Imploding Department Store Results - James_Quinn
7.Dr. Copper is Speaking, are you Listening? ... - Rambus_Chartology
8.Pandemonium in the Stock Market, Dow falls 1,000 points in a week - EWI
9.Asia's Whirling Dervish of Devaluations Has Encircled China's Exports - Keith_Hilden
10.China Weakens the Yuan; Rattles Global Stock and Financial Markets - Gary_Dorsch
Last 5 days
This Stock Market VIX Chart Should Blow Your Mind - 3rd Sept 15
Eurodystopia: A Future Divided - 3rd Sept 15
Stock Market Prepares for the Next Decline - 3rd Sept 15
Europe Rethinks the Schengen Agreement - 3rd Sept 15
BP Oil Company Moves past Mistakes But Still Feeling Price Pinch - 3rd Sept 15
EU Migration Crisis and Population Density, Why Cameron is Right, England Really is Full - 3rd Sept 15
Stock Market Return to Crisis: Things Keep Getting Worse - 3rd Sept 15
Dow Theory Stock Market Sell Signal Examined - 3rd Sept 15
How OPEC’s Attempt to Save Face Affects the Crude Oil Market - 3rd Sept 15
Crude Oil Price Forecast 2015 and 2016 - Video - 3rd Sept 15
The Real Threat from China’s Stock Market Crash - 2nd Sept 15
How Our “Mixed Economy” Created These Mixed-Up Markets - 2nd Sept 15
'Gravity' Is Returning to Stocks and Bond Markets - 2nd Sept 15
OPEC Divorce And Self-Destruction Thanks To Saudi Crude Oil Strategy? - 1st Sept 15
The Beginning Of A New Financial / Stock Market Cycle - 1st Sept 15
Three Things Every Master Trader Knows About Trading Options - 1st Sept 15
Chinese Yuan Revolution? - 1st Sept 15
Take Advantage of Record-High Auto Sales… Before This Bubble Bursts - 1st Sept 15
Pondering Hitler's Legacy - 1st Sept 15
Mainstream Media Goes Berserk - 1st Sept 15
Your Decisive Stock Market Plan to Follow Whilst Most Investors Shiver With Fear - 1st Sept 15
Are There Stock and Financial Markets Investing Opportunities For The Remainder Of 2015 - 1st Sept 15
Crude Oil Price Forecast 2015 and 2016 - 1st Sept 15
REPO Window Hidden $Trillion QE Monthly Volume - 31st Aug 15
Silver and Warnings From Exponential Markets - 31st Aug 15
Stock Market Calls Fed’s Bluff - 31st Aug 15
Why Some ETFs Led the Stock Markets Down Last Week - 31st Aug 15
Stock Market Collapse - Take The Opportunity To Bail Before It’s Too Late! - 31st Aug 15
The Most Important Market Chart on The Planet - 31st Aug 15
Stock Market 50% Retracement - 31st Aug 15
Stock Market Crash Red Alert for 2nd Downwave... - 31st Aug 15
Independant Scotland 1 Year on, UK Civil War If the SNP Fanatics Had Succeeded - 30th Aug 15
Gold’s 7 Point Broadening Top - 30th Aug 15
The Day the Stock Market Shook the Earth: Takeaways From the Dow’s 1,000-Point Drop - 30th Aug 15
Gold Price Rally Marked by Short Covering - 30th Aug 15
Aging Stocks Bull Market - 29th Aug 15
Economic Destabilization, Financial Meltdown and the Rigging of the Shanghai Stock Market? - 29th Aug 15
The Stocks You Should Be Buying After the Market Drop - 29th Aug 15
How I Learned to Stop Worrying and Love Market Fluctuations - 28th Aug 15
China's Yuan Devaluation: Why It Was "Expected" - 28th Aug 15
Stocks Go Nuts But the Question Remains – Will the Rally Stick? - 28th Aug 15
Fed’s Stock Market Levitation is Failing - 28th Aug 15
The Eight Energy Systems Driving The Stock Market Rout - 28th Aug 15
Silver Sold, then Squeezed - 28th Aug 15
U.S. Economic Fundamentals 'Look Good' - Bullard of St. Louis Fed - 28th Aug 15
Stock Market Margin Calls Mount - 28th Aug 15
Einstein, Physics, Gold and The Formula To End Economic Decay - 28th Aug 15
The 10 Best Stocks for Options Trading Plays in This Market - 28th Aug 15
Economics of a Stock Market Crash - 28th Aug 15
Currency Wars Detonate; Gold Refuses to Budge - 28th Aug 15
UK Immigration Crisis Hits New Record, Trending Towards Becoming a Catastrophe - 28th Aug 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Stocks Slide

Stock Market Crash 2010, History Repeating?

Stock-Markets / Financial Markets 2010 Jan 16, 2010 - 08:30 AM GMT

By: Anthony_Cherniawski

Stock-Markets

Best Financial Markets Analysis ArticleConsumers aren’t that confident. - Confidence among U.S. consumers rose less than forecast in January, signaling a lack of hiring will restrain spending. The Reuters/University of Michigan preliminary index of consumer sentiment increased to 72.8 from 72.5 in December. The gauge averaged 66.3 last year after reaching a record 28-year low of 55.3 in November 2008.  Unemployment, close to a 26-year high and projected to average 10 percent this year, remains a hurdle for the recovery. Gains in confidence and spending, which makes up 70 percent of the economy, will depend on sustained job growth that hasn’t happened since the recession started two years ago.


Finding the truth about derivatives.
At yesterday’s Financial Crisis Inquiry Commission hearings, Brooksley Born, one of the 10 commissioners on the Congressional panel, didn’t use her time taking cheap shots. Born, who ran the Commodity Futures Trading Commission (CFTC) under President Clinton, asked modest questions of Goldman Sachs chief Lloyd Blankfein. The details that she tried to uncover are the financial crisis, distilled.  Born confined her questioning to inadequately regulated, or “over the counter,” derivatives. It’s easy to see derivatives as peripheral to the “mortgage crisis,” but they were actually central to it.

Timothy Geithner remains uncontrite.
Tim Geithner, who will be testifying before congress over his role in the AIG disclosure coverup, confirms that nothing has changed in the administration, and that if he had to bail out AIG's counterparties at par all over again, he would.

Is history repeating?
-- Today was the 312th day from the March low.  The significance of this is that the duration of this rally is now more than twice as long as the bear market rally separating the Crash of 1929 with the 26 month decline from May 1930 to July 1932.   Yet both rallies only retraced 54% of the original losses in both declines.  Mark Twain said, “History doesn’t repeat, but it often rhymes.”  How will it rhyme

 

 

 

Treasury bonds recover from a near-death experience.
-- Treasuries rose, with 10-year notes headed for their biggest weekly gain since November, after a government report showed the cost of living rose less than forecast in December. Treasury long bonds have been written off by the investor public as a “loser.”  The concern about the U.S. Treasury issuing too much debt is a real one.  However, a failure in equities may drive investors into the eager arms of our treasury for a while, since the risk of default is still uncertain, while the risk of loss in stocks may be more immediate.

 

 


Gold may be losing favor.
-- Gold prices fell as the dollar’s rally sapped investor demand for the metal as an alternative asset.The greenback rose as much as 0.7 percent against a basket of six major currencies, halting a six-session slide. Demand for the dollar as a haven increased amid speculation that China’s economy will cool following interest-rate increases. Gold gained 41 percent in 2009 as the dollar declined 9.1 percent.  Is it possible that they will change places in 2010?

 

 

 

Has the Nikkei gone too far, too fast?
-- Japanese stocks rose, capping a second week of gains, as banks advanced on speculation their shares will recover and efforts to boost capital are ending. The Nikkei’s 20% rally in six weeks has been an eye opener.  It currently trades at 38 times earnings, which is a bit of a nosebleed for stock valuations.  Foreign investors have been eager to buy shares, but they may have come late in the game. 

 

 


Shanghai world ranking rises.
-- Shanghai overtook Tokyo as Asia’s biggest stock market by trading value last year, as an 80 percent jump in China’s benchmark index boosted equities demand.   Shares worth $5.01 trillion changed hands on the Shanghai Stock Exchange in 2009, compared with $4.07 trillion on the Tokyo Stock Exchange, according to data compiled by Bloomberg. The Shanghai and Tokyo exchanges were ranked third and fourth globally, the Nikkei newspaper reported, citing the World Federation of Exchanges. Only the Nasdaq stock market and the New York Stock Exchange had higher trading volumes than Shanghai.

 

 

The dollar retraces 50% of its recent gains.
The dollar spent the first two weeks on a “breather” from its first meaningful rally in nine months.  This retracement is common after a financial asset becomes “overbought.”  This is when price gets pushed too far in one direction and profits are taken.  A 50% retracement is common, although some pullbacks are more severe.  A pullback allows for “price discovery” where the market allows for buyers who believe that the asset may go higher to come in as “half price.”  Folks, the dollar may be having a blue light special this week!

 

 

Is the real estate market ready for a fall?
-- After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they'll soon start to fall.  Prices have risen more than 3% since May, according to S&P/Case-Shiller.  But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.

 

 

 

Average Gasoline prices still higher than a year ago.
The Energy Information Agency weekly report suggests, “The U.S. average price for regular gasoline rose for the third week in a row, advancing nearly nine cents to settle at $2.75 per gallon, $0.97 higher than the average a year ago. Despite an increase of more than 16 cents over the past three weeks, the average remains $1.36 per gallon less than the all-time high price set on July 7, 2008.”

 

 

 

Frigid weather keeps NatGas prices high.
The Energy Information Agency’s Natural Gas Weekly Update reports, “A major arctic air mass enveloped most of the country through Monday, January 11, bringing the lowest temperatures of the season to date as far as the southern tip of Florida. The cold weather resulted in spot price increases across the lower 48 States in the first few days of the report week, most of which peaked on Thursday, January 7. The associated increase in space-heating demand resulted in double-digit prices in Florida and the Northeast, while the rest of the spot price locations traded between $6 and $9 per MMBtu.”

David Rosenberg says “This is not a time to chase the market.”
The vagaries of an overvalued market is that good news may no longer be good enough — and viewed as an opportunity to take profits. When this strategy occurs en masse — well, look out. And in extremely overvalued markets, it doesn’t take much. Food for thought — think of the risk involved before chasing the performance of the past year.

Are the regulators really watching?

-----Original Message-----
From: CME Globex Control Center
Sent: Wednesday, January 13, 2010 4:54 PM
Subject: ESH0 Event
Importance: High

Between 11:03 and 11:04 CT today, there were a series of transactions in
ESH0 in which a market participant appears to have inadvertently traded
approximately 200,000 contracts as both buyer and seller.  CME maintains
trade practice and risk management rules and procedures respecting such
matters.  In keeping with standard practices and CME's self-regulatory
responsibilities, CME is reviewing the circumstances of this event.

If they aren’t watching, maybe someone else should be.  This trade is presumably worth as much as $13 billion in notional value and benefitted the trading firm involved by as much as $22 million.  The problem was, it was all smoke and mirrors.  This has been identified as a cross-trade between two computers owned by the same firm.  So far they have not been busted.  

Traders alert:  The Practical Investor is currently offering the daily Inner Circle Newsletter to new subscribers.  Contact us at tpi@thepracticalinvestor.com for a free sample newsletter and subscription information.

Our Investment Advisor Registration is on the Web

We are in the process of updating our website at www.thepracticalinvestor.com to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .

Anthony M. Cherniawski,
President and CIO
http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History