Recession Over…

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uncle-sam-says-no-recession

Yes dear reader, the recession is officially over now, as the Dow close above 11,000 for the second day in a row.  Happy days are here again!  The jobless people are back too work now, as Intel must have hired them, causing the great earnings report announced after the bell this afternoon.

Quote... "Intel Corp. says its net income in the first quarter nearly quadrupled over last year.  Intel's latest profit was lifted by sales of new chips for computer servers as well as an overall bump in technology spending.  And in the comparable period last year the company took a big charge to write down the value of an investment."  End Quote.

Hmmm... Did Goldman Sachs need newer and fastest super chips for their computers, that they use to manipulate the market with?  Yeah... that must be it!  That's why Intel beat estimates this quarter.  Regardless of how they did it, (if it's actually an accurate report), we pretty much knew that all the earnings reports this week are going to be positive.

No company is going to go against Uncle Sam and tell the market that they had a horrible last quarter, as no one bought their junk because of the bad weather.  Instead, they are going to make up whatever they want, (positive of course) and the government is going to clap and applaud their report.

We are so far from reality that INSANE isn't a strong enough word anymore.  Anyone that lives in the larger cities can drive up and down the road and see stores and restaurants still closed... and they will never reopen.  You can drive though many of the new sub-divisions and see house after house for sale.

The real unemployment is around 17%, not the 10% the government tells you.  No one is spending money now.  In fact, there is a large shift now to "pay down debt" by most Americans.  Where is the spending coming from to create the great earnings?  The government didn't send me a check in the mail, with instructions to go spend it and simulate the economy.  Did they send you one?

Everywhere I look, and all the people I talk too... are struggling now.  People are hurting.  They are moving in together to share expenses as most are losing their jobs, or getting pay cuts.  My mother and father are at that age where they are retired and like to travel around in a motor home.  My mother is very conservative, and doesn't look at all the corruption and stuff... like I do.

In the past year I've noticed her mention the government many times, speaking specifically about how crooked they are.  Coming from my mother... to hear that was a shock!  She is definitely a "Blue Pill" taker... if you know what I mean.

Of course I took the Red Pill.  But anyway, she was telling me how many homes she saw up for sale, and how many businesses were closed down, as she and my father were driving around in Florida.  Of course I already knew that, but hearing it from her just reaffirmed how huge the disconnect is between the stock market and the real world.

So, I guess we will continue rallying up a little bit each day, until all the bears are dead, (or in hibernation), and the bulls are sleeping.  Then one day, out the blue, BAM! ...a loud gun goes off as the farmer decides it's time to kill the bull, and eat some steak.

As all the other sleeping bulls awake, they will all run for the exits to escape the farmers rifle.  But, it will be too late for many, as the farmer is an excellent shot, and many bulls will be slaughtered.  But for now, the bulls can graze peacefully knowing that Obama and the gang are paying the farmer quite well to keep them alive.

Red

869 COMMENTS

  1. I know what you mean Red. So MANY people I talk to are really amazed as to what is going on… ie. Market vs reality

    CSX reported also

  2. Red, I seem to be the only one I know that has taken the Red pill. I wish I had taken the blue one like all my friends and family!

  3. Red, why have you been so intent on fighting this trend? You are using too much logic with your political analysis. “The market can remain irrational longer than you can remain solvent”.

    • This reminds me of an episode in Married With Children. Al Bundy and Marcy and a few others were at the bar, bitching about slaving for peanuts as working stiffs at jobs they hate, for families that don't respect them. “Why do we do it?” ” Because we are stupid!”

  4. The entire situation is appalling. The numbers are not fake it is how they are interpreted. Upon reading the earnings release you can see that

    Data Center Group revenue down 8 percent.
    Other Intel Architecture group revenue down 9 percent.
    Intel® Atom™ microprocessor and chipset revenue of $355 million was down 19 percent
    PC Client Group revenue was flat

    But what the street does is pounce on year over year comps. And of course they look great.

    Talk to anyone in the tech business and you will find out quickly that the numbers are real.

    Question is who or where is driving the demand.

    Answer? Its Asia 5 to 1. At least Intel actually publishes those numbers.

    Not to mention the falling dollar over this time period.

    Oh well.

    I am starting to believe that this won't end until the retail investor is sucked in; en mass.

    • let the devil get the hind most. You don't want to be left behind in this economy recovery, do you?

      The more things change, the more they stay the same. Wall Street is always ruled by the madness of the crowd.

  5. Fundamentals in the short run don't matter but Red wasn't implying they did. Technicals do however, and the technicals look bad. Looking for a VIX gap fill at 15.54 and hope that it happens today.

  6. Futures (/ES) just touched 1200 and fell back.
    Carl has long been calling for 1200.

    I have an old note on my /ES chart. Can't recall why I wrote it, but it says: SC says 1120 before 1200

    • Yeah well, in time like this, I have an Atilla answer for that. “back then I forecasted it, BUT the market DIDN”T listen” ! haha.. such arrogance

      Here is what happened. The adverse conditions have persisted since March. By March 26, the technical picture has evolved to bearish. I initiated short positions. The following week, the market started to flipflop around there. I bought my April Puts by April 1. By April 5-6, the market technical pitcture has changed, eventhough the inverse conditions that have historically preceded a 10% decline continued to persist. I blew the TZA out (at a loss, naturally) and kept he April for lottery play. And it has turned out exactly like all my lottery tickets, worthless. lol

      I bought some May put spreads for another set of lottery play. I am risking 5% theoretically, but limiting that to half that in practice, ie,via stoploss. The april put spread costed peanut. About 1.5% Didn't care.

      The May put was bought as first skirmish, not as main attack. But it does call into the question of my using input from sources other than my own. But who am I to argue with people who have been trading almost longer than I have lived, and have PhDs, and decades of data to back them up? Of course not. So I bought some May puts and now needing another shift at McDick AND Burger King.

      The puzzling, or not so puzzling part is the reversal starting on April 5-6. Every star was lined up for the perfect storm toward the end of March. Then, nothing. Market turned around after Easter and didn't look back. Now that is not that unusual. Many cases of that. A minor hiccup, and then a resumption of the plunge in earnest. The resumption can start with at most 2-3 days of warning. So far, no sign of that.

  7. Carl’s morning call:

    June S&P E-mini Futures: Today's range estimate is 1193 – 1204. It looks like the ES will reach 1212 before a break of as much as 20 points develops.

    1185 -1195.75 actual yesterday (10.75 points)
    1200 high last night
    1193-1204 estimate for today (11 points)

    1198 currently, so estimate is -5 to +6 from here (neutral)

  8. $DJI is @ it's next inflection point on a couple setups

    $DJI currently has 4 consecutive higher closes than opens on the daily. In the last 333 trading days, 5 out of the last 6 times when the $DJI made it to 5 consecutive higher closes, it went on to a 6th.

    $DJI is currently coiling on the back of another daily containment pt. This is the same setup that led to the 3.11 & 3.29 upward thrust. Will this time be different?
    http://www.flickr.com/photos/47091634@N04/45201

    • It's opx week, so I'm sure it will hold. Plus, the recession is over now Sun, haven't you heard? Everyone is making money again and home prices have recovered.

      🙂

      • partly like it's 1999!!!!!!!
        PCLN@$990
        those were the days, you think people are bullish now, that bullgasm ended with a big bang

        • Back in the early 90's I was trading some. I had and account with Charles Schwab. I worked at night, so I would go into their office everyday and hang out chatting with the other traders that were there watching the tape.

          Back then, a live feed cost a fortune, and they had 4 computer's in the office setup with a live feed. So, the traders would use them all day to trade with. They had the green text, and were in DOS. Quite different then today.

          I had a friend who traded all those tech stocks and eventually lost $260,000 on them. She played Cisco a lot, as well as Juniper.

          It was fun while it lasted, but I eventually lost my small trading account, and quit trading. I had a job, so it wasn't the end of the world. She… however, died several years later.

        • LMAO.. William Shatner refused to do anymore ad for PCLN b/c the shares he got as payment have lost so much value. LOL

    • I think it will be different this time Sundancer but I have been wrong many a time before. It all depends on what happens when we get that VIX gap fill.

  9. Huge green candle on the VIX right now that looked totally unnatural. Went from 15.71 to 15.99 in the blink of an eye.

  10. QQQQ's are almost back @ 50, their going to get close to their 07' high

    $DJI is ~6% away from 11,816

      • I don't think so either, however I would prefer we get there sooner versus later, these 8 pt. range days put me to sleep

        • It would be too easy if it did that. Makes sense for it to chop for the next 4 months to put everyone out of business. I am serious about the VIX gap fill. It's obvious they are keeping the VIX up, but IMO, the market “SHOULD” come down as soon as they let that VIX gap fill. Bull/bear thinks it was already filled. To me that fill number looks like 15.54 and we only got to 15.69 today.

      • the TL that the $SPX has been married too since March 09' will be in the 1280 area around the Summer Solstice.

          • Not quite the solstice:) the 16th. That's why I have multiple personalities! Too bad I couldn't share a birthday with your dog – then maybe someone could have thrown me a bone!

      • Don't ruin the party, it's 1999!!!!!!!

        Everybody is going to be rich!!!!!!!

        PCLN has got another $725 until it gets back to it's ATH

  11. Carl at day’s end:

    1193-1204 estimate for today (11 points)
    1196 -1207.25 actual today (11.25 points)
    Carl was about 3 points low on both ends of the range.

    Trades: No Trades today

    Grade: C (lost no money)

  12. TNA opened down 1.8%. Today’s gap was not filled. TNA was up 6.4% at the high, and closed up 6.4%.

    Recent unfilled gaps: $55.95 to $56.03, $61.45 to $62.30 (today)

    We are now in a Full Moon Trade, which tends to favor TNA.
    AmericanBulls has TNA with a Hold signal. This trade bought TNA at $56.50, and closed today at $65.42, up 15.8% in 10 days.

    Volume for TNA today was about average for the past 26 days.

    $RVX (VIX for $RUT) was down 2.5% today with TNA up 6.4%. No divergence.

    TNA has now been up 9 of the last 15 days. Drifting higher until today’s rocket.

    The high for TNA today was $65.42, the highest TNA price on my charts.

    Ultimate Oscillator for TNA rose for the 8th day, from 70 to 73 today on a big up day. A reading of 73 is Very Good for TNA.

    MACD on the monthly chart crossed over to the upside 7 days ago and is rising sharply. Good for TNA.

    Bollinger Bands for $RVX (VIX for $RUT): Today’s doji candle close a little bit above the bottom Bollinger band. MACD seems to have topped and is coming down. Looks like $RVX might fall tomorrow. Good for TNA.

    Bollinger Bands for $RUT: Today’s white candle for $RUT closed well above the top Bollinger Band. Two prior closes above the top Bollinger Band higher led to a higher $RUT. MACD is working back up. Good for TNA.

    Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s white candle closed Above the upper Bollinger Band. The upper Bollinger Band is rising. This could be the beginning of a 3-day sell signal. Good for TNA, for the time being.

    TNA had a much higher high, much higher low and much higher close – Good for TNA.

    Money flow for the Total Stock Market was $1,192 million flowing into the market on an up day. Bullish – Good for TNA.

    I will post the AmericanBulls candlestick interpretation a bit later.

    Overall, it looks good for TNA.

  13. guys, if the Vix BB sell signal pattern works, the market should go down from here now that we have filled the gap on the vix.

  14. what just happened ?

    seriously, in 1 year the XRT went from an all time low to an all time high today….ya go look!

    there are companies making money and a lot of it, record profits for some… not just retail… UPS is doing well,ect…

    is it like Red says about not paying or having a mortgage anymore?

    was it the cocooning for 2-3 years and now the shoppers are out of their caves buying everything in sight?

    I know the market is overbought, I know all about the lies and BS to get markets up…

    but what the F just happened..

  15. also,

    the baltic dry index is still in the gutter, ships are parked out at sea.
    X had terrible earnings in Jan
    AA again had bad earnings, and are demolishing plants.
    copper stockpiled, not being used
    bankruptcies still going up
    foreclosures not stopping
    real unemployment 16.9%

    and on and on…

  16. over at martin weiss's site which are always bearish by the way explained it all so clearly to me… i posted it below and yes I have been long stocks and do short by i never excepted this strong of a recovery. he says that we won't know for some time why people were buying Coach handbags in a time like this, instead just follow the trend even though you know it's crazy.

    ” Right now, the consumer discretionary sector is back on an upswing. Hard to believe?

    Often the reasons a specific market sector goes up (or down) are apparent only in hindsight. Yet the market is telling us that luxury goods companies are doing much better than they were a year ago.

    And one thing I’ve learned over the years is that you have to follow the trend — even when you don’t understand it! “

    • That one is easy. Don't you people know anything about those fat WallStreet bonuses and pays? Of course the luxury sector is back to life again.

  17. The Daily view from Americanbulls

    TNA was a Hold yesterday, and rose today, remaining a Hold. The TNA buy was at $56.50. TNA closed at $65.45, up 15.8% since the buy. The candlestick today was a White Closing Marubozu (big white candlestick closing at the high).

    TZA was a Wait yesterday, fell today, and remains a Wait. The candlestick for today was a Black Closing Marubozu (big black candlestick closing at the low). The TZA sell price was $6.51. TZA closed today at $5.89, down 9.5% since the sell.

    Three recent TZA Buy signals have failed and may perhaps serve as a warning:
    Buy at $7.33, sell at $7.14
    Buy at $7.11, sell at $7.05
    Buy at $7.04, sell at $6.51

    For that matter, recent TNA Buy signals (until this last one) have also been uninspiring:
    Buy at $55.36, sell at $55.43
    Buy at $55.69, sell at $55.63
    Buy at $56.50, up 15.8%

    Summary of Positive ETFs & stocks (Market positive):  +13
    Hold: IWM(1x, up 5.5%), UWM(2x, up 11.5%), TNA(3x, up 15.8%), IYR(1x RE, up 3.1%), URE(2x RE, up 6.0%), DRN(3x RE, up 16.3%), GS(up 6.9%), AAPL(up 1.4%), SPY(up 1.8%), QQQQ(up 3.2%), DIA(up 2.0%)
    New Confirmed BUY: USO (oil), UCO (2x oil)

    Transition to Market Positive:  -1
    Not Very Highly Reliable BUY-IF: AMZN

    Transition to Market Negative:  +2
    Not Very Reliable SELL-IF: GOOG
    Low reliability SELL-IF: ERX(3x energy),

    Market Negative: none

    Comment: Bullish overall, Bullish Oil, Bullish $RUT, Bullish Real Estate
    Action for TNA or TZA for tomorrow: None

  18. what just happened ?

    seriously, in 1 year the XRT went from an all time low to an all time high today….ya go look!

    there are companies making money and a lot of it, record profits for some… not just retail… UPS is doing well,ect…

    is it like Red says about not paying or having a mortgage anymore?

    was it the cocooning for 2-3 years and now the shoppers are out of their caves buying everything in sight?

    I know the market is overbought, I know all about the lies and BS to get markets up…

    but what the F just happened..

  19. also,

    the baltic dry index is still in the gutter, ships are parked out at sea.
    X had terrible earnings in Jan
    AA again had bad earnings, and are demolishing plants.
    copper stockpiled, not being used
    bankruptcies still going up
    foreclosures not stopping
    real unemployment 16.9%

    and on and on…

  20. over at martin weiss's site which are always bearish by the way explained it all so clearly to me… i posted it below and yes I have been long stocks and do short by i never excepted this strong of a recovery. he says that we won't know for some time why people were buying Coach handbags in a time like this, instead just follow the trend even though you know it's crazy.

    ” Right now, the consumer discretionary sector is back on an upswing. Hard to believe?

    Often the reasons a specific market sector goes up (or down) are apparent only in hindsight. Yet the market is telling us that luxury goods companies are doing much better than they were a year ago.

    And one thing I’ve learned over the years is that you have to follow the trend — even when you don’t understand it! “

  21. That one is easy. Don't you people know anything about those fat WallStreet bonuses and pays? Of course the luxury sector is back to life again.

  22. The Daily view from Americanbulls

    TNA was a Hold yesterday, and rose today, remaining a Hold. The TNA buy was at $56.50. TNA closed at $65.45, up 15.8% since the buy. The candlestick today was a White Closing Marubozu (big white candlestick closing at the high).

    TZA was a Wait yesterday, fell today, and remains a Wait. The candlestick for today was a Black Closing Marubozu (big black candlestick closing at the low). The TZA sell price was $6.51. TZA closed today at $5.89, down 9.5% since the sell.

    Three recent TZA Buy signals have failed and may perhaps serve as a warning:
    Buy at $7.33, sell at $7.14
    Buy at $7.11, sell at $7.05
    Buy at $7.04, sell at $6.51

    For that matter, recent TNA Buy signals (until this last one) have also been uninspiring:
    Buy at $55.36, sell at $55.43
    Buy at $55.69, sell at $55.63
    Buy at $56.50, up 15.8%

    Summary of Positive ETFs & stocks (Market positive):  +13
    Hold: IWM(1x, up 5.5%), UWM(2x, up 11.5%), TNA(3x, up 15.8%), IYR(1x RE, up 3.1%), URE(2x RE, up 6.0%), DRN(3x RE, up 16.3%), GS(up 6.9%), AAPL(up 1.4%), SPY(up 1.8%), QQQQ(up 3.2%), DIA(up 2.0%)
    New Confirmed BUY: USO (oil), UCO (2x oil)

    Transition to Market Positive:  -1
    Not Very Highly Reliable BUY-IF: AMZN

    Transition to Market Negative:  +2
    Not Very Reliable SELL-IF: GOOG
    Low reliability SELL-IF: ERX(3x energy),

    Market Negative: none

    Comment: Bullish overall, Bullish Oil, Bullish $RUT, Bullish Real Estate
    Action for TNA or TZA for tomorrow: None

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