Sum of Market Signals: 1.35
Sum of Market Predicted Percent Gain: -0.0249
Number of Negative Signals: 6
Negative short market prediction: -0.0249
Trade Cmb: +--------+------------+--------+------------+--------+ | Symbol | Date | Signal | Prediction | RankMV | +--------+------------+--------+------------+--------+ | VB | 10/24/2011 | 0.350 | 0.007874 | 7 | | TLT | 10/24/2011 | 0.000 | 0.006848 | 1 | | RWR | 10/24/2011 | 1.000 | 0.006114 | 2 | | EWJ | 10/24/2011 | 1.000 | 0.003403 | 6 | | GLD | 10/24/2011 | -1.000 | 0.002495 | 3 | | EPP | 10/24/2011 | 1.000 | 0.002254 | 8 | | IEV | 10/24/2011 | 0.000 | 0.002029 | 9 | | IVV | 10/24/2011 | -1.000 | -0.004981 | 5 | | ILF | 10/24/2011 | 0.000 | -0.011135 | 10 | | ADRE | 10/24/2011 | 0.000 | -0.011459 | 11 | | DBC | 10/24/2011 | -1.000 | -0.018978 | 4 | +--------+------------+--------+------------+--------+
Big macro news last week was EU came to an agreement on Thursday concerning Greece. Bond holders take a 50% loss on debt, banks have to raise something like $200B Euro to recapitalize. The markets rallied furiously late on Thu and then on Friday as a result. This agreement is missing some very important details on the funding side. Over the weekend it was clear people started to pick it apart and have realized this isn't over. Further risk is out there as within 48 hours of the announcement on Greece, Ireland put out feelers basically saying, "we'd like a similar deal"... Portugal, Spain, Italy won't be far behind. My personal take is we are only in the 7th inning on this and as this year's world series demonstrated, it's not over until it's over. I still have a short Europe position.
ReplyDeleteAt home, durable goods, consumer spending, and new housing all were to the upside surprise. Consumer spending is a bit of a concern because incomes did not rise which means consumers went into savings to increase their spending. Consumer confidence is at lows not seen since 2009 lows which is contrary to the consumer spending number.
GDP grew by an astonishing 2.5% which no one expected. This number more than any other is causing bears to rethink the double-dip recession thoughts.
Case/Schiller home price index fell. Many macro people believe the bigger economy will not recover until housing recovers.
Earnings season has been strong even though estimates have come down. Forward looking statements have been overall weak.
Jobless claims are still over 400k.
Best commentary I read last week on the markets and pretty much sums up how I feel:
"Meanwhile, the S&P trading range has held, and markets are still in breakout mode. Until they fade, in which case they obviously were not in breakout mode, but rather breakdown mode. In which case they will go lower, until they find support (unless that breaks) and then they go lower and find support (that holds) in which case they can reverse. Unless they don’t. If that happens, you might have been caught leaning the wrong way, which helps set the stage for the next turnaround. Unless it doesn’t. Which goes to show you how dangerous crowded trades can be. Unless they continue, cause after all we know the trend is your friend and you can’t fight the tape and its tough to be a contrarian and long and strong is the posture you want. Until it all goes into reverse, and then the trend is not your friend and you should not have gone along to get along with a tape that was a bull trap and it looks like we are heading lower. Unless we don’t."
Sean