Bonds to rally, but...

The economist states the probability of a recession by the end of the year is 30 to 40%. It's still not a done deal, yet.

However...
If 5.25% isn't enough to bring on a recession, 6% will suffice.

Superman is strong, but he can't stop this one.

http://forums.pelicanparts.com/uploa...1152920249.jpg

Just in case anyone needs cheering up :-)

Hey, I am cheery. I made 2% on the NDX today.

But, stepping back a bit, the market is acting badly enough to be scary. There's a technical pattern called the death cross, when the 50 day MVA (blue line) crosses under the 200 day MVA (yellow line). NDX and SOX had the death cross on 6/13-14/06. SPX is on the verge of a death cross. (A death cross is not considered a bullish pattern.)

Market is pretty oversold. If earnings are okay next week, I'm guessing we'll get a rally. I'm also guessing lots of people will use that rally as a chance to sell. There have been too many of these sharp, evanescent rallies recently for me to get too excited about them.

So part of me is cheery but the other part is worried.

I say we back Israel and get the ball rolling, press the button and go for the Holy War against the fking Muslim nutsos. Bomb em, nuke em, Delta force em...either they are with us or against us...and if they are against they are DEAD, DEAD DEAD!!!!

Thought I'd revive this thread, just to keep stock market posts in one place.

So, market got the "pause" in Fed rate hikes that it has supposedly been looking for. And no major negative economic news today, CSCO upsided to help the day start off strong. Yet SPX closed down -0.43% and NDX went from +1.85% early in day to barely positive at close.

Thoughts, explanations, expectations? I'm not going to repost mine, I've have taken up enough bandwidth in past posts already.

Explanations? Will a jackleg's opinion suffice?

The market is finally making the no-****-sherlock realization that the economy is slowing.

While there was no major negative news, Toll Brothers (TOL) and WCI (WCI Communities) surprised analysts with abnormally high cancellations and low new order totals for the third quarter. WCI sold 36 condos in this past quarter. That number is down 88.8% from 2005 with 321 sales.

The homebuilders are heading for an iceberg and the radar is kaput. They have managed to disappoint even the most bearish housing analysts. While homebuilders represent a small portion of the equity markets, the impact of housing on the overall economy has been significant.

Back to the thread topic: Dow Jones Transports look absolutely horrible. One blogger pointed out the fact this index has a P/E of ~35. 35 puts them at the top of a mighty tall cliff.

I found it interesting when there was soooo much emphasis on what the Fed was going to do this time. There seemed to be such single-minded focus on it. Like if they raised rates, the economy was going to tank, but if they stayed put, everything would be rosy.

So people seemed to be rooting for BAD macroeconomic news - high unemployment, slowing GDP, etc.

Now that rates have stayed, it seems like the spotlight has been taken off rates, and focused on what matters more - the underlying health and fundamental strength of the economy.

When the light is cast there, it seems to me it shows something not pretty. Housing is taking a major tank, and housing has been a HUGE part of the low unemployment and high GDP. That is undoubtedly ending, the news from the homebuilders and used home sales is consistently only bad these days.

Plus, people are tapped out. The "Home Equity ATM" is closed. People are not feeling as rich as they once did. Some people here in So Cal are even starting to believe that maybe home prices won't increase 20% per year forever (gasp!). Unemployment is rising. This will all take it's Toll (pun intended, insider joke!) on corporate earnings and the economy.

And, to top it off, inflation is not under control.

So now that the focus is off the Aug Fed meeting, there is plenty of things for the mkt to worry about, and it is worrying.

I think there is going to be nothing but bad news in the coming months, and the mkt will hurt.

Did someone in the OT leave a picanic basket unattended? It appears a trio of bears ransacked camp and left destruction and mayhem, eh, Booboo?

http://forums.pelicanparts.com/uploa...1155226615.jpg

Hard to read but this is a chart of continuing unemployment claims. Appears to have bottomed and heading up.

What is the next domino in the housing decline?

First, the housing stocks began tanking. That decline has progressed over the past 12-13 months. Recently, Countrywide announced falling volume and lenders have been clocked as of late. Assuming this progression continues, what's next? On one forum, Bed, Bath & Beyond was mentioned as a candidate ready to fall.

Here's an interesting post on Barry Ritholtz's blog:
Multiplier Effect of Each Dollar Spent on Housing

It seems like consumer discretionary, home furnishings, and home remodeling companies would be the next to take a hit. Consumer discretionary is already down, but I don't think the bad numbers have truly hit, yet.

The next domino in the housing decline is . . .

SoCal:

The entire series of articles listed on that site should be required reading.

I have been screaming about this for two years, ever since the first signs of "change" began to show up.

Chilling.