Posted on 06/19/2003 8:11:31 AM PDT by NormsRevenge
Edited on 04/13/2004 3:31:28 AM PDT by Jim Robinson. [history]
NEW YORK - A key measure of future economic activity rose in May, beating analysts' expectations and bolstering hopes that the economy may be headed for a rebound.
The Conference Board reported Thursday that its Index of Leading Economic Indicators increased by 1.0 percent in May, after a 0.1 percent rise in April and a 0.2 percent decline in March.
(Excerpt) Read more at bayarea.com ...
The tax cut/reduction/stimulus/trickledown may take a bit to kick in. The Guvs need to get all the newly approved govt charity and welfare checks out as soon as possible.
That may help the poor overtaxed masses.. a little.
Too bad all the dopes who helped kneecap America can't be made to pay for their trade and immigration misdeeds.
I'm more optimistically cautious than cautiously optimistic.
Rates are low across the board. Most companies are just not hiring. They are running lean, overworking their present employees, hiring offshore cheap labor thru legal loopholes lobbied for by corporations.
It would be nice to see Congre$$ enact some laws that do something good for American workers, for a change. Is that too much to ask?
We'll see if things are better this fall. If not, the demRats have won. They setup a hollow bottomed economy under Clinton and we are paying for all the crooked business dealings and sellouts to our competitors that happened on his watch and with the assistance and/or silence from both sides of the aisle. just my opinion.
Any thoughts?
There’s a lot going on.
IMHO the biggest factor is that are still a lot of traders who are still influenced by the doomin-gloomer-Dubya’s-fault news outlets – and those people only care about their political agenda regardless of how goofy they get. They’ll spin any and all good news until it pukes; just last month when consumer sentiment soared, Reuter’s went so far as to invent a pole that said that it went down!
Another factor is that most traders (including yours truly) are well aware of the economy’s robust strength and have been already enjoying the upward trend that’s been going on since October of last year. (It’s weird how nobody is talking about how long the market’s been going up.)
Still one more reason is that many of us are changing sectors. For example, I personally have been seeing a lot of movement out of retail into health care and housing.
In this case you have a market that's run up very nicely from a classic bear market triple bottom pattern and all of the technical indicators have shown the market to be "overbought" for a considerable time now. This tends to make the short term trading types a little nervous because they're always hedged one way or another and a number of them missed the move & are anxious to get in while all those who've been in are hesitant to keep hoping for more without stopping to take profits (the adage "bulls make money, bears make money, pigs get slaughtered).
What's been particularly interesting about the move in the markets over the past few months is the degree to which individuals & retail investors have taken some initiative and helped the "backing and filling" process, limiting & minimizing losses at any particular level & thoroughly frustrating the bears & market timers who've been totally mystified each time resistance was broken.
Now you have another set of market commentators & trading types (semi-respectable ones ie Gary B. Smith & Scott Blier) noting the market has appeared poised to take a little breather after the big options inspired runup on Monday. They've encouraged people to take profits and, in such an environment, folks are leary to step up and start buying with any kind of volume, particularly given the additional uncertainties posed by options expiration later today and tomorrow (something that always leads to volatility, though we saw a lot of that take place on Monday)
Your observations are exactly why (a) day to day punditry from those on CNBC or Puplava or whomever are not truly reflective of overall market conditions nor what investors' larger expectations truly reflect nor (b) should a longer term investor ever base fundamental (buy, sell or hold) decisions based on such day-to-day gibberish vs. the long term performance expectations for any particular investment. Some days the market may ignore truly bad news while others it may back off despite truly outstanding numbers (as today with LEI, dropping unemployment, etc.) In 6 months one could look back on the commentary arising from the trading floor or in the daily machinations of the Financial Sense(less) and laugh at what absolute gibberish it truly is & totally irrelevant to the long term expectations you'd expect would remain static over even that short period of time. Many of the books written by great investors have significant portions dedicated to the value of ignoring such, other than for value in daily musings, to monitor trends and / or to enjoy a good laugh each evening, if you're reading the likes of Tice, Fleck or Puplava. It's also why Warren Buffett suggests investors would be better off if the stock market was actually closed for years at a time as such daily fluctuations in the market should be irrelevant to the value & growth of the kinds of quality companies investors should truly be focused on.
That said, I'd expect the options expiration here will also lead to some further volatility, as traders try to sort things out, set aside profits for their EOM mid-year June reports & those who've missed out entirely try to guess how much they can afford to wait before getting back in the market (which could frustrate those who are getting out even further because then their only option is getting back in at higher prices with increased addtional costs). Also keep in mind "no tree grows to the sky" and it's very healthy for the market to meander and consolidate its gains, in stair-step pattern, as it's been doing for the past couple months now, making for a substantial, diversified base that will likely hold & not be susceptible to increasing lower lows as was characteristic during the bear market. or at least IMO ... caveat emptor and happy investing! :)
Good observation ... several health care stocks & particularly big-pharma (ie JNJ + PFE) have been making long overdue moves over the past couple days. Some of that is due to relief that the Pubbies will keep total socialist control of medicine + health care at bay, somewhat, at least, for the near future. But it's also due to people taking profits in things which have run up nicely and moving their money into areas which had yet to fully benefit from the market's moves thus far.
I think there are few things worthy of further observation here: for the trading inclined, this is good, healthy & strong market behavior. for the longer term investor, a perfect example of why a diversified portfolio is key as one never knows which sectors or industries will do well at any given point in time. I also hope that this will also reflect a flight to quality and that the more-pathetic names, many in tech-land, which saw tremendous gains as a result of investor relief + short covering, will give way and only the stronger entities will continue to see such levels of continuing appreciation. lastly, I'm pleased to see areas other than tech take lead at this point and I'd actually like to see the DOW take over for NASDAQ somewhat at this point. the industrial + cyclical companies should be the next to move & that will be quite sudden & volatile when we hear the likes of GE are seeing significant improvements in their plastics business, for example (something the street is hoping for & did not hear today).
Friday, is "Triple Witching Day"..., the day that options expire, there is always a major "tug of war" as to the price of most of the stocks against which options have been written. Folks who want to have their call options exercised want the price UP, those who want them to expire want the price down. Flipside for those involved in the put otions. Then, those involved in straddles just want (and engineer) volatility! There are countless reasons for increased volatility at such times PLUS we have the end of the quarter "window dressing" coming up soon...
The volatility (and unpredictable nature) of the market ebbs and flows BY THE MINUTE at times. However, when known "critical points" (e.g. Options Expirations Dates and, "Triple Witching Dates"), things become evermore dicey and a "Crapshoot" for those with short term investment goal!
Think about an individual trader. When he is maxed out long he can buy no more. He has used up his ability to bid prices higher in order to purchase even one more share. What if the majority of the traders have done so? Markets don't move on news of any kind, they move on the act of buying and selling securities. Read "Reminiscences of a Stock Operator" by Edwin Lefevre. His character, Jessie Livermore, made money by buying when the market went up on bad news and selling when it down on good news. He decided such actions were insider transactions.
The economy wasn’t the problem. The problem was that no one really wanted to buy. What they wanted to do was worry about interest rates and the economy's vitality
What must truly frustrate the bears is that the selling didn't go very far, only down 114 on the DOW for the day. Charts are still looking very, very good and the day's move is still well above the major moving averages and still far above any of the prior bear market resistance.
A 400 billion dollar expansion of Medicare is keeping socialism at bay?
"In signing it, as he will surely be forced to do, he will preside over the biggest expansion of government health benefits since the Great Society."
-Clinton administration's former Medicare administrator, Nancy Min DeParle
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