Economics
A look at average income:
And a look at personal consumption expenditures versus home prices (this is ugly):
http://calculatedrisk.blogspot.com/2008/08/case-shiller-real-national-prices.html
And household income versus per capita income:
http://econompicdata.blogspot.com/2008/08/household-income-up-per-capita-income.html
The FDIC released its list of problem banks yesterday. Some graphics on that data:
http://econompicdata.blogspot.com/2008/08/problem-list-of-banks-growing-but-115th.html
A look at housing prices by state (must read):
http://mjperry.blogspot.com/2008/08/blog-post_26.html
Politics
Domestic
Biden on
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/25/AR2008082502337_pf.html
Obama’s record on gun control:
http://article.nationalreview.com/?q=Mzk4ZjVkMGQ5ZjMzYTY4ZDIzMjMyZTYzMDJjMzlhZGQ=
International War Against Radical Islam
The Market
Technical
A great article on the key to success in trading (owning) stocks:
http://traderfeed.blogspot.com/2008/08/implicit-learning-and-unattached-mind.html
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Time to do nothing. The technical picture is unclear. The DJIA (11412) and S&P (1271) are in a clearly defined medium term down trend extending back to October 2007 (upper boundary DJIA 12647, S&P 1391). On a shorter term basis, both are also in a downtrend whose upper boundary (DJIA 11538, S&P 1284) is now set by the May 2008 and August 2008 trading highs (note the proximity of both Averages to these upper boundaries). On the other hand, the S&P is holding in an area providing support from both the January 2008 (1267) and March 2008 (1256) low’s (note this index’s proximity to these levels). Unfortunately, the same can not be said for the DJIA whose next visible level of support is the July 2008 (10809) lows. It is this latter fact that gives me pause.
I could argue that the July low’s were the bottom and that the indices just need time and distance to consolidate (i.e. trade sideways for a time) in order to break out of the aforementioned downtrends if I could find some near term support for the DJIA similar to that of the S&P. I can’t. So until we get some identifiable trends for both Averages, I am on the sidelines.
Fundamental
Adding to this uncertainty is (1) the lack of clarity on the final disposition of Fannie/Freddie. Remember throughout this entire Market decline, it has always been the lack of clarity in the resolution of a problem related to a major financial institution that has caused the panic sell offs. (2) the Democrat platform which if enacted would not be a positive for Your Money.
The latest data on credit spreads:
http://bespokeinvest.typepad.com/bespoke/2008/08/credit-spreads.html
All this said, I am sticking with my opinion that the July low will mark the bottom which implicitly means that near term I think that the DJIA will find support and the Fannie/Freddie problem will be resolved. I am just not willing to commit further cash reserves till we get some sign of those occurring.
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A look at S&P earnings expectations:
http://bespokeinvest.typepad.com/bespoke/2008/08/high-growth-exp.html
Aggressive Growth Buy List
Company Close 8/26
Ecolab $44.99 43-49
Frontier Oil 17.32 18-21
CH Robinson 50.94 46-53
Schlumberger 98.00 92-106
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