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| | | Sandy? | | | Other than last Thursday’s mini-deluge of economic data, the week’s news was sparse. Friday was no exception with just one report: Industrial Production.
Economists had expected the report to read 78.4% but it was only 77.8%. Did economists, analysts, and reporters blame the miss on a weaker Europe (which is in recession), a weaker global economy, or even a weaker US? No, they immediately blamed it on hurricane Sandy. Or was it Sandy from Grease? Nope, it was the hurricane.
Bloomberg said the following once released
Industrial production declined 0.4 percent in October after having increased 0.2 percent in September. Hurricane Sandy, which held down production in the Northeast region at the end of October, is estimated by the Fed to have reduced the rate of change in total output by nearly 1 percentage point. The largest estimated storm-related effects included reductions in the output of utilities, of chemicals, of food, of transportation equipment, and of computers and electronic products.
Market expectations apparently were way off on Sandy impact with the consensus at up 0.2 percent for overall industrial production.
Does this make sense? Didn’t hurricane Sandy land in the New York region on October 29th, which was the END of the month and therefore should not have affected October data by much at all? I would expect it to affect November’s data due to the lengthy power outages.
And one last question/observation: doesn’t this report cover the entire country and not just the New York region? Something seems odd – like analysts & economists do not want to admit to the slowdown. Just sayin’. | | Trade well and follow the trend, not the so-called “experts.” | | Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia. | | | | | | | | | |  | | | | is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin's proven techniques for powerful results. | | | | | |  | | | | Congratulations to Vishal Kakar in our New Forex Program!
"WOW what a signal mate thank you. I shorted Eurusd when I got your mail from 12731 and closed at 12710 made 21 pips @£50 per point which £1050. | | | | NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial. | | | |  | | |  | | | | Volatility Commentary | | | How Low Can Vix Fall? VIX plunged today 8.78% to close at 16.41. This plunge came despite only a modest rebound in the S&P500 Index today, up 0.48% to 1359.88. So that begs the question, how low can VIX fall if S&P500 Index has a meaningful rebound? The answer to that would depend on how strong the expected rebound would be. Let's take a look at some resistance levels. Should the S&P500 Index rebound to its 200-day moving average at 1382, VIX could very well fall to 15.5 level. Should it rebound to the 20-day moving average, VIX could be at 14.5. Finally, should the S&P500 Index rebound to its 50-day moving average, VIX could very well be at 13.5. Where do these VIX forecasts come from? They are based on probability analysis of VIX based on where the S&P500 Index is trading relative to its major moving average lines.
| | |  | | | | Currency Spotlight | | | | The Australian dollar finished the trading week lower against the U.S. dollar, but above the 200-day Simple Moving Average and psychological 1.0300 level. Pressure mounted against the Aussie after the IMF hinted that the central bank could lower rates if the economy continued to weaken. Earlier this month, the Reserve Bank of Australia kept the benchmark interest rate at 3.25%, the highest rate among the other 7 major economies. With only New Zealand’s interest rate a distant second place at 2.50%, the RBA will still have the highest interest rate if it decides to cut rates next month or in February. Tonight, the RBA will release its detailed report that outlines their opinion on what made them decide to keep rates steady. Last month’s Minutes outlined the concerns over weakness in mining, falling GDP and hinted towards a rate cut that never happened. Any improved outlook on the economy, mildly supportive comments on iron ore and coal prices, or even an upbeat outlook for the resolution of overseas issues like the fiscal cliff being resolved, could help trigger a move higher for the Australian currency. If the financial markets start the trading week strong, any optimism from tonight’s Minutes report may help the this currency reverse last week’s decline.
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|  | | | | Watch List | | | The market had started on a small slide down, but sure enough the rally hit and held on the pop up. The reaction out of the White House was favorable to finding a solution on the Fiscal Cliff, and the reaction was fast and swift. The S%P made a 10 point move in minutes and is closing well above the low of the day. These conditions I have been speaking on all week have showcased themselves daily. Now with the holiday next week, it should be a fairly neutral market by historical standards. This year could be very different. The amount of volume traded in the markets today was well above average. That means a lot of interest and lots of action as well as people looking to get out of their positions.
After the initial drop and pop action, stocks have essentially moved sideways. Sears(SHLD) was hit particularly hard today following on the heels of JC Penny(JCP) bad earnings report. While other retailers are thriving in these economic conditions, these two companies continue to struggle and is looking more like Groupon then Target.
Look for more of the same volatility going into the new year. Although with the news and reaction to the news today addressing the Fiscal Cliff was favorable, I still need more proof then a small one day rally to change my outlook which is still slightly bearish with good volatility. Protect your profits and look for shorter term moves. Watch for fast reversals and listen close to whatever news that comes out of Europe. It can make the market shift and reverse faster then Jeff Gordon chasing the NASCAR Trophy. Open Position: CHKP Stocks to Watch: AAPL AMZN PCLN EXPE BAC C GS NFLX FOSL RIMM | | |  | | | | Futures Data | | | ES 1357.00 / 1345.00 POC… 1356.00 YM 12548 / 12473 NQ 2532.50 / 2507.00
Notes from the Pit
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