Hello traders everywhere! Adam Hewison here, President of INO.com and Co-creator of MarketClub, with your mid-day market update for Friday, the 24th of May.
If The Economy Is So Good, Why Did This Happen?
We have been talking about this all week... Why did these bedrock companies, Wal-Mart (NYSE:WMT), Target (NYSE:TGT) and Sears (NASDAQ:SHLD), all miss their earnings estimates? Is this an early warning signal that the economy is really not as healthy as the Fed and everyone else would like to see? We will be examining all three stocks today.
Watch Today's Video Update Here
Looks Like Stocks Are Closing Out The Week Lower
As of this writing, it looks as though the stock market is going to close out the week lower. This is a first down week in four weeks and it's coming from a key level. If you have not watched our S&P 500 special video, I highly recommend that you take the time before the day is out to watch it.
Is Gold Trying To Make A Base To Move Higher?
There is a sense in the market that smart traders are getting just a little bit nervous about equities and money in general. Gold appears to be the beneficiary of this worry. Certainly, the $1,350 area on a close-only weekly basis is very important. Providing that level holds, I would not be surprised to see further sideways and perhaps some upside action in the gold market.
Are Currencies The New "Hot" Market?
You see the news, you hear about how Japan is basically devaluing its currency (Japanese Yen) which is proving to be a huge boom in the Forex markets which trade over $4 trillion every day! This huge worldwide market dwarfs every other market on the planet. More and more traders who have traditionally traded stocks are looking at Forex as an opportunity to make money. For example, if you have been following these updates for any length of time, you've seen me talk about the collapse of the Australian dollar and the Japanese Yen and both trades have been very successful. The Forex markets tend to trend and the trends tend to persist longer in Forex than they do in the stock market. Also, and this is the shocker, the Forex market can be less volatile than stocks. A 10% move in a currency over a year is considered a huge move. What makes Forex trading exciting is the leverage factor. You can leverage up to 50 to 1. Today we will be looking at the Yen, the Australian dollar and of course, the Euro.
Watch Today's Video Update Here
Recent Special Videos:
Wal-Mart (NYSE:WMT)
Lululemon (NASDAQ:LULU)
Apple (NASDAQ:APPL)
Tesla (NASDAQ:TSLA)
Google (NASDAQ:GOOG)
On behalf of MarketClub, I would like to wish all of our clients around the world a very happy and safe Memorial Day weekend. We will be back on Tuesday, so enjoy the break and this important holiday, remembering the sacrifices that were made for freedom.
Have a great trading day and holiday weekend,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Adam appears frequently on the following financial news channels as a guest expert. Click on any cable logo to watch Adam's latest appearance.
Why do you send me these when there is no place to log on and view? IT IS VERY AGGREVATING!!!
I have been a member for a couple of years and you treat my E-mail address as a prospective customer!!!!
Neil
I am pleased about the recent scrutiny of the government agencies for one reason. They are too big and subject to being politicized thus rendering our traditional Constitutional Republic and its historical values irrelevant. There is simply too much political spin.
Anyway, last week I emailed Senator Ted Cruz with a concern. However, I do not imagine it saw the light of day, and anyway, it involves an issue that may be sensitive for him inasmuch as it may infringe on various US Congressional members' entitlement to engage in insider trading, i.e. freedom from prosecution for such activity, an activity that last year they outlawed for themselves, but recently reinstated as an amendment to an important bill that had to be passed. So, I was thinking perhaps someone with connections could possibly bring it to the attention of appropriate State agencies or personnel where it may be scrutinized.
It involves the BLS, fondly referred to as the Bureau of Lies and Statistics by certain Wall Street traders. It has to do with their inflated employment numbers reported on the first Friday of each month since the beginning of the year. I say inflated because this is possibly politicized. The real time numbers based on IRS wage and salary data according to Trim Tab Investment Research are much lower except for one month when it was higher than what BLS reported (BLS states their numbers, based on a survey-of a few large cap companies, 40-50% of which surveys are actually responded to) are correct plus or minus 100,000. So, it is nothing more than a guess presided over by a huge agency that produces a number which on a single day causes billions to be won or lost. However, TrimTabs utilizing a small staff and the IRS numbers embedded in their monthly wage and salary reports churns out more accurate data.
How do I know it is more accurate? Usually the BLS revise their data such that over a 3 month period the 3 month average coincides with the TrimTab numbers. However, that is not the case this year. Their 3 month average even with revisions is still much higher.
What are the implications of this? At some point the BLS will have to compensate their 'guess' so that their numbers actually start to coincide with reality.
So what you say? This is what.
The higher numbers (actually low by historical standards) play into the narrative of an improving economy thereby justifying the recent FED action of QE infinity, and the Administations' narrative as well.
In actual fact we are in deflation, and this is the real reason for the FED actions, and the reason for the bear market in metals.
Additionally, the Adminstration has known this all along, and when the BLS starts to report lower employment numbers going forward, instead of taking responsibilty, they will blame sequestration and attempt to gain the political highroad for the 2014 Congressional elections. After all they will say, 'we were doing quite well until sequestration'--WRONG.
The market will interpret this bad news as good news thereby fueling the continuing FED engendered Bull market rally with free money to the banks and public companies who will increase their stock buyback programs after a quick correction inasmuch as the FED will either continue current QE, or actually increase it. This will probably be 'leaked' by John Hilsenrath of the Wall Street Journal, the unofficial spokesman of the FED as he did last June for QE3, or the FED will come right out and say it.
I find it peculiar that an organization of small size can derive more accurate numbers than a politicized bloated agency, and that no one else sees this, other than the Congressmen and women profiting by insider trading, among others. Or maybe, I am incorrect and everyone already knows. Perhaps that is the reason few people are investing and many are just trading short and intermediate term.
It is just another bubble, but one which should continue for another year. After that, beware and flee for your life, or capitalize on it.