I usually post a Control Panel only once a week, but I would like to break into our program with a real-time METAR: after a few months of sunny weather, a Nor'easter appears to be moving in.http://stockcharts.com/freecharts/gallery.html?$SPXFor the past couple of weeks, the SPX has been treading water, with unusually small daily movements. The past 6 days have been 3 doji days with no movement followed by a sudden up day, followed by an "engulfing" day down, followed by another down day (today) where the high was at yesterday's low and went down from there. This is a topping pattern.I expect a series of down days until clarity emerges about the sequester in a week and possibly beyond that. I don't see a superstorm (a major bear setback) because I don't see a systemic crisis right now...but the market is overvalued and overbullish so the setback could be nasty. Or it could be fairly short and not worth taking action.Of course, this METAR is as accurate as other weather reports -- that is, no guarantees. Wendy
Though corrections are always possible, and may even be occurring now, once again I don't see anything alarming to suggest over valued and over bought. The P/E, as imperfect a metric as it may be, is 15.54 vs 14.53 a year ago so it has increased but not alarmingly so. And the dividend yield of 2.53% is actually above a year ago of 2.50. The DJ Transports have actually fallen in P/E from 20.90 a year ago to 18.94 today with an increase in dividend percent to 3.72 from 1.56.On the other hand the DJ Utilitys have risen in P/E to 22.42 from 14.95 a year ago, an alarming increase screaming correction to me. And the dividend has fallen from 4.05% to 3.10% which is also not a good sign.We own D, DUK, and SO and DRIP D and DUK plus add $50/mo to DUK. I do not trade these stocks. So although I am expecting a significant correction, we will continue to hold them.There are a couple of mildly worrying things in the highs and lows as the NYSE last week had two days with the number of new 52-week daily lows somewhat above 40, and I don't like to see that (The NASDAQ Composite had none.). Still, the number of 52-week daily highs were above 40 every day with three days above 100 (and 412 on Tuesday!), resulting in weekly highs of 576 (and I like to see this above 100) with 82 new lows (I like to see this below 100, which it is, but the highest number since the week ending December 17, 2010.) Needless to say, the breadth index was negative for both the S&P500 and the NASDAQ Composite).So I only see a looming problem in the utilities but am watchful on other areas.Incidentally, with what seems to be the inevitable Sequester, seems to be good for the "Dollar" stores (DG & FDO) as they went up nicely this last week. We own a bit of each.brucedoe
The sequester is a tempest in a teapot, unless that is, it engenders international anarchy because of Defense Dept. cuts. Short term meaningless.
"We own D, DUK, and SO and DRIP D and DUK plus add $50/mo to DUK. I do not trade these stocks. So although I am expecting a significant correction, we will continue to hold them.I have D and DUK also and I plan to hold even if there is a signficant correction of 20% or more, because they are long term holdings, the dividend yield will simply go up (if the price drops) and it looks more promising than savings and/or 10 year treasuries over the longer haul. That's my story for now, anyway.
The sequester is a tempest in a teapot, unless that is, it engenders international anarchy because of Defense Dept. cuts. Short term meaningless.I disagree. When you look at the size of the sequester versus the size of the deficit (let alone the entire current-year forecast expenditure or the debt or the unfunded liability)...... it's a tempest in a teaspoon.
... it's a tempest in a teaspoon.amen. Everyone is crying about all the "jobs" lost and how it will "kill" the economy. The evening news had sound bites from several people all agreeing that Congress needs to kick the can down the road.Governors: Looming cuts threaten economic gainsHawaii Gov. Neil Abercrombie, a former congressman, noted that the cuts — known in Washington-speak as "the sequester" — could lead to 19,000 workers laid off at Pearl Harbor, site of the surprise attack in 1941 that launched the United States into World War II. Today, Joint Base Pearl Harbor-Hickam supports Air Force and Navy missions.http://news.yahoo.com/governors-looming-cuts-threaten-econom...What are the numbers, really? iirc, they're talking about $1.2T over 10 years or $120B/yr, less than a 15% reduction in the annual deficit, or a little over 3% of the entire $3.8T budget? Steve
What are the numbers, really? iirc, they're talking about $1.2T over 10 years or $120B/yr, less than a 15% reduction in the annual deficit, or a little over 3% of the entire $3.8T budget? Or about the same amount that most Americans have had to cut back this year as a result of reinstatement of the SS tax.
I mostly agree that the sequester is teaspoon tempest, but the engineer in me has GREAT Respect for the power of small numbers.1.5% fewer cars on freeways and traffic jams disappear.1.5% increase in pressure and boilers explode and people die and ships sink.etc.The "small" amounts are all falling on "discretionary" spending, and that equals the actual functioning of government. It is falling on those budgets in the most simple minded of all manners, and that means that stupid really bad things will happen. The knock on effects could be worse.That it is all at root political DRAMA means the politicos will play up the drama.I am neither terrified nor sanguine.david fb
I mostly agree that the sequester is teaspoon tempest, but the engineer in me has GREAT Respect for the power of small numbers.1.5% fewer cars on freeways and traffic jams disappear.1.5% increase in pressure and boilers explode and people die and ships sink.Small numbers have great power in some contexts, but not in others.Driving off the cliff 1.5% more slowly - really doesn't matter.
It also means the research on ALZ will be cut, which will mean larger future costs in caring for all the boomers unlucky enough to come down w/ the disease, along with other similar health "challenges".PM <my spinal tap on Monday had no side effects and the Memory and Aging Project has one more data point!>
It also means the research on ALZ will be cut,We can probably all agree the government is funding a large number of usefull endevors. But since the mob doesn't want to pay for anything, and the accumulated debt is already burning some $360B/yr in interest costs, in spite of the Fed's rate surpression, some decision making, other than kicking the can down the road and rolling up more debt, would be appropriate.Steve
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