Monthly Archives: April 2014

Classical Wednesday


30 minute atr
daily pivots
weekly pivots
upside retracements
downside retracements
shorter term retracements
regression channels
price support and resistance levels
On the economic calendar:-
 
07:00 MBA Purchase Applications
08:15 ADP Employment Report (Consensus 210 K v Prior 191 K)
08:30 GDP (Consensus 1.1% v Prior 2.6%)
          Employment Cost Index (Consensus 0.5% v Prior 0.5%)
          Treasury Refunding Announcement
          3 Year Note Announcement
          10 Year Note Announcement
          30 Year Note Announcement
09:45 Chicago PMI (Consensus 56.9 v Prior 55.9)
10:30 EIA Petroleum Status Report
14:00 FOMC Meeting Announcement (Consensus 0 to 0.25% v Prior 0 to 0.25%)
15:00 Farm Prices
POMO:-
None today

On Capital

I spent the weekend reading Thomas Piketty and an interesting blog post by @Nemo_incognito. The Piketty popularity train is in full gear and Nemo's discussion of the topic was well worth the read. Krugman is doing all he can to pull the discussion into the smug left wing black hole that he loves.

For practitioners whose views are often tempered by the realities of markets and margin clerks - like us - the topic is still important. We see the Piketty Theory - That the wealthy (capital holders) will prosper because they can earn a return higher than the economic growth rate that constrains the rest - in a simpler way: The price level of the stock market tells you little about the economy despite the constant drilling of the connection. In times of Quantitative CB policy, the relationship becomes even more elastic (abstract).

what did the level of the Nasdaq say about the state of Tech in 1999? What does the recent new high in the S&P say about the soft 2% growth in the economy now? As we (and @IvantheK) have discussed before, monetary and tax policy is tilted to capital over labor. Abundance Economics supports the view that unlike other "products" the price of capital can increase while there is too much of it. The cost of capital is being held down. The monetization of debt has caused equity to take on "cash-like" characteristics. Pundits often say "Take profits, Raise cash, or Move to the sidelines" when the market is down. These actions apply to the "owner" of a cash substitute. How exactly does one "Move to the sidelines" with an actual Megaplex battery factory?

The next 20 years will shift the concept of Capital Ownership as the Boomers retire in greater numbers. The massive demographic "taking of the profits" will have to transfer to someone else. Piketty's solution of taxation underestimates the behavioral shift that would accompany this hand-off. I continue to advocate from the other side of the equation. The US economy MUST grow faster at both a real and nominal level. The social upheaval associated with inequality will bubble up in Russia and China long before the US.

Classical Tuesday


30 minute atr

daily pivots

weekly pivots

upside retracements

downside retracements

regression channels

price support and resistance
On the economic calendar:-
 
07:45 ICSC-Goldman Store Sales
08:55 Redbook
09:00 Case - Shiller HPI (Consensus 0.7% v Prior 0.8%)
10:00 Consumer Confidence (Consensus 83.0 v Prior 82.3)
          State Street Investor Confidence Index
11:30 4 Week Bill Auction
          52 Week Bill Auction
13:00 2 Year FRN Auction
POMO:-
 
10:15 - 11:00 Outright Treasury Coupon Purchases between $2.00 - $2.50 billion

Classical Monday


30 minute atr

daily pivots

weekly pivots

upside retracements

downside retracements

regression channels

price support an resistance
On the economic calendar:-
 
10:00 Pending Home Sales Index (Consensus 0.6 v Prior -0.8)
10:30 Dallas Fed Manufacturing Survey (Consensus 6.0 v Prior 4.0)
11:00 4 Week Bill Announcement
11:30 3 Month Bill Auction
          6 Month Bill Auction
POMO:-
 
10:15 - 11:00 Outright Treasury Coupon Purchases between $1.75 - $2.25 billion

Weekly Hooper Futures Model 25 Apr

Weekly Futures Model:

The weakness in Crude was evident when prices slipped below the weekly sell point of control at 101.33 as WTI dropped close to Weekly first objective.

I don't plan on adding many more Weekly Hooper futures, but I continue to believe that the Weekly Hooper Model correctly points the way for larger trend moves. If that is the case, the bias for the equity indexes is still bullish as Friday's sell-off in the NQs has come down only to retest the weekly buy POC.   Continue reading