TSX 60 Index also displays an evening star warning. Reversal below 660 would complete a bull trap, indicating a down-swing to 590*. 21-Day Twiggs Money Flow below zero warns of (medium-term) selling pressure.
* Target calculation: 660 – ( 730 – 660 ) = 590
Dow Jones Industrial Average tall shadow (or wick) on the latest candlestick [R] indicates rising selling pressure. With excitement about a European bailout deal fading, expect a test of support at 10600. Failure would indicate another down-swing, with a target of 10000*.
* Target calculation: 11000 – ( 12000 – 11000 ) = 10000
S&P 500 Index shows continued consolidation between 1120 and 1220 on the weekly chart. 13-Week Twiggs Money Flow below zero indicates selling pressure. Failure of support at 1120 would test the 2010 low at 1020*/1000.
* Target calculation: 1120 – ( 1220 – 1120 ) = 1020
NASDAQ 100 Index shows an evening star reversal warning, completed if price reverses below 2200. 63-Day Twiggs Momentum holding below zero reminds that we are in a primary down-trend. Breach of the lower trend channel would warn of another down-swing, with a target of 1750*.
* Target calculation: 2050 – ( 2350 – 2050 ) = 1750
Financial markets rallied around the globe Monday as investors saw the first glimpse of real hope for containing the European debt crisis. Problem was that the lead advocates of the deal, the IMF’s Christine Lagarde and the European Commission’s Olli Rehn, are bureaucrats who don’t have to answer to electorates every few years.
Decidedly not on board were the actual governments of the 17 euro-zone nations. Euro-zone finance ministers came home from Washington doubting they could sell more risk to voters already grumbling at past and present tax money being put behind insolvent state treasuries in Greece, Portugal and Ireland.
Supply of new and existing homes for sale stood at 8.4 months at August’s selling rates, down from a large supply of about 11 months a year ago. Equally important, fewer homes are waiting to go on the market. This so-called “shadow inventory” consists of homes in foreclosures, those already repossessed by the lender or homes with a mortgage delinquent for 90 days or more. Mortgage-data provider CoreLogic estimates the shadow inventory totaled 1.6 million in July, down from 1.9 million a year ago.
via Housing Takes Baby Steps Towards Better Balance – Real Time Economics – WSJ.
Forty three months after the recession began in January 2008, almost 5% of the labor force remains unemployed. In 7 of the eleven recessions since World War II, all the jobs lost during the recession were filled within 24 months. What’s happening in this ‘recovery’ is simply unprecedented.
The crucial talks between the European Union-European Central Bank-International Monetary Fund “Troika” with the Greek government remain on hold as Greece pulls together another six billion euros in cuts and taxes to hit its promised 2011 target. At stake is the next eight-billion-euro bailout payment, without which Greece goes broke within weeks.
via European Crisis Primer: Where Things Stand – Real Time Economics – WSJ.
The Consumer Sentiment Survey of Americans, created by George Katona at the University of Michigan in the early 1950’s, and known today as the Thomson-Reuters University of Michigan Surveys of Consumers, has included a remarkable question about the reasonably long-term future, five years hence, and asks about visceral fears concerning that period:
“Looking ahead, which would you say is more likely – that in the country as a whole we’ll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?”
That question is usually not singled out for attention, but it appears spot-on for what we really want to know: what deep anxieties and fears do people have that might inhibit their willingness to spend for a long time. The answers to that question might well help us forecast the future outlook much more accurately.
Those answers plunged into depression territory between July and August, and the index of optimism based on answers to this question is at its lowest level since the oil-crisis-induced “great recession” of the early 1980’s…..
This is a much bigger downswing than was recorded in the overall consumer-confidence indices. The decline occurred over the better part of a decade, as we began to see the end of debt-driven overexpansion, and accelerated with the latest debt crisis.
The timing and substance of these consumer-survey results suggest that our fundamental outlook about the economy, at the level of the average person, is closely bound up with stories of excessive borrowing, loss of governmental and personal responsibility, and a sense that matters are beyond control. That kind of loss of confidence may well last for years.
via The Great Debt Scare – Robert J. Shiller – Project Syndicate.
The euro-zone PMI for September slid 1.5 points to 49.2, according to data provider Markit, signaling contraction by falling below the 50 mark for the first time since July 2009. The new-orders component of the survey also declined, suggesting further weakness ahead.
HSBC’s preliminary China Manufacturing Purchasing Managers’ Index, or “flash” PMI, fell to a two-month low in September, indicating a broadening slowdown in the Chinese economy, with industrial output swinging from a modest expansion to a deterioration.
via China manufacturing data paint weak picture – Economic Report – MarketWatch.
