Just noticed that Ed Downs drew the Dow's downtrend line higher than I did; looks like a scenario for a pullback still:
signalwatch.com
Here's my version:
cache.wsrn.com
Don't know how Ed got that lower line parallel; it's back to the Photoshop drawing board for me. ;-) It's still the first weekly close above that first line.
Hawk mentioned Kudlow's money supply chart showing negative growth; caught it Friday night. Kudlow was pointing to adjusted M2 (minus money market funds). Was pretty interesting; I've always had a problem with the money market role in money supply. A lot of people have pointed to the rise of money markets as a reason that money supply measurements have become irrelevant. I guess it's possible for money supply measures to grow just by everyone selling stock. Someone who knows more may want to chime in on this issue.
AAII (if I got the acronym right) showed individuals bullish by 63%; is that likely at a major bottom? How's NDX COT commercials/non-commercials, anyone?
And finally, from today's Post; could this really be the reason for Friday's rally? Bruce Steinberg changed his mind about the Big R at about 11 a.m.:
Yesterday, 30 minutes after the Labor Department released its report, Bruce Steinberg, the chief economist at Merrill Lynch, sent an e-mail to clients declaring that the economy "could be beginning to look recessionary." For an economist who had spent much of the last six months dismissing all the recession talk, it was a noticeable admission.
By 11 a.m., however, Steinberg had recanted. In two subsequent e-mails, he explained that his momentary lack of faith was based on the observation that, over the past 50 years, there had never been back-to-back months of declining payroll employment without a recession following. But with the Fed taking early and aggressive action, he concluded that this time it might be different.
"After further consideration, we are not, at this point, moving to a recession forecast," Steinberg wrote, adding that if payrolls decline for a third month in May, it will "make it hard to deny the economy had slipped into recession." |
