STOCK MARKET WATCH, FRIDAY OCT 17....(#1)

Technical Analysis -- Valuable Tool or Misguided Product of 'Beautiful Mind'?
Recommendations for Self-Teaching Technical Analysis

In the movie, “A Beautiful Mind”, university professor, John Forbes Nash Jr., suffers from schizophrenia and hallucinates that he has been engaged by the CIA to decode a foreign plot to overthrow the US Government. He looks for clues to these plots through what he believes are messages he finds in common magazines and newspapers. His hallucinations are so detailed and real in his mind that he sees and talks to an imaginary CIA agent, Parcher, played by Ed Harris.

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In many respects the public perceives technical analysts to be similar to Dr. Nash. As with Dr. Nash in “Beautiful Mind”, the public perceives technical analysts as borderline schizophrenics looking for order in random occurrences in stock market charts. Perhaps their own failures in their attempts to read stock charts lend more credence to their belief that technical analysts are practicing useless voodoo, or readings of an 8-ball, or ouija board. They get a lot of reinforcement from some writers in financial magazine publications, and cable TV. Cable often includes brief “bites” of so-called technical experts espousing analyses that are as unsound as their cheerleading analysts’ misguided stock tips.

The facts are that there is something of value in technical analysis. Human nature tends to take on repeatable patterns. Such patterns are represented on stock charts, which can be used to predict future stock moves. However, technical analysis is a discipline that is similar to counting cards at the blackjack table. You will not make money every time. Appropriate use of technical analysis will give you an edge over the market or “house” that will allow you to make money over time (including transaction costs). There are many styles and philosophies of technical analysis. The beginner should know that as with anything else of value, it requires a lot of work including education, practice, and discipline. It’s amazing how many people trade stocks based on what they think is sound technical analysis, having never even read a book or examined anything except for Internet stock message boards. That is a sure fire method for failure. Internet Chat boards are loaded with misguided hearsay posing for technical analysis. It’s a waste of time. Stay away.

Our stock market is in the midst of a speculative bubble. I agree with Warren Buffett’s observation this winter (when the stock market was much lower), that there is very little true investment value in most sectors of common stocks of US companies now. This winter, Buffett’s organization ferreted out Best Buy (BBY), stock in the low 20’s. It was sold a couple of months ago in the mid-40s, and now trades in the mid-50s. No longer a Buffett-type value by any means! There is precious little profit to be made in investing in common stocks in the fundamental buy-and-hold manner that made Warren Buffett one of the best long-term investors and richest people in the world. If you read any good book on fundamental analysis of stocks written in the 80s or before, you will find that the valuations used as examples are much lower from what we have in today’s market. If you want to be like Warren Buffett, you will have to wait for this current speculative bubble to burst. Be patient, eventually it will. In this stock market environment, to achieve positive returns while avoiding large losses you must know and apply technical analysis. To do this effectively, you must educate yourself.

"Below are my recommendations for self-education in Technical Analysis."

1. The Consumer Continues to Do His “Job”

It is scathing, to say the least, and a ruthlessly smart depiction of the overextended consumer.

When they finally come clean (they being the over-extended consumer) the mess will be so massive, it will be devastating. All credit maxed out to the hilt, often just to project an illusion of wealth...when the truth comes out it will be because there are no more ways available to fund the facade.

Many a houseof cards has been constructed in America. A big wind is heading that way like a tornado targeting a trailer park. Brace for it, it's going to hurt.

Julie==the little ray of sunshine ;-)

No matter where you live be it in Atlanta or in upstate Michigan, we see them everyday. With a row of $800k houses just 1-1/2 blocks from my home, I am stunned with a sense of wonder at how these folks can afford everything: new house 2 new cars and new kids. Plus, they take vacations.

I will guess that when the bank has a "for sale" sign in the front yard of one of these homes, then I will know that something big is up.

... told him by a phone installer. The guy had gone to a new McMansion to check a phone and walked into the front room and there was nothing in it except a cheap dining set and a TV. While he was checking the line, in the way of small talk, he said, "oh, still moving in, huh?"

The answer: "We are moved in."

The supposition was that they were completely tapped out just getting into the house. If it weren't so damned sad, this country would be a really funny place to live.

Cheers.

McMansions are part of the problem. Gotta have 'em bigger and better than the other guy. Fools.

I've seen more foreclosures in my local paper the last two years than I care to remember. I think the great facade is soon to experience the death throws.

Will check back in with any data in a bit, time to get child #2 off to school.

Julie

Lordy, what is going on? I thought that they were profitable, at last.

NEW YORK (CNN/Money) - Readings of the economy's housing and consumer sectors could impact U.S. stock markets, along with investor reaction to eBay and Sun Microsystems results, as bulls try to close out another positive week Friday.

At 5:30 a.m. ET, futures pointed to a slightly lower open for the major indexes.

Before the markets open, the government issues its September report on housing starts, with economists surveyed by Briefing.com expecting the annual rate to have edged up to 1.83 million from 1.82 million.

Then, shortly after the opening bell, the University of Michigan's preliminary October index of consumer sentiment is seen climbing to 88.2 from 87.7 in September.

story

I've got a busy day lined up outside the house, so I just dropped in to say "I must be going!"

Looks like it could be a run of the bulls or an ox roast, depending on the numbers reported. Y'all have fun and I'll see you Monday! :hi:

My time here is limited. We are getting a portion of our place recarpeted. Some heavy lifting required.

I will check in when I can.

We won't take any wooden nickels while you're gone!

Thanks for kickin' things off Ozy! Glad you checked in Maeve and I for one am damn glad you are helping to keep the culture of one of the finest peoples alive and well. The Emerald Isle owes you a debt of gratitude. :hi:

Julie

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=3636063

U.S. housing starts rose unexpectedly in September, the government said on Friday, as relatively low mortgage interest rates kept their allure for home buyers.

Ground-breaking for new homes jumped 3.4 percent to a seasonally adjusted annual rate of 1.888 million units in the month from an upwardly revised 1.826 million pace in August, the Commerce Department said. Starts beat the expectations of analysts polled by Reuters, who were expecting a 1.82 million unit pace.

It was the second-highest rate this year and a clear signal the housing market remains strong. Starts may have been helped by a dip in mortgage interest rates in September, a trend that has reversed in the past couple of weeks on hopes for faster economic growth.

Permits, an indicator of builder confidence, fell 2.2 percent to a seasonally adjusted annual rate of 1.86 million units from an upwardly revised 1.901 million clip in August.

as I heard earlier in the week that mortgage apps dropped to new lows. If the mortgage rate remains that low, look for big drops in housing starts.

Good econ issue to watch.

Julie

9:51 and here's how things look early on:

Dow 9,804.01 +12.29 (+0.13%)
Nasdaq 1,944.15 -5.99 (-0.31%)
S&P 500 1,050.01 -0.07 (-0.01%)
10-Yr Bond 4.435% -0.020

Some blather on Street rumblings:

This Blow May Bolster the Big Board
Friday October 17, 8:21 am ET
By Gary Weiss


If the trading floor is the heart and soul of the New York Stock Exchange, the Big Board's announcement on Oct. 16 was a dagger to the heart. Five of the seven NYSE specialist firms -- which have a monopoly on stock trading on the exchange floor -- have been informed that "disciplinary action" will be brought against them for allegedly trading ahead of customer orders and otherwise taking advantage of their privileged position on the trading floor.
It seems like awful timing by the Big Board, doesn't it? In the past few days, mutual funds and other institutional investors have been clamoring for changes in the specialist system, which many institutions have long criticized for trading practices that allegedly rip off customers . Institutions are also pressing for splitting off the exchange's regulation from its operations, a step opposed by the NYSE interim Chairman John Reed.

RECIPE FOR FAILURE? In fact, the timing may not be so bad at all -- at least, not for exchange officials who are clamoring to prevent just the kind of far-reaching change that critics are seeking. For one thing, the disciplinary actions are obviously intended to prove a point that Reed has made several times: Empowering outsiders who don't have the technical expertise to spot wrongdoing would be a recipe for regulatory failure. "If specialists misbehave, you have to be a practiioneer to know it when you see it," Reed testified before a House subcommittee on Oct. 16. "We aren't perfect regulators, but we are quite good at it."

http://biz.yahoo.com/bizwk/031017/nf200310166147_db035_1.html

Julie

10:07


Dow 9,759.12 -32.60 (-0.33%)
Nasdaq 1,931.66 -18.48 (-0.95%)
S&P 500 1,045.22 -4.86 (-0.46%)
10-Yr Bond 4.449% -0.006

Julie

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=3636422

U.S. consumer confidence improved in October, market sources said on Friday, as the nation's long-dormant jobs market showed signs of life.

The University of Michigan's index of consumer sentiment rose to 89.4 in October, the sources said, beating economists' forecasts of a rise to 88.0 and up from a final reading of 87.7 in September.

The survey's current conditions index climbed to 102.2, from 98.4 in September. The expectations index, which tracks perceptions about the future of the economy, rose slightly to 81.2 from 80.8 in September


So far the markets don't seem to be buying this.

DJIA 9814.82 23.10
Nasdaq Comp 1943.76 -6.38
S&P 1048.83 -1.24
Amex Comp 1017.26 -3.68

Hello everyone and happy Friday!

Today's reading is SUBORDINATE changing to ENCOURAGING. Subordinate says, "You must overcome vanity, pride, and any ostentatious behavior." Wow! Sounds like a direct response to the McMansions discussion earlier in the thread!! Encouraging says, "The time has come when you can achieve your aims through the encouragement of others."

C'mon everyone! We can take our country back!!!!

:grouphug:

Checking in with the noon-time snap-shot:


Dow 9,755.64 -36.08 (-0.37%)
Nasdaq 1,924.48 -25.66 (-1.32%)
S&P 500 1,043.54 -6.53 (-0.62%)
10-Yr Bond 4.409% -0.046

Looks like the Street isn't getting with the program yet today. They must not have got the WH memo: Good news only!

Julie

Dow 9,746.67 -45.05 (-0.46%)
Nasdaq 1,922.68 -27.46 (-1.41%)
S&P 500 1,042.54 -7.53 (-0.72%)
10-Yr Bond 4.399% -0.056


Seems comfortable at these levels for now.

Julie

Afternoon marketeers! Wanted to drop in real quick and say hello, and share the umm...err...not-so-happiness in the market today:

Dow 9,749.04 -42.68 (-0.44%)
Nasdaq 1,922.29 -27.85 (-1.43%)
S&P 500 1,042.61 -7.46 (-0.71%)
10-Yr Bond 4.415% -0.040


I got dropped into training class at the last minute at work, and have had no time to lurk or post in the last three days. I'm finishing it this afternoon - hopefully I'll be back on my lunchtime stock market watch duties come Monday.

Till then, keep your stocks close (and your dollars closer)!

Thanks for stopping in Steve. We know you're with us in spirit at least. :-)

1:20 and it's much the same, when with the curve hit and which direction will it curve?

Dow 9,745.41 -46.31 (-0.47%)
Nasdaq 1,921.69 -28.45 (-1.46%)
S&P 500 1,042.00 -8.07 (-0.77%)
10-Yr Bond 4.414% -0.041

Side of blather:

U.S. stocks pulling back at midday
Friday October 17, 12:54 pm ET
By Michael Baron


NEW YORK (CBS.MW) -- U.S. stocks fell Friday as a disappointing profit outlook from Web bellwether EBay and widening losses at Sun Microsystems fueled investors worries about growth in the technology sector.

The Dow saw broad selling with 21 of its 30 components moving lower. The biggest losers among the blue chips were Alcoa, financial components J.P. Morgan Chase and Citigroup, and diversified industrial firm United Technologies. The blue-chip index has lost ground in three of the past four sessions.

The results overshadowed economic data indicating an improvement in consumer sentiment, continued strength in the housing market and robust inflows for U.S. equity funds.

http://biz.yahoo.com/cbsm-top/031017/9f675bea3b6bdf2a836eece29548273e_1.html

Julie

Looking a bit worse as the end of the day comes closer:

Dow 9,729.80 -61.92 (-0.63%)
Nasdaq 1,915.83 -34.31 (-1.76%)
S&P 500 1,039.49 -10.58 (-1.01%)
10-Yr Bond 4.388% -0.067

Don't blame the talking-head cheerleaders. Believe me they are doing their very best but to no avail.

Julie

Dow 9,721.79 -69.93 (-0.71%)
Nasdaq 1,912.36 -37.78 (-1.94%)
S&P 500 1,039.32 -10.75 (-1.02%)
10-Yr Bond 4.388% -0.067

Catch all you marketeers on Monday. Everybody have a great weekend! :hi:

Julie