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Dartline™ First Look - morning directional planner

... Gold prices gained $12.7 at $1,129.4 after touching a new high of $1,130.60, fueled by the dollar carry trade. The weak dollar is a key component in the carry trade. The carry trade was a big money vehicle over the past decade when traders would borrow yen in order to invest in higher yielding assets. This was facilitated by the Bank of Japan keeping rates so low for an extended period of time. The dollar has taken over that mantra as the Fed's interest rate policy and quantitative easing have provided a negative interest rate for all intents and purposes. Now traders shorting the dollar, but with so many players in the game a sudden rise in the dollar's exchange rate could create a panic out of risk assets and back into dollars. The dollar index over the past two days has been unable to break above the 75.60 area with any conviction. After failing once again to break through resistance, momentum traders that were attempting to squeeze the dollar higher got scared and took profits from the past few days. This pushed the dollar lower until it received support at the 75.20 area. The key to determining the near term direction could be be Helicopter Bernanke's speech today at noon. Any hint or perception of rising rates would cause the dollar to rally. ... Use 1112.40 in the Standard & Poor's 500 index as first test to maintain upside bias. Although the S&P's break above 1,100 is increasingly being portrayed as having the potential to determine that this is no bear market rally, anything that suggests consumer confidence is taking a hit as the holidays approach could initiate a wave of profit taking in the U.S. -- the impact of which would doubtless be felt on markets across the globe. However, a breakout would warrant increasing investment allocation to the buy side with 1166.36 as primary mid-term resistance. Maintain support at 1044.80.  (Monday Nov 16 | post #2)

Business News

Dartline™ First Look - morning directional planner

November 16, 2009, 7:00 am ... The Standard & Poor's 500 index futures are up 8.80 to 1100.70, as the FTSE 100 index of leading British shares up 62.60 points, or 1.2 percent, at 5,365.98, Germany's DAX rose 61.11 points, or 1.1 percent, to 5,747.94 and the CAC-40 in France was 36.41 points, or 1 percent, higher at 3,842.42. Earlier, Japan's Nikkei 225 stock average closed up 20.87 points, or 0.2 percent, to 9,791.18 after figures showed the Japanese economy expanded at an annual rate of 4.8 percent in the third quarter. That was the second straight quarter of expansion and the biggest rise since 2007. Indeed, the growth in Japan was due to a rise in consumer spending as opposed to exports. In greater China, Hong Kong's Hang Seng rose 390.35 points, or 1.7 percent, to 22,943.98, and Shanghai's benchmark surged 87.40 points, or 2.7 percent, to 3,275.05. Markets in South Korea, Taiwan, Singapore and Australia rose between 1 percent and 2 percent. Meanwhile, Oil prices rose in tandem with stocks. Benchmark crude for December delivery was up 92 cents at $77.27 a barrel; the contract settled down 59 cents at $76.35 on Friday. ... The weak dollar is key component in the carry trade and created overbought liquidity to stocks and commodities. The carry trade was a big money vehicle over the past decade when traders would borrow yen in order to invest in higher yielding assets. This was facilitated by the Bank of Japan keeping rates so low for an extended period of time. The dollar has taken over that mantra as the Fed's interest rate policy and quantitative easing have provided a negative interest rate for all intents and purposes. Now traders shorting the dollar, but with so many players in the game a sudden rise in the dollar's exchange rate could create a panic out of risk assets and back into dollars. The dollar index over the past two days has been unable to break above the 75.60 area with any conviction. After failing once again to break through resistance, momentum traders that were attempting to squeeze the dollar higher got scared and took profits from the past few days. This pushed the dollar lower until it received support at the 75.20 area. The key to determining the near term direction could be be Helicopter Bernanke's speech today at noon. Any hint or perception of rising rates would cause the dollar to rally. ... Due today are U.S. retail sales figures for October -- analysts expect the headline number, which includes auto sales, to have rebounded by 0.9 percent during the month following September's 1.5 percent decline. Retailers will continue to dominate the earnings calendar in the U.S. this week too. Those expected to report include Home Depot Inc. (HD) - last $27.34, Target Corp. (TGT) - last $48.94 and Gap Inc. (GPS) - last $22.92. Retail sales are particularly important when assessing the outlook for the global economy -- without the help of U.S. consumer spending, which accounts for around 70 percent of the U.S. economy, any global economic recovery will be modest. Indeed, a smaller than anticipated rebound could heap pressure on Wall Street, particularly on the S&P 500, which has failed to sustain a break above the 1,100 mark -- Dartline suggests that a close above 1,100 for the index could act as a catalyst for further gains around the world.  (Monday Nov 16 | post #1)

Business News

Dartline™ First Look - morning directional planner

November 11, 2009, 7:00 am ... The Standard & Poor's 500 index futures up 9.40 to 1101.30, as the Chinese government said the slump in the country's exports eased last month as industrial output and retail sales rose sharply, with inflation still tame. Together, the figures showed China's economy, with the help of massive stimulus spending, would meet or surpass this year's economic growth target of eight percent. Adding to positive signs in Asia, Japan's core machinery orders, a closely watched indicator of corporate capital spending, jumped 10.5 percent in September, marking the second straight month of gains. ... The benchmarks in Britain, Germany and France rose nearly 1 percent and will give the S&P index a "heads up" for further gains. ... Crude oil for December delivery is down 12 cents to $78.93 a barrel at in electronic trading on the New York Mercantile Exchange. Oil has moved from $32 a barrel since December, and Dartline expects the upward trend to continue to close at yearend at $100, as prices continue to be driven by the dollar and sentiment. Indeed, the dollar is under pressure in European trading hours after a top U.S. Federal Reserve official declared that authorities won't step in to boost the buck unless its decline became "disorderly, which means -- look for a further decline of The ten percent. In a speech late Tuesday, Federal Reserve Bank of Dallas President Richard Fisher said he is aware that the Fed's current stance of keeping interest rates low for an "extended period" was denting the dollar. Moreover, traders have seized upon the implication that Fed officials do not see the dollar's decline as disorderly at this point, triggering a fresh wave of dollar selling Wednesday. Dovish comments from three other Fed speakers Tuesday also supported the move and contradicts Geithner's noise to defend the greenback. The market shrugged off his comments, supporting the view that it is the Fed, not other officials, that has control over the currency for now. ... The Australian dollar, one of the key high-yielders in the G10 space with interest rates at 3.5%, rose to a fresh 15-month high at US$0.9345 from the US$0.9310 area. Meanwhile, gold added $11.3, or 1 percent, to $1,113.8 an ounce, a 15 month high. ... Standard & Poor's 500 index futures are currently above 1095, which keeps intact the near term test and follow through to 1112. A breakout would warrant increasing investment allocation to the buy side with 1166.36 as primary mid-term resistance. Change support to 1044.80 from 1025.19.  (Wednesday Nov 11 | post #1)

Business News

Dartline™ First Look - morning directional planner

November 10, 2009, 7:00 am. ... The Standard & Poor's 500 index futures are down 2.00 to 1089.60, as Britain's FTSE 100 added 0.3 percent, Germany's DAX was up 0.1 percent and France's CAC-40 down 0.2 percent. Meanwhile, Asia's rally ran out of momentum toward the end of the session, although it marked the region's third straight advance. Oil and gold prices softened, while the dollar slipped against the yen. Investors were cheered by an overnight surge in the U.S., where the Dow Jones rocketed 2 percent Monday to its best finish since Oct. 3, 2008. Also boosting traders' moods in Asia was news the Group of 20 major countries will keep economic stimulus measures in place, as well as relatively healthy earnings reports at Japanese companies, analysts said. Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong, said more signs of trouble for the global economy, including rising unemployment in the U.S., were nevertheless assuring investors that existing loose-money policies would continue. "It is a matter of twisted logic," he said. "They forget the fact that the economy is lousy and we are still in a recession." Japan's Nikkei stock average added 61.74 points, or 0.6 percent, to close at 9,870.73, and Hong Kong's Hang Seng edged up 0.3 percent to 22,268.16, though traded well of the day's highs. South Korea's markets gained 0.4 percent to 1,582.30. Shares were also higher in mainland China, Australia, Taiwan and the Philippines. But India's market fell 0.4 percent. ... Oil prices drifted below $79 in Asia, with benchmark crude for December delivery down 83 cents to $78.60. The contract rose $2 overnight. In gold, prices slipped $1.6, or about 0.2 percent, to $1,099.8 an ounce. The dollar was trading at 89.72 yen, down from 89.95 yen. The euro edged lower to $1.4981. ... Important test likely in the near term 1095 - 1112 trading range for Standard & Poor's 500 index. A breakout would warrant increasing investment allocation to the buy side with 1166.36 as primary mid-term resistance. Continue to use 1025.19 as support. Trade both sides of the market, taking profits, reducing laggards and remain committed with a upside bias.  (Tuesday Nov 10 | post #1)

Business News

Dartline™ First Look

November 9, 2009, 7:00 am ... The Standard & Poor's 500 index futures up 11.00 to 1077.20, as Group of 20 agreed to maintain their stimulus measures in the wake of weak U.S. employment figures. At a meeting in Scotland, the countries' finance ministers pledged to "continue to provide support for the economy until the recovery is assured" after U.S. jobs figures Friday showed unemployment at a 26-year high of 10.2 percent. Asset markets have taken comfort from the continued coordinated pro-growth plans of the G-20, with equity markets remaining supportive with worldwide FREE MONEY SCHEMES. ... In Europe, the FTSE 100 index of leading British shares was up 61.21 points, or 1.2 percent, at 5,203.93 while Germany's DAX rose 78.58 points, or 1.4 percent, at 5,566.83. The CAC-40 in France was 43.84 points, or 1.2 percent, higher at 3,751.13. However, the dollar has continued to fall as the finance ministers steered clear of any attempt to talk up the U.S. currency. Comments from the International Monetary Fund that the dollar was still "on the strong side" in terms of its trade-weighted basis helped fan the dollar selling Monday, particularly against the euro. While the dollar may be weak against the euro, it is considered to be overvalued against the Chinese yuan. By midmorning London time, the euro was 0.7 percent higher at $1.4994 while the dollar was 0.1 percent lower at 89.88 yen. Indeed, the market took the IMF's comments as a green light to continue with the broader dollar bearish trade. ... This week, attention turns towards the U.S. consumer with many leading retailers, such as Wal-Mart Stores Inc. (WMT) - last $51.25, Abercrombie & Fitch Co. (ANF) - last $35.01, Macy's Inc. (M) - last $19.18 and JC Penney Inc. (JCP) - last $30.52, reporting third quarter earnings. Without the help of the consumer, which accounts for around for 70 percent of the U.S. economy, any global economic recovery will be modest. The rise in U.S. unemployment is worrying for the retail sector -- the results this week may be satisfactory, but what of the outlook? ... Earlier in Asia, Hong Kong's Hang Seng index rose 1.7 percent to 22,207.55, and Japan's Nikkei stock average edged up 0.2 percent to 9,823.90. Benchmarks in mainland China, South Korea, Taiwan, Singapore, Australia and New Zealand also advanced. ... Oil prices shot higher as Hurricane Ida threatened oil installations in the Gulf of Mexico. Benchmark crude for December delivery was up $1.24 at $78.67; the contract fell $2.19 on Friday. ... As stated, in the near term 1095 - 1112 range remains first test to higher values for Standard & Poor's 500 index. Continue to use 1166.36 as primary mid-term resistance and support at 1025.19. Trade both sides of market, taking profits, reducing laggards and remain committed, but defensive. An end of year rally is a distinct possibility but what concerns traders is unemployment and the performance of the retail sector as we head towards Christmas.  (Monday Nov 9 | post #1)

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DARTLINE - Closing Thoughts

October 19, 2009, 4:00 pm ... Closing Thoughts ... The Standard & Poor's 500 index closed up 10.22 (0.94%) to 1097.90, as benchmark crude for November delivery rose $1.08 to settle at $79.61 on the New York Mercantile Exchange. The contract added 95 cents to settle at $78.53 on Friday. Continual dollar weakness and high hopes for increase demand equals trader confidence. Because oil is bought and sold in dollars, crude essentially becomes cheaper for global traders. Last week, crude broke out of a five-month trading range between $65 and $75 a barrel on a weakening U.S. dollar and expectations that oil demand will eventually recover as the global economy grows next year. A growing economy increases demand for energy. Indeed, the gains were overwhelmingly driven by financials and market optimism rather than fundamentals. ... Underreported: The National Association of Home Builders said this month's housing market index, which tracks industry confidence, slipped by one point to 18, the first dip since June when the reading fell to 15. Builders also are feeling less positive about the likelihood of sales between now and the next six months and said home-shopper foot traffic has softened since September. The dimmed outlook comes as the federal tax credit that covers 10 percent of a home price up to $8,000 for first-time buyers is set to expire. To qualify, homebuyers must complete their transactions by Nov. 30. "It would be virtually impossible at this point to complete a new home sale in time to take advantage of that buyer incentive," said David Crowe, the NAHB's chief economist. The builders' trade association is lobbying the Obama administration to support a 12-month extension. "That would amount to a very effective stimulus to housing demand and a needed boost to the overall economy," Crowe said. ... Despite job losses and other impacts from the recession, new home sales have climbed five months in a row. Several major homebuilders have posted better than expected financial results since the spring. The reading for current sales conditions slipped one point to 17. Traffic by prospective buyers fell three points to 14. The sales expectations index over the next six months fell two points to 27. The latest NAHB index reflects a survey of 493 residential developers nationwide. Index readings below 50 indicate negative sentiment about the market. The last time it was above 50 was in April 2006. ... The yield on the benchmark 10-year Treasury note fell to 3.40 percent from 3.42 percent late Friday. Traders grew hopeful that Federal Reserve policymakers would be able to withdraw some of the money supporting the economy as conditions improved. That could help prevent inflation, which has become a concern in the markets because of the huge amounts of money the government has pumped into the financial system. The New York Federal Reserve, which carries out the central bank's market operations, said in a statement that it has been preparing plans for how it could begin weaning the economy from monetary stimulus. The dollar mostly fell against other major currencies, while gold prices rose. The ICE Futures U.S. dollar index, which tracks the dollar against other major currencies, fell 0.3 percent. ... Overseas, Japan's Nikkei stock average fell 0.2 percent. Britain's FTSE 100 rose 1.8 percent, Germany's DAX index rose 1.9 percent, and France's CAC-40 advanced 1.7 percent.  (Oct 19, 2009 | post #1)

Business News

Dartline™ .... Closing Thoughts.

October 15, 2009, 4:00 pm ... Closing Thoughts ... The Standard & Poor's 500 index closed up 4.54 to 1096.56, as benchmark crude prices rose $2.40 to settle at $77.58 on Thursday. Meanwhile, the dollar hit a 52-week low as Stinky Pants Geithner reassured the Chinese of U.S. intent to maintain strong dollar policy. ... Obama Nation again declines to name China as a country that is manipulating its currency to gain unfair trade advantages. Geithner did say he has "serious concerns" about a lack of flexibility in the value of China's currency against other currencies, and the country's rapid accumulation of foreign exchange reserves including U.S. dollars. The latest finding is certain to spark protests among American manufacturers who contend that China is keeping its currency at artificially low levels against the dollar to gain unfair trade advantages. The critics say the weak Chinese currency has resulted in lost U.S. jobs. The hidden agenda: Do whatever necessary to keep FREE MONEY POLICY in place to insure higher, and higher stock prices. The theory: --- Weak dollar creates more value in paper assets and the primary means to lift the economy to prosperity. ... The Labor Department said first-time claims for jobless benefits dropped to a seasonally-adjuste d 514,000 from an upwardly revised 524,000 the previous week. The fifth decline in six weeks defied economists' forecasts of a slight gain. Apparently, the decline in jobless claims shows companies are cutting fewer workers, though the drop isn't yet steep enough to signal new hiring. And the low level of inflation is holding down prices as Americans slowly regain their appetite to shop despite rising unemployment and tight credit conditions. The noise on the Street in nutshell --- "All point to an economy that is starting to grow again." ... In a separate report, the Labor Department said consumer prices rose 0.2 percent last month, matching analysts' expectations. Prices excluding the volatile energy and food categories also rose 0.2 percent. Over the past 12 months, consumer prices fell 1.3 percent, as the recession kept a lid on inflation. Excluding food and energy, prices rose 1.5 percent. The lack of inflation has given Federal Reserve policymakers the room to leave interest rates at a record low near zero since December in an effort to give the economy a boost. The absence of price pressures also has been good news for cash-strapped households, but it means no cost-of-living increase next year for the more than 57 million Americans receiving Social Security and other government benefits, the first time that's happened in over 30 years. Low inflation is consistent with the early stages of an economic recovery,even as business activity picks up. However, unemployment is still high and factories have enough spare capacity to increase output without sending prices higher.  (Oct 15, 2009 | post #1)

Business News

Dartline™ ... Closing Thoughts.

October 12, 2009, 4:05 pm ... Closing Thoughts ... The Standard & Poor's 500 closed at 1076.19 up 4.70, as the dollar has fallen steadily over the past few months, as traders, more upbeat on the economy, take money out of traditional safe-haven assets and put it to work in stocks. The ICE Futures U.S. dollar index, which tracks the dollar against other major currencies, is down 14 percent since early March. The S&P 500 index is up 58.4 percent since then. Trading was light as much of the country observed the Columbus Day holiday. No major economic reports were due and government bond markets were closed. ... Britain's FTSE 100 rose 0.9 percent, Germany's DAX index jumped 1.3 percent, and France's CAC-40 gained 1.3 percent. In Asia, Hong Kong's Hang Seng index finished down 0.9 percent. Japan's market was closed for a holiday. ... Underreported: Is China for real? Unexpectedly low projection for China's steel demand next year, a crucial factor in iron ore price talks, surprised even ArcelorMittal (MT) Chief Executive Lakshmi Mittal, the World Steel Association's outgoing chairman. China's massive measures to stimulate its economy have revived the appetite for steel in the country, which in turn prompted the global steel association to project a smaller decline in global steel demand this year than it had estimated in April. It said Monday that it now sees an 8.6% drop compared with its April outlook for a 14.1% decline. But as the measures have increased Chinese demand for steel, the picture for 2010 has weakened substantially amid concerns about industry overcapacity. China's steel demand will likely grow 19% in 2009, but growth could drop to 5% next year as support from stimulus measures wanes, the global steel group said, based on a forecast by the China Iron and Steel Association, the country's steel industry authority. Mr. Mittal said that China's low forecast for 2010 comes as a "surprise " given the economic growth for the world's third largest economy is projected at around 8% to 9% in 2010. So what's the deal? ... Noise from the Peanut Gallery: On March 9th, the Wall Street Journal ran an article titled 'Dow 5,000? There's A Case For It.' The Dow (DJI: ^DJI ) bottomed that very day at 6,440, along with the S&P 500 (SNP: ^ ^GSPC ) and Nasdaq (Nasdaq: ^IXIC ), and went on to rally for seven consecutive months. What now wise one? Maybe you should read Dartline --- we had a better idea back in March 2009?  (Oct 12, 2009 | post #1)

Business News

Alcoa posts surprise $77M US profit

October 8, 2009, 4:00 pm ... Closing Thoughts ... The Standard & Poor's 500 index closed up 7.90 to 1065.48 on a weak dollar and oil. Benchmark crude for November delivery added $2.12 to settle at $71.69 a barrel on the New York Mercantile Exchange. In London, Brent crude gained $2.57 to settle at $69.77 on the ICE Futures exchange. Traders have shrugged off supply data, with the same flair to discount stocks' fundamentals. Classic example was Alcoa Inc (AA) - last $14.35. Purportedly, AA posted its first profit after three consecutive quarterly losses, on cost savings, higher aluminum prices and a very sharp pencil. TOTAL NOISE. After clearly reviewing the footnotes and related financial statements, the so called "profit" was bogus --- created from fancy accounting tricks, i.e. deferred liabilities, mark to fancy by increasing the value of inventories and changing the way AA recognized earnings and indirect expenses, etc. ... The dollar lost more value to other major currencies as the federal government pumped money into stimulus programs. Indeed, traders need little encouragement to extend selling of dollars, while receiving 'good news" in the form of ongoing weak U.S. consumer credit and a positive Australian employment report. Look for the U.S. dollar's downside against Asian currencies being slowed by intervention, as consolidation or rallies are opportunities to establish or add to shorts. It is the latest effort by Asian monetary authorities in recent weeks to temper rallies in their currencies, which have been driven higher by speculators fleeing the U.S. dollar and placing bets that Asia will lead the global economic recovery. Indeed, a stronger Asian currencies will help to contain inflation as the region's economy gathers steam, exports will suffer, leaving countries vulnerable when fiscal stimulus measures are eventually withdrawn. As for Obama Nation --- "So what? As long as the world buys our paper, will print it in fatter rolls." And the FREE MONEY POLICIES ALLOW STOCKS TO MERRILY ROLL HIGHER. You would think that BULLSHIT doesn't role uphill?  (Oct 8, 2009 | post #1)

Top Stories

Dartline™ First Look - morning directional planner .... and Closing Thoughts.

October 6, 2009, 4:00 pm ... Closing Thoughts - The Standard & Poor's 500 index closed up 14.26 to 1054.72, on Australia's decision to raise interest rates that caused the U.S. dollar to weaken further, which, in turn, raised commodity prices. Stock traders cheered the drop in the dollar because it boosts corporate profits by making U.S. goods cheaper to overseas buyers, while bond prices slipped, sending the yield on the benchmark 10-year Treasury note up to 3.26 percent from 3.23 percent late Monday. ... Energy and materials stocks jumped as oil rose and gold reached a record high. Indeed, traders bought paper in a show of confidence came as Australia became the first major country to adjust creditor. HOPE IS NOT AN INVESTMENT STRATEGY, BUT YOU CANNOT FIGHT THE TAPE. ... The upbeat tone among traders is a departure from recent weeks when disappointing reports on unemployment, manufacturing and consumer sentiment gave stocks their first back-to-back weekly drops since July. Traders seem inclined right now to grab hold of any good news they hear, discount the truth, while sentiment creates its own momentum. ... Crude oil rose 47 cents to settle at $70.88 per barrel on the New York Mercantile Exchange, while gold rose above $1,040 an ounce.  (Oct 6, 2009 | post #1)

Business News

Bisness Talk

October 5, 2009, 4:00 pm ... Closing Thoughts The Standard & Poor's 500 index closed up 15.25 to 1040.46, on financial stocks led the gains after Goldman Sachs raised its rating on large banks. Clearly, the Goldman Sachs report was taken directly from an idea presented by Dartline on September 28, 2009, to wit: Watch for more accounting tricks to pump up bank earnings for the coming quarter: Bankers will write ups 'toxic' asset to the new accounting standard --- mark to fantasy. The recent rally in the markets for "toxic" securities will offer a major boost to US banks' third-quarter earnings. Indeed, bankers will take advantages of it by booking gains on assets that caused them billions of dollars in losses during the crisis. The "engineered " rise in prices of mortgage-backed securities and other formerly battered debt gives banks the first big chance to "write up" some of the value of these distressed assets. In the past three months, the Markit ABX index, which tracks securities backed by home loans such as subprime mortgages issued to borrowers with weak credit, has gained more than 30%, as traders rediscovered their risk appetite and the US government flooded the debt markets with liquidity. The extent of the write-ups will benefit CBSH, JPM, WABC, HOMB, GE, BAC, ZION, C, BK, EWBC, FFIC, IBKC, RF, CTBI, CSGP, USB, WSBC, COF, CS, FITB, GRNB, LFFN, FFCH, FMER, NBBC. At very least, Goldman should have referenced BTD as the source. ... The Institute for Supply Management said its service index rose to 50.9 in September from 48.4 in August. Experts expected a reading of 50, the dividing line between growth and contraction. The index hadn't grown since August 2008. Thomas J. Lee, chief U.S. equity strategist at J.P. Morgan, said the improvement in the service index is encouraging because it could help boost confidence in the economy, a key element of a sustainable recovery. "We really have to see the animal spirits kick in in the next six months, which is confidence in both businesses and consumers," he said. TOTAL NOISE. The report is misleading. The gain was a one time improvement on recalculating services related to indirect advertising. If excluding the "special item" it would below last month to 47.9, suggesting a clear contraction of services and weakening economy. ... Benchmark crude for November delivery gained 46 cents to settle at $70.41 on the New York Mercantile Exchange. "It still recognizes the favorable vibes that it's getting from the stock market, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. Weak economic data weighed on crude prices last week. The U.S. reported worse than expected manufacturing and jobs numbers, with the unemployment rate rising to 9.8 percent in September, the highest since 1983. Apparently, traders are going on the perception of improving fundamentals?  (Oct 5, 2009 | post #2)

Business News

G.M. to Close Saturn After Penske Pulls Out of Deal

October 1, 2009, 4:00 pm ... Closing Thoughts The Standard & Poor's 500 index closed off 27.28 to 1029.80, and below secondary support at 1033. For the past two week Dartline suggested -- A breakdown below 1033 would trigger a mid-level correction to 995.20. Now that the event occurred, consider reducing all long positions and contra-plays by 50 percent and attempt to sell into a "dead cat" bounce tomorrow. The primary catalyst for the drop was the consumer not buying durables --- General Motors Co. and Chrysler Group LLC posted the biggest slowdowns during the month. The September slump for car and truck makers follows a heady summer. Automakers got a big lift in July and August from clunkers, which spurred sales of nearly 700,000 new vehicles. The government program's big discounts lured in many customers who otherwise would have waited until later in the year to walk into dealerships. Now automakers are starting to feel the effect. GM's sales plunged 45 percent to 155,679 vehicles in September, compared with a year earlier. Chrysler sold only 62,197 vehicles last month, down 42 percent. As suggested, the Cash for Clunkers scheme is going more damage than necessary. Even GM blamed its sales decline on the clunkers program pulling buyers into July and August, weak consumer confidence and low inventory levels during September before production increases could replenish stocks. ... Japan's Toyota Motor Corp. said sales fell 13 percent while Nissan Motor Co. said its sales fell 7 percent. Honda's sales fell 23.3 percent to 77,229. ... Ford Motor Co. (F) - last $6.97 had the smallest decline among major manufacturers, falling 5.1 percent to 114,241, but the decline followed two straight months of rising sales. Ford's sales fell 37.2 percent from August. Two of Ford's vehicles -- the Focus and Escape -- were top sellers in the clunkers program. But now, with clunkers done, sales of the those vehicles posted steep declines. The fuel-efficent Focus fell 64.1 percent between August and September. The Escape crossover declined 58.5 percent. ... Indeed, October is traditionally a slow month for sales. On top of that, shoppers are guarding their wallets, worried about holding onto their jobs. Now the question is whether dealers can really lure them back and help the industry recover for the remainder of the year. If not, the "green shoots" claimed by Helicopter Bernanke would be dead on arrival. ... The Labor Department said that initial claims for unemployment insurance rose to a seasonally adjusted 551,000 from 534,000 in the previous week. The increase comes after three weeks of declines. Weekly claims have been trending down since the spring, but the decline has been painfully slow. The four-week average, which shoots out fluctuations, dropped to 548,000, about 110,000 below its peak in early April. Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers. Many economists say initial claims below 400,000 would be a signal that employers are adding to the net total of jobs. ... The dollar mostly rose against other major currencies, while gold slid. Light, sweet crude rose 21 cents to settle at $70.82 a barrel on the New York Mercantile Exchange.  (Oct 1, 2009 | post #1)

Business News

Dartline™ ... Closing Thoughts.

September 30, 2009, 4:00 am ... Closing Thoughts ... The Standard & Poor's 500 index closed down 3.53 to 1057.08, on consensus that the economic recovery will be slow and painful. According to Dartline's analysis, the economy will grow at 2.1 percent in the just-started October-December quarter. If accurate, it would mark a slowing from the projected growth of at least 3 percent that many experts think occurred in the just-ended third quarter. Indeed, the economy shrank at a rate of 0.7 percent in the April-June period, the Commerce Department said Wednesday. The third quarter's performance is expected to mark a turning point for the economy, providing the strongest signal yet that the worst recession since the 1930s is over. Many experts say consumers likely came back to life in the third quarter, boosting spending at around a 2 percent pace. If they are right, it would be the strongest showing since the first quarter of 2007, before the recession started. Dartline data does not support the rosy conclusion. Consumer spending, which supplies about 70 percent of economic activity, would be show negative growth. The consumer remain pessimistic about the holiday shopping season,as wages and salaries are down, meaning people don't have the means to spend. Wages in the second quarter fell 4.7 percent from the same quarter last year, the government said Wednesday. Both businesses and consumers are still having trouble getting credit -- the oxygen of the economy, analysts said. Such forces are "likely to constrain the speed of recovery," Donald Kohn, the Federal Reserve's vice chairman warned in a speech Wednesday. ... Higher auto sales, boosted by the government's now-ended Cash for Clunkers program, was a major factor behind the third quarter's expected improvement. People were offered rebates of up to $4,500 to buy new fuel-efficient cars and trade in old gas guzzlers. Such scheme are worthless in the longer term since they artificially create demand. Helicopter Bernanke said in early September "the recession, which started in December 2007, was very likely over." But he warned that pain will persist -- especially for the nearly 15 million unemployed Americans. Because the recovery is expected to slow to a more plodding pace in coming months, the nation's unemployment rate -- now at a 26-year high of 9.7 percent -- is expected top 12 percent next year. Unless the FREE MONEY POLICIES extend to the consumer with a rebate check of $5,000 each, the recession will not go away in the foreseeable future. The economy has now contracted for four straight quarters for the first time on records dating to 1947. Economic activity shrank 3.8 percent since the second quarter of last year, marking the worst recession since the 1930s. "We all ardently want to believe the nation is on the economic comeback trail," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech in Mobile, Ala. "In thinking about the recovery, I recommend for now a mind set of measured optimism." Hope is not an investment strategy. ... The Chicago Purchasing Managers Index fell to 46.1 in September rather than rising to the 52 that expert expected. The index, considered a precursor to the national Institute for Supply Management index to be released on Thursday, pointed to a Midwestern manufacturing industry than is weaker than had been expected. ... Traders are waiting to see whether there will be a significant drop in the number of jobs cut nationwide during September. Investors also are concerned about the unemployment rate. Economists predict the unemployment rate rose to 9.8 percent in September from 9.7 percent a month earlier. A snapshot Wednesday on employment showed some modest improvement in the labor market. The ADP National Employment Report found that private sector employment fell by 254,000 in September following a revised loss of 277,000 jobs in August. It was the fewest jobs lost since July 2008.  (Sep 30, 2009 | post #1)

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Dartline™ First Look - morning directional planner

September 30, 2009, 7:00 am ... The Standard & Poor's 500 index futures up 4.40 to 1059.20, as benchmark crude for November delivery was up 42 cents at $67.13 in electronic trading on the New York Mercantile Exchange after falling 13 cents yesterday. Oil support above $65 remains significant and indicates that the weak U.S. dollars controls its destiny and that of equities. Indeed, fundamentals suggest otherwise --- U.S. crude inventories for a third week, which suggests consumer demand remains weak. Crude stocks increased 2.8 million barrels while analysts had expected a jump of 2.1 million barrels. ... Traders wait for the release of the government's September jobs report later this week, they may get a sense of what those numbers will show when the ADP National Employment Report, a private sector jobs tally, is released. They will also get a measure the Commerce Department's latest reading on second-quarter GDP. Both reports come out before trading begins. ... Use 1067.40 as primary resistance for the Standard & Poor's 500 index and support at 1033.37. Maintain the narrow range for a better indicator to near term direction.  (Sep 30, 2009 | post #1)