YRC Worldwide and the Transportation industry...

YRC Worldwide came out with their earnings today and it was a disappointment. In their 8K released today, they cited lower volume in shipping client orders and competition as reasons for the downward guidance. What is very important note here is that YRC Worldwide's CEO said that their clients have made dramatic changes to their inventories. Hint hint... Retail companies aren't seeing the demand for their goods! Why would they stock more inventory when the people are not buying the goods. Could this be an early detection that the American consumer is done buying discretionary goods. Even though the most recent home sales for Feb are above expectations, is it now a concern that people will stop purchasing items due to less mortgage refinancing? Time will only tell and stories like this will have to be more consistent. Yet the warning signs are there....  ¶ 11:18:00 AM 0 comments

  Producer Price Index..... Hello all,
Been busy but I'm back. Today the PPI number was released and it is suggesting that producers are able to produce goods at a fairly cheaper rate than the last time it was reported. This is full PPI number. Yet, most smart people on Wall St. focus on the core number. Excluding food and energy, the number was .1 percent better month over month and .2 worse year of year. Though most people perdicted a .1% PPI number, the actually PPI core number came in at .3 compared to .4 last month (returning to the status quo of inflationary concerns).

What does this mean? It means that the long term trend is still intact concerning the inflation and its affects upon the well being of our national economy. Yet, I would like to see how the PPI (not the core PPI) came in a lot better than it did. If this is a sign of weakening inflationary pressure for the short-term, some of the ideas that pop into my head are:

1) While the markets might react very positive to the PPI number, we must see a consistent improvement in the PPI number as well as CPI number to confirm that inflationary trends are not causing issues for the economy.

2) If this trend continues, corporate earnings might be adjusted to the upside. Why? Because we can assume that if the CPI number remains at it's current level and PPI is continuing to come down, companies are producing cheaper goods while making a nice profit selling their goods.

3) We must see how the Fed will react considering these numbers. Bernanke spoke last night in NY and described that the US Fed policy should reflect more of the stimuli coming from the global landscape rather than an internal reflection. What does this mean? Bernanke is guiding the economy to be flexible and adapt more to the emerging and interdependent global marketplace.

While I am still a believer that this market might turn to the downside in the short-term, I will be watching how these numbers will affect the market. It might just be a determining factor for the bulls to justify a rally. If this rally does happen, be prepared to see short interest covering go into full swing. But only time will tell and I feel that we must trend a little lower after a 3 year rally to really break out to the upside...  ¶ 9:23:00 AM 1 comments

  Politics make up the day... There have been many developments on the international political spectrum today... and the market finished higher?!?!

Mudslinging was in full force today as Iran responded to the West's action on referring the case to the United Nations Security Council. Iran stated that the West, and in particular the US, would face "harm and pain" upon requesting the IAEA case be brought to the UN for possible sanctions. The US is suggesting that Iran has enough highly enriched uranium gas that could be developed into 10 nuclear warheads. Iran is keeping to its story of nuclear fuel for peaceful, electrical purposes. The IAEA suggests that if Iran doesn't comply with reinstating inspection standards within 30 days, then the case will be moved to the UN. Also, Israel said that if the UN is not successful in deterring Iran, they will move unilaterally to protect its citizens.

What to make of all this? Well, this definitely does not look good for the markets in the short-medium term. Although the market did end higher today, the political situation should be at the fore-front of "smart money" thinking.  ¶ 7:30:00 PM 0 comments

  Consumer Staple Sector rally is possible
The Consumer Staples Sector is in a prime situation to capitalize on a market downturn. Usually, this sector is a safehaven for smart money when the market is headed lower. As we can see from this chart above, the sector is in a tight trading range and might rally if conditions permit such a move. An inverted yield curve, slowing productivity, and geopolitical concerns are driving forces for the possible scenario.

As you view the chart, you will see the white lines which are indicated as Fibonacci Time Zones (FTZ). FTZ's are an valuable tool to gage market timing and patterns. It follows the principle set forth by Leonaardo Fibonacci, recognizing the fact that there is a proportional sequence of numbers in nature as well as in finance. More of this topic can be found at investopedia in the link section to the right.

At each line or zone, we can see that the underlying vehicle (the Staples Sector in this case) has made a sudden turn, either higher or lower. I have noted that the final zone, March 18, has not been realized yet. Time will verify if a move should occur at this zone and market conditions will dictate which way the move will be. Keep an eye on 244 and 247 as resistance points for a rally.  ¶ 3:42:00 PM 0 comments

  S&P 500 Communications Sector

The S&P 500 Communication Sector is making multi-year highs. Part of this reason is due to the recent AT&T/BellSouth deal, which is driving the rally forward today. We should see the first resistance level around the 136.00 level. If we push past that, we might be heading higher. Yet, 21 day slow stochastics are pointing to an overbought situation. Continue to watch if the market gets some momentum, but as it stands now the markets look like they are not finding any footing...  ¶ 7:13:00 PM 0 comments