One thing that the Fed and President Obama haven't fixed yet is the number of new home sales…they remain depressed at 2009 levels, as shown on the graph below.
New Home Sales Still Depressed at 2009 Levels
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
“Dual Mandate” Means “Greed is Good”
That's the message I heard in today's press conference from Fed Chairman, Ben Bernanke, following the release of today's FOMC statement. As he mentioned, the current unemployment rate is above the Fed's targeted range, while inflation remains contained within the upper end of their current targeted range. Since he is, apparently, prepared to give leeway over and above the current 2% inflation rate in order to ease credit to stimulate job creation and the housing sector, I can interpret that to mean that the markets, in general, are not yet overbought…my assumption is that news should be received favourably by the stock market bulls.
By the way, it seems to me that an apparently stable stock market (i.e. proceeding in an orderly uptrend and higher than today) by the time the 2012 U.S. election is underway would not give Republicans cause to complain about the effectiveness of President Obama's policy measures during his term in office…an "offshoot benefit" of this "dual mandate" policy. So, I'll say that greed is good, particularly for the Democrats this year. While the VIX remains at low levels, the fear factor is, indeed, gone.
After-Hours Earnings Breakout in AAPL
As I'm writing this post, AAPL has broken out to make an all-time high of 468.95 in after-hours trading after releasing their latest earnings report. I last wrote about AAPL on January 9th and mentioned a couple of possible scenarios. One was a pullback to re-test November lows, and the other was a run-up by market makers into earnings.
The Daily chart below shows where tonight's price was hit…above the +2 deviation level of the upward-trending regression channel which began at the June 2010 lows. When tomorrow's candle opens, it may re-test tonight's high before dropping. Near-term support would sit, firstly, at the +1 deviation level around 440, followed by this month's Volume Profile POC (yellow horizontal line) at 422.32…the next level would lie at the channel "mean" (currently at 412.35), and, subsequently, at the 50 sma (red) at 397.15.
As I mentioned in my previous post, AAPL has, so far, been unable to remain above its +1 deviation level of this channel…we'll see whether the same applies over the next days/weeks ahead, or whether it's "different this time"…with 500.00 within reach, who knows!
High Dividend Stocks vs Emerging Markets
Below are two 3-year Daily charts. The first chart is of an ETF containing high dividend-paying stocks, DVY, and the second is of the Emerging Markets ETF, EEM. Inasmuch as the Major Indices are near major resistance levels, as mentioned in my post of January 20th, I thought I'd compare these two ETFs to see where money flows over the next days/weeks. I'll say that DVY represents value stocks and that EEM represents the more risky, volatile growth stocks.
DVY made a 3-year high on January 3rd of this year and is currently holding above last month's Volume Profile POC (horizontal red line) at 52.81. It has been in a daily uptrend since its December lows. If traders are interested in purchasing additional value stocks, I'd expect to see DVY break and hold above its high of 54.63.
European Consumer Confidence Has Not Improved
European Confidence data released today shows that consumer confidence remains depressed at 2008/09 levels, well below zero, as shown on the graph below. This low level of consumer spending is fact in spite of the rosy picture that markets are attempting to paint and is well below the average recorded for the past nine years.
