Charts Show Bear Wedges Form in SPX, VIX Major indices look like market could see large downturn

Two years ago the S&P 500 Index began a monster rally that saw it surge over 100% to the February 2011 highs. Options trading investors are now staring at a rising wall of risk while corporate credit spreads remain bullish, corporations are able to expand margins and produce increasing profits, and Federal Reserve Chairman Ben Bernanke has declared that there are no inflationary concerns.

Right now investors have to weigh rising oil prices, geopolitical conflict in the Middle East, the threat of higher interest rates and inflation against the bullish backdrop. The price action in the broader market place is talking, but we have to listen with an open mind. There are two key price levels that are obvious when we look at a daily chart of the CBOE S&P 500 Index Options (CBOE: SPX). First of all, the SPX at the1331-1332 price level is acting as major resistance and holding the bulls in check. Should this level be breached to the upside on a daily close, we could see prices extend higher to test recent highs. The chart below illustrates the key upside level around 1331-1332.

S&P Index Options (CBOE: SPX)

However, it is important to note the bearish wedge forming on the SPX daily chart. If price can push below the recent lows around 1294, we should see an extension lower to the 1260-1280 area before support comes back into focus. If we were to test the 1260-1280 price level, it is hard to say where price action could go. We could see an extension higher which pushes to higher highs or we could rollover and test the 1250 price level below. I will wait until we get confirmation in either direction before making any major assessment, but for right now those are the key levels for traders to watch. The chart below illustrates the bearish wedge located on the SPX daily chart.

S&P 500 Index Options (CBOE: SPX)

My bias remains to the downside due to what I am seeing in the CBOE Volatility Index (CBOE: VIX) and what I refer to as the “usual suspects”. The usual suspects include small caps represented by iShares Russell 2000 Index (NYSE: IWM), transports, represented by iShares Dow Jones Transport (NYSE: IYT), and the financials represented by Financial Select Sector (NYSE: XLF). I look at all of these metrics daily. I also take into consideration other analysis metrics such as market internals and chart formations, but the crux of my daily analysis is derived from the analysis of the VIX and the suspects.

Take for example the VIX daily chart. It is trending higher and is well above key moving averages. I believe that in the future we will see the VIX test the 200 period moving average and potentially breakout. The test I am sure about, the breakout remains to be seen. The key levels on the VIX are shown below:

CBOE Volatility Index (CBOE: VIX)

IWM has a similar trading pattern as the S&P 500 index but at current price levels it is well off of the recent highs. It is also building a bearish wedge and I will be watching it closely to see which way it breaks. If IWM breaks down ahead of the SPX it is likely that the SPX will follow suit. The transports (IYT) have gotten banged up the worst as the rise in oil price negatively impacts the entire sector. Transports are also trading well below recent highs and also have a bearish wedge formed on the daily chart.

Interestingly enough the U.S. Dollar Index futures appear to have formed a short/long term bottom on the daily chart. It is unknown whether this is just a bounce to work off oversold conditions or the beginning of a longer term move higher. The primary point for traders to consider is that a rising dollar could place additional selling pressure on the S&P 500, crude oil, and precious metals.

By now I’m guessing most readers are starting to get the theme here. We have bearish wedges forming on key indices; however that does not mean that they will follow through to the downside. We could see a failure and a breakout higher just as easily as a bearish breakdown, thus the reason why the key levels are so important on the S&P 500. I am going to wait for a clear breakout/breakdown and will accept directional risk on the broad indices at that point. Until then, I am not going to get involved in the daily chop.

What Does Dr. Copper Have To Say?

TOP 5 CHARTS OF THE WEEK

By Econgrapher

This week the focus is on China and monetary policy. First up we look at China’s vital stats for February: inflation, retail sales, industrial production, and international trade. Some of the data is a little distorted due to the holiday season in China, but there are still some interesting insights. Finally we check out some of the seven interest rate changes that various central banks around the world announced over the past week.

1. China Inflation
China reported inflation of 4.9% in February, the same figure as in January. The figure was largely driven by food price inflation, with the prices of foodstuffs rising 11.0% but with non-foodstuffs also showing signs of life, rising 2.3% year on year. The other key category was housing, which rose 6.1%, showing the Chinese housing market is still chugging along, with a mind boggling rate of new buildings under way e.g. the government’s 10 million unit social housing program. Overall, food prices are still the key driver, so it will be interesting to see whether food prices may normalize following some of the short-term supply disruptions. But there are also significant wages, capacity, and aggregate demand aspects to inflation, so it’s likely that the People’s Bank of China has some further tightening up its sleeve.

2. China Retail Sales
February retail sales slumped as expected due to the seasonal effect of the Chinese new year holiday period. However the February figure alone was higher than September 2010 (1.38 trillion yuan vs 1.35 trillion), so the upward trajectory is still firmly entrenched. And it’s unsurprising, over the past 5 years urban per capita incomes have doubled to about 20,000 yuan in the 2010 year. The only thing to watch though is the rate of growth has tapered off a bit – this will be a key indicator to monitor over the next few months.

3. China Industrial Production
China recorded growth in industrial production of 14.9% year on year in February (compared to 12.8% growth in February 2010). In terms of sectors the fastest growing were General Purpose Machinery (22.8%), and Nonmetal Mineral Products (18.9%), while the slowest growing sectors were Textiles (8.5%), and Transport Equipment (12.8%). So the message was, basically China’s industrial engine is still running strong, and the PMI figures have flagged this. February PMI was about 52 on both measures – indicating expansion. Industrial production is likely to continue to find strength from export demand, property construction demand, and government infrastructure spending demand. But to be sure, over time industrial production will increasingly find strength from domestic demand e.g. in the case of car sales – with massive sales of automobiles in China.

4. China International Trade
On international trade, China reported lower volumes and a -$7.3 billion deficit as seasonal factors bit into trade volumes. However, looking through the seasonal factors, on a rolling quarterly basis, and compared to last year, here’s how it would stack up: in the 3 months to February 2010 exports were $400m vs $335m, imports were $390m vs $295m, and the surplus was $12.5m vs $40m. So the volumes are definitely up, but there is some tangible reduction in the trade surplus. Of course some are pointing to this alleviating some of the Yuan debate in the short term, but the PBOC is already starting to acknowledge the role of the Yuan in managing inflation, so watch this space.

5. Monetary Policy Review
On monetary policy, those that raised interest rates included: Thailand +25bps, Kazakhstan +50bps, Korea +25bps, Serbia +25bps, and Peru +25bps. Meanwhile New Zealand -50bps and Trinidad & Tobago -25bps reduced their main policy rates. The rate cuts were the exception, and New Zealand even more of an exception, as the move was motivated as a response to the earthquake. For the most part though the theme was a collective desire to anchor inflation expectations and avoid the second round effects of rising commodity prices. The UK notably didn’t do anything, in contrast to the ECB – which suggested rates could rise as early as April. But then we wont be able to know their rationale until the Bank of England meeting minutes come out in a week or so.

Summary

So we saw inflation remaining high in China, which affirms suspicions around a swath of fundamentals that point to broad-based inflationary pressures. On retail sales, consumer spending maintained upward momentum overall, despite the seasonal effects of holidays. Likewise, industrial production showed no let-up, with a variety of factors supporting further strength in China’s industrial engine over the medium term. As for international trade, a few quirks saw China report a trade deficit in February, but that’s likely to quickly reverse, but there are some interesting trends unfolding. Looking more broadly at the world, the main theme of monetary policy decisions over the past week was the old chestnut of emerging market inflation, with banks looking to preempt second round effects of rising commodity prices. Question is, when’s the PBOC’s next move?

Time to Bet on a RISING U.S. Dollar?

Dr. Steve Sjuggerud writes: You hear it over and over...

"Because of all the debts and the deficits, the dollar is about to crash."

Yes, the debts and deficits will come home to roost in the long run...

But is the dollar going to crash right now? Right this second? Should you bet on it crashing tomorrow?

I say no... The dollar looks poised for a three-month rally, as I'll show you today.

Let's start with the most basic question first. When people talk about the dollar crashing, what do they mean?

Usually, they mean a trip to Europe will cost you a fortune, as an example... They mean a dollar won't buy you much outside the U.S.

By that standard, the dollar has already crashed... Goods in Europe are already 30% more expensive than the U.S. So the euro is expensive relative to the dollar. (Meanwhile, European countries have big debts and deficits, too.)

Longtime DailyWealth readers know we size up just about every investment opportunity on three factors. We look for things that are 1) cheap, 2) hated, and 3) in an uptrend.

Let's take a look...

The dollar is cheap... as I described above. The euro is expensive. You're reaching the point where Europeans can buy stuff from the States, ship it home, and sell it for a profit. This situation can't last forever.

The dollar is hated... Currency traders have bigger bets against the dollar than at any time since late 2009 – the last time the dollar bottomed and kicked off a massive rally. And our friends at SentimenTrader say investor sentiment on the U.S. dollar is more bearish than on any other commodity... a strong contrarian sign. Sentiment signals usually are good for about three months.

The uptrend? It's not here yet, but it's close... The dollar has strengthened this month. The euro topped out on March 4 at $1.40, and it's already down to $1.38. Our True Wealth Systems computers tell us the dollar only needs to rise 1.5% for it to be in an uptrend – in "buy" mode.

If the U.S. stays on its path of ever-increasing debts, the dollar will surely be the casualty.

But with history as our guide, the dollar has a chance to have a three-month rally... particularly once we see a real uptrend kick in. Then we'll have all three factors in "buy" mode.

If you're planning on betting against the dollar today, I urge you to be careful...

The dollar is cheap, it's more hated than it's been in years (the last time it was this hated, it started a major rally), and it might be starting a new uptrend now.

These are the conditions for a "buy," not a "sell."

While you may want to bet against the dollar, I think you'd be better off doing nothing today...

Too many people are already betting against the dollar right now, and many of those are new bets. The typical outcome in this situation is a somewhat violent move upward that knocks those new speculators out of the trade.

In short, if you want to bet against the dollar, consider waiting instead... You may get a much better opportunity in a couple months.

Good investing,

Steve

http://www.dailywealth.com

Technically Precious with Merv: Gold Reversal Ahead?

Over the past several days gold has been hitting all time highs BUT the momentum indicator was telling us that the move was on greatly diminished strength. Reversal Ahead?

GOLD :LONG TERM

From the long term stand point we are still nowhere in trouble with this bull market but things are starting to show weakness. Gold remains above its positive sloping long term moving average line. The long term momentum indicator (I use the 150 day RSI) remains in its positive zone but has now moved below its trigger line, although the trigger is still in a positive slope so this is just the very first stage of a momentum warning. The momentum indicator is well below its levels from the Nov to Dec period when gold was about at the same price level as now. The one indicator that continues to be on a tear is the volume indicator. It is still right up there at all time high levels and above its positive sloping trigger line. All in all the long term rating remains BULLISH.

INTERMEDIATE TERM

A two year bull move seems to be sputtering and having difficulty moving higher. The chart very clearly shows the topping process with the intermediate term momentum showing continued reduced strength as gold was trying for higher ground. Since the momentum indicator reached into its overbought zone way back in early Dec of 2009 the subsequent new highs have been on lower and lower momentum readings. Although we usually look at the neutral momentum line (at 50%) as the dividing line between positive and negative momentum gold seems to have established a very solid level at about the 47.5% level as the strong support level. This is the level to now watch to see if the momentum shifts to the negative side. Yes, the momentum is heading lower and one can say its trend is negative but it is still slightly inside its positive zone. With all that has been going on in the world these past several weeks one should have expected gold to be zooming into the stratosphere. The momentum indicator shows that, at this time, the strength is just not there for such move.

The other feature that jumps out at you is the long up trending channel that has trapped gold for the past two years. Remember, momentum is a warning. One would not declare the direction of the security based solely on momentum. One needs to also check the trend of the price. The price could continue on its merry way for a long time with a steadily diminished momentum reading so it’s important to check the trend also. Here, as long as gold stays inside that channel one might continue to suggest that the trend remains positive.

Having said all that I still go to my normal indicators for my final reading as to the rating for the period. Gold is still above its positive sloping intermediate term moving average line. The intermediate term momentum indicator is still in its positive zone but moving lower and has already crossed below its trigger line. The trigger has also turned to the down side. The volume indicator remains quite positive and above its positive sloping trigger line. For the intermediate term the rating remains BULLISH but starting to weaken. The short term moving average line remains above the intermediate term line for confirmation of this rating.

SHORT TERM

The short term is showing a little more weakness than the other time periods but it’s not yet in the bear category. Trend changes are usually (but not always) noted in the short term first. Here, the price of gold did drop below its short term moving average line on Thursday and the line did turn negative just a wee bit but on Friday gold was back just above its moving average line and the moving average turned back just a wee bit to the up side. We are in an area that any up and down move by the price of gold could change the indicators so unless we get a trend we may be in for more volatility on a daily basis. The momentum indicator remains just above its neutral line in the positive zone. It also is moving lower and is below its negative sloping trigger line. As for the daily volume action, it is somewhat questionable as to its message. Friday the daily volume was above its average volume of the past 15 days for a good sign as the day was an up day in the gold price. However, the day before the volume was a little bit higher and also above its 15 day value but that was a down day for the gold price. So, no real message that you can grab on to. All in all, as of the Friday close the short term rating is BULLISH but very iffy. The very short term moving average line is just above the short term line for confirmation of this bull BUT it is moving lower fast and could very easily cross below the short term line on another down gold day.

As for the immediate direction of least resistance, I’ll go with the down side, although there may still be another day or so of upside movement. The topping process seems to have been completed with the Stochastic Oscillator in its negative zone and still in a downward drift. The very short term moving average line remains pointing downward and the trend is still towards lower levels despite Friday’s advance.

SILVER

Silver remains in a short term up trending channel since late Jan. It seems to want to break to the down side but still remains in the channel. The recent move into new highs was with slightly diminished momentum but not to the point of being a concern yet. Although still out performing gold it does appear that silver is getting ready for some sort of reaction to the bull move and new commitments in this area should be carefully reviewed, as they should always be. All three time periods are still BULLISH as far as the ratings go.

PRECIOUS METAL STOCKS

It has not been a good week for precious metal stocks, as the Table below indicates. Dangerous times may be ahead for investors and speculators.

Merv’s Precious Metals Indices Table

Well, that’s it for this week. Comments are always welcome and should be addressed to mervburak@gmail.com.

Asian Stocks, U.S. Futures Tumble on Japan Quake; Gold Gains

The Nikkei 225 Stock Average tumbled the most in two years, leading declines in Asian stocks, while U.S. equity index futures and oil fell after Japan’s biggest earthquake on record. Gold rose and the yen weakened.

The Nikkei 225 plunged 4.3 percent and the MSCI Asia Pacific Index was 2.1 percent lower at 132.25 as of 10:20 a.m. in Tokyo. Standard & Poor’s 500 Index futures fell 0.4 percent. Crude retreated for a fifth day in New York, while gold rose 0.7 percent to $1,427.85 an ounce. The yen slipped against 13 of 16 major currencies. The cost of protecting Japan’s sovereign and corporate bonds from non-payment surged.

Prime Minister Naoto Kan said Japan is facing its worst crisis since the end of World War II, as local media said the death toll from the March 11 earthquake and the ensuing tsunami may top 10,000. The Bank of Japan today injected 7 trillion yen ($86 billion) into the financial system.

“I expect a weaker tone to pervade Asian markets,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “Uncertainty about the ultimate impact of Friday’s earthquake and tsunami are likely to see investors adopt a cautious stance.”

More than six stocks dropped for each that gained on MSCI’s Asia index. Tokio Marine Holdings Inc., Japan’s second-largest casualty insurer, was the biggest decliner on the Nikkei 225. Paladin Energy Ltd., a uranium producer based in Perth, dropped 13 percent.

Bond Risk

The temblor and subsequent tsunami may have killed 10,000 people in Miyagi prefecture north of Tokyo, national broadcaster NHK reported, citing local police. The official toll reached 1,597, with 1,481 more missing and 1,683 injured, the National Police Agency said.

Credit-default swaps linked to Japanese government debt climbed 7.5 basis points to 86 basis points, according to Citigroup Inc. That’s the biggest increase since November and the highest level in about eight weeks, CMA prices show. The Markit iTraxx Japan index surged 21.5 basis points to 119 basis points, the largest gain in almost 10 months, according to Deutsche Bank AG and CMA in New York.

The Japanese yen retreated from a four-month high against the dollar amid speculation policy makers will sell the currency to aid exporters. The government sold 2.12 trillion yen in September in its first intervention in the foreign-exchange market since 2004. The yen reached 80.22 against the dollar on Nov. 1, the strongest since April 1995, when it reached a postwar record of 79.75.

The yen touched 80.62, the strongest since Nov. 9, before falling to 82.17 per dollar from 81.84 in New York last week. It declined 0.6 percent to 114.45 per euro.

Oil for April delivery fell 1.2 percent to $99.98 a barrel on concern Japan’s quake will limit demand in the world’s third- largest economy and crude user. Gold for immediate delivery climbed for a second day.

US Economy on Steroids: Poverty Levels Equal to the 1930s

Bob Chapman

Global Research

Wall Street at least temporarily relieved of the burden of having to buy Treasuries & Agency bonds, is looking at the jump in oil prices as nothing more than an irritant to their plans for a higher market. Bill Dudley of the NY Fed, a most powerful member, continues to make a vigorous defense of Federal Reserve policies. He, and a few other Fed participants, and Chairman Bernanke believe liquidity is the key for solving problems. That is not only in the realm of debt purchases, but in the relief it brings to Wall Street and banking. It relieves them of the responsibility of having to make those purchases to assist the Fed. Those funds can then be directed toward other investments, such as la liquidity-driven stock market rally. The correlation between the movements in the Fed balance sheet and market can be traced to 85% of market movement for the past 2-1/2 years. An interesting result of Fed manipulative policy is low level of short interest during this period. Most of the professional market players knew the market was headed higher, because they knew such overwhelming liquidity injections would have to take it higher.

They also knew that the Fed had to keep the wealth affect going, because the market was the only generator of wealth left, as the bond market bubble would be broken eventually. The Fed has engineered a market recovery and Wall Street knew what they were up too. QE1 saved the financial community and QE2 saved the government debt structure at least temporarily. The wealth effect has been saved temporarily as well. The public has been left with a pile of crumbs as they struggle for survival. Unemployment has improved ever so slightly and now we have a new problem to increase the suffering and that is much higher oil prices.
The largess sponsored by the privately owned Federal Reserve has still not been enough to spur adequate growth and the effects of Fed monetary creation and deficit spending have not been enough to produce higher economic growth and now the economy has to deal with rampant inflation, the result of QE1 and QE2, plus stimulus, of what will turn out to be a subsidy of some $5 trillion, plus rocketing oil prices. It then is not surprising that we are seeing downward revisions of analysts in 3rd and 4th quarter growth estimates. We still are seeing declines in home prices and sales, as well as in orders and shipments. All this cannot help but negatively affect consumer spending. At the same time the states and municipalities are severely cutting back.
The inventory overhang, higher interest rates and lack of funds for down payments have again trapped the housing market. As we predicted long ago, before anyone else, that the downside in housing has at least two years to go, and perhaps four years, before a bottom is found. Then how long will it bump along the bottom? Perhaps eight years or 20 years, or more. Even new homes are facing lower appraisals.
There is lack of job creation and debt control. The Republicans want to cut $61 billion from the budget deficit, which is a pittance and an insult with a deficit of $1.6 trillion. They cannot be serious, but they are. This shows you how out of touch with reality most politicians are and that they only answer to those who are paying them off, not their constituents.
There has been no impetus on job creation at a time when real unemployment is 22.4%. It is like the American worker didn’t exist. The situation at the state and municipal levels isn’t helping at all either, as cutbacks and layoffs prevail. This while food and gas prices head toward the stratosphere. As we predicted earlier, 2011 is not going to be a good year for growth at 2% to 2-1/4% at best. The stock market is not expecting this, and when it becomes evident the market will fall.
It is interesting to note that personal income rose 1% month-on-month, but as tax relief is subtracted, you remember that pork package from December don’t you, and growth would have been 0.1%. Hardly a number to write home about. As a result January spending fell 0.1% and that should continue negative. Don’t forget all that credit card debt from November and December has to be paid off. As we predicted the fist quarter should show negative spending and consumption.
The personal question we are asked is when will the Fed find out it cannot continue to create money and credit? Whether most of you realize it or not present monetary policy has been in action for 11 years, so this is nothing new. That is how long inflation has been created over those years. It shows you that central banks have major leeway and a long time line to do their dastardly deeds. The problem for these bankers is that in the end they lose every time. Historically they have extracted themselves by buying everyone in sight. When the Lombard League collapsed in 1348 they were exiled and in 1789 in France their heads were removed.
What is interesting is that in each case and there were many, the bankers knew exactly what the outcome would be, but they proceeded in spite of that. Today, the Fed is trying to stabilize inflation at about 2%. Official figures are 1.5% when in reality the figures are between 7% and 9%. There is supposed to be a sustainable recovery in jobs. That has not happened as yet with only an official reduction of 1% in the U6. Needless to say, we question those statistics in as much as government has great difficulty telling the truth. 65% to 70% of jobs are created by small and medium sized businesses and loans to these businesses have been reduced by almost 30%, hindering the ability for these companies to expand and create employment. The situation hasn’t changed.

For the most part only AAA companies have easy access to credit and percentage-wise they have cut employment most. Consumer growth has been limited by bankruptcies and unavailability of credit. 17 million jobs were created out of 26 million as a result of securitization of credit, a market that no longer exists. As a result over the past two years the economy has lost 2 million jobs. Those losses are complicated by the losses attributable to free trade, globalization, offshoring and outsourcing. Due to this trade policy the economy cannot increase output to any great degree, nor can it produce jobs. The birth/death ratio doesn’t fool any inquiring mind. It is simply bogus and the millions of jobs created under its statisticians are lies and worthless. As long as we have such a trade policy we will have to have quantitative easing indefinitely.
QE2, which we predicted in May of 2010, began in June not later unbeknownst to most professionals. The full amount of funds to be used was $900 billion not $600 billion and it remains to be seen just how much money has again been created out of thin air. The purchase of CDS and MGS, known as toxic waste was supposed to have ended, but we know some was purchased from China. We wonder just how much was purchased and where it is being hidden? The QE2 and stimulus funds will have all been spent by June, which means the second half of the year will see an economic slide, which few are expecting. That could be in part why we are finally seeing a market correction. As far as we know the Fed is holding about $1.3 trillion in Treasuries followed closely by China, which has about $1.17 trillion. Americans hold $3.3 trillion and foreigners $4.45 trillion. The inflation created by monetization of US government debt is now showing in price inflation, particularly in food. That has been aided by a flight to quality to gold and silver, but also to all commodities. That flight will continue. The market may be telling us as well that quantitative easing is going to end. If that happens the world economy will collapse. Those who want an end to QE cannot understand what they are asking for. Deflation will immediately take over sucking the entire world economy down with it. The withdrawal of liquidity will be devastating, but for sometime price inflation already in the system would prevail, but would be on a downward slope. The Fed is the director and what happens depends on what they do. The inflation caused by QE 1 and 2 and stimulus 1 and 2 cannot be contained by the Fed. It is already in the system and it will have to play itself out unless the Fed begins QE3 this fall accompanied by stimulus from Congress. Sound economic growth hasn’t existed for 11 years and it is worse now than ever. The Fed cannot hold up the economy indefinitely no matter how much liquidity they inject into the system. It is all only a holding action. We probably will get QE3 and there may be more, but in the end it is all for naught. This system has to self-destruct.
What the Fed has given Wall Street and banking, which owns the Fed, is an economy on steroids, which is not a cure but a continuing palliative. Debt and unfunded liabilities spread worldwide will end up dishonored. The Fed’s idea is to inflate the problems away, but that can only work in general terms. How do you really inflate debt away without default? Perhaps the market is beginning to realize no matter how much money and credit is injected into the system that is not going to ultimately work. The elitists are at a dead end and they are well aware of it because they deliberately created this monstrosity. Everything is in place for economic, financial, social and political failure not only in the US, but in many other countries as well. The result will negatively impact the world for sometime to come. Materialism is coming to an end. You have been warned.
In the US living standards for some 16% of the population is already at poverty levels equal to the 1930s. Can you imagine where it would be without food stamps and extended unemployment, etc. this is caused by the wages of debt, accompanied by the disparity and inequality between the rich and the poor. That 16% is a total of some 45 million Americans.

Global Research

Bob Chapman

The Coming Economic Implosion - It's a Set-Up!

The Great Depression will look like chump change compared to the economic collapse the United States is about to suffer, according to several experts. Unemployment, Civil Unrest, US Deficit, Increase Social Security, Healthcare System. This is just the tip of the iceberg.

World Market Charts

Click for a larger image

A Longer Look Back

Here is the same chart starting from the turn of 21st century. The relative over-performance of the emerging markets (Shanghai, Bombay, Hang Seng) is readily apparent. However the pattern has generally been reversing over the past few months.

Why Did America Have A 90% Income Tax Under Eisenhower? Economy

Michael Hudson is interviewed on the Real News Network. He reviews the reasoning behind income tax policy in the 20th century, a good lesson in financial history. Interestingly, he says that data show tax cuts have been followed by slow growth in the US. He also says that "every recovery since World War II has taken place with a larger and larger proportion of debt to income."

Another interesting tidbit: the average holding period for a stock on the New York Stock Exchange has increased from 20 to 22 seconds in the past year. High frequency trading anyone?

US Economic Calendar for the Week

Date	Time (ET)	Statistic	For	Actual	Briefing Forecast	Market Expects	Prior	Revised From
Mar 15	8:30 AM	Empire Manufacturing	Mar	-	17.0	17.0	15.43	-
Mar 15	8:30 AM	Export Prices ex-ag.	Feb	-	NA	NA	0.9%	-
Mar 15	8:30 AM	Import Prices ex-oil	Feb	-	NA	NA	0.8%	-
Mar 15	9:00 AM	Net Long-Term TIC Flows	Jan	-	NA	NA	$65.9B	-
Mar 15	10:00 AM	NAHB Housing Market Index	Mar	-	16	17	16	-
Mar 15	2:15 PM	FOMC Rate Decision	Mar	-	0.25%	0.25%	0.25%	-
Mar 16	7:00 AM	MBA Mortgage Index	03/11	-	NA	NA	+15.5%	-
Mar 16	8:30 AM	Housing Starts	Feb	-	545K	570K	596K	-
Mar 16	8:30 AM	Building Permits	Feb	-	565K	573K	562K	-
Mar 16	8:30 AM	PPI	Feb	-	0.5%	0.6%	0.8%	-
Mar 16	8:30 AM	Core PPI	Feb	-	0.2%	0.2%	0.5%	-
Mar 16	8:30 AM	Current Account Balance	Q4	-	-$110.0B	-$110.0B	-$127.2B	-
Mar 16	10:30 AM	Crude Inventories	03/12	-	NA	NA	2.52M	-
Mar 17	8:30 AM	Initial Claims	03/12	-	380K	387K	397K	-
Mar 17	8:30 AM	Continuing Claims	03/05	-	3750K	3750K	3771K	-
Mar 17	8:30 AM	CPI	Feb	-	0.3%	0.4%	0.4%	-
Mar 17	8:30 AM	Core CPI	Feb	-	0.1%	0.1%	0.2%	-
Mar 17	9:15 AM	Industrial Production	Feb	-	0.5%	0.6%	-0.1%	-
Mar 17	9:15 AM	Capacity Utilization	Feb	-	76.5%	76.5%	76.10%	-
Mar 17	10:00 AM	Leading Indicators	Feb	-	1.0%	0.9%	0.1%	-
Mar 17	10:00 AM	Philadelphia Fed	Mar	-	25.0	28.0	35.9	-