From ZeroHedge.com's Tyler Durden. A record plunge in consumer credit, and the American middle class has just given the new and improved Obama-endorsed "spend spend spend" recovery and confidence plan the middle finger. $6.1 billion decline in revolving credit, and a $15.4 billion drop in non revolving credit, on a $4 billion expected decline! June's decline was revised downward to a $15.6 billion reduction in credit. Someone please spin how a record consumer retrenching is in any way benficial to America's GDP. Yet TradeBot and HAL9000 have largely priced in this $17 billion miss to consensus. And here is what a consumerless recovery (another term to add to the growing -less list) looks like: ---- And stocks love it.
This market is 100% manipulated by the government, so forget about analyzing economic numbers because it doesn't matter in terms of market direction. Sooner or later the market will catch with reality, in the meantime just trade the chart and go long when the sentiment gets bearish because that's where they will ram it up. Case in point: last Friday.
Unbelievable: Tue Sep 8, 2009 3:02pm EDT WASHINGTON, Sept 8 (Reuters) - Total U.S. consumer credit fell by a record $21.6 billion in July, Federal Reserve data showed on Tuesday, while June's decline was bigger than previously thought. July consumer credit outstanding fell at a 10.4 percent annual rate to $2.47 trillion, suggesting that households were shying away from credit amid rising unemployment.
Market doesn't care when JPM and GS have an unlimited amount of funds from the feds to pump stocks. It wouldn't take a great deal of money to stop a crash, all it takes is a few thousand contracts from midnight-3am EST to bump futures up a few handles. News doesn't matter, hell they'll run the spooz to 5k with 80% unemployment. I am glad I don't trade stocks. I just can't find a single reason to hold a stock overnight. I understand that stocks are priced by forward earnings but earnings are rapidly declining. It makes my stomach cringe knowing that the investors are not cutting their losses here. The next leg down is going to be the worst. It's not like the economy has changed at all since 1500 on the Spooz, "they" allowed/planned for this to happen. If "they" want to do it again "they" easily can. All the accounting, congressional hearings and other hoopla is all a farce and we'll continue on this drift upwards until they're ready to turn off the buy bots.
The way I see it, we are going to need a big unexpected news event on a massive down day to break the back of this manipulated rally. When we see two days of consecutive heavy selling, I'll be more of a believer in the downside. Until then, low volume moves are way too easy to manipulate, and they just aren't going to let this thing fall too far, period. The worst you will see is sideways consolidation ranges while overbought conditions work themselves off. Take a look at the big down day last week: heavy volume, close at the lows, but no follow-through. The market just churned at the lows, and now here we are at 1025 again. A lot of silly people (including most newsletter writers out there) are trying to trade this market like it's 2007. You can't do that. In 2007 the government wasn't involved in the market, so it was moving in a more normal way. Trading is all about reading the prevailing market condition and adapting to it, and sometimes the underlying conditions are telling you to throw away standard analysis techniques because they don't work.
I'm applying for "Bank Holding Company" status. That way I can get free money at the window, prop up my trading account,and give myself a bonus. Then everyone will think I'm so savvy and smart.
As usual, CNBC is literally reporting the same news and facts as Bloomberg, always being a day later (at least). There is no way CNBC is NOT relying on Bloomberg in some way for its stories, etc.