Stocks in a Vacuum Up Scenario

Settlement is T+3 so today you might have seen some of that. But it will still show up as a position for funds on their books on wednesday as being long if they bought it on Tuesday before 4pm.

 

Nasdaq up on the year. After being down 20% it has rallied 24%. I try not to get caught up in high beta names during the day, but can't help but notice that tech really seems to be leading the way more often again. AAPL up 32% in the last few weeks. Most of us are watching the banks during the day, and yes when JPM sells of $2 from 3.30pm to the close the market goes lower with it. QQQ's. GOOG. AAPL tend to lead advance's and declines before the S&P turns it seems more and more. This is how it used to be, but so many of us are glued to the stupid banks because its where the action has been for so long now. Makes me think that some normalcy may be coming back into the marketplace?

 

Sounds to me like we have the ingredients for a serious pullback as the fund managers drop stocks as quickly as they can while they still are showing a profit.

 

Today was the last day for institutions to buy if they wanted to have it show on their books. But they definitely didn't buy today, if anything, they took some off.

 

Any believers yet? I wish I took my own advice back on 3/14 and just bought and held. Tried to get too cute and sold big rallies to buy them back cheaper, ended up always paying higher. Now that we are back to unchanged on the year, I think the sucking sound of money uninvested and 'missing' out is just starting to really chase this market now. How about that close for the banks! Panic to participate, unbelievable. Anyone still shorting the vacuum up in stocks?

 

not short but not as long anymore either. I tried to be cute through the rally too, should have just held. Good write-up and Thanks for the insight in the original post.

 

As for the overall market rally, its manipulation at best and completely overbought, can it go higher of course it can however anyone willing to put money into stocks now isn't thinking straight. Remember the stock market takes the escalator up and the elevator down, fear is alot stronger than greed and you will see this when we have multiple down down days followed by multiple down weeks. Remember its the printing press along with the trillions of dollars propping up the entire system. Thats not the way to fix a crisis.

 

Banks See Loan Losses Deepening This Year, Fed Loan Officers' Survey Shows

http://www.bloomberg.com/apps/news?pid=20601068&sid=aUsKT1cqx43c&refer=home

Fed Says U.S. Banks Expect Deepening of Loan Losses (Update1)
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By Scott Lanman

May 4 (Bloomberg) -- Most U.S. banks expect loan delinquencies and losses to increase this year, a Federal Reserve report showed today before this week’s release of stress tests of the nation’s 19 largest lenders.

More than 70 percent of respondents on net said bad loans will rise should the economy progress “in line with consensus forecasts,” the Fed said in a quarterly survey of banks’ senior loan officers. More firms made it tougher for consumers to get home and credit-card loans in the past three months than in the previous survey, while fewer tightened terms for businesses.

The report indicates that signs of stabilization in the U.S. economy aren’t resulting in an easing in lending terms. Banks are hoarding a record $1.1 trillion of cash even after the Treasury and central bank made emergency capital injections and set up special lending programs to ensure lenders extended credit to households and businesses.

“The vast majority of domestic and foreign respondents indicated that they expect deterioration in credit quality for all types of business and household loans,” today’s Fed report said.

The Fed is scheduled to release results of stress tests on the 19 largest banks on May 7. Chairman Ben S. Bernanke is taking unprecedented steps to expand credit and break the back of a financial crisis, and the Obama administration has said it’s prepared to make further taxpayer funds available to ensure no major American bank fails.

‘Clearly Turning’

“It’s important that banks allow corporations to refinance their existing debt, and that is not happening yet to the extent to which it should,” former Fed Governor Robert Heller said in an interview with Bloomberg Television. “The economy is clearly turning. Things are getting better. Bank lending could help by supporting creditworthy borrowers.”

Economic figures in the past two weeks have shown smaller declines in house prices and stabilization in sales, a jump in consumer confidence and the smallest contraction in manufacturing in seven months. Still, economists surveyed by Bloomberg News forecast the U.S. unemployment rate in April jumped to 8.9 percent from 8.5 percent the previous month. The jobs report is scheduled for May 8.

Not a single U.S. bank in the Fed survey reported easing credit terms and conditions on prime residential mortgage loans or loans to large or mid-sized commercial and industrial firms.

‘Very Elevated’

In business lending, the share of banks tightening loan terms remained “very elevated” while declining for the second straight survey, the Fed said. For commercial and industrial loans, the share of banks tightening credit standards fell to 40 percent from 65 percent, the central bank said.

For commercial real estate, about 65 percent of domestic banks raised standards for loans, versus 80 percent in the January survey. It’s the first time since October 2007 that the share of banks tightening on commercial property fell below 70 percent, the Fed said.

Fed officials took action last week to aid the commercial real-estate market. The Fed authorized five-year loans to investors purchasing commercial mortgage-backed securities as part of a $1 trillion emergency program to aid consumer and business lending. The industry said the program’s three-year loans were insufficient to avert defaults.

Commercial and industrial loans on banks’ books totaled $1.51 trillion as of April 22, according to a separate Fed report last week. That compares with $1.54 trillion in September 2008.

‘Tight Credit’

Fed policy makers said in their policy statement last week that “tight credit” is still restricting consumer spending. The central bank’s Open Market Committee, meeting April 28-29, left the door open to boosting programs to aid lending even with “some easing of financial market conditions.”

The survey, conducted from March 31 to April 14, received responses from 53 domestic banks out of 56 firms with combined assets of $6.5 trillion, along with the U.S. operations of 23 foreign institutions.

A larger share of banks reported tightening terms on residential mortgages compared with the previous survey, the central bank said.

At the same time, about 35 percent of domestic respondents saw increased demand for prime mortgages, a reversal from a net 10 percent reporting weaker demand in January. That was the first increase in such demand in at least two years, the Fed said.

Last week, fixed mortgage rates fell for a third consecutive week, matching the record low reached earlier in April. The average rate of a 30-year mortgage dropped to 4.78 percent, the lowest in records dating to 1970, McLean, Virginia- based Freddie Mac said.

Fed Purchases

The Fed is purchasing $1.25 trillion of mortgage-backed securities and $300 billion of long-term Treasuries as part of efforts to lower home-loan rates.

About 65 percent of banks, up from 45 percent in January, lowered credit-card lines for new or existing customers, while the share of banks raising minimum required credit scores also increased, the Fed said.

Last week, the U.S. House of Representatives passed a so- called credit-card bill of rights after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. Lawmakers said they’re under increasing pressure from constituents to respond to rising interest rates and abrupt changes to consumers’ accounts.

The legislation is backed by President Barack Obama.

In the previous survey, released Feb. 2, the Fed said a majority of U.S. banks had made it tougher for consumers and businesses to get credit in the prior three months.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net.
Last Updated: May 4, 2009 14:50 EDT

 

I too read all the negative news. Like Moody's putting WFC on negative watch, just before it ripped up another $2.50. I am not saying this is right or wrong. I am a short-term trader, I read the tape. The market is going up for one reason and one reason alone: There are more buyers than sellers.

You can say it's the government or manipulation, I don't care. As long as I buy it lower than I sell it!

 

Looking back over 2009 I wish I had taken more of my own advice on this. Check out the date. I felt fairly compelled at the time that this was important. It was a time of panic so I'll take some credit for this OP, as I have only started like 3 threads since 2003. It is not my intent to patronize self. I just want to thank the vast majority of traders/bloggers on ET for adding their 2 cents on here over a difficult year and hope we can help each other in the new year. I'll do my best to try and add some value-added.

3/13/09 Friday closings:

INDU - 7224
S&P - 756

Best of luck to all in 2010!