Biderman’s Daily Edge 5/16/2012: Why Stocks Could Rally but Only for Short Term

May
16

In last Mondays video I said stocks and bonds could rally starting Friday after the Facebook deal prices Thursday night. While I expect Gold to keep rallying, US stocks are unlikely to. Why? My good friend, the late Ed Hart used to say “stocks will trade their way to perdition.” Ed Hart was the best thing on the old Financial News Network before it was assimilated by CNBC. Stocks trading their way to perdition means to me that regardless of long term reality, over the short term stocks can go counter trend, but only for a while. Read More

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Biderman’s Daily Edge 5/14/2012: Stocks & Gold Should Rally Post Facebook IPO

May
14


A major stock market event will occur later this week when Facebook goes public. Stocks and gold likely will keep selling off until the Facebook offering hits the market. And everything else being equal, I then expect a sharp rebound in stocks and gold after the offering.

I personally will be buying Facebook and gold on the IPO day.

The Biderman Market Theory says all there is in the stock market are shares of stock. Not very complicated. 80 percent of all shares are held by mutual funds, Exchange Traded Funds, hedge and pension funds and family offices. Money flows in and out of those institutions. Read More

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A Two-part Conversation with Jim Bianco

May
14

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Warning: A Midsummer Market Nightmare

May
14

By Dan Dorfman

Dan DorfmanDorfman And Dollars
Dan Dorfman follows the dollars and sense of the markets 

In the late 1500s, William Shakespeare brought us A Midsummer Night’s Dream. Now, more than 415 years later, Michael Larson, editor of the Florida-based Safe Money Report, one of the country’s more prominent bearish investment newsletters, offers us his own Wall Street version of that play. Call it, say, a midsummer market nightmare, or a resumption of last summer’s debacle, notably in July and August, when the Dow dived about 2,000 points on fears of a contagion of the European debt crisis and the June end of QE-2.

Alas, Larson sees another bummer of a summer, with the Dow tumbling over next the several months to the 12,000-12,200 range, largely triggered by a swelling global economic slowdown. Read More

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Since July 2010, Number of People Exhausting Emergency and Extended Unemployment Programs Nearly Equals Increase in Disability Recipients. Pure Coincidence? We Think Not!

May
11

In a recent post on GlobalEconomicAnalysis, Mish Shedlock suggested the decline in the unemployment rate was due, in part, to the rapid increase in enrollment in disability because people on disability are no longer counted as unemployed. Read More

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Stimulus Tactic of Increasing Government Debt to Increase GDP Broken and Unsustainable. How Long before Massive Government Debt Buildup Triggers Another Financial Shock?

May
11

A recent post on the popular ZeroHedge financial blog compared the annualized growth in federal debt to the annualized growth in GDP in Q1 2012. ZeroHedge reported that while U.S. government debt rose by $359.1 billion in Q1 2012, the U.S. GDP grew only $142.4 billion. Durden noted that, “It now takes $2.52 in new federal debt to buy $1 worth of economic growth.” Read More

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Data Synopsis March 31, 2012- U.S. Equity ETFs Are Indicating to Buy. Leveraged ETF Investors are Saying Sell.

Mar
15

 

  • We estimate that U.S. equity ETFs have shed $900 million in the week ending Jan. 31 (netting a positive $12.4 billion for January), after recording a negative $5.5 billion in November and pulling in $13.0 billion in December. The selling over the past week should cheer bullish market participants. During 2011, U.S. equity ETFs gained $38.6 billion.

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  • U.S. equity mutual funds, meanwhile, gained $1.2 billion in the week ended January 31, netting a negative $1.2 billion for 2012. It will be interesting to see if U.S. equity mutual funds see net positive flows for all of 2012. We believe that in comparison to the last five years, U.S. equity mutual funds will come in at their highest levels in 2012. From a longer-term perspective, these funds have shed $148 billion since the start of May of 2011 and notched a negative-$134.5 billion flow in 2011. For perspective, the annual outflow in 2008 clocked in at $147.5 billion. Positive U.S. equity mutual fund flows are bearish from a contrarian standpoint. 

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The Joys of $100 a Share Big-Cap Stocks

May
08

By Dan Dorfman

Dan DorfmanDorfman And Dollars
Dan Dorfman follows the dollars and sense of the markets 

Don’t wince. This is about $100 stocks. If you’re about to say forget it, that triple-digit priced stocks are too rich for your blood, don’t. Granted, every investor dreams of latching on to a get-rich-quick pipsqueak stock that can go through the roof. Correspondingly, hordes of investors, fearful of stocks at towering prices, will take a shots on the cheapies, theorizing that lower-priced equities have much more upside potential than higher priced ones. That may sound right, but it’s wrong. Just the opposite has been the case in recent decades, according to a new study undertaken by the Dow Theory Forecasts, one of the country’s leading investment newsletters…Read More

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Biderman’s Daily Edge 5/8/2012: Sell in May and Go Away for Third Straight Year

May
08

In 2010 the US stock market peaked at the end of April and then sold off until the Fed announced QE2 several months later. In 2011 the stock market peaked at the end of April and sold off until the Fed announced Operation Twist several months later. This will be the third year in a row that stocks have started selling off in May. I predict the drop will continue until the Fed announces the next version of stock market stimulus; probably in August at the Fed’s Yellowstone confab. Why stock prices did not peak at the end of this April was that in April 2010 and April 2011 there were decent inflows into US equity mutual funds and US ETFs. This April there were outflows not inflows from both US equity mutual and Exchange Traded Funds…Read More

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TrimTabs and BarclayHedge Report Hedge Funds Take in $2.3 Billion in March

May
09

In 2012’s First Quarter, Hedge Funds Had $3.2 Billion in Outflows and Underperformed the S&P 500

Nearly Half of Hedge Fund Managers Expect S&P 500 in 2012 to Retreat Below 2011 Year-End Level

New York, NY—May 8, 2012—BarclayHedge and TrimTabs Investment Research reported today that the hedge fund industry added $2.3 billion (0.1% of assets) in March, down from a $6.8 billion inflow in February and only the fourth monthly inflow since July 2011. Based on data from 3,034 funds, the March TrimTabs/BarclayHedge Hedge Fund Flow Report estimated that industry assets stood at $1.8 trillion in March, up 2.2% from $1.7 trillion in February.

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Skullduggery Suspected in Euronext-NYSE shares

May
09

By Dan Dorfman

Dan DorfmanDorfman And Dollars
Dan Dorfman follows the dollars and sense of the markets 

Hey, is there skullduggery afoot at the New York Stock Exchange, particularly in the trading of the shares of its parent, Euronext-NYSE, Inc (NYX)?

Signs sure suggest so, as evidenced, I’ve learned, by a second investigation that has been launched into such trading, this one by the Securities and Exchange Commission. It is one of a number of SEC investigations that I recently became aware of, thanks to a regulatory source. Read More

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Biderman’s Daily Edge 5/9/2012: Austerity is Bad

May
09

Austerity is becoming a dirty word. Nobody wants austerity. Wikipedia says austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided. Really, I am shocked to learn that Europeans who have been getting something for nothing want to keep getting that something; particularly since Europes future under the combination of austerity and no growth policies is very, very bleak and dark. Read More

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