Follow the Money as It Exits Safe Havens

George Brooks |

Bull Wall StreetInvestor's first read   - Brooksie's edge before the open

Monday, February 6, 2012

DJIA: 12,862    S&P 500: 1344.90

What happens “IF” suddenly there is no justification for all that money hiding out in a safe haven, where it earns next to nothing  ?

At the end of the day, the benefit of the doubt always seems to favor the negative.

But, who can blame investors for cowering on the sidelines, after the 2007-2009 Great Recession/Bear Market, followed by a bunch “flash crashes,” in mid-2010 that  highlighted serious structural problems in the way stocks are traded ?

Clearly Congress gave no one reason to believe it cared about anything other than ousting the President with one obstruction after another.

And now we have the European horror show featuring  bank and sovereign debt brinkmanship with all the countries in the world waiting for a Greek thumb up or thumb down.

BUT when things get too imbalanced one way or the other the pendulum  swings the other way.

I started off  last  week with an alert to a potential  positive impact from 16 economic indicators that were to be reported, but warned that a drop of 100 Dow points would have to happen first. We didn’t have to wait for the 100-point decline, it came in early trading.  We didn’t have to wait long for a big rally, either.

The numbers were good, the market reacted positively.

This week’s economic report are less important.

TUESDAY:

  • ICSC Goldman Store Sales (7:45 a.m.) by major retailers which account for 10% of total store sales.
  • Consumer Credit (3:00 p.m.) –Consumer credit jumped $20.4 billion November.

WEDNESDAY: 

  • MBA Purchase Applications (7: 00 a.m.)as a measure of applications at mortgage bankers, this index provides leading indicator of single family home sales and housing construction.

THURSDAY:

  • Jobless Claims (8:30 a,m.) Initial claims dropped 12,000 for the week ending Jan. 28 to 367,000.  Obviously “down: is good.
  • Wholesale Trade (10:00a.m.) – slowed to 1 0.1 percent gain, Inventory/sales ratio holding at 1.15.

FRIDAY:

  • International Trade (8:30 a.m.) Trade gap widened in Nov. due to jump in oil imports and dip in exports. The index is comprised of merchandise and services
  • Consumer Sentiment (9:55 a.m.) Rose  in the final week of January, Sentiments have been soaring since July.

TODAY:  Expect a little shakeout before 10:30, but generally opportunity.

Recent Posts:

Jan 20 DJIA: 12,623 "Two European Meetings Next Week to Set Tone of the Market"
Jan 23 DJIA: 12,720 "Europeans Seeking Long-Term Economic Cure"
Jan 25 DJIA: 12,675 "Consolidation, Correction Likely though US Stocks Hold Strong Against EU Turmoil"
Jan. 26 DJIA: 12,756 "Fed Would Raise Interest Rates If Inflation Picks Up"
Jan 23 DJIA: 12,720 "Europeans Seeking Long-Term Economic Cure"
Jan 25 DJIA: 12,675 "Consolidation, Correction Likely though US Stocks Hold Strong Against EU Turmoil"
Jan. 26 DJIA: 12,756 "Fed Would Raise Interest Rates If Inflation Picks Up"
Jan. 27 DJIA: 12,734 "Warning! Tradable Market Action Lies in Waiting"
Jan. 30 DJIA: 12,660 "“HUGE” Week for Economic Indicators"
Jan. 31 DJIA: 12,653  "All That Is Needed Is a Spark"
Feb. 1   DJIA: 12,632 "Week’s Economic Reports Could Be The Springboard"
Feb. 3   DJIA: 12,862 "Investors Beating the Bullish Tune"
George  Brooks

*Bloomberg.Com

**National Journal

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The writer of  Investor’s first read, George Brooks,  is not registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.

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Companies

Symbol Name Price Change % Volume
COHR Coherent Inc. 132.11 -3.87 -2.85 109,415

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