On 3/3/12, Saturday, the Chinese People’s Political Consultative Conference (CPPCC), a national advisory body, begins. The Eurozone unemployment rate hits almost 11% this week, the highest since 1999. Italy unemployment rate is over 9%, the highest in over ten years. At the same time, inflation in the Euro area is at 2.7%, spending 15 months above the ECB-targeted 2% level. France’s joblessness rises to 9.4%.
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On 3/5/12, Monday, the Chinese National People’s Congress (NPC), the national legislature, begins meetings. China lowers the projected growth rate to 7.5%. Markets sour on that news since there will be less need for commodities if growth is slowing. Lower commodities = lower equities markets. Brazil lowers growth estimates. Data continues to show Europe slipping into or already in recession.
On 3/6/12, Tuesday, Super Tuesday Election Day. Markets drop strongly at the open on the disappointing China growth projections. Keystone’s SPX:VIX Ratio Indicator drops under 68 indicating a large down day on tap. The SPX falls 21 points, down 1.5%. The Dow Industrials fall 204 points, down 1.6%. The markets experience the largest down day of the year thus far. Just as the markets are losing their grip rumors surface about a new Fed quantitative easing program, and markets bounce into the close.
On 3/6/12, Keystone’s proprietary trading algorithm, Keybot the Quant, turns bearish flipping to the short side at 12:18 PM EST at SPX 1343. Semiconductor and copper weakness over the last two days are the technical cause for the market pull back.
On 3/7/12, Wednesday, Super Tuesday elections show mixed results with a slight advantage for Romney. Markets continue upwards after the big selloff yesterday due to the Fed leaking the news of a ‘sterilized quantitative easing program’ under consideration. Every time a central banker hints at QE, the junkies (traders) become excited about the crack cocaine (QE), and the markets move higher. Traders, like addicts, are addicted to the easy money. The markets are floating upwards on a faux recovery; the QE crack lowers the value of the dollar and elevates commodities and equities markets. Oil moves higher as well as gold, silver and copper. Brazil cuts rates which is a surprise move. An X-class solar flare makes its way to the Earth but does not result in any significant wave interference for wireless devices. Interestingly, the early August 2011 waterfall crash coincided with solar flare activity.
On 3/8/12, Thursday, the markets move higher into the Full Moon which typically occurs about two-thirds of the time each month. China CPI shows inflation lower than expected. Traders think that more QE may occur to stimulate the economy so Asian markets move higher; all markets are addicted to the central bankers’ crack cocaine. BOE and ECB Rate Decisions leave rates unchanged. The ECB lowers the Eurozone growth rates. Do you notice a pattern? Many countries around the world continue to ratchet down growth expectations; the U.S. is likely next to lower the GDP forecasts. India cuts rates in a surprise move. All major governments around the world are using quantitative easing to stimulate their economies and markets, but the world has never experienced universal QE all at once. TXN issues weak guidance moving forward which requires traders to rethink the perceived health of the wireless sector. AAPL remains elevated, however, and Apple is the markets. As Apple goes, so goes the markets.
On 3/8/12, Keystone’s proprietary trading algorithm, Keybot the Quant, turns bullish flipping to the long side at 12:04 PM EST at SPX 1364. This is a whipsaw move since the algorithm flipped back to the bull side within 24 hours of turning bearish. No doubt that the Fed’s sterilized QE crack cocaine saved the markets this week.
On 3/9/12, Friday, the U.S. Jobs Report shows over 200K jobs created with the unemployment rate staying at 8.3%. News hits at 2:50 PM EST that Greece has officially defaulted on its sovereign debt. ISDA (International Security and Derivatives Association) says the Greece restructuring triggers a credit event. Only 36% of the Greece population works and about 20,000 people are homeless in the streets, truly a Greek tragedy. The market end the day up taking the news in stride. For the week, the broad markets moved sideways taking the large drop on Tuesay but recovering by Friday. The broad markets continue to display topping behavior over the last three weeks. Now that Greece appears under control, all eyes focus on Portugal, and the Portugal 10-year yields start to move up indicating worry. Spain remains a worry as well with the highest unemployment of all European countries.
On 3/10/12, Saturday, Harrisburg, the capital of the State of Pennsylvania, says it will miss general-obligation (GO) bond payments for the first time next week. The muni market bubble appears to be topping and popping as the year moves along. Obscene amounts of money (QE money) continue to chase the high-yield market and corporate bonds, which will also likely end badly, especially since the less experienced traders, Ma and Pa, are now chasing into these instruments.
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On 3/12/12, Monday, Euro Finance Ministers meet in Brussels. 3-Year Note Auction. Treasury Budget.
On 3/13/12, Tuesday, IMF meets in Washington and decides its contribution to the Euro woes. Retail Sales. Business Inventories. 10-Year Note Auction. FOMC Meeting Rate Announcement.
On 3/14/12, Wednesday, target date for Greece and its creditors to sign the new lending agreement. Italy bond auctions. Import and Export prices. Chairman Bernanke speaks. Oil Inventories. 30-Year Bond Auction.
On 3/15/12, Thursday, Spain and France bond auctions. Jobless Claims, Producer Price Index (PPI), TIC data, Empire State Mfg Survey, Philly Fed Survey.
On 3/16/12, Friday, Consumer Price Index (CPI). Industrial Production-Fed fave to gauge manufacturing growth, Consumer Sentiment.
On 3/17/12, Saturday, ……St. Patricks’s Day, a day when everyone is Irish.
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On 3/20/12, Tuesday, Spring begins in the northern hemisphere. Housing Starts. TIF.
On 3/22/12, Thursday, New Moon. FDX, NKE.
On 3/27/12, Tuesday, Consumer Confidence.
On 3/29/12, GDP.
On 3/30/12, Friday, EOM, EOQ1. Consumer Sentiment. China PMI.
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