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85709 Earmarks and Counting, Renewable Energy 101 - surprising!
By Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
Dr.Faessel@onthemar.com
Friday - 3/06/2009
More doom - in a chart of doom. Yesterday another lower low was posted on the major indexes, although the NASDAQ 100 (NDX) has yet to take out the November lows. The (TICK) had a low post of 1458 and had multiple probes into the minus 1400s, indicating extreme short-term oversoldness. It's like 1973/1974 all over again; twisting, writhing, unceasing misery. And where it all stops nobody knows. Sentiment and oversoldness indicators are at record or near record levels. Anecdotal statements by a host of talking heads (and people I know) indicating that they "never won on another share of stock again in their lifetime" certainly captures the overriding emotion of the "former" investor class.
We are now in "La La Land" as far as support goes. Yesterday's low of S&P 500 (SPX) 677 is vulnerable and fragile. Resistance at 682 and 689 could be breached with any kind of a short covering rally. In the event a rally gets ignited 740 looks like a doable target to me. It seems that with each report regarding the new titanic spending programs the market gasps and the selling accelerates. What stops this is unknown. We must be near the capitulation stage. S&P futures reacting to the just announced unemployment numbers (unemployment rate of 8.1% versus 7.6% in January) have the futures markets going bananas, jumping and reversing like you wouldn't believe; currently - up 2 points.
The Treasury 10-year yield plummeted 15 ticks to 2.83% as the stock market hit new lows. 3-month Libor is up to 1.292 indicating more problems manifesting in the credit markets.
Yesterday China's Premier Wen Jiabao said China is growing near its 8% target and needs no additional stimulus package. This was a day after a ‘former' Chinese official startled markets by saying the country will soon announce a huge new spending program. Asia stocks took off and led us higher, but the clarified report sent stocks and markets down again.
* Remember this line re Earmarks? "I'll scour the federal budget, line by line, and make meaningful cuts." Obama said he'd reform the earmark culture. Ha! Change - Oh yea! Tell me about it. Before his term ends he adds $4.9 trillion and adds another $7.4 trillion if given a second shot, doubling the national debt in 5-years and tripling it in 10. And the stock market votes ever day and; what you see is what you get, and it ain't pretty. Trillions and trillions lost. Good Grief!
CNBC's Jim Cramer's: “My Response To The White House” is worth reading. As you may know he was a big supporter of Obama. http://www.mainstreet.com/article/moneyinvesting/news/cramer-my-response-white-house
Overbought / oversold indicators (Arms and McClellan) are still posting levels that are extremely oversold. Contrary Indicators and longer term surveys of negative sentiment remain very close to all-time high fear levels. Shorter term sentiment measures are also indicating growing and major fear.
Yesterday's McClellan Oscillator (favorite overbought / oversold indictor), posted a minus and deeply oversold 250 after Wednesday's somewhat oversold minus 150.
Should mention again that there is an interesting configuration showing on the McClellan chart that shows a “higher low” set up. Previous looks such as this have been prophetic of major rallies in the making.
Yesterday's CBOE Total Exchange Volume Put / Call Ratio was 1.02. Wednesday's post was 0.95. Last Monday's post was a high fear level 1.07.
The (VIX) (FEAR INDEX) closed at 50. Last Monday's interday high was 53, the highest tick /fear listing of the (VIX) since January 21.
Market leader Exxon Mobil Corp (XOM) $62.22 today announced plans to invest between $25 billion and $30 billion annually over the next 5-years to meet expected long-term growth in world energy demand.
All is not gloom and doom:
- Yesterday Wal-Mart (WMT) $48.75 rose 3%, hiked its annual dividend by 15% to $1.09 a share said customer traffic rose in February (had a 5.1% same-store sales gain) and the average ticket also increased. It cited strong comps in grocery, health and wellness, and entertainment. The S&P Retail Index fell 3.6%.
- Family Dollar Stores (FDO) $30.66. Q2 sales rose 6.4%, spurring the specialty discounter to hike profit guidance. (FDO) rose 12%.
- Another Wow performer - Teen clothier Buckle (BKE) $23.78 a red hot performer through 2008, continues on fire with same-store sales jumping 21%.
** Renewable Energy 101 – from yesterday's WSJ
Let's convert the energy produced by U.S. wind and solar installations into oil equivalents.
The conversion of electricity into oil terms is straightforward: one barrel of oil contains the energy equivalent of 1.64 megawatt-hours of electricity. Thus, 45,493,000 megawatt-hours divided by 1.64 megawatt-hours per barrel of oil equals (only) 27.7 million barrels of oil equivalent from solar and wind for all of 2008.
Now divide that 27.7 million barrels by 365 days and you find that solar and wind sources are providing the equivalent of 76,000 barrels of oil per day. America's total primary energy use is about 47.4 million barrels of oil equivalent per day.
Of that 47.4 million barrels of oil equivalent, oil itself has the biggest share -- we consume about 19 million barrels per day. Natural gas is the second-biggest contributor, supplying the equivalent of 11.9 million barrels of oil, while coal provides the equivalent of 11.5 million barrels of oil per day. The balance comes from nuclear power (about 3.8 million barrels per day), and hydropower (about 1.1 million barrels), with smaller contributions coming from wind, solar, geothermal, wood waste, and other sources.
Here's another way to consider the 76,000 barrels of oil equivalent per day that come from solar and wind: It's approximately equal to the raw energy output of one average-sized coal mine.
Dr. John L. Faessel: Dr.Faessel@onthemar.com
Published at Investorideas.com Financial Article Feed : http://www.investorideas.com/RSS/feeds/II-Art.xml
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