Wednesday, October 15, 2008

The Kirk Report

The Kirk Report

Give Up The Ghost

Posted: 15 Oct 2008 04:20 PM CDT

"I don't just think we're going to test the lows. I think we're going to violate them and break lower in a big way." - Kent Engelke

Such is the way of today's sentiment as we continue to see the market give up the ghost.

Dow Jones

Along with a plethora of disappointing data on the economy, Bernanke's speech sure didn't impress anyone as the market now wants much less talk, and far more action especially on the upside which was completely absent from today's trading session. Interestingly enough, the earnings reports so far haven't been all that bad unless you actually took time to listen to some conference calls today.

The only positive takeaway from today's session is that we won't have to wait very long for that "market has already bottomed, but we will have to retest the lows before moving higher again" theory to pan out.

HSH Associates

Posted: 15 Oct 2008 12:06 PM CDT

HSH Associates
Another resource I've been finding helpful these days to monitor the consumer loan market and interest rates is HSH Associates. In fact, their free market trends newsletter is something I look forward to reading each and every week.

Just you know, I recently added their blog to the news I read page and I encourage you to visit it frequently to get a good understanding on what is happening in this key part of the economy right now. For example, if you've wondered why mortgage rates are going up as interest rates go down (this morning they are above 7% for a 30 year mortgage), you'll find a quick explanation that will help you understand why. In a credit-focused economy, websites like this can prove very helpful to sort through all of the noise.

Keeping Tabs On Insider Buying

Posted: 15 Oct 2008 11:39 AM CDT

J3
Over the past few days I've been looking over my trading notes from the last bear market to understand what I should be doing with my money right now. In doing so, I noticed the following statement that I wrote back in 2002:

"After major market corrections/bear markets, keep close tabs on insider buying activity especially among stocks that have really been beaten up and which future prospects look dim. Stock screens that utilize insider buying activity as a criteria have outperformed significantly especially over six month time frames."

I recently discovered a very helpful website that allows me to track insider activity with ease. J3 offers excellent insider screening tools, up-to-date insider info, key ratio analysis, and even sends daily insider activity summaries directly to my email. The cost? Right now it is completely free for nonprofessionals and, based on what I've seen so far, I really like what they provide. Check it out!

Recession Risk

Posted: 15 Oct 2008 07:57 AM CDT

Good morning. Premarket futures are lower this morning as the market tries to figure out how deep and long the recession will be.

To answer that question, investors are sorting thorugh a number of mixed earnings reports (see KO, CSX, ABT, INTC, JPM, WFC) and some relatively dismal economic data. For example, September retail sales came in well below expectations (-1.2% vs -0.7% consensus) and the Empire Manufacturing report dropped -24.6 vs -10.0 consensus. As for inflation, the Price Producer Index fell 0.4% while the core prices rose 0.4%.

Along with watching the credit markets and seeing signs of easing, several Fed officials are making headlines this morning that they recognize recession risk but no rate cut is needed. Meanwhile, Meredith Whitney was out with cautious comments on banks even in spite of the latest rescue efforts.

Premarket gainers: EPIC, KO, ALTR, TSL, DNA, TLB, EXC, WB, WFC, INTC, AAPL, AMSC, UAUA, APWR, DISH, WIT, PPC, TSL, DTG, ECLP, CSH, MYL, & LUFK.

Premarket losers: LLTC, EBAY, CHT, AAUK, ACGY, ING, RTP, BBL, EXM, KEY, SWN, C, DELL, JPM, ASML, DRYS, KWR, PCU, AIG, AIB, CIT, SI, MT, & GGP.

In addition to this morning's data, we have business inventories at 10:AM, the EIA petroleum status report at 10:35AM, and the Beige Book at 2PM. We also have more Fedspeak from Bernanke around noon.

Needless to say, the market needs to show some signs that Monday's rally was not a fluke and that, even in spite of recession worries, buyers remain and the bad news has already been priced in.

Have a wonderful Wednesday!

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