Looks like the FKLI is reversing ! The low is 800 level.
Monday, November 10, 2008
10:54 am - DJIA raise up on lower volume !
Sellers had temporarily left the market for the time being !
10:24 am - Market Outlook by Bill Wermine
Dear Traders,
Today I attended a market outlook by Pong Teng Siew, Head of Research of Jupiter Securities. There was a full house, standing room only. Mr Pong is a highly regarded analyst and has been able to consistently forecast KLSE market turns. He feels 802 is the near term bottom because credit markets world wide are unfreezing. The new fear he said is world wide recession which 1/2 of the developed countries including the US, UK and Europe are in. however; markets turn in the depth of a recession as players anticipate an economic upturn.
He suggested to be in defensive mode. Avoid property, construction, banking, auto and airline shares as the economy is slowing. On the other hand, he recommends Sime, TM and PPB Group due to defensive qualities and solid dividends. I hold these shares for my managed accounts.
He also forecasts a recovery in crude oil and CPO as these commodities are deeply oversold and are trading at less than fundamental value. He also feels the US Dollar will resume its fall as credit markets unfreeze and the US prints money to bail out the banks, auto companies, un employed workers, housing etc. Obama will print massive amounts of US Dollars to fulfill his election promises.
We are holding our monthly Traders Club at Phillip Capital Office on 15 November at 10 AM . If you have any topics you wish to share please let me or Martin know.
I will present an interesting study on Gap trading in the CPO and CI Futures and how to use volume to confirm the success of a gap trade. I need someone to present on point and figure.
Have a good day
Bill
Today I attended a market outlook by Pong Teng Siew, Head of Research of Jupiter Securities. There was a full house, standing room only. Mr Pong is a highly regarded analyst and has been able to consistently forecast KLSE market turns. He feels 802 is the near term bottom because credit markets world wide are unfreezing. The new fear he said is world wide recession which 1/2 of the developed countries including the US, UK and Europe are in. however; markets turn in the depth of a recession as players anticipate an economic upturn.
He suggested to be in defensive mode. Avoid property, construction, banking, auto and airline shares as the economy is slowing. On the other hand, he recommends Sime, TM and PPB Group due to defensive qualities and solid dividends. I hold these shares for my managed accounts.
He also forecasts a recovery in crude oil and CPO as these commodities are deeply oversold and are trading at less than fundamental value. He also feels the US Dollar will resume its fall as credit markets unfreeze and the US prints money to bail out the banks, auto companies, un employed workers, housing etc. Obama will print massive amounts of US Dollars to fulfill his election promises.
We are holding our monthly Traders Club at Phillip Capital Office on 15 November at 10 AM . If you have any topics you wish to share please let me or Martin know.
I will present an interesting study on Gap trading in the CPO and CI Futures and how to use volume to confirm the success of a gap trade. I need someone to present on point and figure.
Have a good day
Bill
Saturday, November 08, 2008
9:42 am - Stocks rise after 2 days of heavy selling
Stocks rise after 2 days of heavy selling NEW YORK (AP) - 1107b--wallstreet Buyers returned to Wall Street Friday after two days of heavy losses,mindful of the economy's growing problems but attracted by stocks' lower prices.Analysts said the advance was to be expected as Wall Street experiences a rockyrecovery from October's devastating selling. The major indexes jumped more than 2 percent, including the Dow Jonesindustrial average, which rose nearly 250 points in light trading. For the week,the Dow and broader benchmarks like the Standard & Poor's 500 index lost about 4percent after surging 10 percent or more last week. Friday's trading was a mini-version of the market's performance over thepast two weeks, with investors upbeat, then realizing there was little basis inreality for their resurgent confidence, then changing their minds again. The market briefly came off its highest levels of the session afterPresident-elect Obama reiterated at a news conference that there is a great dealof hard work to be done to restore the economy to health. Investors hadoptimistically sent prices higher, only to temporarily pull back when Obamaunderscored what they already know: that the economy's problems won't be easilysolved. George Shipp, chief investment officer at Scott & Stringfellow, said Obamaappeared to be trying to telegraph to the market not to expect too muchimmediately. Obama, noting that he has until January before taking office, saidhe will work to support an economic stimulus plan and will seek ideas forhelping the auto industry. "My expectation is that he lowers the bar and buys the time," Shipp said."Certainly there is no reason to create any undue expectations right now." The market fluctuated after Obama spoke, then righted itself to close nearits best levels of the day. Hank Smith, chief investment officer at Haverford Investments said themarket's turns aren't a surprise. "I think it's absolutely part of the bottoming process," Smith said. "TheOct. 10 low has been tested again a number of times." The blue chips hit anintraday low of 7,882.51 on Oct. 10. Friday's economic and corporate news reminded the market that the countrycould be in for a deep and protracted recession. The Labor Department said the nation's employers cut 240,000 jobs inOctober, hurtling the U.S. unemployment rate to a 14-year high of 6.5 percent.The market had expected employers to cut 200,000 jobs and for the unemploymentrate to rise 6.3 percent. Meanwhile, Ford Motor Co. reported a $129 million third-quarter loss andannounced plans to cut more than 2,000 additional white-collar jobs. GeneralMotors Corp. said it lost $2.5 billion in the quarter and warned it could runout of cash in 2009. The struggling automaker also said it has suspended talksto acquire Chrysler. Although the day's news was on its face worse than expected, investors weredrawn by prices beaten down the past two sessions and some relief that thereports weren't more grim. "We're coming off of a very oversold market that had already braced itselffor bad news out of Detroit and certainly bad economic data in terms of thelabor report," said Peter Cardillo, chief market economist at Avalon Partners. The market is following the pattern of volatility that analysts warned wouldprevail for some time to come. Obama's election was preceded by a big rally, during which the benchmarkStandard & Poor's 500 index surged 18.3 percent in six sessions up throughTuesday. This was followed by a two-day loss of about 10 percent in the majorindexes, including a 929-point drop in the Dow, as investors turned their focusonce more to the economy's woes. "There are three factors that are driving this market: psychological,fundamental and technical," Smith said. "The psychological is fear and panic.We've certainly seen that." The fundamental factor is investors don't know exactly how the currentcredit crisis is going to affect the economy. And the technical factor that isplaying in to the market is the forced selling from hedge funds and mutual fundsthat have to raise cash for redemptions, Smith said. Nov. 15 is the cutoff for shareholders to notify fund managers of theirintent to cash out investments before year-end, which means a sudden influx of"sell" orders could force funds into dumping more investments. Analysts expectthis to continue to add to the volatility in the market. The Dow rose 248.02, or 2.85 percent, to 8,943.81. The broader S&P 500 index added 26.11, or 2.89 percent, to 930.99, and theNasdaq composite index rose 38.70, or 2.41 percent, to 1,647.40. The Russell 2000 index of smaller companies rose 9.95, or 2.01 percent, to505.79. Advancing issues outnumbered decliners by more than 2 to 1 on the New YorkStock Exchange, where consolidated volume came to a light 4.80 billion shares,compared with 5.96 billion shares traded Thursday. For the week, the Dow fell 4.1 percent, the S&P 500 index lose 3.9 percent,the Nasdaq slid 4.3 percent and the Russell fell 5.9 percent. Paper losses for the week in U.S. stocks came to $500 billion, according tothe Dow Jones Wilshire 5000 Composite Index, which reflects nearly all stockstraded in America. Despite the gains Friday, investors have not lost sight of the potential fora deep and protracted recession. Obama will inherit an economy marred by ahousing collapse, mounting unemployment, hard-to-get credit and financial marketupheaval when he assumes office early next year. Investors are watching closely for whom Obama selects as the next Treasurysecretary, as well as whom he appoints to key Cabinet positions. Additionally,investors are mindful of how the government's $700 billion financial rescuepackage will be further implemented under a new administration. Obama met Fridaywith economic experts ahead of his press conference to discuss steps aimed atrepairing the economy. To provide fresh relief, House Speaker Nancy Pelosi said Democrats will pushfor another round of economic stimulus later this month. The weak economic data on Friday reflect the freeze in the credit marketsthat began in mid-September following the bankruptcy of investment bank LehmanBrothers Holdings Inc., and the subsequent pullback in spending among fearfulconsumers. This has forced companies to cut jobs, said Michael Sheldon, chiefmarket strategist at RDM Financial Group. "Comments that we're hearing from CEOs when they report their earningsindicate that economic activity fell off the cliff," he said. In other corporate earnings news, Sprint Nextel Corp. reported a loss of$326 million in the third quarter as it continued to lose customers. Thenation's third-largest wireless provided had posted a profit in the year-agoperiod. Sprint dropped 31 cents, or 8.4 percent, to $3.37. Investors fled General Motors following its quarterly reports but Fordadvanced. GM tumbled 44 cents, or 9.2 percent, to $4.36, while Ford rose 4cents, or 2 percent, to $2.02. The dollar fell against most other major currencies, while gold prices rose.Light, sweet crude rose 27 cents to settle at $61.04 a barrel on the New YorkMercantile Exchange after falling sharply during the week. The three-month Treasury bill's yield slipped to 0.28 percent from 0.30percent late Thursday. A lower yield indicates increased demand. The yield onthe benchmark 10-year Treasury note rose to 3.79 percent from 3.69 percent lateThursday. Bank-to-bank lending rates fell again, though, suggesting that banks aremore willing to lend to one another -- a positive signal for the tight creditmarkets. The London interbank offered rate, or Libor, for three-month loans indollars dropped for the 20th straight day by 0.10 percent to 2.29 percent, thelowest level since November 2004. Overseas, Japan's Nikkei index fell 3.55 percent, and Hong Kong's Hang SengIndex rose 3.29 percent. Britain's FTS
Friday, November 07, 2008
8:55 am - FKLI gap down due to DJIA almost 5 pct loss
Trading is difficult leaving market congesting !
Thursday, November 06, 2008
6:14 pm - The Crash of 2008... Education...
The Crash of 2008... Education...
From: Robert Dijkstra (info.robertdijkstra@gmail.com)
Sent: Wed 10/29/08 10:05 AM
To: Robert (info.robertdijkstra@gmail.com)
The Crash of 2008... Education...
By Dr.Alexander Elder
Dear Trader,
We live in extraordinary times. The world stock markets have crashed, and their volatility is unprecedented. Back in the 1970s, when I first entered the markets, the 1,000 level of the Dow was called 'the graveyard in the sky' - any time the market went up to that level, it turned and entered a bear market that would go down 200 or even 300 points within the next year or two. Now the Dow can leap almost a thousand points in a single day, and a 200 point range feels almost like a quiet day.
We have seen severe damage to the price structures of major market indexes worldwide. On some days, as I listen to investors and traders, the feeling of fear is almost palpable. It pays to keep in mind that a savvy trader plans ahead, while a poor beginner jumps in response to emotions - he or she buys amidst the optimism of market tops and dumps shares in fear at market bottoms.
Let us review the current market situation, try to look ahead, and plan for the future. We also must begin thinking about the lessons this crash can teach us. This will take a long time and we will not accomplish everything in a single letter, but there are several points worth discussing today.
To find a parallel to today's state of the world's stock markets and global economy one must go back to 1929 and its aftermath. Those times seem like ancient history to most people, but when I first entered the markets I met guys who traded in 1929 and during the bear market that followed the crash. I eagerly listened to those old-timers and learned from them.
The Crash of 1929 rolled over into a Depression due to two severe mistakes by the Republican administration of that day. First, it focused on defending the US Dollar by jacking up interest rates which dealt a body blow to the real economy. Second, a misguided Congress tried to 'protect American industry' by erecting high tariff walls. It never occurred to those gentlemen to ask how we can expect the world to buy our goods if they cannot make money by selling their goods to us.
The current government is acting quite differently. It reminds me of Sigmund Freud's famous quote: 'the voice of reason is quiet but persistent.' Simply put, I think that the current administration has learned from those old mistakes and is handling the crisis much better. They are pumping money into the markets, supporting the banks, and not allowing the system to seize up. Sure, it feels disgusting that taxpayer money is going into the pockets of those who got us into this mess, but the key point is that trust must be restored so that the system can continue to function. Furthermore, instead of building self-defeating protectionist walls, today there is a remarkable degree of cooperation among finance officials around the globe. We are living through the worst worldwide financial crisis since 1929, but the signs are that we will muddle through a lot better now than our forefathers did back then. We do not expect to see what was a sad norm in the 1930's: a 25% unemployment rate, massive repossessions of busted out farms, and other such Grapes of Wrath stuff.
At the same time, I think we have not yet seen the bottom of this decline. Markets rarely if ever trace out V-bottoms. Individual stocks can do it occasionally, but it would be highly unlikely for the entire stock market to turn on a dime. A violent bottom, like the one we just saw, is likely to be retested a few months later on lower volume. Or rather - we hope it gets retested and then the market reverses, but there is no guarantee that the current lows will hold.
Let us look at a few numbers. The average length of a US bear market is about 18 months. This bear is just one year old, meaning it is reasonable to expect this weakness to last into Spring 2009. And what about the real economy? The stock market tends to lead the economy by about 9 months, although this lead may have shortened a bit, as the pace of life has speeded up. This would seem to indicate another year of continued weakness in the economy. When things get ugly in the economy, interest rates decline further, and almost everyone forgets what a bull market looks like, but that's when the first stage of the new bull market can begin - possibly some time in 2009.
Keep in mind that bear market bottoms present fantastic buying opportunities. Prepare yourself to think of incredible bargains you will be able to scoop up. This is a very important topic that we will be tracking in the months ahead.
And what about the lessons we should learn from this crash? The very first one is that every position deserves what I call 'a catastrophic stop'. An experienced trader may manage a short-term trade with only a mental stop, but every position you plan to hold for any length if time deserves a real stop at a level that one hopes never to see. Two friends of mine bought a stock at $20 that they thought was a bargain, but now it trades at 20 cents. One bailed out at $18, the other still holds it today. At the time he bought he should have asked himself, what level he never expected to see - $15? $12? Whatever it was, that's where he should have put his 'catastrophic stop!'
Most traders have very short memories. They look at recent events and extrapolate them into the future. They feel bullish at the tops and bearish at the bottoms. Long-term successful people possess a knowledge of history and a memory of how things work. They need it in order to do the counter-intuitive thing - sell at the tops and buy near the bottoms.
Make no mistake about it - there are fantastic buying opportunities ahead of us on the horizon. It is our goal to learn to recognize them, time them reasonably well, and have the intestinal fortitude to buy. These are the tasks on which we will be focusing.
PS - one day before this email was to be sent out, a message arrived from one of our clients. I reprint it here, with writer's permission, to show how a serious person takes steps to protect himself in a decline and even to profit in it:
"Dr. Elder,
In the last Bear market, I watched my 401k plummet and didn't know who to believe or trust.
After reading your books, attending your webinars and live seminars I began trading. Not successfully at first, but eventually producing consistent results.
Now, I am trading independently and trusting my own analysis of the chart patterns. This year has been incredible for my trading!
Thank you for sharing your lessons and wisdom. Without it, I certainly would be experiencing the same despair as in 2002.
Kyle Richardson"
From: Robert Dijkstra (info.robertdijkstra@gmail.com)
Sent: Wed 10/29/08 10:05 AM
To: Robert (info.robertdijkstra@gmail.com)
The Crash of 2008... Education...
By Dr.Alexander Elder
Dear Trader,
We live in extraordinary times. The world stock markets have crashed, and their volatility is unprecedented. Back in the 1970s, when I first entered the markets, the 1,000 level of the Dow was called 'the graveyard in the sky' - any time the market went up to that level, it turned and entered a bear market that would go down 200 or even 300 points within the next year or two. Now the Dow can leap almost a thousand points in a single day, and a 200 point range feels almost like a quiet day.
We have seen severe damage to the price structures of major market indexes worldwide. On some days, as I listen to investors and traders, the feeling of fear is almost palpable. It pays to keep in mind that a savvy trader plans ahead, while a poor beginner jumps in response to emotions - he or she buys amidst the optimism of market tops and dumps shares in fear at market bottoms.
Let us review the current market situation, try to look ahead, and plan for the future. We also must begin thinking about the lessons this crash can teach us. This will take a long time and we will not accomplish everything in a single letter, but there are several points worth discussing today.
To find a parallel to today's state of the world's stock markets and global economy one must go back to 1929 and its aftermath. Those times seem like ancient history to most people, but when I first entered the markets I met guys who traded in 1929 and during the bear market that followed the crash. I eagerly listened to those old-timers and learned from them.
The Crash of 1929 rolled over into a Depression due to two severe mistakes by the Republican administration of that day. First, it focused on defending the US Dollar by jacking up interest rates which dealt a body blow to the real economy. Second, a misguided Congress tried to 'protect American industry' by erecting high tariff walls. It never occurred to those gentlemen to ask how we can expect the world to buy our goods if they cannot make money by selling their goods to us.
The current government is acting quite differently. It reminds me of Sigmund Freud's famous quote: 'the voice of reason is quiet but persistent.' Simply put, I think that the current administration has learned from those old mistakes and is handling the crisis much better. They are pumping money into the markets, supporting the banks, and not allowing the system to seize up. Sure, it feels disgusting that taxpayer money is going into the pockets of those who got us into this mess, but the key point is that trust must be restored so that the system can continue to function. Furthermore, instead of building self-defeating protectionist walls, today there is a remarkable degree of cooperation among finance officials around the globe. We are living through the worst worldwide financial crisis since 1929, but the signs are that we will muddle through a lot better now than our forefathers did back then. We do not expect to see what was a sad norm in the 1930's: a 25% unemployment rate, massive repossessions of busted out farms, and other such Grapes of Wrath stuff.
At the same time, I think we have not yet seen the bottom of this decline. Markets rarely if ever trace out V-bottoms. Individual stocks can do it occasionally, but it would be highly unlikely for the entire stock market to turn on a dime. A violent bottom, like the one we just saw, is likely to be retested a few months later on lower volume. Or rather - we hope it gets retested and then the market reverses, but there is no guarantee that the current lows will hold.
Let us look at a few numbers. The average length of a US bear market is about 18 months. This bear is just one year old, meaning it is reasonable to expect this weakness to last into Spring 2009. And what about the real economy? The stock market tends to lead the economy by about 9 months, although this lead may have shortened a bit, as the pace of life has speeded up. This would seem to indicate another year of continued weakness in the economy. When things get ugly in the economy, interest rates decline further, and almost everyone forgets what a bull market looks like, but that's when the first stage of the new bull market can begin - possibly some time in 2009.
Keep in mind that bear market bottoms present fantastic buying opportunities. Prepare yourself to think of incredible bargains you will be able to scoop up. This is a very important topic that we will be tracking in the months ahead.
And what about the lessons we should learn from this crash? The very first one is that every position deserves what I call 'a catastrophic stop'. An experienced trader may manage a short-term trade with only a mental stop, but every position you plan to hold for any length if time deserves a real stop at a level that one hopes never to see. Two friends of mine bought a stock at $20 that they thought was a bargain, but now it trades at 20 cents. One bailed out at $18, the other still holds it today. At the time he bought he should have asked himself, what level he never expected to see - $15? $12? Whatever it was, that's where he should have put his 'catastrophic stop!'
Most traders have very short memories. They look at recent events and extrapolate them into the future. They feel bullish at the tops and bearish at the bottoms. Long-term successful people possess a knowledge of history and a memory of how things work. They need it in order to do the counter-intuitive thing - sell at the tops and buy near the bottoms.
Make no mistake about it - there are fantastic buying opportunities ahead of us on the horizon. It is our goal to learn to recognize them, time them reasonably well, and have the intestinal fortitude to buy. These are the tasks on which we will be focusing.
PS - one day before this email was to be sent out, a message arrived from one of our clients. I reprint it here, with writer's permission, to show how a serious person takes steps to protect himself in a decline and even to profit in it:
"Dr. Elder,
In the last Bear market, I watched my 401k plummet and didn't know who to believe or trust.
After reading your books, attending your webinars and live seminars I began trading. Not successfully at first, but eventually producing consistent results.
Now, I am trading independently and trusting my own analysis of the chart patterns. This year has been incredible for my trading!
Thank you for sharing your lessons and wisdom. Without it, I certainly would be experiencing the same despair as in 2002.
Kyle Richardson"
Wednesday, November 05, 2008
Tuesday, November 04, 2008
Monday, November 03, 2008
12:19 noon - Market Outlook from Bill Wermine
Dear Traders.
A week ago, the rush to find US Dollars to repay hugh USD debt was in full force, along with huge flows into US T Bills and notes. Now the river has entered a lake of liquidity dug by the world's central banks, with the US Fed leading the charge with help from Brazil, Mexico, S Korea and Singapore. The result has been a 10 % gain in many world markets including a 6 % gain in the KLSE.
There is a good chance we are looking at a sentiment extreme and prices for the battered victims of the financial markets.
America has awesome twin deficits that make the USD vulnerable and positive for commodities including CPO.
I ran TAVA MetaStock filter today and found several beaten down KLSE blue chip shares with good volume coming in. Could this be the turn ?
The AUD is also turning and should be positive for commodities and our Man Fund AUD investments.
Daily AUD Futures chart showing support coming in and a 776 pip rally.
A week ago, the rush to find US Dollars to repay hugh USD debt was in full force, along with huge flows into US T Bills and notes. Now the river has entered a lake of liquidity dug by the world's central banks, with the US Fed leading the charge with help from Brazil, Mexico, S Korea and Singapore. The result has been a 10 % gain in many world markets including a 6 % gain in the KLSE.
There is a good chance we are looking at a sentiment extreme and prices for the battered victims of the financial markets.
America has awesome twin deficits that make the USD vulnerable and positive for commodities including CPO.
I ran TAVA MetaStock filter today and found several beaten down KLSE blue chip shares with good volume coming in. Could this be the turn ?
The AUD is also turning and should be positive for commodities and our Man Fund AUD investments.
Daily AUD Futures chart showing support coming in and a 776 pip rally.
WE are holding a 10 point CPE course approved by the Securities Commission on 10 November at the Phillip Training room. We start at 10 AM. The subject will be Price and Volume trading. I and Martin intend to make some trades in the CPO and CI Futures markets to demonstrate the power of volume spread analysis as well as some share trades. Cost of the one day course is RM 198. Seats are very limited. FOC to main course grads.
This is a practical course about making money with a very limited amount of theory. Please call Wai Kiat of Phillip Data service 03 398 9522 or 012 398 9522 if you wish to register as he is the organizer.
Risk is low now because of the fear, panic,doom and gloom sentiments of most players.
Have a good week
Bill
Saturday, November 01, 2008
8:29 am - A interesting chart for DJIA - moving higher on increasing volume.
Meeting resistance at 9300. If this break, this wud the 3rd time. Look at P&F charts.
8:27 am - Stocks advance to add to week's large gains
Stocks advance to add to week's large gains NEW YORK (AP) - The stock market closed out ahorrendous October, its worst month in 21 years, with a big advance Friday asmore investors took chances on stocks turned into bargains by waves of intenseselling. The advance -- which gave the market its first back-to-back gains inmore than a month -- fed hopes that Wall Street has indeed found a bottom. The Dow Jones industrials rose 144 points on the day but ended the monthdown 14.1 percent, while the broader Standard & Poor's 500 index lost 16.9percent during October as the stock market fell victim to investors' anguishover frozen credit markets and what looked like an inevitable recession. But the month did end on a far more upbeat note than anyone might haveexpected at the height of investors' despair just weeks ago. The Dow was up 11.3percent for the week, its best weekly performance in 34 years, while the S&P 500index rose 10.5 percent -- a sign of stability that followed a growing sensethat the series of government moves to unlock the credit markets would indeedhelp the economy move toward recovery. Investors who have become used to bad economic news dealt calmly Friday withdata showing a drop in consumer spending. Another reason for the advance: Mutualfunds that dumped stocks furiously as the end of their fiscal year approachedwere finished with their selling. While the market capped a terrible month with a strong week, it likely willneed to put the presidential election next week behind it and focus on theOctober employment report due next Friday before committing to a direction. Thejobs report should provide some insight into how long and how severe theeconomic downturn could be. The market is "settling into a little bit of a holding pattern" ahead of theelection and jobs report, said Craig Peckham, market strategist at Jefferies &Co. "The fear level has clearly subsided, but there's still a pervasive tone ofunease." The Dow rose 144.32, or 1.57 percent, to 9,325.01 after rising as much as274 and falling 62. Broader stock indicators also advanced. The S&P 500 index rose 14.66, or1.54 percent, to 968.75, while the Nasdaq composite index rose 22.43, or 1.32percent, to 1,720.95. The Russell 2000 index of smaller companies rose 23.34, or 4.54 percent, to537.52. Advancing issues outnumbered decliners by about 5 to 2 on the New York StockExchange, where volume came to a moderate 1.57 billion shares. Lighter volumecan raise questions about the conviction behind the market's moves. October marked the Dow's worst percentage loss since 1987. But the 11.3percent gain for the week -- mostly from an 889-point surge on Tuesday ahead ofthe Federal Reserve's second interest rate cut of the month on Wednesday -- gavethe Dow its best weekly performance since Oct. 11, 1974. Still, the market's stats during the month of October were unnerving: -- Paper losses in U.S. stocks came to $2.5 trillion for the month,according to the Dow Jones Wilshire 5000 Composite Index, which representsnearly all stocks traded in America. The 17.7 percent decline was the worstsince the 23 percent drop in October 1987. -- During the week of Oct. 10, the Dow plunged 1,874.19 points, or 18.2percent to finish at 8,451.19, its lowest close since April 2003. The week'sdecline accounted for half of the blue chips' losses for the entire year. -- The Dow fell for eight straight sessions -- the longest losing streaksince the eight days of declines following the Sept. 11, 2001, terror attacks,when the blue chips lost 1,038.12, or 10.8 percent. It lost a staggering 2,400points, or 22.1 percent. -- The market's volatility was so intense that there were just three daysduring the month that the Dow didn't rise or fall in triple digits. The Dow setnew records for one-day point gains, 936.42 and 889.35, and for one-day pointlosses, 777.68 and 733.08. The stock market began the month anguishing over the House ofRepresentative's rejection of the government's plan to bail out the nation'sfinancial system -- a program made necessary by the paralysis of the creditmarkets following the failure of Lehman Brothers Holdings Inc. But the ultimatepassage of the plan gave the market no lasting joy -- it was overshadowed by themarket's intense fears of a prolonged and deep recession, and the volatility andheavy selling that marked the month continued. It was only after the government decided to invest money into the nation'sbig banks that the market began to calm -- there were signs that lending wasstarting to ease. There were still waves of selling, some of them due to hedgeand mutual funds unloading their shares at the end of their fiscal year, but bythis week, signs were emerging that Wall Street was righting itself. But the week's relative stability offered investors some calm. And theirreaction to economic data also showed a decrease in some of their anxiety. TheCommerce Department said personal spending fell by 0.3 percent last month, asexpected, the biggest decline since June 2004. Combined with flat readings inboth July and August, it led to the worst quarterly performance in 28 years. The Chicago Purchasing Managers Index, a measure of manufacturing activity,fell to a reading of 37.8 -- much worse than the 48.0 figure that analystsanticipated. But the University of Michigan's consumer sentiment data came in at57.6, slightly better than the 57.5 expected. Alongside the unsurprisingly downbeat readings, investors also consideredwhether government help for struggling homeowners might be able to helpstabilize the housing market and alleviate a worry for many homeowners, eventhose not behind on mortgage payments. Federal Reserve Chairman Ben Bernanke, speaking by satellite to a Berkeley,Calif., conference said the housing finance system will require bettersafeguards to allow it to function during times of strain in the market. Heoutlined a number of possible ways to structure housing finance in the future,though he did not indicate his preferences. The Bush administration is mulling a proposal that would help around 3million homeowners avoid foreclosure by having the government guarantee billionsof dollars worth of distressed mortgages. It could include changes to loans thatwould lower interest rates for a five-year period. Treasury demand let up slightly as stocks rose. The three-month Treasurybill, considered one of the safest assets around, yielded 0.45 percent, higherthan 0.37 percent late Thursday. A higher yield translates to decreased demand.The 10-year Treasury note's yield was 3.97 percent, unchanged from lateThursday. The dollar was mixed against other major currencies. Gold prices declined. Crude oil fell $1.35 to $64.61 a barrel on the New York Mercantile Exchange. Overseas, Japan's Nikkei stock average fell 5.01 percent. Britain's FTSE 100rose 2.01 percent, Germany's DAX index rose 2.44 percent, and France's CAC-40rose 2.33 percent. Copyright 2008 Associated Press. All rights reserved. This material may not be
Friday, October 31, 2008
Thursday, October 30, 2008
10:19 am - DJIA is up but selling volume remained low !
Watch out for the presidential election on Nov 4.
Wednesday, October 29, 2008
11:46 am - Market Outlook by Bill Wermine !
Dear Traders,
On Wednesday, Sam Gibson, an executive with Man gave a briefing on Man Funds at the PJ Hilton. Many of you including myself and Martin are invested in Man and are worried as many hedge funds are bust or lost most of their assets.
Here are the highlights of his briefing:
1- Man AHL has performed positively this quarter making a small profit. Man AHL is the driver of Man Essential/ Eclipse Funds.
2 - Losses as reflected in your Fame account are because the AUD dropped in value versus the RM. Sam reported that the AUD may recover in the next few months
as world credit problems resolve themselves and banks start to lend again. He also mentioned that Australian Banks are solid and not caught up in the credit crises and this is AUD supportive. Demand for commodities which Australia produces is still strong from China despite the negative press.
3 The Australian government has announced that they will guarantee all bank deposts. This means your capital guarantee for the Man Funds is secure. Your guarantee is secured in AUD government bonds and no exposure to AIG/ Lehmen or any mortgage/subprime bonds.
4 The holding company of Man listed in London FTSE is an asset manager and not a bank which means they do not suffer credit problems that UK banks are suffering.
5 Man AHL deals in commodity markets and exploits trends both up and down. Because commodities are traded on an an official exchange such as the CPOT or CME with a clearing house and in cash there is virtually no risk of default.
6 Man is a fund of funds and not a one man show fund. THis means you are diversified among markets and managers. Most hedge funds that went bust recently are one man show funds.
7 Man fund withdrawals by fearful investors have been very limited in this market turmoil testifing to the confidence of institutional and professional investors in Man.
After listening to the presentation I have decided to personally commit more funds to Man. The newly launched capital guaranteed fund will close on 28 November.
There will be no newsletter this weekend as I am going to Vietnam on holiday. Any questions on your account or investments with me please call Martin 03 2084 9999 ext 3533. Will be back on Tuesday
The KLSE is holding at the monthly support having being tested 3 times. Risk is limited at this levels but continue to deal in only the highest quality issues.
Have a good week ahead
Bill
On Wednesday, Sam Gibson, an executive with Man gave a briefing on Man Funds at the PJ Hilton. Many of you including myself and Martin are invested in Man and are worried as many hedge funds are bust or lost most of their assets.
Here are the highlights of his briefing:
1- Man AHL has performed positively this quarter making a small profit. Man AHL is the driver of Man Essential/ Eclipse Funds.
2 - Losses as reflected in your Fame account are because the AUD dropped in value versus the RM. Sam reported that the AUD may recover in the next few months
as world credit problems resolve themselves and banks start to lend again. He also mentioned that Australian Banks are solid and not caught up in the credit crises and this is AUD supportive. Demand for commodities which Australia produces is still strong from China despite the negative press.
3 The Australian government has announced that they will guarantee all bank deposts. This means your capital guarantee for the Man Funds is secure. Your guarantee is secured in AUD government bonds and no exposure to AIG/ Lehmen or any mortgage/subprime bonds.
4 The holding company of Man listed in London FTSE is an asset manager and not a bank which means they do not suffer credit problems that UK banks are suffering.
5 Man AHL deals in commodity markets and exploits trends both up and down. Because commodities are traded on an an official exchange such as the CPOT or CME with a clearing house and in cash there is virtually no risk of default.
6 Man is a fund of funds and not a one man show fund. THis means you are diversified among markets and managers. Most hedge funds that went bust recently are one man show funds.
7 Man fund withdrawals by fearful investors have been very limited in this market turmoil testifing to the confidence of institutional and professional investors in Man.
After listening to the presentation I have decided to personally commit more funds to Man. The newly launched capital guaranteed fund will close on 28 November.
There will be no newsletter this weekend as I am going to Vietnam on holiday. Any questions on your account or investments with me please call Martin 03 2084 9999 ext 3533. Will be back on Tuesday
The KLSE is holding at the monthly support having being tested 3 times. Risk is limited at this levels but continue to deal in only the highest quality issues.
Have a good week ahead
Bill
Tuesday, October 28, 2008
Friday, October 24, 2008
Thursday, October 23, 2008
1:16 pm - FKLI broke higher at 881.0
Gone long earlier this morning but cut losses. Some clients is long too. Profit objective is 896.5. Let's see if it can hit it today !
10:16 am - I am presenting a talk on futures on FKLI/FCPO this coming Saturday 25 Oct 2008
CIMB Events
OCT 25 (Kuala Lumpur) – 8.00am to 1.30pm
CIMB Bursa Market Chat 2008 – To be held at Securities Commission Kuala Lumpur.
My talk is at 11.45 pm . There are other speakers speaking on market outlook of Msia and online trading by CIMB.
Light refreshments will be served. Admission is Fee.
Call CIMB general line at 03 2084 9999 and ask for itrade for registration.
See you there.
Rgds,
-martin-
OCT 25 (Kuala Lumpur) – 8.00am to 1.30pm
CIMB Bursa Market Chat 2008 – To be held at Securities Commission Kuala Lumpur.
My talk is at 11.45 pm . There are other speakers speaking on market outlook of Msia and online trading by CIMB.
Light refreshments will be served. Admission is Fee.
Call CIMB general line at 03 2084 9999 and ask for itrade for registration.
See you there.
Rgds,
-martin-
8:59 am - There were two major support at 875/876
These two support were in Dec 05 and June 06. I think FKLI can stop here for the time being ! But the point is you need a catalyst for the mkt to rebound back in the afternoon.
Wednesday, October 22, 2008
Tuesday, October 21, 2008
9:11 am - FKLI need to break above 930/931 to move higher.
That's the long trade. However, I suppose many who had long wud take profit at this resistance level 930.
Monday, October 20, 2008
10:16 am - Market Outlook by Bill Wermine
Dear Traders,
I have had a number of calls this week, " Should I sell all my shares ? Is Malaysia in recession? Everything is so bad. I am depressed. All the economic news on TV is bad. Major banks in the world are collapsing- Is it safe to keep my money in the bank ? Is the Man Fund Capital guaranteed still a guarantee ? What if NAB Bank in Australia who underwrites the Man capital guarantee goes bust? Do I lose all my money ?
Fear is at the absolute extreme. Perhaps at the 1931 depression levels- It is as though Chicago was hit by a nuclear bomb !
My advice: DO NOT THROW AWAY YOUR QUALITY SHARES or your Man Investments. (Man AHL made a 7 % return in September covering the JUly and August loss)
Here is the reality: Warren Buffet has opened his wallet to buy for his own account. When he opens his wallet we are close to a bottom. The news is creating the fear and panic and driving the herd of sheep to the slaughter house. The tigers of the market are enjoying the feast.
Look at facts and logic: Credit and oil are the lifeblood of the world economy- oil has collapsed which gives a huge economic boost but the media and most investors are not discounting the almost 50 % drop in crude oil. Credit is beginning to unfreeze. This will cause the US dollar to drop, AUD/MR rate to move in the AUD favor and commodities to pick up and the KLSE/world markets to begin a recovery. Just like our body- when we suffer an injury it takes time to heal. The healing has started.
On Wednesday, you are invited to a private event: Please let me know your questions about current performance/capital guarantee so we can ask Sam.
Mr Sam Gibson from Man Investments will share on how alternative investment can help to enhance your total portfolio while Our CIO, Mr Ang Kok Heng will share his views on the advantages of foreign investments and the analysis on historical performance of Man Investment funds.
Details of the talk are as below:
Date : 22 October 2008 (Wednesday)
Time : 7.00pm - 9.45pm
Venue : Kristal Ballroom 1,
1st Floor East Wing, Hilton Petaling Jaya Hotel,
No 2 Jalan Barat,
46200 Petaling Jaya.
7.00 pm Registration
7.30 pm Alternative Investment Opportunities Through Man Investment
by Mr Sam Gibson of MAN Investment
8.30 pm BREAK*
8.45 pm Voyaging the Financial Tsunami
by Mr Ang Kok Heng, Chief Investment Officer of Phillip Capital Management Sdn Bhd
9.45 pm Question and Answer Session
*Refreshments will be provided.
Please RSVP with Azimah at 03-2711 3038 or email me This seminar is free of charge.
DOW 30 Futures with support building off a double bottom. It takes time to heal. TG issued a classic shakeout signal on 13 October showing that scared sellers are giving to strong hand smart money buyers. Despite the doom and gloom Malaysia is much stronger economically than the US. The political problems in Malaysia are a storm in a teacup and have nothing to do with the supply and demand for CPO etc. .
I have had a number of calls this week, " Should I sell all my shares ? Is Malaysia in recession? Everything is so bad. I am depressed. All the economic news on TV is bad. Major banks in the world are collapsing- Is it safe to keep my money in the bank ? Is the Man Fund Capital guaranteed still a guarantee ? What if NAB Bank in Australia who underwrites the Man capital guarantee goes bust? Do I lose all my money ?
Fear is at the absolute extreme. Perhaps at the 1931 depression levels- It is as though Chicago was hit by a nuclear bomb !
My advice: DO NOT THROW AWAY YOUR QUALITY SHARES or your Man Investments. (Man AHL made a 7 % return in September covering the JUly and August loss)
Here is the reality: Warren Buffet has opened his wallet to buy for his own account. When he opens his wallet we are close to a bottom. The news is creating the fear and panic and driving the herd of sheep to the slaughter house. The tigers of the market are enjoying the feast.
Look at facts and logic: Credit and oil are the lifeblood of the world economy- oil has collapsed which gives a huge economic boost but the media and most investors are not discounting the almost 50 % drop in crude oil. Credit is beginning to unfreeze. This will cause the US dollar to drop, AUD/MR rate to move in the AUD favor and commodities to pick up and the KLSE/world markets to begin a recovery. Just like our body- when we suffer an injury it takes time to heal. The healing has started.
On Wednesday, you are invited to a private event: Please let me know your questions about current performance/capital guarantee so we can ask Sam.
Mr Sam Gibson from Man Investments will share on how alternative investment can help to enhance your total portfolio while Our CIO, Mr Ang Kok Heng will share his views on the advantages of foreign investments and the analysis on historical performance of Man Investment funds.
Details of the talk are as below:
Date : 22 October 2008 (Wednesday)
Time : 7.00pm - 9.45pm
Venue : Kristal Ballroom 1,
1st Floor East Wing, Hilton Petaling Jaya Hotel,
No 2 Jalan Barat,
46200 Petaling Jaya.
7.00 pm Registration
7.30 pm Alternative Investment Opportunities Through Man Investment
by Mr Sam Gibson of MAN Investment
8.30 pm BREAK*
8.45 pm Voyaging the Financial Tsunami
by Mr Ang Kok Heng, Chief Investment Officer of Phillip Capital Management Sdn Bhd
9.45 pm Question and Answer Session
*Refreshments will be provided.
Please RSVP with Azimah at 03-2711 3038 or email me This seminar is free of charge.
DOW 30 Futures with support building off a double bottom. It takes time to heal. TG issued a classic shakeout signal on 13 October showing that scared sellers are giving to strong hand smart money buyers. Despite the doom and gloom Malaysia is much stronger economically than the US. The political problems in Malaysia are a storm in a teacup and have nothing to do with the supply and demand for CPO etc. .
Have a good week
Bill
Saturday, October 18, 2008
5:40 pm - More bad news from DJIA
Fallout from financial crisis hammers housingSaturday October 18, 4:57 am ET By Martin Crutsinger, AP Economics Writer
Financial crisis takes toll on battered housing market; Wall St. ends week with relative calm
WASHINGTON (AP) -- The nation is on track to build fewer homes this year than at any time since the end of World War II, adding to the woes of an economy that analysts said Friday has almost certainly entered a recession.
While the economic outlook darkened even further with bad reports on layoffs and consumer confidence, it was one of the quietest days since the financial meltdown began a month ago. Wall Street's tumultuous week turned out to be its best in five years.
The Dow Jones industrial average lost 127 points Friday but turned in the strong week because of two huge days of gains -- a record 936-point jump on Monday and an increase of 401 points Thursday.
Friday was still marked by the huge swings that have become typical lately. At various points the Dow was up nearly 300 points and down nearly 250, and it finished with a triple-digit move for the 22nd time in 25 trading sessions.
A monthly survey by the National Association of Home Builders showed sentiment among home builders hit a record low in early October.
David Seiders, chief economist for the group, said builders are being hit by a double whammy from the financial turmoil: It's harder for them to get loans to pursue new houses, and more difficult to sell those they do build.
He forecast that builders will keep slashing production in coming months, with construction starts for new homes and apartments totaling just 936,000 this year, the lowest level since 1945.
"The builders are telling us that the financial crisis is really hurting because people justifiably have no idea where things are going," Seiders said.
Before the markets opened, President Bush went to the headquarters of the U.S. Chamber of Commerce to say that the $700 billion financial rescue package was "big enough and bold enough to work."
But he cautioned that it would take time to unlock credit markets.
Adam Levitin, an associate professor at Georgetown University Law School, said that even with the government's injection of billions into the banks, the high debt loads carried by consumers and shortage of creditworthy borrowers could continue to chill lending.
"Who's going to lend to GM right now?" Levitin said at a conference organized by the American Bar Association. He also asked what banks would lend money to homeowners with troubled mortgages.
Analysts said new data released Friday showed it's probably too late for the economy to avoid a recession.
Many of them said they now had recessions in their forecasts, believing that the overall economy, as measured by total domestic production, probably shrank in the July-to-September quarter, dragged lower in part by the continued plunge in housing.
"I don't think there is any ambiguity with respect to whether we are in a recession," said Mark Zandi, chief economist at Moody's Economy.com. "I think it actually started at the end of last year, and because of the financial panic we are going through now, it is likely to last another year."
Other economists said they were looking for at least three consecutive quarters of contraction, reflecting in part the fact that consumers, who account for two-thirds of total economic activity, are showing the strains of the biggest upheaval in the financial sector in 70 years.
A new University of Michigan/Reuters survey showed consumer confidence plunged in early October to its second-lowest level in the past 28 years.
"Concerns about falling employment, incomes and wealth have overshadowed relief from lower energy prices," said Sara Johnson, an economist at Global Insight, a Lexington, Mass., forecasting firm.
The Commerce Department said Friday that construction of new homes and apartments dropped by a bigger-than-expected 6.3 percent in September to an annual rate of 817,000 units, the second weakest performance in government statistics dating back to 1959. The only weaker monthly showing occurred in January 1991, when the U.S. was in a recession and going through a similar painful housing correction.
In a bleak sign of future construction, applications for new building permits fell a sharp 8.2 percent to an annual rate of 786,000 units, the weakest level in more than 25 years.
The government also sharply revised lower its construction data for July and August. That was after dismal news earlier this week that retail sales fell by 1.2 percent in September.
Influential billionaire investor Warren Buffett said in opinion piece in The New York Times that he sees opportunity in the Wall Street chaos. He's been moving his personal investments from safe Treasuries into U.S. stocks.
"To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions," Buffett wrote. "But fears regarding the long-term prosperity of the nation's many sound companies make no sense."
The market eventually will turn around. "So if you wait for the robins, spring will be over," he said.
On the housing front, while the sharp cutbacks in production will help reduce huge inventories of unsold homes, the problem is that rising levels of foreclosures are dumping more homes on the already glutted market.
Zandi said he believed that home prices, which have already fallen by 20 percent, will fall by another 10 percent and will not stabilize until the middle of next year.
Kim Shelpman, the chief executive of Holiday Builders, which operates in Texas, Florida, Alabama and South Carolina, said that her company was competing against a rising tide of foreclosures, but that she believed the excess inventory of homes was being "eaten up at a much quicker pace."
Jesse Barrington, a sale consultant with Sotherby Homes, said the sales slowdown nationwide had been less pronounced in the upscale suburbs of north of Dallas where about 20 homes in a new subdivision had recently sold.
"In a normal economy, this is a good year. In this economy, it's phenomenal," he said.
In the South, sales managed a small 0.5 percent gain in September. They rose by 5.6 percent in the Midwest, where a boost in apartment building offset a slide in single-family homes to a record low.
The weakness last month was led by a 21 percent drop in the Northeast, where construction of single-family units fell to the lowest level on record, and the West, where building slipped by almost 17 percent with single-family construction also hitting a record-low in that region.
On Tuesday, the Treasury Department announced it would inject up to $250 billion in U.S. banks in return for partial ownership stakes, in a program similar to one launched in 1932 by President Herbert Hoover. The government hopes banks will use the capital infusions to rebuild their reserves and bolster lending to customers.
AP Business Writers Jeff Carlton in Dallas and J.W. Elphinstone in New York contributed to this report.
Financial crisis takes toll on battered housing market; Wall St. ends week with relative calm
WASHINGTON (AP) -- The nation is on track to build fewer homes this year than at any time since the end of World War II, adding to the woes of an economy that analysts said Friday has almost certainly entered a recession.
While the economic outlook darkened even further with bad reports on layoffs and consumer confidence, it was one of the quietest days since the financial meltdown began a month ago. Wall Street's tumultuous week turned out to be its best in five years.
The Dow Jones industrial average lost 127 points Friday but turned in the strong week because of two huge days of gains -- a record 936-point jump on Monday and an increase of 401 points Thursday.
Friday was still marked by the huge swings that have become typical lately. At various points the Dow was up nearly 300 points and down nearly 250, and it finished with a triple-digit move for the 22nd time in 25 trading sessions.
A monthly survey by the National Association of Home Builders showed sentiment among home builders hit a record low in early October.
David Seiders, chief economist for the group, said builders are being hit by a double whammy from the financial turmoil: It's harder for them to get loans to pursue new houses, and more difficult to sell those they do build.
He forecast that builders will keep slashing production in coming months, with construction starts for new homes and apartments totaling just 936,000 this year, the lowest level since 1945.
"The builders are telling us that the financial crisis is really hurting because people justifiably have no idea where things are going," Seiders said.
Before the markets opened, President Bush went to the headquarters of the U.S. Chamber of Commerce to say that the $700 billion financial rescue package was "big enough and bold enough to work."
But he cautioned that it would take time to unlock credit markets.
Adam Levitin, an associate professor at Georgetown University Law School, said that even with the government's injection of billions into the banks, the high debt loads carried by consumers and shortage of creditworthy borrowers could continue to chill lending.
"Who's going to lend to GM right now?" Levitin said at a conference organized by the American Bar Association. He also asked what banks would lend money to homeowners with troubled mortgages.
Analysts said new data released Friday showed it's probably too late for the economy to avoid a recession.
Many of them said they now had recessions in their forecasts, believing that the overall economy, as measured by total domestic production, probably shrank in the July-to-September quarter, dragged lower in part by the continued plunge in housing.
"I don't think there is any ambiguity with respect to whether we are in a recession," said Mark Zandi, chief economist at Moody's Economy.com. "I think it actually started at the end of last year, and because of the financial panic we are going through now, it is likely to last another year."
Other economists said they were looking for at least three consecutive quarters of contraction, reflecting in part the fact that consumers, who account for two-thirds of total economic activity, are showing the strains of the biggest upheaval in the financial sector in 70 years.
A new University of Michigan/Reuters survey showed consumer confidence plunged in early October to its second-lowest level in the past 28 years.
"Concerns about falling employment, incomes and wealth have overshadowed relief from lower energy prices," said Sara Johnson, an economist at Global Insight, a Lexington, Mass., forecasting firm.
The Commerce Department said Friday that construction of new homes and apartments dropped by a bigger-than-expected 6.3 percent in September to an annual rate of 817,000 units, the second weakest performance in government statistics dating back to 1959. The only weaker monthly showing occurred in January 1991, when the U.S. was in a recession and going through a similar painful housing correction.
In a bleak sign of future construction, applications for new building permits fell a sharp 8.2 percent to an annual rate of 786,000 units, the weakest level in more than 25 years.
The government also sharply revised lower its construction data for July and August. That was after dismal news earlier this week that retail sales fell by 1.2 percent in September.
Influential billionaire investor Warren Buffett said in opinion piece in The New York Times that he sees opportunity in the Wall Street chaos. He's been moving his personal investments from safe Treasuries into U.S. stocks.
"To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions," Buffett wrote. "But fears regarding the long-term prosperity of the nation's many sound companies make no sense."
The market eventually will turn around. "So if you wait for the robins, spring will be over," he said.
On the housing front, while the sharp cutbacks in production will help reduce huge inventories of unsold homes, the problem is that rising levels of foreclosures are dumping more homes on the already glutted market.
Zandi said he believed that home prices, which have already fallen by 20 percent, will fall by another 10 percent and will not stabilize until the middle of next year.
Kim Shelpman, the chief executive of Holiday Builders, which operates in Texas, Florida, Alabama and South Carolina, said that her company was competing against a rising tide of foreclosures, but that she believed the excess inventory of homes was being "eaten up at a much quicker pace."
Jesse Barrington, a sale consultant with Sotherby Homes, said the sales slowdown nationwide had been less pronounced in the upscale suburbs of north of Dallas where about 20 homes in a new subdivision had recently sold.
"In a normal economy, this is a good year. In this economy, it's phenomenal," he said.
In the South, sales managed a small 0.5 percent gain in September. They rose by 5.6 percent in the Midwest, where a boost in apartment building offset a slide in single-family homes to a record low.
The weakness last month was led by a 21 percent drop in the Northeast, where construction of single-family units fell to the lowest level on record, and the West, where building slipped by almost 17 percent with single-family construction also hitting a record-low in that region.
On Tuesday, the Treasury Department announced it would inject up to $250 billion in U.S. banks in return for partial ownership stakes, in a program similar to one launched in 1932 by President Herbert Hoover. The government hopes banks will use the capital infusions to rebuild their reserves and bolster lending to customers.
AP Business Writers Jeff Carlton in Dallas and J.W. Elphinstone in New York contributed to this report.
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