主题：03/27/2009 Market View -- 宁子

Data Still Showing Modest Gains.

Hear that? Sounds like whips hitting a dead horse carcass again. Once more last week revealed more economic data that, while hardly indicative of a surging economy, shows a slowing of the rush to the depression. Existing home sales, new home sales, and factory orders all topped expectations and more than that, the revisions were positive as well.

I have said it many times before, but when the revisions start taking back what the prior assumptions offered that is when you start to see the true turns in the economy. As with the stock market, weather forecasting, or any other prognostication endeavor, the humans that man the controls tend to fall into a trend in line with the current trend and they don't change their ways even as the trend starts to change. Thus they continue on in the belief the trend will hold even when the data suggests it is at least pausing. Thus their forecasts and assumptions are based on the current trend, and when there is a true change they have to revise their assumptions as more and more data comes in so they can reconcile with the facts.

The facts right now show slowing in the rate of decline and more than that, showing it for more than just a month. Regional manufacturing is stringing together a series of 'slower declines', meaning contraction continues but the pace is slowing more and more. Durable goods orders and factory orders are bouncing back and forth, showing the volatility that is associated with every change in any trend. I use a weather analogy frequently. When a season is well established the weather patterns are trending in one direction and forecasting the weather is easy. Summertime on the coast means a high around 90, still winds, and a 20% chance of a shower coming in off the Gulf. When the fall starts to roll around, however, the winds shift, fronts race through at differing intervals, violent storms kick off when cold air slams into warm moist Gulf air. Volatility. Then as the fall takes control you get nice days that get shorter and shorter. That holds up until winter hits and things get choppy once more.

The economic data is trying to get choppy, trying to show a bit of volatility. The attempts have not been that forceful yet, kind of like a defector from the Eastern Block learning to speak up with freedom's voice. Pensive at first, then gains confidence as he or she is not hauled off and never heard from again. Maybe these are all head fakes, just blips in an otherwise ongoing death spiral. All we know is that the attempts at improvement cover the waterfront and the market responded ahead of them with this initial bounce that, by the way, has the chips out in front just as it was in late 2002 when the market initially rallied off the bottom before the long, drawn out spring 2003 test that nearly had investors slashing their wrists.