THE BEAR CASE

The October PMI Index outlines manufacturing is still growth oriented coming in at 51.2 (above 50 is considered expansion). However month to month comparisons indicates that manufracturing is slowing with a -1.7% decline from September.
Production came in at 51.9 which is a -4.2% decline from the previous month.
Supplier deliveries came in at 50.2 a -3.9% decline from the previous month.
Inventories rose to a reading of 49.4 a +3.0% rise from the previous month.

The October PMI indicates that both the overall economy and the manufacturing sector are growing at a slower rate.

New Orders
ISM's New Orders Index registered 52.1 percent in October. The index is 2.1 percentage points lower than the 54.2 percent reported in September.

Dow theory maintains that both the djia and the transports should be moving in the same direction. When the performance of the averages diverge, it is a warning that change is in the air.




Non confirmation by the transports...

CPI, the consumer price index rose 2.9% from September 2005. This is inflationary and is bearish...

PPI, the producer price index for finished goods fell 1.3 percent in September which is deflationary for domestic producers and is bearish...

As documented in recent charts (see below) there is weakness in the restaurant, computer software, retail, semiconductor's etc..........

Charts and comments are NEVER INTENTED AS ADVICE...

Thanks for visiting...

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