We have our Durable Goods report for August today at 10am.

There are many indications that Durable Goods may miss the high expectaions of a 1.2% increase, especially the anticipated 0.7% mark ex-autos (Cash for Clunkers) and, no matter what, it will be a far cry from the 5.1% increase we posted in July, when the car-buying frenzy began.  We’ve been discussing shipping issues – unless they have found a way to have major appliances walk to your home on their own, there simply isn’t enough shipping and trucking activity to support a big number.  Also, the GDP report, retail sales report, consumer surveys and BBY earnings all indicated that people were just not all hyped up about getting a new washing machine this year

It was a strong July Durable Goods report that launched this leg of the rally on Sepember 2nd.  We at Philstockworld, who actually read the damn reports, noticed that virtually the ENTIRE gain for the month of July was due to a MASSIVE 107% increase in aircraft orders for the month but apparently none of the other analysts seemed to care and those same analysts will be shocked today when pretty much the exact same thing happens as happens after every other major spike in duable goods.  I don’t have to tell you, we have a chart:

 

See – this stuff isn’t hard…  How many times in the past two years have we had two big up months in a row?  Zero (0).  How many times have we had reversals that were as large or larger than the prior positive month?  Five (5).  If I were a betting man (and we are, since we play the markets),  I’d have to put my money on a miss, contrary to the 26 “expert” analysts polled by Bloomberg who forecast more growth.  I could be wrong – gosh, I hope I’m wrong because that would be great for our economy – but after a 10% move up in the markets since our last Durable Goods report, I think I’ll error on the side of caution.  WHR makes a fun short here as you can buy the Jan $80 calls for $3.10 and sell the Nov $75 calls for $3 so it’s net .10 on the spread and, if WHR doesn’t gain almost 10% by November expirations, whatever value left in your Jan calls over .10 is your profit

Also bothering me this morning, is news from the Financial Times, which indicates…
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