Fathers' Day Drive...What Does it Mean?

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My wife and I drove three miles to IHOP for a Father's Day breakfast. So what? As Yogi Berra said, "sometimes you can see a lot by just watching."

Any economy is the sum of its parts. We drove along the Fellsway and saw the 'For Sale' signs, many up for months.Not very surprising, then that the Housing Index (HGX, weekly) above continues to languish in fact making new closing lows.

Of course, home sales rose in Jersey until the NAR corrected their numbers and acknowledged that they actually fell. In other words, the For Sale signs I see aren't imaginary.

Numerous businesses on Route 1 appeared empty. Of course it's hard to eyeball business activity on a Sunday morning.

One wag described the US economy as one where the principal business activity is selling homes to each other, which explains why we have issues. Looking around, I saw restaurants, car dealers (Smart Cars, Nissan, Mercedes), cell phone stores, and gas stations. In other words, businesses where we buy commodities and services, but where we actually make very little.
Restaurants (MG713) have that muddle-through look about them, lower highs, moved below the 50 day average, not terrible, but not exactly thriving either.
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This reminded me of a conversation with an international shoe manufacturer I had last week in the office. He said that getting inexpensive labor in China is becoming more difficult, as workers migrate to higher paying tech manufacturing. In other words, keeping costs down becomes progressively more difficult.

And the Footwear (MG322) shows that, too...below the 20, 50, and 200 day averages, with a low volume rally Friday.
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The point isn't too point out how abysmal the economic conditions are domestically. Rather, we can see for ourselves the activity around us and make our own judgements about the causes and the potential solutions. Not to belabor the point, but most of us have no formal economic training, but the arguments advanced by many 'pundits' hold little water when compared with those engendered by our lying eyes. Of course, many leaders think they can improve conditions by saying they're better. Reminds me of the line from Al Capone in the Untouchables

"You can get further with a kind word and a gun than you can with just a kind word."

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.