Market Soapbox 04/12/05
DJIA +60 10508;SP500 +6 1188;Nasdaq +13 2005;NDX +10 1489
Resistance: DJIA 10600; SP500 1200; Nasdaq 2025; NDX 1510.
Support: DJIA 10370 ; SP500 1170 ; Nasdaq 1975; NDX 1465.
Positive: financial, utility, homebuilding, telecom, insur, biotech, consumer staples, industrials, transports, health care, software
Negative: energy, semi, disk drive, networking
Dollar: vs Yen: -0.1150 107.75 ; vs Euro: +0.0055 1.2916.
Bonds: 10-yr note +18 yielding -.072 4.36%;
Gold: XAU -0.47%; $430.40 +1.10. CRB: 302.63 -1.55
Oil: XOI -1.45%, Cushing Crude $51.86; -$1.85; -3.4%.
52 Week HiLo: DJIA 66/49; Nasdaq 31/68; Amex 1/1.
A/D Volume: DJIA 2/1, Nasdaq 2/1, Amex 2.5/1.
Volume: DJIA 1.85B, Nasdaq 1.87B
Upcoming Notable reports
WEND: Advanced MicroDevices, Apple, Lam Research
THURS: DowJones, Eaton, Fairchild Semi, Hibernia, MGIC, Pepsi, Rambus, Samsung, Southwest Air, Sun Micro
FRI: Citigroup, GE, Wachovia, Import/Export Prices, TIC Foreign Inflows, Industrial Production.
Monday the 18th, quarterly reports start in volume for 3 weeks and Tuesday the 19th, the PPI awaits.
What a difference a report makes, three words and six little hours....
8:30AMEST: Feb trade deficit @ $61 billion, +4.3% from January, the bulk of the increase can be attributed to rising oil prices. Currency markets focus on the deficit with China which fell $1.4 Billion to $13.9 billion in February from $15.3 billion in January. The recent removal of textile trade quotas caused a 62.4% increase in Chinese textile imports in the first two months of the year, but the February overall gap of $13.9 billion represented the lowest level since June, 2004.
The dollar rose, gold, bonds and stocks sold off. The 10 year was -7 ticks. A/D Volume was NYSE & Nasdaq 1/4, AMEX 1/15. All sectors were deep into the red, the DJIA was -90, SP500 - 10, Nasdaq -20, NDX -17. I have seen -130 point days look better than this internally, the market looked like a corpse having rigor mortis twitches.
2PM EST: Press releases indicate that March FOMC Minutes suggest the Fed is of the belief that an accelerated pace of policy tightening (i.e. 50 bp) does not appear necessary at this time. Three little words, NO ACCELERATED PACE, is all it took. Minutes after the FOMC report an awesome display of computer controlled swing trading and short covering ensued.
With the market just below resistance: DJIA @ 10360, SP500 1170, Nasdaq 1970, NDX 1460; the market bounced and went vertical on higher volume for 90 minutes, erasing all of the days losses and posting a gain. Reversals were DJIA +170, SP500 +20 , Nasdaq +37, NDX +30. The 10 year went +19 ticks, a +27 tick reversal, bringing the yield down to 4.36%. Gold rose, oil fell and the dollar split vs Yen/Euro.
Here's what the FOMC minutes indicated: Some members of the FOMC pressed the case for ending the FOMC's pledge that the pace of future rate hikes could occur at a "measured pace." These members saw higher odds that the pace of rate hikes would have to accelerate. But the majority decided to keep the measured pace language. They argued that the wording did not preclude a faster pace of rate hikes or a pause and noted that long-term yields had risen despite the measured language.
The market media put a positive spin on the FOMC minutes and we witnessed short covering by the Boys from Bermuda. If one looks closely, the exclusion of an accelerated pace is nowhere to be found in the verbiage. After today's bond market reaction, I would not preclude the Fed finally putting its foot down and shocking the markets with a .50bp raise.
Computer controlled swing trading and short covering for Fridays options expiration propped up a corpse of a market. I expect the market to hover around Max pain levels @ DJIA 10600, SP500 1190, NDX 1480 until Friday which will commence a continuation of the downtrend.
Resistance: DJIA 10600; SP500 1200; Nasdaq 2025; NDX 1510.
Support: DJIA 10370 ; SP500 1170 ; Nasdaq 1975; NDX 1465.
Positive: financial, utility, homebuilding, telecom, insur, biotech, consumer staples, industrials, transports, health care, software
Negative: energy, semi, disk drive, networking
Dollar: vs Yen: -0.1150 107.75 ; vs Euro: +0.0055 1.2916.
Bonds: 10-yr note +18 yielding -.072 4.36%;
Gold: XAU -0.47%; $430.40 +1.10. CRB: 302.63 -1.55
Oil: XOI -1.45%, Cushing Crude $51.86; -$1.85; -3.4%.
52 Week HiLo: DJIA 66/49; Nasdaq 31/68; Amex 1/1.
A/D Volume: DJIA 2/1, Nasdaq 2/1, Amex 2.5/1.
Volume: DJIA 1.85B, Nasdaq 1.87B
Upcoming Notable reports
WEND: Advanced MicroDevices, Apple, Lam Research
THURS: DowJones, Eaton, Fairchild Semi, Hibernia, MGIC, Pepsi, Rambus, Samsung, Southwest Air, Sun Micro
FRI: Citigroup, GE, Wachovia, Import/Export Prices, TIC Foreign Inflows, Industrial Production.
Monday the 18th, quarterly reports start in volume for 3 weeks and Tuesday the 19th, the PPI awaits.
What a difference a report makes, three words and six little hours....
8:30AMEST: Feb trade deficit @ $61 billion, +4.3% from January, the bulk of the increase can be attributed to rising oil prices. Currency markets focus on the deficit with China which fell $1.4 Billion to $13.9 billion in February from $15.3 billion in January. The recent removal of textile trade quotas caused a 62.4% increase in Chinese textile imports in the first two months of the year, but the February overall gap of $13.9 billion represented the lowest level since June, 2004.
The dollar rose, gold, bonds and stocks sold off. The 10 year was -7 ticks. A/D Volume was NYSE & Nasdaq 1/4, AMEX 1/15. All sectors were deep into the red, the DJIA was -90, SP500 - 10, Nasdaq -20, NDX -17. I have seen -130 point days look better than this internally, the market looked like a corpse having rigor mortis twitches.
2PM EST: Press releases indicate that March FOMC Minutes suggest the Fed is of the belief that an accelerated pace of policy tightening (i.e. 50 bp) does not appear necessary at this time. Three little words, NO ACCELERATED PACE, is all it took. Minutes after the FOMC report an awesome display of computer controlled swing trading and short covering ensued.
With the market just below resistance: DJIA @ 10360, SP500 1170, Nasdaq 1970, NDX 1460; the market bounced and went vertical on higher volume for 90 minutes, erasing all of the days losses and posting a gain. Reversals were DJIA +170, SP500 +20 , Nasdaq +37, NDX +30. The 10 year went +19 ticks, a +27 tick reversal, bringing the yield down to 4.36%. Gold rose, oil fell and the dollar split vs Yen/Euro.
Here's what the FOMC minutes indicated: Some members of the FOMC pressed the case for ending the FOMC's pledge that the pace of future rate hikes could occur at a "measured pace." These members saw higher odds that the pace of rate hikes would have to accelerate. But the majority decided to keep the measured pace language. They argued that the wording did not preclude a faster pace of rate hikes or a pause and noted that long-term yields had risen despite the measured language.
The market media put a positive spin on the FOMC minutes and we witnessed short covering by the Boys from Bermuda. If one looks closely, the exclusion of an accelerated pace is nowhere to be found in the verbiage. After today's bond market reaction, I would not preclude the Fed finally putting its foot down and shocking the markets with a .50bp raise.
Computer controlled swing trading and short covering for Fridays options expiration propped up a corpse of a market. I expect the market to hover around Max pain levels @ DJIA 10600, SP500 1190, NDX 1480 until Friday which will commence a continuation of the downtrend.
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