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Wednesday, April 13, 2005

Market Soapbox 04/13/05

DJIA -104 10404;SP500 -14 1174;Naz -31 1974;NDX -27 1462
Resistance: DJIA 10600; SP500 1200; Nasdaq 2025; NDX 1510
Support: DJIA 10370 ; SP500 1170 ; Nasdaq 1975; NDX 1460
Positive: drug, health care
Negative: materials, energy, tech, semi, hardware, transport, biotech, homebuilding, consumer discretionary, consumer staples, utility, retail
Dollar: vs Yen: -0.4250 107.34 ; vs Euro: +0.0004 1.2918
Bonds: 10-yr note -2 yielding +.008 4.36%;
Gold: XAU -1.98%; $431.10 +0.10 CRB: 300.83 -1.80
Oil: XOI -2.23%, Cushing Crude $50.22; -$1.64; -3.16%
52 Week HiLo: DJIA 66/49; Nasdaq 42/129; Amex 16/32
A/D Volume: DJIA 1/4, Nasdaq 1/6, Amex 1/10
Volume: DJIA 1.92B, Nasdaq 1.67B

Upcoming Notable reports
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.

The markets weakness and yesterdays computer controlled short covering was exposed by a complete lack of follow through. Like early yesterday, the market looked like a corpse twitching from rigor mortis.

The dollar split -yen/+euro, gold little help, bonds and stocks sold off. Oil prices fell 3.16% to a 7-week low. Crude oil futures extended yesterday's 3.4% sell off, 9 out of 10 economic sectors closed lower, Semi's and materials led the way -2.7%.

We have warned about this and there are no surprise's sales of chip-making equipment -2.5% to $2.43 billion in Feb the first decline in 19 months. Q105 profit growth will deaccelerate 50%. SP500 members Q105 profit will average 8.3%, down from 19.7% growth Q404. On the year, Nasdaq -8.5%, DJIA -3.1%, SP500 -2.5%. The SP500 IT Index -8.1% the worst performer among 10 industry groups.

Commerce Dept. March retail sales +0.3%, forecast +0.8%, excluding auto sales +0.1%, forecast +0.5%; the smallest advance since April of last year. The treasuries 5 year note auction, high yield of 4.046%, bid to cover 1.86, below 2.59, the average for the previous 10 auctions and the lowest since June 2003. Indirect bidders (foreign central banks), picked up $4.20 billion, or 28% of the issue, well below the 42% level seen at the last sale.

Friday came early, as the market went below max pain levels @ DJIA 10600, SP500 1190, NDX 1480. Tomorrow, 12 of this week's 31 S&P components are scheduled to report Q1 results.

Knock three times...The SP500 hit 1163 on 3/29 and 3 times since, has come back down to 1170. The NDX hit 1458 on 3/29, and 3 times since has come back down to 1460. For the last 11 trading days, wild intraday swings have characterized the indexes.

The market could roll down from now till the 20th. In the next 4 trading days, the market will decide which direction it is going. The worst may be over, however, Monday the 18th, quarterly reports start in volume for 3 weeks and Tuesday the 19th, the PPI awaits. These are not reasons for the market to rise in any meaningful fashion.

The key to watch is the SP500, if it closes below 1160 for 2 days, the downtrend will continue to last years Oct low at a minimum.


At Wed Apr 13, 10:00:00 PM PDT, Anonymous Ed said...

I am the only one reading this stuff? Great site. Great commentary. Please keep up the good work. I appreciate it and especially look forward to the "Soapbox" every day.


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