Market Soapbox 05/13/05

Resistance: DJIA 10400; SP500 1180; Nasdaq 1980; NDX 1465
Support: DJIA 9900 ; SP500 1125 ; Nasdaq 1870; NDX 1375
Positive: semi, tech, hardware, software, networking
Weak: materials, utilities, energy, financial, health care, consumer staples, brokerage, drug, biotech
52 Week HiLo: NYSE 31/79; Nasdaq 38/84; Amex 16/40
A/D Volume: NYSE 579/1548, Nasdaq 1309/520, Amex 21/230
Volume: NYSE 2.149B, Nasdaq 1.865B

Upcoming Notable reports:
MON: NY Empire State Apr 15.0
TUE: Building Permits Mar 2050K; Housing Starts Mar 2030K; Core PPI Mar 0.2%; PPI Mar 0.5%; Capacity Utilization Mar 79.6%; Industrial Production Mar 0.3%
WEN: Core CPI Mar 0.2%; CPI Mar 0.3%
THU: Jobless Claims Prior 325K; Leading Indicators Mar -0.3%; Philly Fed Apr 12.0

Business Inventory +0.4% (Feb 0.5%, est. 0.4%), Export Prices(ex-ag) +0.5%, Mar 0.4%, Import Prices(ex-oil) +0.4% Mar 0.3%, Michigan Sentiment Prelim 85.3 (Apr 87.7, est. 90.0)

European (DAX +0.20%) & Asian markets (Nikkei 225 -0.26%) were split. Dollar up vs. Yen/Euro, gold & commodities down, bonds & oil up. 10 year note +7 ticks, yield -.029 @ 4.12%. Oil: +.27%; fell below $48, closed @ 48.67. Contra action: Oil & $ up.

Today's Sooey Pig Pig!! award goes to Smith Barney for trimming earnings estimates on Morgan Stanley, Goldman Sachs and Lehman Brothers.

Warning that "revenue weakness in the second quarter is across the board." Apparently churning the market through speculation and conning the public isn't generating enough fees of late. Could not happen to a better bunch. Loud squeal and oink.

A split tape day with conviction to the downside. The market was choppy, sideways staggering until 12:30EST, then it fell over the next step downwards and bounced up into the close.

9 of 10 sectors down on higher volume. Not even falling bond yields and stable oil could prop it up. The dollar hit a seven month high vs Euro.

Michigan Consumer Sentiment had its 5th straight decline, and is the lowest since Mar 03. Inventory decreased and import/export prices went up. Do you smell oil burning?

Oil has dropped 16% since April 1st, do I hear $42 as previously predicted in these pages? Not yet, but getting there.

Bonds continue to rally as the herd is spooked into treasuries due to the uncertain nature of high yield emerging market, corporate junk and the hedge fund fiasco.

Next week, options expiration, GM derivatives fallout (hedgsters cash is tied up meeting margin calls) and CPI/PPI should give a nice downward shove to the markets starting sometime Tues, and lasting until Fri.

A bounce Mon & Tues on short covering could be in the cards. Please see today's Market Analysis posting for further insight on the bigger picture. Just my opinion, I could be wrong.

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