Market Soapbox 05/25/05
Resistance: DJIA 10600; SP500 1200; Nasdaq 2100; NDX 1550
Support: DJIA 10400 ; SP500 1180 ; Nasdaq 2000; NDX 1500
Positive: oil, utilities, commodities, natural gas
Weak: everthing else.
For 52 Week HiLo, A/D Volume, Volume and Market Momentum go to the sidebar, look for Favorite Tools - BarCharts - Market Momentum, click on it. Everything you ever needed in one screen.
Economic Reports of Note:
THU: Chain Deflator Prel. (est.3.2%, prev. 3.2%); GDP Prel. (est. 3.7%, prev. 3.2%); Jobless Claims (est. 320K, prev. 321K)
FRI: Personal Income (est. 0.6%, prev. 0.5%); Personal Spending (est. 0.8%, prev. 0.6%); Michigan Sentiment Revised (est. 85.3, prev. 85.3)
European (& Asian markets were down. Dollar split vs. Yen/Euro, gold, oil & commodities up, bonds down. Contra action: None. Durable Orders +1.9% (est. +1.3%, prev. -2.6%); New Home Sales 1.316M (est. 1.328M, prev. 1.431M)
The good news, April durable goods orders were up for the first time this year. The bad news, excluding transportation, total orders were -0.2%. A mixed bag showing that there is underlying economic activity, mostly auto manufacturers clearing out the inventory.
New home sales were down from the previous record high and below estimates. The previous record high was also revised downwards from 1.431M to 1.313M. The Real Estate Industry inflating numbers to stoke the flames? No, I would never imagine it. Uh-uh, Homebuilders and Reits got hit today.
Today's Soohey Pig Pig!! Award goes to me for letting the pig have a quiet day in its poke.
A down and out day, the 2 year note auction pulled some liquidity out of the market, resulting in a consolidation and quiet close to the Nasdaq's longest winning streak since December 1999. 9 of 10 sectors down on lite volume.
July Oil futures broke out over $52 today, and closed +2.5% at almost $51. Profit taking in the semis -1.5% ended a 13% surge in the SOX since the end of April.
The bond party took a breather as the 10 year had approached the 4.0% line. 10 year note @ 4.07, 30 year bond @ 4.40, the spread is 33 basis points. See yesterdays post, Yield Curve Inversion III for empirical evidence as to why this is not a good situation.
Tomorrows chain deflator will not help the markets, I look for more sideways and down action on low volume. Friday perhaps more profit taking before the 3 day weekend, Tues a continuation. We seem to have hit a plateau after last Wen. big surge.
The financial sector has backed off, this could be a sign that Uncle Mo (Momentum) is shifting. There's a tremor in the force, an odor is in the air and something nasty lurking in the woodshed, I just can't seem to put my finger on it.
MARK YOUR CALENDARS!!!
Between now and June 3rd the markets action will be key as to whether we break out to the upside or break down. The line in the sand has either; already been reached or could be at NDX 1590, SP500 1215, DJIA 10725.
If the market heads for these levels we could see one of two things, a break out to the upside, or another miserable failure at that level in which the downside would test the 2004 lows and make this a cruel, cruel, summer.
June 3rd we will get the Non Farms Payroll, and by June 10th, post 5 & 10 year note auctions, treasury budget, foreign trade report and Alfred E. Greenspun's testimony on the economy, we will know where we are headed for sure.
A break out might occur on June 30th if the Fed removes the word "measured" and indicates the potential for a pause in the near term. That would spark a breakout that could last until the Treasury 30Y bond announcement in August.
The pause is something we have anticipated strictly as an accomodation for the yield curve shift which will be caused by the 30 year bond reintroduction in August and the Chinese RMB 5% unpeg later this year.
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong. P.S. Please read last Friday's Vacation posting.
Support: DJIA 10400 ; SP500 1180 ; Nasdaq 2000; NDX 1500
Positive: oil, utilities, commodities, natural gas
Weak: everthing else.
For 52 Week HiLo, A/D Volume, Volume and Market Momentum go to the sidebar, look for Favorite Tools - BarCharts - Market Momentum, click on it. Everything you ever needed in one screen.
Economic Reports of Note:
THU: Chain Deflator Prel. (est.3.2%, prev. 3.2%); GDP Prel. (est. 3.7%, prev. 3.2%); Jobless Claims (est. 320K, prev. 321K)
FRI: Personal Income (est. 0.6%, prev. 0.5%); Personal Spending (est. 0.8%, prev. 0.6%); Michigan Sentiment Revised (est. 85.3, prev. 85.3)
European (& Asian markets were down. Dollar split vs. Yen/Euro, gold, oil & commodities up, bonds down. Contra action: None. Durable Orders +1.9% (est. +1.3%, prev. -2.6%); New Home Sales 1.316M (est. 1.328M, prev. 1.431M)
The good news, April durable goods orders were up for the first time this year. The bad news, excluding transportation, total orders were -0.2%. A mixed bag showing that there is underlying economic activity, mostly auto manufacturers clearing out the inventory.
New home sales were down from the previous record high and below estimates. The previous record high was also revised downwards from 1.431M to 1.313M. The Real Estate Industry inflating numbers to stoke the flames? No, I would never imagine it. Uh-uh, Homebuilders and Reits got hit today.
Today's Soohey Pig Pig!! Award goes to me for letting the pig have a quiet day in its poke.
A down and out day, the 2 year note auction pulled some liquidity out of the market, resulting in a consolidation and quiet close to the Nasdaq's longest winning streak since December 1999. 9 of 10 sectors down on lite volume.
July Oil futures broke out over $52 today, and closed +2.5% at almost $51. Profit taking in the semis -1.5% ended a 13% surge in the SOX since the end of April.
The bond party took a breather as the 10 year had approached the 4.0% line. 10 year note @ 4.07, 30 year bond @ 4.40, the spread is 33 basis points. See yesterdays post, Yield Curve Inversion III for empirical evidence as to why this is not a good situation.
Tomorrows chain deflator will not help the markets, I look for more sideways and down action on low volume. Friday perhaps more profit taking before the 3 day weekend, Tues a continuation. We seem to have hit a plateau after last Wen. big surge.
The financial sector has backed off, this could be a sign that Uncle Mo (Momentum) is shifting. There's a tremor in the force, an odor is in the air and something nasty lurking in the woodshed, I just can't seem to put my finger on it.
MARK YOUR CALENDARS!!!
Between now and June 3rd the markets action will be key as to whether we break out to the upside or break down. The line in the sand has either; already been reached or could be at NDX 1590, SP500 1215, DJIA 10725.
If the market heads for these levels we could see one of two things, a break out to the upside, or another miserable failure at that level in which the downside would test the 2004 lows and make this a cruel, cruel, summer.
June 3rd we will get the Non Farms Payroll, and by June 10th, post 5 & 10 year note auctions, treasury budget, foreign trade report and Alfred E. Greenspun's testimony on the economy, we will know where we are headed for sure.
A break out might occur on June 30th if the Fed removes the word "measured" and indicates the potential for a pause in the near term. That would spark a breakout that could last until the Treasury 30Y bond announcement in August.
The pause is something we have anticipated strictly as an accomodation for the yield curve shift which will be caused by the 30 year bond reintroduction in August and the Chinese RMB 5% unpeg later this year.
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong. P.S. Please read last Friday's Vacation posting.
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