Market Soapbox 07/20/05 UPDATED
Resistance: DJIA 10625; SP500 1225; Nasdaq 2175; NDX 1575
Support: DJIA 10200 ; SP500 1210 ; Nasdaq 2100; NDX 1550
From 04/14/05, 05/20/05 & 06/15/05: DON'T GO AGAINST THE DOLLAR!
The following evidence supports our contentions. The dollar is at a 14 month high vs the Yen & a multi month high vs the Euro. Chinese GDP projections have slowed to 9.2% for the last quarter.
The Chinese GDP numbers are dubious and suspect due to the nature of the Chinese reporting mechanisms and can be trusted even less than a Big 4 prepped corporate income statement. A safe assumption is that half of the number, probably closer to 4.5% is more realistic.
Results from the July BOE meeting were released showing a 5-4 vote to remain steady on interest rates. Since that meeting declining economic data indicates that the BOE will probably vote for a 25 basis point cut in August.
Of recent, EuroZone economic news has not been pretty. Word on the street is that summer resort employment in Italy, France & Spain is off big time.
European member state budget deficits are growing. Germany, France, Italy and Portugal amongst others are well over and will not be able to conform to the 3% of GDP limit. Trichet may be forced to cut rates 25 basis points by the end of the summer season.
Last year we called for $50 plus oil, this year we called for a drop to $42 ($46 was realized) and then $60 plus oil by summer. Well, you can't say you were not warned.
Last quarter, Japans trade surplus was cut by 35% due to rising oil prices. Struggling economies such as Japan and the Eurozone are being taxed by the oil price increases. China and US are assimilating the increases.
Potential market reactions to the above circumstances in the near term include; Japanese, Eurozone, BOE bonds, yen, sterling and the Euro will weaken further against the $. The RMB will not until the peg goes to a 5% float.
The bottom line that we have been screaming in these pages since last year: US rates will continue to rise as will the dollar. A bond market flush will occur for the newer higher yield bonds and a commodities market meltdown is not out of the cards either.
Last years hurricane season was one for the record books, ask any of those who own hyperinflated Florida real estate. This year, Dennis & Emily are just the tip of the iceberg. The really bad news is, this trend will continue to worsen.
The ozone hole allowed just enough additional UV in, the polar caps started melting and the process is started. It can be reversed but slowly over the next 50 years.The cool streams of polar water arriving in the deep ocean tranches will wreak havoc on "predictable" and "normal" weather patterns for years to come.
GAIA is pissed and we are going to pay, and dearly I might add, for as long as the oil sisters, and corporate military industrial complex rule the roost. Barring global pandemic by 2008; expect oil to stay around and above $50 for the rest of your natural life.
European & Asian markets up. Dollar split vs. Yen/Euro, oil & commodities down, bonds & gold up.
What started as a down day on low volume ended as an up day, biotech, airlines, pharma, gold bugs, materials, healthcare & transports did well. GM reported their 3rd straight quarterly loss.
Chevron boosted its Unocal tender to $63 per share, well short of the CNOOC offer of $67, this may force the Chinese to bump up to $70 per share.
Today's Soohey Pig Pig!! Award goes to the brown shoe boys on the street for talking up Tech and leading the herd to slaughter.
Yesterday we talked about Yahoo & Intel reporting after the bell. Afterhours trading was at extremly high volume Nasdaq 60 Million & NYSE 80 Million and produced the following dismal results:
Nasdaq: Yahoo -10%, Intel -4.3%, Google -2.07%, Cisco -1.34%, Juniper -3.88% and Microsoft -1.07%.
NYSE: Motorola -0.91%, Texas Instruments -1.76%, Novastar Fin -1.87%, LSI Logic -1.91%, Taiwan Semiconductor -2.15%, Seagate -3.14%, Plantronics -5.26%. Soohey! Soohey! Pig, Pig, Pig!
Today and tomorrow Uncle Al's comments are his last prior to departure. This may result in upbeat economic comments which would be interpreted as a leaning towards a potential removal of the word "measured.
At a minimum Uncle Al will impart a continuation of rate hikes until the Fed reaches 4-4.25% at the low end. Longer term, this would bring the 10 year into the 5% range. The markets could have a knee jerk reaction to this interpretation.
The SP500, MID, RUT, HGX, FTSE, DAX, CAC and KOSPI are all at multi year and some at all time highs. The 52 week hi/lo ratio indicates that valuations may be streched at this time.
Perhaps a short position on QQQ and/or select tech stocks due to report is in order after yesterdays 25 point and todays 12 point increase in the Nasdaq. Yesterdays afterhours high volume selloff and todays pummeling of select high tech stocks are not a sign of strength.
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.
Support: DJIA 10200 ; SP500 1210 ; Nasdaq 2100; NDX 1550
From 04/14/05, 05/20/05 & 06/15/05: DON'T GO AGAINST THE DOLLAR!
The following evidence supports our contentions. The dollar is at a 14 month high vs the Yen & a multi month high vs the Euro. Chinese GDP projections have slowed to 9.2% for the last quarter.
The Chinese GDP numbers are dubious and suspect due to the nature of the Chinese reporting mechanisms and can be trusted even less than a Big 4 prepped corporate income statement. A safe assumption is that half of the number, probably closer to 4.5% is more realistic.
Results from the July BOE meeting were released showing a 5-4 vote to remain steady on interest rates. Since that meeting declining economic data indicates that the BOE will probably vote for a 25 basis point cut in August.
Of recent, EuroZone economic news has not been pretty. Word on the street is that summer resort employment in Italy, France & Spain is off big time.
European member state budget deficits are growing. Germany, France, Italy and Portugal amongst others are well over and will not be able to conform to the 3% of GDP limit. Trichet may be forced to cut rates 25 basis points by the end of the summer season.
Last year we called for $50 plus oil, this year we called for a drop to $42 ($46 was realized) and then $60 plus oil by summer. Well, you can't say you were not warned.
Last quarter, Japans trade surplus was cut by 35% due to rising oil prices. Struggling economies such as Japan and the Eurozone are being taxed by the oil price increases. China and US are assimilating the increases.
Potential market reactions to the above circumstances in the near term include; Japanese, Eurozone, BOE bonds, yen, sterling and the Euro will weaken further against the $. The RMB will not until the peg goes to a 5% float.
The bottom line that we have been screaming in these pages since last year: US rates will continue to rise as will the dollar. A bond market flush will occur for the newer higher yield bonds and a commodities market meltdown is not out of the cards either.
Last years hurricane season was one for the record books, ask any of those who own hyperinflated Florida real estate. This year, Dennis & Emily are just the tip of the iceberg. The really bad news is, this trend will continue to worsen.
The ozone hole allowed just enough additional UV in, the polar caps started melting and the process is started. It can be reversed but slowly over the next 50 years.The cool streams of polar water arriving in the deep ocean tranches will wreak havoc on "predictable" and "normal" weather patterns for years to come.
GAIA is pissed and we are going to pay, and dearly I might add, for as long as the oil sisters, and corporate military industrial complex rule the roost. Barring global pandemic by 2008; expect oil to stay around and above $50 for the rest of your natural life.
European & Asian markets up. Dollar split vs. Yen/Euro, oil & commodities down, bonds & gold up.
What started as a down day on low volume ended as an up day, biotech, airlines, pharma, gold bugs, materials, healthcare & transports did well. GM reported their 3rd straight quarterly loss.
Chevron boosted its Unocal tender to $63 per share, well short of the CNOOC offer of $67, this may force the Chinese to bump up to $70 per share.
Today's Soohey Pig Pig!! Award goes to the brown shoe boys on the street for talking up Tech and leading the herd to slaughter.
Yesterday we talked about Yahoo & Intel reporting after the bell. Afterhours trading was at extremly high volume Nasdaq 60 Million & NYSE 80 Million and produced the following dismal results:
Nasdaq: Yahoo -10%, Intel -4.3%, Google -2.07%, Cisco -1.34%, Juniper -3.88% and Microsoft -1.07%.
NYSE: Motorola -0.91%, Texas Instruments -1.76%, Novastar Fin -1.87%, LSI Logic -1.91%, Taiwan Semiconductor -2.15%, Seagate -3.14%, Plantronics -5.26%. Soohey! Soohey! Pig, Pig, Pig!
Today and tomorrow Uncle Al's comments are his last prior to departure. This may result in upbeat economic comments which would be interpreted as a leaning towards a potential removal of the word "measured.
At a minimum Uncle Al will impart a continuation of rate hikes until the Fed reaches 4-4.25% at the low end. Longer term, this would bring the 10 year into the 5% range. The markets could have a knee jerk reaction to this interpretation.
The SP500, MID, RUT, HGX, FTSE, DAX, CAC and KOSPI are all at multi year and some at all time highs. The 52 week hi/lo ratio indicates that valuations may be streched at this time.
Perhaps a short position on QQQ and/or select tech stocks due to report is in order after yesterdays 25 point and todays 12 point increase in the Nasdaq. Yesterdays afterhours high volume selloff and todays pummeling of select high tech stocks are not a sign of strength.
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.
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