Market Soapbox 08/03/05
Resistance: DJIA 10750; SP500 1250; Nasdaq 2200; NDX 1625
Support: DJIA 10450 ; SP500 1210 ; Nasdaq 2100; NDX 1535
European markets & Asian markets down. Dollar split vs. Yen/Euro , oil, commodities & gold up, bonds down.
Today's Soohey Pig Award goes to the media for its mixed retail same store reports hype. "Extremely hot weather, and perhaps high gas prices, weighed on retailers last month".
The gas prices pinching people, yes, as far as hot weather goes, I thought people go to the mall and bask in the AC to escape hot weather.
You might as well say the bird flu and killer cicadas kept people in too. Soohey!! Pig, Pig!!!
The Bank of England cut rates today by 25 basis points to 4.50 percent, the first cut in over 2 years. The ECB left rates at 2.00 percent for the 26th month.
A consolidation day with AUTHORITY on higher volume. Oil, gas, energy, commodities & precious metals up, everything else got beat like a drum. Reits, Semis, Semi Mfg, Retail, Biotech were pounded into the ground.
Yesterday, the treasury confirmed what I have been saying since last year, the 30 year bond is back in January 06.
This should drop current 10 year bond prices, today the market reacted correctly as bond prices went down and yields went up.
For over a week, I have been saying that perhaps shorts on the NDX and select tech stocks are in order, some industry reports indicate continued weakness in the chip sector.
2 days ago, the SOX Philly Semiconductor Index hit a new 52 week high and the Nasdaq is at a 4 year high. A few days ago the AMEX Securities Broker/Dealer Index (XBD) closed at historic highs
The last two days, semis, semi manufacturers & the financial sector are getting hammered, AS THEY SHOULD.
Reintro of the long bond, rising low end rates, flattening yield curve, limited carry trade, rising energy costs, FNMA & FHLMC handcuffed and forced to reduce their portfolios, RMB revaluation, these all equal two things; RISING INTEREST RATES and a BOND MARKET BASHING.
In addition, the scent of a market peak in equities, bonds and real estate and a long overdue consolidation is very ripe these days. They just need a little shove over the cliff, thats all.
The long bond exited in 2001, and things have been out of control since. Money has been chasing higher yield instead of being invested in sustainable economic activity. Big mistake.
All one need do is look at a chart showing the difference between the 30 year and 10 year yields over the last 30 years to see what is coming in the near term.
As the central banks, whose mandate is to keep prices STABLE and prevent INFLATION, have lost control over the gravitational force of money, something systemic has to give.
Did you ever play a game of Monopoly where the bank ran out of money? This leads to the question of the day; How do the central banks keep the international kiting scheme afloat?
The last time the Japanese printed up 35 Trillion yen to buy our bonds, what will it be this time? For complete details refer to 35 Trillion Reasons Why.
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 10450 ; SP500 1210 ; Nasdaq 2100; NDX 1535
European markets & Asian markets down. Dollar split vs. Yen/Euro , oil, commodities & gold up, bonds down.
Today's Soohey Pig Award goes to the media for its mixed retail same store reports hype. "Extremely hot weather, and perhaps high gas prices, weighed on retailers last month".
The gas prices pinching people, yes, as far as hot weather goes, I thought people go to the mall and bask in the AC to escape hot weather.
You might as well say the bird flu and killer cicadas kept people in too. Soohey!! Pig, Pig!!!
The Bank of England cut rates today by 25 basis points to 4.50 percent, the first cut in over 2 years. The ECB left rates at 2.00 percent for the 26th month.
A consolidation day with AUTHORITY on higher volume. Oil, gas, energy, commodities & precious metals up, everything else got beat like a drum. Reits, Semis, Semi Mfg, Retail, Biotech were pounded into the ground.
Yesterday, the treasury confirmed what I have been saying since last year, the 30 year bond is back in January 06.
This should drop current 10 year bond prices, today the market reacted correctly as bond prices went down and yields went up.
For over a week, I have been saying that perhaps shorts on the NDX and select tech stocks are in order, some industry reports indicate continued weakness in the chip sector.
2 days ago, the SOX Philly Semiconductor Index hit a new 52 week high and the Nasdaq is at a 4 year high. A few days ago the AMEX Securities Broker/Dealer Index (XBD) closed at historic highs
The last two days, semis, semi manufacturers & the financial sector are getting hammered, AS THEY SHOULD.
Reintro of the long bond, rising low end rates, flattening yield curve, limited carry trade, rising energy costs, FNMA & FHLMC handcuffed and forced to reduce their portfolios, RMB revaluation, these all equal two things; RISING INTEREST RATES and a BOND MARKET BASHING.
In addition, the scent of a market peak in equities, bonds and real estate and a long overdue consolidation is very ripe these days. They just need a little shove over the cliff, thats all.
The long bond exited in 2001, and things have been out of control since. Money has been chasing higher yield instead of being invested in sustainable economic activity. Big mistake.
All one need do is look at a chart showing the difference between the 30 year and 10 year yields over the last 30 years to see what is coming in the near term.
As the central banks, whose mandate is to keep prices STABLE and prevent INFLATION, have lost control over the gravitational force of money, something systemic has to give.
Did you ever play a game of Monopoly where the bank ran out of money? This leads to the question of the day; How do the central banks keep the international kiting scheme afloat?
The last time the Japanese printed up 35 Trillion yen to buy our bonds, what will it be this time? For complete details refer to 35 Trillion Reasons Why.
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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