Market Soapbox 08/08/05
Resistance: DJIA 10750; SP500 1250; Nasdaq 2200; NDX 1625
Support: DJIA 10500 ; SP500 1210 ; Nasdaq 2100; NDX 1535
European markets & Asian markets up. Dollar down vs. Yen/Euro , oil up, commodities, gold & bonds down.
Today's Soohey Pig Award goes to the media for its Saudi oil spin. The US Embassy and consulates in Saudi Arabia have been closed down for Monday and Tuesday because of a threat against US government buildings there.
Saudi officials have no knowledge of the threats, but British and Austrailian intelligence are also claiming that terrorist activity is imminent in the area.
Oil hit an all time high above $63 per barrel on fears that a US gasoline shortage will suddenly materialize. SOOHEY, PIG, PIG!!!
A gap up and then slightly down day on lower volume. The XOI roared, Energy, Oil, Natural Gas and Materials were up. Transports, utilities and Financials were down.
Homebuilding & REITs got pounded down again. Consolidation in biotech & HMOs kept Health Care down. Technology was weak across the board, led by profit-taking in chip stocks.
The 10-year note hit 4.41% following mediocre auction results. The Treasury Dept. auctioned off $18 bln in 3 year notes, but indirect bidder participation was 28% - the third the worst showing since August 2003 and below an auction average of 38.5%.
This mornings head fake may be it for the next two days, FOMC meeting on Tues with 25 basis point increase and forward looking statements from Uncle Al which will indicate no pause and more increases.
Todays 3 year note auction pulled some liquidity out of the market, but, options unwind & 5 year note auction on Wen; 10 year note auction on Thurs equals even less liquidity in the market.
The impetus for this market turn is multi faceted, overbought conditions, no fear, higher oil and rising interest rates being the leading factors.
Market internals the last three days have been horrible. We believe that the lack of liquidity will further consolidate the market in the next two to three days.
Something that should be investigated is buying futures in the VXD (DJIA) and VIX (SP500), these indices measure volatility in the associated indices options. They both hit ALL TIME lows on July 20th.
Volatility at an ALL TIME LOW means theres no FEAR in the market, and thats when you should worry the most. Since the 20th, volatility has increased by 20 - 25% (a nice profit on the futures), and the VIX/VXD futures are still buys at these prices.
Whether it be geopolitical mania buying or panic selling, we believe volatility will be on the rise in the markets prior to year end. Go here for further info and call your broker for details.
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 10500 ; SP500 1210 ; Nasdaq 2100; NDX 1535
European markets & Asian markets up. Dollar down vs. Yen/Euro , oil up, commodities, gold & bonds down.
Today's Soohey Pig Award goes to the media for its Saudi oil spin. The US Embassy and consulates in Saudi Arabia have been closed down for Monday and Tuesday because of a threat against US government buildings there.
Saudi officials have no knowledge of the threats, but British and Austrailian intelligence are also claiming that terrorist activity is imminent in the area.
Oil hit an all time high above $63 per barrel on fears that a US gasoline shortage will suddenly materialize. SOOHEY, PIG, PIG!!!
A gap up and then slightly down day on lower volume. The XOI roared, Energy, Oil, Natural Gas and Materials were up. Transports, utilities and Financials were down.
Homebuilding & REITs got pounded down again. Consolidation in biotech & HMOs kept Health Care down. Technology was weak across the board, led by profit-taking in chip stocks.
The 10-year note hit 4.41% following mediocre auction results. The Treasury Dept. auctioned off $18 bln in 3 year notes, but indirect bidder participation was 28% - the third the worst showing since August 2003 and below an auction average of 38.5%.
This mornings head fake may be it for the next two days, FOMC meeting on Tues with 25 basis point increase and forward looking statements from Uncle Al which will indicate no pause and more increases.
Todays 3 year note auction pulled some liquidity out of the market, but, options unwind & 5 year note auction on Wen; 10 year note auction on Thurs equals even less liquidity in the market.
The impetus for this market turn is multi faceted, overbought conditions, no fear, higher oil and rising interest rates being the leading factors.
Market internals the last three days have been horrible. We believe that the lack of liquidity will further consolidate the market in the next two to three days.
Something that should be investigated is buying futures in the VXD (DJIA) and VIX (SP500), these indices measure volatility in the associated indices options. They both hit ALL TIME lows on July 20th.
Volatility at an ALL TIME LOW means theres no FEAR in the market, and thats when you should worry the most. Since the 20th, volatility has increased by 20 - 25% (a nice profit on the futures), and the VIX/VXD futures are still buys at these prices.
Whether it be geopolitical mania buying or panic selling, we believe volatility will be on the rise in the markets prior to year end. Go here for further info and call your broker for details.
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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