Market Soapbox 08/23/05
Resistance: DJIA 10750; SP500 1250; Nasdaq 2200; NDX 1625
Support: DJIA 10500 ; SP500 1210 ; Nasdaq 2100; NDX 1535
European & Asian markets down. Dollar down vs. Yen/Euro , XAU & XOI down, commodities flat, oil, bonds & gold up.
Today's Soohey Pig Award goes to me for letting the pig have a quiet day in its poke.
Monday a whipsaw day which ended barely up. Today, a down day with little to cheer about other than utilities getting a bid from divident seekers.
From Aug 12th: "As stated yesterday, the market COULD bounce over the next 8-9 trading days and make a final attempt a new YTD high. Today's consolidation could set the foundation, or break it.
We will watch the internals and action closely, around Aug 23 we should know where its heading for September."
Since 07/20: the VIX, VXD and VXN have moved up 25% as market volatitily has increased.
Since 08/02: the BBH (biotech holders) and DJTA (transports) have flat lined, SOX (semis), RTH (retail), RKH (regional banks), OIH (oil services) & XOI (oil index) have fallen over.
Last week: S&P performance was the biggest disappointment in over 2 months -0.9%, oil pushed to new highs +$66, yet oil stocks sold off, the energy sector provides the largest contribution (42% EPS growth) to the S&P 500.
Curious indeed, the dollar slid especially against the YEN and yet US bonds rallied as 10 year yields have come down from 4.42% to their lowest 4.17% since early July.
Even with the 10 year bond party driving yields down to 4.17, which means LOWER INTEREST RATES.... homebuilders and mortgage REITS have been crucified in a major sell off.
Witnessed by... 7 consecutive losing sessions for the Philly Housing Sector Index HGX which is now 13% off its all time high.
and by.... July existing home sales fell 2.6% to 7.16M (est. 7.25M) from a stronger record level of 7.35M in June.
Tomorrow's new home sales figures will be interesting, are we seeing the mustard starting to come off the hot dog?
It seems the 08/12 consolidation defined a downward tone which begin on 08/02. The markets are sliding down from a peak, and the signs we are seeing are not healthy.
Many factors are contributing, and many indicators are starting to line up on one side, the downside.
This downside could take awhile to be realized. $66 oil and the dollars performance will be major factors.
We suspect that the markets inability to rally in the last 8 trading days is a sign that September could bring new market lows.
Looking farther out, despite lower interest rates (at the moment), if the housing market slows considerably, we could see some major economic and market damage over the next 16 months.
A major drop in the markets such as 40%, would not be out of the question, and it could happen very rapidly.
The Japanese stock market hit levels not seen since July 2001 on Tuesday, with the benchmark Nikkei index briefly climbing above 12,500.
We are at a juncture not unlike the Nikkei was in 2000, after it bounced up to a 4 year high after a precipitous slide.
Between 1990 - 1993, the Nikkei 225 tumbled from 40,000 to 14,000, then went sideways and up for 7 years, till early 2000.
Thats when it hit a 4 year high at just over 20,000. It was all down hill from there, to finally rest at 7607 in early 2003.
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 & Asian markets down. Dollar down vs. Yen/Euro , XAU & XOI down, commodities flat, oil, bonds & gold up.
Today's Soohey Pig Award goes to me for letting the pig have a quiet day in its poke.
Monday a whipsaw day which ended barely up. Today, a down day with little to cheer about other than utilities getting a bid from divident seekers.
From Aug 12th: "As stated yesterday, the market COULD bounce over the next 8-9 trading days and make a final attempt a new YTD high. Today's consolidation could set the foundation, or break it.
We will watch the internals and action closely, around Aug 23 we should know where its heading for September."
Since 07/20: the VIX, VXD and VXN have moved up 25% as market volatitily has increased.
Since 08/02: the BBH (biotech holders) and DJTA (transports) have flat lined, SOX (semis), RTH (retail), RKH (regional banks), OIH (oil services) & XOI (oil index) have fallen over.
Last week: S&P performance was the biggest disappointment in over 2 months -0.9%, oil pushed to new highs +$66, yet oil stocks sold off, the energy sector provides the largest contribution (42% EPS growth) to the S&P 500.
Curious indeed, the dollar slid especially against the YEN and yet US bonds rallied as 10 year yields have come down from 4.42% to their lowest 4.17% since early July.
Even with the 10 year bond party driving yields down to 4.17, which means LOWER INTEREST RATES.... homebuilders and mortgage REITS have been crucified in a major sell off.
Witnessed by... 7 consecutive losing sessions for the Philly Housing Sector Index HGX which is now 13% off its all time high.
and by.... July existing home sales fell 2.6% to 7.16M (est. 7.25M) from a stronger record level of 7.35M in June.
Tomorrow's new home sales figures will be interesting, are we seeing the mustard starting to come off the hot dog?
It seems the 08/12 consolidation defined a downward tone which begin on 08/02. The markets are sliding down from a peak, and the signs we are seeing are not healthy.
Many factors are contributing, and many indicators are starting to line up on one side, the downside.
This downside could take awhile to be realized. $66 oil and the dollars performance will be major factors.
We suspect that the markets inability to rally in the last 8 trading days is a sign that September could bring new market lows.
Looking farther out, despite lower interest rates (at the moment), if the housing market slows considerably, we could see some major economic and market damage over the next 16 months.
A major drop in the markets such as 40%, would not be out of the question, and it could happen very rapidly.
The Japanese stock market hit levels not seen since July 2001 on Tuesday, with the benchmark Nikkei index briefly climbing above 12,500.
We are at a juncture not unlike the Nikkei was in 2000, after it bounced up to a 4 year high after a precipitous slide.
Between 1990 - 1993, the Nikkei 225 tumbled from 40,000 to 14,000, then went sideways and up for 7 years, till early 2000.
Thats when it hit a 4 year high at just over 20,000. It was all down hill from there, to finally rest at 7607 in early 2003.
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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