Market Soapbox 10/06/05
Resistance: DJIA 10750; SP500 1250; Nasdaq 2200; NDX 1625
Support: DJIA 10250 ; SP500 1200 ; Nasdaq 2050; NDX 1535
Today's SOOHEY PIG PIG award goes to Freddie Mac and Wall Street Analysts. Freddie is Fannie Maes smaller brother, FHLMC sparked interest yesterday upon announcing a $2 bln share buyback that, in turn, spurred positive analyst comments, FRE up 3.6% yesterday and 3.3% today, pity da fools.
With a yield curve inversion imminent, the elimination of the carry trade, a profit margin squeeze especially for the financial sector, energy cost driven stagflation, recession on the horizon and rising interest rates; I just can't fathom how anyone could think that there is any upside to the already hyperinflated stocks of the GSE's, mortgage lenders, Reits or homebuilders. SOOHEY, PIG PIG!!!
European -1% & Asian markets -2.5% down BIG. Dollar down vs. Yen & Euro, XAU & gold up BIG, XOI & oil down, commodities down & bonds flat. Contra trend: none. $ had its biggest down day -1.9% vs Euro since 2003.
Two weeks ago, DJIA -270 on higher volume, DJIA plunged below all major DMA's, the rest sitting on 90DMA. Last week, DJIA +148, up and down all week, lacking leadership & conviction. Last month, only the 10th time since 1970, the market closed up for the month of September.
Mon, up & down, early DJIA +38, then split tape to end DJIA -33. Tues, DJIA -94 falling fast and hard into the close. Wen, someone opened up a can of WHOOP-ASS on the market with AUTHORITY, DJIA -123, this week DJIA -282.
Today, more of same with less "visible" intensity (more on this later), DJIA -83, Nasdaq -32; SP500 -13 at one point; the market bounced day end and closed DJIA -31; SP500 -5; Nasdaq -19 with butt ugly internals. The late day bounce above technical levels was programmed trading at its best.
XAU up big & DJTA up, the rest of the indices down. Tech issues, XOI, SOX, XAX, MID, RUT, NDX & DJUA took it upside the head. An uppercut to energy futures: Oil -2%; Natural Gas - 3%; Unleaded -4%. Airlines +5%, Gold Bugs +2.2%, Retail +1%.
A left hook to Utilities -2.1%, Oil -2.5%, Telecom -1.5%, Natural Gas -3.3%, Biotech -2%, Homebuilders -1.6%. A right cross to flat Bond prices with the 10 year yield @ 4.36%. The 5 & 10 year gap is 14 basis points. The 30 year @ 4.58, the 10 & 30 gap is 22 basis points. The 2 and 5 year gap is 4 basis points.
Dallas Fed President Fisher continues to warn on inflation, calling it a "virus" that cannot be allowed to infect the "blood supply," and notes that inflation shows "little inclination" of declining. Funny how the core CPI mysteriously doesn't reflect this inflation they speak of, wonder why?
I recently commented that the only thing which could give the market a boost or impetus to the upside would be a pullback in energy futures, boy was I wrong. Despite the recent pullback in commodities and energy futures, and with crude oil at two month low 61.50, in the last 3 days, DJIA, SP500 & Naz all minus 2.5%, Energy sector -9.2% and Utilities -4.7%.
A quick analogy on less "visible" intensity; after Clay vs Frazier I, Ali (ne Clay) tasted canvass and defeat for the 1st time when he lost on a unanimous decision, then spent 2 days in the hospital licking his wounds.
Smokin Joe retained his title and spent 10 days in the hospital, after which he never was the same fighter. Frazier may have scored the points and won the fight, but Ali truly put a physical whuppin on him, the intensity of which was not truly evident until after the fight and later in Fraziers career.
Less "visible" intensity means you have to look under the hood at the internals to see that much like Smokin Joe this market is taking a severe beating, the intensity of which is not truly reflected in the movement of the indices. The market is staggered, on the ropes, wobbly legged and teetering on the precipice.
Tues & Wend the 90DMA level for the SP500, DJIA, MID, RUT & Nasdaq was obliterated on high volume. Only the SOX & NDX are still above 90 DMA. Today, major support levels DJIA 10250, Nasdaq 2050 and SP500 1185 were breeched and on the verge of being taken out on high volume.
The energy futures pullback has precipitated profit taking in the energy, materials and utilities sectors which was the only thing holding the market up, coupled with sudden cognizance of energy cost driven STAGflation, this has pulled the whole market down.
So what would boost or hold up the market at this point? A dissipation of "inflation" fears, or the capture of Osama Bin Laden, neither of which realistically is anywhere on the horizon or radar.
Based on this fact, in the near and mid term, if you haven't already, start counting because its could be face down on the canvas sometime in the Oct 10th - 21st timeframe. We may be witnessing a redux on the 18th anniversary of October 1987, and yes you should look at that chart.
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 10250 ; SP500 1200 ; Nasdaq 2050; NDX 1535
Today's SOOHEY PIG PIG award goes to Freddie Mac and Wall Street Analysts. Freddie is Fannie Maes smaller brother, FHLMC sparked interest yesterday upon announcing a $2 bln share buyback that, in turn, spurred positive analyst comments, FRE up 3.6% yesterday and 3.3% today, pity da fools.
With a yield curve inversion imminent, the elimination of the carry trade, a profit margin squeeze especially for the financial sector, energy cost driven stagflation, recession on the horizon and rising interest rates; I just can't fathom how anyone could think that there is any upside to the already hyperinflated stocks of the GSE's, mortgage lenders, Reits or homebuilders. SOOHEY, PIG PIG!!!
European -1% & Asian markets -2.5% down BIG. Dollar down vs. Yen & Euro, XAU & gold up BIG, XOI & oil down, commodities down & bonds flat. Contra trend: none. $ had its biggest down day -1.9% vs Euro since 2003.
Two weeks ago, DJIA -270 on higher volume, DJIA plunged below all major DMA's, the rest sitting on 90DMA. Last week, DJIA +148, up and down all week, lacking leadership & conviction. Last month, only the 10th time since 1970, the market closed up for the month of September.
Mon, up & down, early DJIA +38, then split tape to end DJIA -33. Tues, DJIA -94 falling fast and hard into the close. Wen, someone opened up a can of WHOOP-ASS on the market with AUTHORITY, DJIA -123, this week DJIA -282.
Today, more of same with less "visible" intensity (more on this later), DJIA -83, Nasdaq -32; SP500 -13 at one point; the market bounced day end and closed DJIA -31; SP500 -5; Nasdaq -19 with butt ugly internals. The late day bounce above technical levels was programmed trading at its best.
XAU up big & DJTA up, the rest of the indices down. Tech issues, XOI, SOX, XAX, MID, RUT, NDX & DJUA took it upside the head. An uppercut to energy futures: Oil -2%; Natural Gas - 3%; Unleaded -4%. Airlines +5%, Gold Bugs +2.2%, Retail +1%.
A left hook to Utilities -2.1%, Oil -2.5%, Telecom -1.5%, Natural Gas -3.3%, Biotech -2%, Homebuilders -1.6%. A right cross to flat Bond prices with the 10 year yield @ 4.36%. The 5 & 10 year gap is 14 basis points. The 30 year @ 4.58, the 10 & 30 gap is 22 basis points. The 2 and 5 year gap is 4 basis points.
Dallas Fed President Fisher continues to warn on inflation, calling it a "virus" that cannot be allowed to infect the "blood supply," and notes that inflation shows "little inclination" of declining. Funny how the core CPI mysteriously doesn't reflect this inflation they speak of, wonder why?
I recently commented that the only thing which could give the market a boost or impetus to the upside would be a pullback in energy futures, boy was I wrong. Despite the recent pullback in commodities and energy futures, and with crude oil at two month low 61.50, in the last 3 days, DJIA, SP500 & Naz all minus 2.5%, Energy sector -9.2% and Utilities -4.7%.
A quick analogy on less "visible" intensity; after Clay vs Frazier I, Ali (ne Clay) tasted canvass and defeat for the 1st time when he lost on a unanimous decision, then spent 2 days in the hospital licking his wounds.
Smokin Joe retained his title and spent 10 days in the hospital, after which he never was the same fighter. Frazier may have scored the points and won the fight, but Ali truly put a physical whuppin on him, the intensity of which was not truly evident until after the fight and later in Fraziers career.
Less "visible" intensity means you have to look under the hood at the internals to see that much like Smokin Joe this market is taking a severe beating, the intensity of which is not truly reflected in the movement of the indices. The market is staggered, on the ropes, wobbly legged and teetering on the precipice.
Tues & Wend the 90DMA level for the SP500, DJIA, MID, RUT & Nasdaq was obliterated on high volume. Only the SOX & NDX are still above 90 DMA. Today, major support levels DJIA 10250, Nasdaq 2050 and SP500 1185 were breeched and on the verge of being taken out on high volume.
The energy futures pullback has precipitated profit taking in the energy, materials and utilities sectors which was the only thing holding the market up, coupled with sudden cognizance of energy cost driven STAGflation, this has pulled the whole market down.
So what would boost or hold up the market at this point? A dissipation of "inflation" fears, or the capture of Osama Bin Laden, neither of which realistically is anywhere on the horizon or radar.
Based on this fact, in the near and mid term, if you haven't already, start counting because its could be face down on the canvas sometime in the Oct 10th - 21st timeframe. We may be witnessing a redux on the 18th anniversary of October 1987, and yes you should look at that chart.
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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