Market Soapbox 10/20/05
Resistance: DJIA 10250; SP500 1200; Nasdaq 2050; NDX 1535
Support: DJIA 10200 ; SP500 1175; Nasdaq 2000; NDX 1500
Our top story tonight, Generalissimo Francisco Franco is STILL dead. In other news, initial jobless claims fell to 355K vs est 365K vs last weeks 390K. Leading indicators for Sept. -0.7% est -0.5%.
But the big news, October Philly Fed @ 17.3, vs. 2.2 in September vs. est. 10.0. New orders +18.6 vs. -0.5 last month, shipments +19.5 and employment +17, prices paid jumped to 67.6 and prices received jumped 24 points to 32.6. How about a hot steamin cup o stagflation? This did not help the Treasury market today.
Disappointing guidance from EBAY plunged shares of the worlds largest garage sale 6%. Pfizer was also punished by 7% on disappointing guidance.
Today's SOOHEY PIG PIG award goes to the buyers and holders of GM stock along with a big HEY STUPID WHAT THE HELL WERE YOU THINKING??? award.
Tuesday, GM shares up over 7% after the annoucement of a a huge Q3 loss of $1.1 billion, or $1.92 per share. The Street expected a loss of “only” 87 cents per share. Don't results like these usually tank a stock?
GM announced a healthcare agreement with the UAW that would cut health-care costs by nearly $3 billion a year; another $2 billion in structural cost cuts; and the possibility of a GMAC sale. Lets see now, $5 Billion a year in cost cutting and GM is selling the only part of the company that actually makes any money.
These events are nothing to cheer about because as we noted in these pages previously, Kirk Kerkorian will cannibalize and part out GM, no pun intended toward Delphi. KK will sell the ONLY thing that makes money, and he can get a bundle for; GMAC.
GM management will collect the cash and their bonuses, while the employees, union, stock and especially bond holders will not pass go. KK will walk away from the automobile manufacturing division which loses BILLIONS on operations and healthcare & pension benefit obligations.
GM has shrinking US and global market share, a product line wrought with gas hogs, poorly designed dogs and SUV's, and a management team that is the posterboy for whats wrong in Corporate America today.
Its almost a sure bet that GM will go bankrupt in 3 years or less, no matter what they do. Also, the convergence of GM & GMAC issues could cause a derivatives market event. The worst part is the employees, pensioners, union, bondholders and stockholders will all get screwed royally. A hearty SOOHEY PIG PIG & HEY STUPID WHAT HELL WERE YOU THINKING???
European & Asian markets up. Dollar up vs. Yen & Euro, XAU & gold down, XOI & oil down, commodities down & bonds down. Contra trend: None.
4 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 3 weeks ago, DJIA +148, up and down all week, lacking conviction. 2 weeks ago, DJIA -281 crashing through long term resistance levels on higher volume. Last week, large swings up & down DJIA -6.
This week large herks & jerks, Mon. DJIA +61 giving a follow-through on Fridays action. Tues. DJIA got slapped by PPI -62. Wen, wobbly out the gate DJIA -38 then closing strong DJIA +123 on improved internals & higher volume.
Today, a can o whupass opened on the market, a royal slap down with AUTHORITY DJIA -133; SP500 -18; Naz -23 on absolutely vapid internals. This week DJIA -11, over the last 4+ weeks -420.
DJUA, MID & RUT getting slapped, XAU & XOI still getting the royal slap down. Sectors: Utilities, Commodities, Healthcare, Pharma, Gold Bugs, Airlines, Biotech, Natural Gas and Reits taking a big fat red bath. Semi's up??
Bond prices down with the 10 year yield rising @ 4.48%. The 5 & 10 year gap is 14 basis points. The 30 year @ 4.70, the 10 & 30 gap is 22 basis points. The 2 and 5 year gap is 8 basis points.
Yesterdays Beige book and falling oil provided a bounce, although we do not agree with the Beige books optimistic assessment that we have weathered Katrina & Rita, those chickens have yet to come home to roost.
From last week: "the XAU headed for 100 from 112" and "perhaps before the end of Oct" today XAU @ 102, almost there. The pullback in the energy sector and futures (crude -3%) continues, natural gas inventory +75 bcf to 3062 bcf, vs est +55 bcf; dropping natural gas 5%.
Crude oil fell below $60 for the 1st time since July @ $59.85. We will go on record with our private thoughts at this time, oil has pulled back from $70 to $60, which we anticipated, on the current pullback we expect it to continue to $52 per barrel.
Yesterday Exxon Mobil fell reportedly as the result of a discounted 24 Million share block trade worth $1.4 billion which was initiated by Goldman Sachs for unknown reasons. Today Chevron Corp. declined after $323 million of its shares were sold at a discount in a block of 5.6 million shares at $57 apiece by Bank of America Securities.
Yesterday's late day rally on higher volume lacked follow - through in todays market. More Dr. Jekyl & Mr. Hyde, yesterday the largest decline in European markets in 3 months and the largest increase in the SP in over 6 months, today a 180 degree turn as the DJIA gave back all of yesterdays gains.
From Market Soapbox: 10/13/05: "The Stoxx 600, which covers the major exchanges of 17 European countries, has lost 3% this quarter, its worst ever fourth quarter start and biggest slide since 1987." Remember that year??
From Market Soapbox 10/06/05 "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".
By the way, the anniversary of the single largest % drop in stock market history referred to as Black Monday, was yesterday. Could it be DejaVu all over again?
Over 70% of the SP500 financial issues were down today as most of the damage is being inflicted on the broader indexes including the market leading MID & RUT. Today's Dec/Adv volume ratio NYSE 5.7 to 1; Amex 10 to 1, do I hear a herd of elephants rustling about the exit gate?
Maybe, because that rustling sound is sounding more like feet stamping. The herks, jerks and convulsions are getting alot bigger in scale. We either break out to the upside and commence a year end rally or this elephant rolls over on its side and tanks big to the downside. Aprils YTD low 1136 beckons followed by 1090 & 1060.
Keep it tween da ditches, 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 and Hey! Hey! Lets be careful out there...This is The Nattering Naybob and your NOT.
Support: DJIA 10200 ; SP500 1175; Nasdaq 2000; NDX 1500
Our top story tonight, Generalissimo Francisco Franco is STILL dead. In other news, initial jobless claims fell to 355K vs est 365K vs last weeks 390K. Leading indicators for Sept. -0.7% est -0.5%.
But the big news, October Philly Fed @ 17.3, vs. 2.2 in September vs. est. 10.0. New orders +18.6 vs. -0.5 last month, shipments +19.5 and employment +17, prices paid jumped to 67.6 and prices received jumped 24 points to 32.6. How about a hot steamin cup o stagflation? This did not help the Treasury market today.
Disappointing guidance from EBAY plunged shares of the worlds largest garage sale 6%. Pfizer was also punished by 7% on disappointing guidance.
Today's SOOHEY PIG PIG award goes to the buyers and holders of GM stock along with a big HEY STUPID WHAT THE HELL WERE YOU THINKING??? award.
Tuesday, GM shares up over 7% after the annoucement of a a huge Q3 loss of $1.1 billion, or $1.92 per share. The Street expected a loss of “only” 87 cents per share. Don't results like these usually tank a stock?
GM announced a healthcare agreement with the UAW that would cut health-care costs by nearly $3 billion a year; another $2 billion in structural cost cuts; and the possibility of a GMAC sale. Lets see now, $5 Billion a year in cost cutting and GM is selling the only part of the company that actually makes any money.
These events are nothing to cheer about because as we noted in these pages previously, Kirk Kerkorian will cannibalize and part out GM, no pun intended toward Delphi. KK will sell the ONLY thing that makes money, and he can get a bundle for; GMAC.
GM management will collect the cash and their bonuses, while the employees, union, stock and especially bond holders will not pass go. KK will walk away from the automobile manufacturing division which loses BILLIONS on operations and healthcare & pension benefit obligations.
GM has shrinking US and global market share, a product line wrought with gas hogs, poorly designed dogs and SUV's, and a management team that is the posterboy for whats wrong in Corporate America today.
Its almost a sure bet that GM will go bankrupt in 3 years or less, no matter what they do. Also, the convergence of GM & GMAC issues could cause a derivatives market event. The worst part is the employees, pensioners, union, bondholders and stockholders will all get screwed royally. A hearty SOOHEY PIG PIG & HEY STUPID WHAT HELL WERE YOU THINKING???
European & Asian markets up. Dollar up vs. Yen & Euro, XAU & gold down, XOI & oil down, commodities down & bonds down. Contra trend: None.
4 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 3 weeks ago, DJIA +148, up and down all week, lacking conviction. 2 weeks ago, DJIA -281 crashing through long term resistance levels on higher volume. Last week, large swings up & down DJIA -6.
This week large herks & jerks, Mon. DJIA +61 giving a follow-through on Fridays action. Tues. DJIA got slapped by PPI -62. Wen, wobbly out the gate DJIA -38 then closing strong DJIA +123 on improved internals & higher volume.
Today, a can o whupass opened on the market, a royal slap down with AUTHORITY DJIA -133; SP500 -18; Naz -23 on absolutely vapid internals. This week DJIA -11, over the last 4+ weeks -420.
DJUA, MID & RUT getting slapped, XAU & XOI still getting the royal slap down. Sectors: Utilities, Commodities, Healthcare, Pharma, Gold Bugs, Airlines, Biotech, Natural Gas and Reits taking a big fat red bath. Semi's up??
Bond prices down with the 10 year yield rising @ 4.48%. The 5 & 10 year gap is 14 basis points. The 30 year @ 4.70, the 10 & 30 gap is 22 basis points. The 2 and 5 year gap is 8 basis points.
Yesterdays Beige book and falling oil provided a bounce, although we do not agree with the Beige books optimistic assessment that we have weathered Katrina & Rita, those chickens have yet to come home to roost.
From last week: "the XAU headed for 100 from 112" and "perhaps before the end of Oct" today XAU @ 102, almost there. The pullback in the energy sector and futures (crude -3%) continues, natural gas inventory +75 bcf to 3062 bcf, vs est +55 bcf; dropping natural gas 5%.
Crude oil fell below $60 for the 1st time since July @ $59.85. We will go on record with our private thoughts at this time, oil has pulled back from $70 to $60, which we anticipated, on the current pullback we expect it to continue to $52 per barrel.
Yesterday Exxon Mobil fell reportedly as the result of a discounted 24 Million share block trade worth $1.4 billion which was initiated by Goldman Sachs for unknown reasons. Today Chevron Corp. declined after $323 million of its shares were sold at a discount in a block of 5.6 million shares at $57 apiece by Bank of America Securities.
Yesterday's late day rally on higher volume lacked follow - through in todays market. More Dr. Jekyl & Mr. Hyde, yesterday the largest decline in European markets in 3 months and the largest increase in the SP in over 6 months, today a 180 degree turn as the DJIA gave back all of yesterdays gains.
From Market Soapbox: 10/13/05: "The Stoxx 600, which covers the major exchanges of 17 European countries, has lost 3% this quarter, its worst ever fourth quarter start and biggest slide since 1987." Remember that year??
From Market Soapbox 10/06/05 "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".
By the way, the anniversary of the single largest % drop in stock market history referred to as Black Monday, was yesterday. Could it be DejaVu all over again?
Over 70% of the SP500 financial issues were down today as most of the damage is being inflicted on the broader indexes including the market leading MID & RUT. Today's Dec/Adv volume ratio NYSE 5.7 to 1; Amex 10 to 1, do I hear a herd of elephants rustling about the exit gate?
Maybe, because that rustling sound is sounding more like feet stamping. The herks, jerks and convulsions are getting alot bigger in scale. We either break out to the upside and commence a year end rally or this elephant rolls over on its side and tanks big to the downside. Aprils YTD low 1136 beckons followed by 1090 & 1060.
Keep it tween da ditches, 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 and Hey! Hey! Lets be careful out there...This is The Nattering Naybob and your NOT.
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