Market Soapbox 10/21/05

Resistance: DJIA 10350; SP500 1200; Nasdaq 2100; NDX 1575
Support: DJIA 10200 ; SP500 1175; Nasdaq 2000; NDX 1500

Our top story tonight, Generalissimo Francisco Franco is STILL dead.

In other news, in the virtual world, Google up 12% on increased net revenues - seven fold, Sandisk up 21% on doubled profits. Meanwhile, in the industrial world, Caterpillar down big 9.5%, missing on EPS, Pfizer down again 3%.

Today's SOOHEY PIG PIG award goes to me for letting that poor little pig have a quiet day in its poke. European & Asian markets up. Dollar up vs. Yen & Euro, XAU & gold up, XOI up & oil down, commodities flat & bonds up. 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 even larger convulsions, Mon. DJIA +61 giving a follow-through on Fridays action. Tues. DJIA got slapped by PPI -62. Wen, closing strong DJIA +123 on improved internals. Thurs, a royal slap down DJIA -133.

Today, a split tape day, DJIA down, up, down -66, however with improved internals. Naz +14, with a mini tech rally. 3rd straight day the SOX has been up, sniff, sniff. This week DJIA -77, over the last 5 weeks -486, giving up almost 100 points per week.

DJTA & OEX down. DJUA, MID, RUT, XAU & XOI trying to lead. Sectors: Energy, utilities, tech, human resources, airlines, reits, wireless, telecom, refiners, diversified metals & minerals, commodities, drillers & steel leading the way up.

Pharma, healthcare, industrials, cyclicals, constuction & farming, auto retail, electronics manufacturing, autoparts & equipment, railroads, general merchandise, aerospace & defense, beat down.

Bond prices up with the 10 year yield falling @ 4.42%. The 5 & 10 year gap is 13 basis points. The 30 year @ 4.65, the 10 & 30 gap is 23 basis points. The 2 and 5 year gap is 6 basis points.

Yesterday, crude oil fell below $60 for the 1st time since July @ $59.85, today it stayed there. We went on record with our private thoughts yesterday, oil has pulled back from $70 to $60, which we anticipated, on the current pullback we expect it to continue to $52 per barrel.

We look for the dollar index to head for 95 by year end, as the Yen and Euro transpose digits by year end. Say what?? Now, $1.19 to the Euro, 115 yen to the dollar, by year end $1.15 to the Euro, 119 yen to the dollar. You heard it here first and we repeat our mantra for this year - DO NOT GO AGAINST THE DOLLAR.

From yesterday, 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. If its to the downside, Aprils YTD low 1136 beckons followed by 1090 & 1060.

Remember, 3 straight days up for the SOX which is famous for false positives, however, if we break out of the doldrums it will lead the way by at least 6 trading days. Three down, three to go.

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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