Market Soapbox 11/03/06
Resistance: DJIA 10600; SP500 1225; Nasdaq 2200; NDX 1630
Support: DJIA 10200 ; SP500 1175; Nasdaq 2000; NDX 1500
In our top story tonight, Generalissimo Francisco Franco is STILL dead.
In other news, Q3 productivity +4.1% (highest since Q204) vs. est +2.7% & prior +2.1%; unit labor costs unexpectedly fall - 0.5% vs est +2.5% & prior +1.8%, keeping inflation in check.
Meanwhile, the US consumer is still carrying the world on their backs as October same-store sales from 60 retailers rise better than expected +4.4%.
Services demand rising as ISM Services checked in at 60 vs. est. 57 & prior 53.3. However, Factory Orders declined in at -1.7% vs. est. -1.0% & prior +2.9% showing a slowdown in the pipeline.
Today's SOOHEY PIG PIG award goes to me for letting the pig have a quiet day in its poke.
6 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 5 weeks ago, DJIA +148, up and down, lacking conviction. 4 weeks ago, DJIA -281 crashing through long term resistance levels on higher volume. 3 weeks ago, large swings up & down DJIA -6. 2 weeks ago larger swings, DJIA -77.
Last week, even larger swings, DJIA +186. Monday: broadbased follow through DJIA +37. Tues, the opposite DJIA -33 on vapid internals. Wend. broadbased follow through DJIA +66 on higher volume.
Today, more broadbased follow through as investors cheered upbeat economic reports, but rising oil quelled the euphoria, DJIA +50 on so-so internals and higher volume. This week DJIA +120, over the last 5 weeks DJIA -180.
DJTA hitting an all time high of over 4000, NDX, XOI & SOX up BIG & leading the way, XAU down BIG. CAC, DAX & FTSE up nicely, Hang Seng up BIG & Nikkei 225 up.
Dollar up BIG vs. Euro & up vs. Yen, XAU down BIG & gold up, XOI & crude oil up @ $62, CRB commodities up & bonds down. Contra trend: none.
Sectors: Airlines, Banking, Gold Bugs -1.70%, Real Estate, Reits, Homebuilders, Heathcare & Telecom down. Biotech +2.5%, Broadband +4%, Energy, Natural Gas, Pharma, Oil, Oil Services, Retail, Transports, High Tech, Wireless & Semis +2.3% up nicely.
Bond prices slapped down with the 10 year yield rising @ 4.65% & the 30 year @ 4.84. The curve flattens as the 2 & 5 year gap @ 8 basis points; the 5 & 10 year gap @ 11 basis points; the 10 & 30 gap @ 19 basis points.
The long end on the bond market continues to respond to Uncle Al's ante up as intraday- the 10 year hit a 7 month high at 4.65 and the 2 year at its highest since mid 2001 at 4.46. How much farther can yields go up?? See our other post today.
From Yesterday: "We feel that the tech rally is a bull trap being set for next quarter. High tech valuations will be hurt severely by FASB rule changes regarding stock options expensing which come into effect for next quarters reporting.
Many companies will issue pro forma numbers to obscure the fact that they are grossly overvalued on the books. Whether investors fall for this chicanery, remains to be seen."
During Q4 reporting mid to late Jan 06 is when the effect of this change will truly be felt. We feel that shorts are in order for any high tech stock that has not already reported the dilution effect of options in Q3, as their actual valuation is much lower than advertised.
We continue churning up since 10/13 on most indices, judging by the SOX, the tech rally is in its fifth day. The market rally is broadbased since 10/28 judging by the participation of Retail, Transports, Industrials & Tech.
Todays market was up 90 points and then leaked into the close as rising crude prices (short covering induced) spoiled the party. We pierced upwards resistance on higher volume, that resistance should become support. Lets see.
By COB Monday Nov 8th the market will define its direction for the remainder of November. Until then we reserve judgment as this market until this week, has been acting like Dr. Jekyl & Mr. Hyde.
FYI, we have had over 10,000 hits since March of this year, and we thank you for your support. Alot of the big blogs get 10,000 hits in a week or a month, but the Nattering One relishes just the fact that somebody is actually listening. Thanks for coming and drive careful, cause we want you to come back, ya'll hear now??
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
In our top story tonight, Generalissimo Francisco Franco is STILL dead.
In other news, Q3 productivity +4.1% (highest since Q204) vs. est +2.7% & prior +2.1%; unit labor costs unexpectedly fall - 0.5% vs est +2.5% & prior +1.8%, keeping inflation in check.
Meanwhile, the US consumer is still carrying the world on their backs as October same-store sales from 60 retailers rise better than expected +4.4%.
Services demand rising as ISM Services checked in at 60 vs. est. 57 & prior 53.3. However, Factory Orders declined in at -1.7% vs. est. -1.0% & prior +2.9% showing a slowdown in the pipeline.
Today's SOOHEY PIG PIG award goes to me for letting the pig have a quiet day in its poke.
6 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 5 weeks ago, DJIA +148, up and down, lacking conviction. 4 weeks ago, DJIA -281 crashing through long term resistance levels on higher volume. 3 weeks ago, large swings up & down DJIA -6. 2 weeks ago larger swings, DJIA -77.
Last week, even larger swings, DJIA +186. Monday: broadbased follow through DJIA +37. Tues, the opposite DJIA -33 on vapid internals. Wend. broadbased follow through DJIA +66 on higher volume.
Today, more broadbased follow through as investors cheered upbeat economic reports, but rising oil quelled the euphoria, DJIA +50 on so-so internals and higher volume. This week DJIA +120, over the last 5 weeks DJIA -180.
DJTA hitting an all time high of over 4000, NDX, XOI & SOX up BIG & leading the way, XAU down BIG. CAC, DAX & FTSE up nicely, Hang Seng up BIG & Nikkei 225 up.
Dollar up BIG vs. Euro & up vs. Yen, XAU down BIG & gold up, XOI & crude oil up @ $62, CRB commodities up & bonds down. Contra trend: none.
Sectors: Airlines, Banking, Gold Bugs -1.70%, Real Estate, Reits, Homebuilders, Heathcare & Telecom down. Biotech +2.5%, Broadband +4%, Energy, Natural Gas, Pharma, Oil, Oil Services, Retail, Transports, High Tech, Wireless & Semis +2.3% up nicely.
Bond prices slapped down with the 10 year yield rising @ 4.65% & the 30 year @ 4.84. The curve flattens as the 2 & 5 year gap @ 8 basis points; the 5 & 10 year gap @ 11 basis points; the 10 & 30 gap @ 19 basis points.
The long end on the bond market continues to respond to Uncle Al's ante up as intraday- the 10 year hit a 7 month high at 4.65 and the 2 year at its highest since mid 2001 at 4.46. How much farther can yields go up?? See our other post today.
From Yesterday: "We feel that the tech rally is a bull trap being set for next quarter. High tech valuations will be hurt severely by FASB rule changes regarding stock options expensing which come into effect for next quarters reporting.
Many companies will issue pro forma numbers to obscure the fact that they are grossly overvalued on the books. Whether investors fall for this chicanery, remains to be seen."
During Q4 reporting mid to late Jan 06 is when the effect of this change will truly be felt. We feel that shorts are in order for any high tech stock that has not already reported the dilution effect of options in Q3, as their actual valuation is much lower than advertised.
We continue churning up since 10/13 on most indices, judging by the SOX, the tech rally is in its fifth day. The market rally is broadbased since 10/28 judging by the participation of Retail, Transports, Industrials & Tech.
Todays market was up 90 points and then leaked into the close as rising crude prices (short covering induced) spoiled the party. We pierced upwards resistance on higher volume, that resistance should become support. Lets see.
By COB Monday Nov 8th the market will define its direction for the remainder of November. Until then we reserve judgment as this market until this week, has been acting like Dr. Jekyl & Mr. Hyde.
FYI, we have had over 10,000 hits since March of this year, and we thank you for your support. Alot of the big blogs get 10,000 hits in a week or a month, but the Nattering One relishes just the fact that somebody is actually listening. Thanks for coming and drive careful, cause we want you to come back, ya'll hear now??
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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