Market Soapbox 11/08/05
Resistance: DJIA 10600; SP500 1225; Nasdaq 2200; NDX 1640
Support: DJIA 10200 ; SP500 1175; Nasdaq 2000; NDX 1500
In our top story tonight, Generalissimo Francisco Franco is STILL dead.
In other news, Freddie Mac -2%, Fannies cousin had a $220 Million profit reduction in 05. CountryWide Financial -1%; had a 60% YOY increase in mortgage loan fundings. A rush to lock in? Fear of higher rates?
Meanwhile, homebuilder Toll Brothers cut their FY06 deliveries outlook, are they saying the housing sector could be slowing??? Subsequently the sector was pounded mercilessly, literally falling off their charts. The HGX down 5%, Toll Brothers -11%, Centex -5%, Pulte -7%, Lennar -4.5%, DR Horton -8%.
As a result of all the above, anything having to do with the housing market bubble consolidated today: homebuilding, construction materials, building products, home improvement, appliances, thrifts & mortgage, REIT's, real estate, etc. Is the mustard off the hot dog??
In contrarian developments, the bond market continued yesterdays rally BIG TIME heading into 3 days of auctions. Most convenient for todays $18 Billion 3 year note auction wouldn't you say? The $18 Billion 3 year auction brought a yield of 4.458% and drew a less than expected indirect bidder participation of 29.9%.
Incidentally and unnoticed by most, the NDX hit a 46 month high today at 1636.84, not since 01/11/02 has it been this high. The QQQQ did not follow the NDX to a high, strange divergence.
Today's SOOHEY PIG PIG award goes to me for letting the pig have a peaceful day in its poke.
7 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 6 weeks ago, DJIA +148, lacking conviction. 5 weeks ago, DJIA -281 crashing down on higher volume. 4 weeks ago, large swings DJIA -6.
3 weeks ago larger swings, DJIA -77, 2 weeks ago, even larger swings, DJIA +186. Last week, broadbased gains on higher volume DJIA +128. This makes two consecutive weeks of gains totaling DJIA +314 as the upward grind started 10/13.
This week, Mon. a weak attempt with DJIA +55 on so-so internals. Today, a down day DJIA -47 on wretched internals and lower volume. This week, DJIA +8, over the last 8 weeks DJIA -164.
The SOX & NDX tried to lead as the tech rally fell short on its 7th day. XOI up 1%, MID & RUT suffering. CAC flat, DAX down, FTSE flat, Hang Seng up & Nikkei 225 down.
Dollar up vs. Euro 1.17 & down vs. Yen 117, XAU down & gold 462.3 up, XOI & crude oil up 59.71, CRB commodities & bonds up. Contra trend: bond rally in the face of a housing sector pullback.
Sectors: Airlines, Networking, Securities, Transports, Cyclicals, Retail, Real Estate, Reits, Homebuilders & Banking suffering. Biotech, Energy, Gold Bugs, Natural Gas, Oil Services & Oil up nicely.
The curve flattens further as Bonds up with the 10 year yield FALLING @ 4.56% & the 30 year @ 4.76. The 2 & 5 year gap @ 6 basis points; the 5 & 10 year gap @ 8 basis points; the 10 & 30 gap @ 20 basis points.
Yesterday: "Looking ahead at potential market influences, options unwind around Nov 9th, Nov 10th: Export & Import prices, Treasury budget & Trade balance. Nov 15th: PPI & Retail Sales; Nov 16th: CPI & Net Foreign Purchases; Nov 17th Philly Fed, Capacity Utilization, Industrial Production. Nov 18th: Options Expiration.
Add to the above list the following auctions: Tue Nov 8th;, 3 year note; Wen Nov 9th; 5 year note; Thurs Nov 10th; 10 year note. Depending on how these reports are received, and the liquidity drain from the auctions (depending of foreign participation), we could see another consolidation from Nov 8th through Nov 18th....
A November 440 @ 2.50 put might be a good play this and next week, it could come into the money around $6-7 quickly and maybe more." The ride down may have started at noon today when the SOX hit 455.76.
Reporting season is at an end as 85% of Q3 results are in. Cisco Systems reports Q1 (Oct) results after the close tomorrow while Dell reports Q3 earnings on Thursday.
Take note: Q4 results will come in mid Jan and will be subject to the FASB stock options expensing ruling, GAAP valuations in high tech will be severely altered to the downside. We will comment on this in a separate post later this week.
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, Freddie Mac -2%, Fannies cousin had a $220 Million profit reduction in 05. CountryWide Financial -1%; had a 60% YOY increase in mortgage loan fundings. A rush to lock in? Fear of higher rates?
Meanwhile, homebuilder Toll Brothers cut their FY06 deliveries outlook, are they saying the housing sector could be slowing??? Subsequently the sector was pounded mercilessly, literally falling off their charts. The HGX down 5%, Toll Brothers -11%, Centex -5%, Pulte -7%, Lennar -4.5%, DR Horton -8%.
As a result of all the above, anything having to do with the housing market bubble consolidated today: homebuilding, construction materials, building products, home improvement, appliances, thrifts & mortgage, REIT's, real estate, etc. Is the mustard off the hot dog??
In contrarian developments, the bond market continued yesterdays rally BIG TIME heading into 3 days of auctions. Most convenient for todays $18 Billion 3 year note auction wouldn't you say? The $18 Billion 3 year auction brought a yield of 4.458% and drew a less than expected indirect bidder participation of 29.9%.
Incidentally and unnoticed by most, the NDX hit a 46 month high today at 1636.84, not since 01/11/02 has it been this high. The QQQQ did not follow the NDX to a high, strange divergence.
Today's SOOHEY PIG PIG award goes to me for letting the pig have a peaceful day in its poke.
7 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 6 weeks ago, DJIA +148, lacking conviction. 5 weeks ago, DJIA -281 crashing down on higher volume. 4 weeks ago, large swings DJIA -6.
3 weeks ago larger swings, DJIA -77, 2 weeks ago, even larger swings, DJIA +186. Last week, broadbased gains on higher volume DJIA +128. This makes two consecutive weeks of gains totaling DJIA +314 as the upward grind started 10/13.
This week, Mon. a weak attempt with DJIA +55 on so-so internals. Today, a down day DJIA -47 on wretched internals and lower volume. This week, DJIA +8, over the last 8 weeks DJIA -164.
The SOX & NDX tried to lead as the tech rally fell short on its 7th day. XOI up 1%, MID & RUT suffering. CAC flat, DAX down, FTSE flat, Hang Seng up & Nikkei 225 down.
Dollar up vs. Euro 1.17 & down vs. Yen 117, XAU down & gold 462.3 up, XOI & crude oil up 59.71, CRB commodities & bonds up. Contra trend: bond rally in the face of a housing sector pullback.
Sectors: Airlines, Networking, Securities, Transports, Cyclicals, Retail, Real Estate, Reits, Homebuilders & Banking suffering. Biotech, Energy, Gold Bugs, Natural Gas, Oil Services & Oil up nicely.
The curve flattens further as Bonds up with the 10 year yield FALLING @ 4.56% & the 30 year @ 4.76. The 2 & 5 year gap @ 6 basis points; the 5 & 10 year gap @ 8 basis points; the 10 & 30 gap @ 20 basis points.
Yesterday: "Looking ahead at potential market influences, options unwind around Nov 9th, Nov 10th: Export & Import prices, Treasury budget & Trade balance. Nov 15th: PPI & Retail Sales; Nov 16th: CPI & Net Foreign Purchases; Nov 17th Philly Fed, Capacity Utilization, Industrial Production. Nov 18th: Options Expiration.
Add to the above list the following auctions: Tue Nov 8th;, 3 year note; Wen Nov 9th; 5 year note; Thurs Nov 10th; 10 year note. Depending on how these reports are received, and the liquidity drain from the auctions (depending of foreign participation), we could see another consolidation from Nov 8th through Nov 18th....
A November 440 @ 2.50 put might be a good play this and next week, it could come into the money around $6-7 quickly and maybe more." The ride down may have started at noon today when the SOX hit 455.76.
Reporting season is at an end as 85% of Q3 results are in. Cisco Systems reports Q1 (Oct) results after the close tomorrow while Dell reports Q3 earnings on Thursday.
Take note: Q4 results will come in mid Jan and will be subject to the FASB stock options expensing ruling, GAAP valuations in high tech will be severely altered to the downside. We will comment on this in a separate post later this week.
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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