Market Soapbox 12/06/05
Resistance: DJIA 11000; SP500 1300; Nasdaq 2300; NDX 1750
Support: DJIA 10800 ; SP500 1250; Nasdaq 2250; NDX 1670
In our top story tonight, Gold hit a 20 year high; Final Q3 Productivity in at 4.7% vs est. 4.5% vs prior 4.1%; unit labor costs -1%.
This second straight decline in unit labor costs resulted from layoffs and wage cuts and was misconstrued as economic slack, which was then touted by the ring in nose medai as contained inflation, a bond and equities rally ensued.
Factory Orders +2.2% vs est. +1.3% vs prior -1.4% broadcast as upbeat for economic strength. The good news: orders for non defense capital goods excluding aircraft, a proxy for business spending, +1.4% vs prior -1.8%.
The bad news: Factory Orders Ex transport (read aircraft) a more modest +0.6%. Defense Aircraft +142%; Civilian Aircraft +50% and non durable goods orders +0.5%, helped mask, Computer orders -0.8%, electrical equipment and appliances -3.4%, and automobiles and parts -1%.
The really bad news: inventories to shipments ratio - a measure of how long it would take to deplete stocks at the current sales pace - went down to 1.17 months.
This matched August's record low -- indicating inventories are at the leanest level since records were established in 1992. Translated there is very little slack and any increase in demand will stoke inflation. This may have been what put the late day kabosh on the earlier equities party.
Todays SOOHEY, PIG, PIG!! award goes to me for letting the pig have a quiet day in its poke.
11 weeks ago, DJIA -270 breaking key support. 10 weeks ago, DJIA +148, lacking conviction. 9 weeks ago, DJIA -281 crashing down. 8 weeks ago, large swings DJIA -6. 7 weeks ago larger swings, DJIA -77. Five weeks of downturn totaling -486.
6 weeks ago, recovery begins with larger swings, DJIA +186. 5 weeks ago, broadbased gains DJIA +128. 4 weeks ago, DJIA +154. 3 weeks ago, a slowing, DJIA +79. 2 weeks ago, DJIA +165. Five weeks of gains totaling DJIA +712.
Last week DJIA -53, breaking the up trend. Mon, a profit taking day, DJIA - 42. Today DJIA +22, a camel hump day on decent internals, up one side DJIA +101, then crashing down 80 points into the close. Over the last 11 weeks DJIA +232.
DJTA, SOX & XAU up nicely, MID, DJUA & XAX down. CAC up, DAX up, FTSE up, Hang Seng down, Nikkei 225 up.
Dollar flat vs. Euro & Yen, XAU & gold up 513, XOI & crude up @ 60.15, CRB commodities up. Contra trend: none.
Bonds up with the 10 year yield falling @ 4.48% & the 30 year @ 4.67. The 2 & 5 year @ 2 basis points; the 5 & 10 year gap @ 7 basis points; the 10 & 30 gap @ 19 basis points.
Sectors: Airlines, Gold Bugs, Natural Gas, Tobacco, Transports, Commodity, Cyclical & Semi's up nicely. Biotech, Pharma, Securities Brokers & Healthcare REIT's pummled down. Internet B2B -4.5% ouch!
Looking ahead at potential market influences: Dec 7; Options Unwind, 5 yr auction, Crude inventories, Consumer Credit, Dec 8; 10 yr auction, Initial Claims, Dec 9; Michigan Sentiment, Wholesale Inventories.
Today, INTRADAY - Gold @ 513 hit a twenty year high, excepting the DJIA, all major indices hit 4.5 year highs, MID & RUT made all time highs. After breaching resistence, the markets pulled back and bled badly into the close.
Yesterday: "It appears options unwind started a day or two early with equities and bonds selling off." Today's pop up was hopeful, but what ensued was not. This is a critical juncture for the market, we either break out to the upside with conviction lest we digress.
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, this is The Nattering Naybob and your NOT!!!
Support: DJIA 10800 ; SP500 1250; Nasdaq 2250; NDX 1670
In our top story tonight, Gold hit a 20 year high; Final Q3 Productivity in at 4.7% vs est. 4.5% vs prior 4.1%; unit labor costs -1%.
This second straight decline in unit labor costs resulted from layoffs and wage cuts and was misconstrued as economic slack, which was then touted by the ring in nose medai as contained inflation, a bond and equities rally ensued.
Factory Orders +2.2% vs est. +1.3% vs prior -1.4% broadcast as upbeat for economic strength. The good news: orders for non defense capital goods excluding aircraft, a proxy for business spending, +1.4% vs prior -1.8%.
The bad news: Factory Orders Ex transport (read aircraft) a more modest +0.6%. Defense Aircraft +142%; Civilian Aircraft +50% and non durable goods orders +0.5%, helped mask, Computer orders -0.8%, electrical equipment and appliances -3.4%, and automobiles and parts -1%.
The really bad news: inventories to shipments ratio - a measure of how long it would take to deplete stocks at the current sales pace - went down to 1.17 months.
This matched August's record low -- indicating inventories are at the leanest level since records were established in 1992. Translated there is very little slack and any increase in demand will stoke inflation. This may have been what put the late day kabosh on the earlier equities party.
Todays SOOHEY, PIG, PIG!! award goes to me for letting the pig have a quiet day in its poke.
11 weeks ago, DJIA -270 breaking key support. 10 weeks ago, DJIA +148, lacking conviction. 9 weeks ago, DJIA -281 crashing down. 8 weeks ago, large swings DJIA -6. 7 weeks ago larger swings, DJIA -77. Five weeks of downturn totaling -486.
6 weeks ago, recovery begins with larger swings, DJIA +186. 5 weeks ago, broadbased gains DJIA +128. 4 weeks ago, DJIA +154. 3 weeks ago, a slowing, DJIA +79. 2 weeks ago, DJIA +165. Five weeks of gains totaling DJIA +712.
Last week DJIA -53, breaking the up trend. Mon, a profit taking day, DJIA - 42. Today DJIA +22, a camel hump day on decent internals, up one side DJIA +101, then crashing down 80 points into the close. Over the last 11 weeks DJIA +232.
DJTA, SOX & XAU up nicely, MID, DJUA & XAX down. CAC up, DAX up, FTSE up, Hang Seng down, Nikkei 225 up.
Dollar flat vs. Euro & Yen, XAU & gold up 513, XOI & crude up @ 60.15, CRB commodities up. Contra trend: none.
Bonds up with the 10 year yield falling @ 4.48% & the 30 year @ 4.67. The 2 & 5 year @ 2 basis points; the 5 & 10 year gap @ 7 basis points; the 10 & 30 gap @ 19 basis points.
Sectors: Airlines, Gold Bugs, Natural Gas, Tobacco, Transports, Commodity, Cyclical & Semi's up nicely. Biotech, Pharma, Securities Brokers & Healthcare REIT's pummled down. Internet B2B -4.5% ouch!
Looking ahead at potential market influences: Dec 7; Options Unwind, 5 yr auction, Crude inventories, Consumer Credit, Dec 8; 10 yr auction, Initial Claims, Dec 9; Michigan Sentiment, Wholesale Inventories.
Today, INTRADAY - Gold @ 513 hit a twenty year high, excepting the DJIA, all major indices hit 4.5 year highs, MID & RUT made all time highs. After breaching resistence, the markets pulled back and bled badly into the close.
Yesterday: "It appears options unwind started a day or two early with equities and bonds selling off." Today's pop up was hopeful, but what ensued was not. This is a critical juncture for the market, we either break out to the upside with conviction lest we digress.
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, this is The Nattering Naybob and your NOT!!!
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