Market Soapbox 12/07/05
Resistance: DJIA 11000; SP500 1300; Nasdaq 2300; NDX 1750
Support: DJIA 10800 ; SP500 1250; Nasdaq 2250; NDX 1670
In our top story tonight, Generalissimo Francisco Franco is STILL dead.
In other news, the EIA report showed a build of +2.72M barrels vs est. -1.92M; gasoline inventories +2.74M vs est +1.05M; distillate supply +2.74M vs est. +1.75M.
The unexpected large builds reversed morning energy future gains (crude up 1%) and turned them negative, crude closed down 1%.
Consumer credit came in negative 7.2B vs est +7B vs prior -0.1B, hinting that maybe the consumer is pulling back in their spending or has already spent the money at the gasoline pump earlier this year.
The 5 year note auction bid-to-cover ratio, an indication of demand, was 2.38, its lowest since July. However, foreign demand rose, with indirect bidders taking 44% of the notes, compared with just 21% in November.
Greenspan's recently released written responses to the November 3 congressional panel reiterated that it is 'impossible' to know what the neutral policy rate is and that global savings (foreign purchases) have kept long-term yields low as a flatter yield curve may not indicate economic weakness.
Bonds and interest rate sensitive equities were trounced, because the translation means that 4.5% may not be neutral as everyone thinks, so the Fed may not pause there.
Also, a flatter or inverted curve may not indicate economic weakness or cause a recession. Sit down, strap in and start screaming, we are sticking to our guns that rates are going way higher than anyone thinks.
Todays SOOHEY, PIG, PIG!! award goes to the media for attempting to put a positive spin on WellPoints forecasted EPS and 2006 outlook.
"After announcing its fiscal 2006 outlook, its forecasted EPS appears to fall below the consensus estimate, backing out a one-time item (stock options expense) translates to EPS that should be two cents higher than expected."
The stock was punished -2.8% as investors did not fall for this sleight of hand. Stock options expensing is NOT a one-time item and should not be swept under the rug as it directly effects the company's valuation.
Be prepared mid January when FASB stock options expensing becomes mandatory, and many high tech companies will attempt this same jerrymandering through the media. Caveat Emptor.
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. Tues up & down DJIA +22. Today, DJIA -46 broadbased consolidation on lower volume and heinous internals. This week, DJIA -66, over the last 12 weeks DJIA +107.
XAU & XAX up, RUT, XOI, SOX & DJUA pounded down. CAC, DAX & FTSE down, Hang Seng & Nikkei 225 up.
Dollar up vs. Euro 1.1734 & Yen 120.72, XAU & gold up 515.80, XOI & crude down @ 59.21, CRB commodities up. Contra trend: $ & gold up.
Bonds down with the 10 year yield rising @ 4.51% & the 30 year @ 4.71. The 2 & 5 year @ 3 basis points; the 5 & 10 year gap @ 7 basis points; the 10 & 30 gap @ 20 basis points.
Sectors: Gold Bugs & Internet Infrastructure up nicely. Oil, Biotech, Telecom, Securities Broker, Utilities, Healthcare, Cyclical, Semis, Real Estate, REIT's, Homebuilders, Finance & Banking pounded down hard.
Looking ahead at potential market influences: Dec 8; 10 yr auction, Initial Claims, Dec 9; Michigan Sentiment, Wholesale Inventories.
The markets are still going up and down with the price of crude futures. What will happen to the markets if theres a large pullback next year in oil futures?
Yesterdays "contained inflation" media misinformation led to the biggest one day 10 year note rally in three weeks.
Today, upon further review of the statistics and Greenspans comments bonds and interest rate sensitive sectors such as finance and homebuilders -3.7% took a pounding.
Yesterday: "After breaching resistence, the markets pulled back and bled badly into the close.... we either break out to the upside with conviction or we digress."
We keep making new highs but the market is losing traction the last 8 trading days. Perhaps the January correction might come early due to the elephants clearing their positions before year end?
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, Generalissimo Francisco Franco is STILL dead.
In other news, the EIA report showed a build of +2.72M barrels vs est. -1.92M; gasoline inventories +2.74M vs est +1.05M; distillate supply +2.74M vs est. +1.75M.
The unexpected large builds reversed morning energy future gains (crude up 1%) and turned them negative, crude closed down 1%.
Consumer credit came in negative 7.2B vs est +7B vs prior -0.1B, hinting that maybe the consumer is pulling back in their spending or has already spent the money at the gasoline pump earlier this year.
The 5 year note auction bid-to-cover ratio, an indication of demand, was 2.38, its lowest since July. However, foreign demand rose, with indirect bidders taking 44% of the notes, compared with just 21% in November.
Greenspan's recently released written responses to the November 3 congressional panel reiterated that it is 'impossible' to know what the neutral policy rate is and that global savings (foreign purchases) have kept long-term yields low as a flatter yield curve may not indicate economic weakness.
Bonds and interest rate sensitive equities were trounced, because the translation means that 4.5% may not be neutral as everyone thinks, so the Fed may not pause there.
Also, a flatter or inverted curve may not indicate economic weakness or cause a recession. Sit down, strap in and start screaming, we are sticking to our guns that rates are going way higher than anyone thinks.
Todays SOOHEY, PIG, PIG!! award goes to the media for attempting to put a positive spin on WellPoints forecasted EPS and 2006 outlook.
"After announcing its fiscal 2006 outlook, its forecasted EPS appears to fall below the consensus estimate, backing out a one-time item (stock options expense) translates to EPS that should be two cents higher than expected."
The stock was punished -2.8% as investors did not fall for this sleight of hand. Stock options expensing is NOT a one-time item and should not be swept under the rug as it directly effects the company's valuation.
Be prepared mid January when FASB stock options expensing becomes mandatory, and many high tech companies will attempt this same jerrymandering through the media. Caveat Emptor.
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. Tues up & down DJIA +22. Today, DJIA -46 broadbased consolidation on lower volume and heinous internals. This week, DJIA -66, over the last 12 weeks DJIA +107.
XAU & XAX up, RUT, XOI, SOX & DJUA pounded down. CAC, DAX & FTSE down, Hang Seng & Nikkei 225 up.
Dollar up vs. Euro 1.1734 & Yen 120.72, XAU & gold up 515.80, XOI & crude down @ 59.21, CRB commodities up. Contra trend: $ & gold up.
Bonds down with the 10 year yield rising @ 4.51% & the 30 year @ 4.71. The 2 & 5 year @ 3 basis points; the 5 & 10 year gap @ 7 basis points; the 10 & 30 gap @ 20 basis points.
Sectors: Gold Bugs & Internet Infrastructure up nicely. Oil, Biotech, Telecom, Securities Broker, Utilities, Healthcare, Cyclical, Semis, Real Estate, REIT's, Homebuilders, Finance & Banking pounded down hard.
Looking ahead at potential market influences: Dec 8; 10 yr auction, Initial Claims, Dec 9; Michigan Sentiment, Wholesale Inventories.
The markets are still going up and down with the price of crude futures. What will happen to the markets if theres a large pullback next year in oil futures?
Yesterdays "contained inflation" media misinformation led to the biggest one day 10 year note rally in three weeks.
Today, upon further review of the statistics and Greenspans comments bonds and interest rate sensitive sectors such as finance and homebuilders -3.7% took a pounding.
Yesterday: "After breaching resistence, the markets pulled back and bled badly into the close.... we either break out to the upside with conviction or we digress."
We keep making new highs but the market is losing traction the last 8 trading days. Perhaps the January correction might come early due to the elephants clearing their positions before year end?
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!!!
Comments