Market Soapbox 12/16/05
Resistance: DJIA 11000; SP500 1300; Nasdaq 2300; NDX 1750
Support: DJIA 10700 ; SP500 1240; Nasdaq 2200; NDX 1650
In our top story tonight, Generalissimo Francisco Franco is STILL dead. In other news, the current account deficit at -195.8B vs est. -205B vs prior -197.7B. Narrowing for the 2nd straight time by 0.1% to 6.2% of GDP, as the deficit was 6.4% of GDP in Q2.
Foreign direct investment in the U.S. was up nearly $40 billion in Q3, the biggest quarterly increase in more than four years. Net foreign purchases of U.S. Treasurys rose to $40.9 billion in Q3 from $9.9 billion in Q2.
Foreign purchases of U.S. equities rose to a record $160.7 billion from $114.1 billion, while purchases of corporate bonds rose to $99.5 billion from $80 billion. Purchases of agency bonds rose to $34.5 billion from $20.4 billion.
The dollar cratered against all currencies this week due to misinterpreted signals from the Federal Reserve that rate increases are nearing an end.
Despite the FOMC rate hike and other up beat economic news, the dollar trading at 115.61 yen, a seven week low. The dollar has fallen 4.8% against the Yen since reaching a 2 year high above 121 yen on Dec. 4.
From yesterday: "The icing on the cake would be further retracing of the dollar against the Euro and Yen." Oil over $50 will continue to increase the cost of inputs and goods throughout the supply chain(see yesterdays Philly Fed).
Combined with economic activity and very little slack (evident from a multitude of inventory and capacity utilization reports), this will create inflation pressures. We believe the dollar will restart its upswing early next year,when it becomes apparent that the Fed is NOT pausing and continues to raise interest rates.
Todays SOOHEY, PIG, PIG!! award goes to me for letting the pig have a quiet day in its poke.
12 weeks ago, DJIA -270 breaking key support. 11 weeks ago, DJIA +148, lacking conviction. 10 weeks ago, DJIA -281 crashing down. 9 weeks ago, large swings DJIA -6. 8 weeks ago larger swings, DJIA -77. Five weeks of downturn totaling -486.
7 weeks ago, recovery begins with larger swings, DJIA +186. 6 weeks ago, broadbased gains DJIA +128. 5 weeks ago, DJIA +154. 4 weeks ago, a slowing, DJIA +79. 3 weeks ago, DJIA +165. Five weeks of gains totaling DJIA +712.
2 weeks ago, DJIA -53, breaking the up trend. Last week, DJIA -99, two straight down weeks. Mon, a split tape day DJIA -11. Tues, DJIA +56 with improved internals and higher volume. Wen, a split tape and internals day, DJIA +60. Thur, DJIA -2 with horrible internals on higher volume.
Today, initially another split tape day, DJIA -4 on tepid internals with higher volume and volatility due to quadruple options expiration. This week DJIA +99, over the last 12 weeks DJIA +173.
XAU up, all other indices down, RUT, MID, NDX, SOX & XOI pounded down. CAC, DAX & FTSE up, Hang Seng & Nikkei 225 down.
Dollar down vs. Euro & Yen , XAU up & gold down, XOI & crude down BIG -3.5% @ 57.90, CRB commodities down. Contra trend: none. Note: gold closed under 504 after Monday touching a 25-year high of $543 an ounce.
Bonds up with the 10 year yield falling @ 4.44% & the 30 year @ 4.65. The 2 & 5 year @ 1 basis points; the 5 & 10 year gap @ 8 basis points; the 10 & 30 gap @ 21 basis points.
Sectors: Airlines, Transports, Gold Bugs, Pharma, Consumer & Banking up nicely. Biotech, Natural Gas, Oil, Oil Services, Energy, Tech, Commodity, REIT's & Semis down.
Looking ahead at potential market influences: Dec 20 Building permits, Housing starts, PPI & Core PPI; Dec 21 Chain deflator, GDP, EIA Crude; Dec 22 Initial claims, Personal income & spending, Leading indicators; Dec 23 Durable orders, Mich sentiment, New home sales.
From yesterday: "We are witnessing a perplexing oscillation... a choppy topping pattern that has formed as a result... beware of another shoulder forming off the top. Where there's smoke, there is usually fire and the scent of elephant's attempting to tread lightly as they unwind their positions prior to year end is in the air."
Today, oil futures & the energy sector pulled back which kept the market down. For the DJIA this was an up week, breaking the two week down trend.
However, this weeks DJIA & SP500 "up trend" is deceiving. The mid & small caps along with the legs under the Santa Claus rally; tech, precious metals and the energy sector are all consolidating.
Next week will bring conflicting news as housing data should be down, inferring that the Fed can pause, while PPI and chain deflator will show uptrending in costs and core inflation. The question is what will the irrational "see no evil, hear no evil, speak no evil" market choose to pay attention to?
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 10700 ; SP500 1240; Nasdaq 2200; NDX 1650
In our top story tonight, Generalissimo Francisco Franco is STILL dead. In other news, the current account deficit at -195.8B vs est. -205B vs prior -197.7B. Narrowing for the 2nd straight time by 0.1% to 6.2% of GDP, as the deficit was 6.4% of GDP in Q2.
Foreign direct investment in the U.S. was up nearly $40 billion in Q3, the biggest quarterly increase in more than four years. Net foreign purchases of U.S. Treasurys rose to $40.9 billion in Q3 from $9.9 billion in Q2.
Foreign purchases of U.S. equities rose to a record $160.7 billion from $114.1 billion, while purchases of corporate bonds rose to $99.5 billion from $80 billion. Purchases of agency bonds rose to $34.5 billion from $20.4 billion.
The dollar cratered against all currencies this week due to misinterpreted signals from the Federal Reserve that rate increases are nearing an end.
Despite the FOMC rate hike and other up beat economic news, the dollar trading at 115.61 yen, a seven week low. The dollar has fallen 4.8% against the Yen since reaching a 2 year high above 121 yen on Dec. 4.
From yesterday: "The icing on the cake would be further retracing of the dollar against the Euro and Yen." Oil over $50 will continue to increase the cost of inputs and goods throughout the supply chain(see yesterdays Philly Fed).
Combined with economic activity and very little slack (evident from a multitude of inventory and capacity utilization reports), this will create inflation pressures. We believe the dollar will restart its upswing early next year,when it becomes apparent that the Fed is NOT pausing and continues to raise interest rates.
Todays SOOHEY, PIG, PIG!! award goes to me for letting the pig have a quiet day in its poke.
12 weeks ago, DJIA -270 breaking key support. 11 weeks ago, DJIA +148, lacking conviction. 10 weeks ago, DJIA -281 crashing down. 9 weeks ago, large swings DJIA -6. 8 weeks ago larger swings, DJIA -77. Five weeks of downturn totaling -486.
7 weeks ago, recovery begins with larger swings, DJIA +186. 6 weeks ago, broadbased gains DJIA +128. 5 weeks ago, DJIA +154. 4 weeks ago, a slowing, DJIA +79. 3 weeks ago, DJIA +165. Five weeks of gains totaling DJIA +712.
2 weeks ago, DJIA -53, breaking the up trend. Last week, DJIA -99, two straight down weeks. Mon, a split tape day DJIA -11. Tues, DJIA +56 with improved internals and higher volume. Wen, a split tape and internals day, DJIA +60. Thur, DJIA -2 with horrible internals on higher volume.
Today, initially another split tape day, DJIA -4 on tepid internals with higher volume and volatility due to quadruple options expiration. This week DJIA +99, over the last 12 weeks DJIA +173.
XAU up, all other indices down, RUT, MID, NDX, SOX & XOI pounded down. CAC, DAX & FTSE up, Hang Seng & Nikkei 225 down.
Dollar down vs. Euro & Yen , XAU up & gold down, XOI & crude down BIG -3.5% @ 57.90, CRB commodities down. Contra trend: none. Note: gold closed under 504 after Monday touching a 25-year high of $543 an ounce.
Bonds up with the 10 year yield falling @ 4.44% & the 30 year @ 4.65. The 2 & 5 year @ 1 basis points; the 5 & 10 year gap @ 8 basis points; the 10 & 30 gap @ 21 basis points.
Sectors: Airlines, Transports, Gold Bugs, Pharma, Consumer & Banking up nicely. Biotech, Natural Gas, Oil, Oil Services, Energy, Tech, Commodity, REIT's & Semis down.
Looking ahead at potential market influences: Dec 20 Building permits, Housing starts, PPI & Core PPI; Dec 21 Chain deflator, GDP, EIA Crude; Dec 22 Initial claims, Personal income & spending, Leading indicators; Dec 23 Durable orders, Mich sentiment, New home sales.
From yesterday: "We are witnessing a perplexing oscillation... a choppy topping pattern that has formed as a result... beware of another shoulder forming off the top. Where there's smoke, there is usually fire and the scent of elephant's attempting to tread lightly as they unwind their positions prior to year end is in the air."
Today, oil futures & the energy sector pulled back which kept the market down. For the DJIA this was an up week, breaking the two week down trend.
However, this weeks DJIA & SP500 "up trend" is deceiving. The mid & small caps along with the legs under the Santa Claus rally; tech, precious metals and the energy sector are all consolidating.
Next week will bring conflicting news as housing data should be down, inferring that the Fed can pause, while PPI and chain deflator will show uptrending in costs and core inflation. The question is what will the irrational "see no evil, hear no evil, speak no evil" market choose to pay attention to?
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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