Market Observations 07/20/06
Like we said, yesterday was a BIG headfake as Benny & the Feds FOMC comments offered the market little tonic today. Dwindling profits, inflation fears and over $70 oil still rule.
Yesterday, Yahoo profits -80%, stock -22%. Today, Intel profits -57%, stock -6.5%. Apple and Motorola profits +48%, both stocks +12% & +8%.
Oil continues a 4 day & -6% pullback. Transports, Energy, Tech, Mid, Small, Semis & Metals got slammed. The $ & commodities suffered as the bond rescue continues.
Positioning the 6 mo with the Aug 9th 25bps bump @ 5.5 to equal fed funds, the 10 yr will go to 5.25.
This could be the pausing point for Benny & the Feds. Energy passthrough will cause additional pain early next year.
Yesterday, the RUT burst up from 670 to 702, as short sellers ran for the hills. Like we said it would, today the RUT fell through MAX PAIN at 683 intraday. Amazing isn't it?? FYI, Aug options MAX PAIN are now at 705.
Next weeks 20 year TIPS, 2yr & 5 yr note auctions could send us down another notch or two. Watch 670 RUT as support and 720-725 as resistance for clues.
We could fall past 670, then another fatty headfake to the upside before the next BIG step down?
Yesterday, Yahoo profits -80%, stock -22%. Today, Intel profits -57%, stock -6.5%. Apple and Motorola profits +48%, both stocks +12% & +8%.
Oil continues a 4 day & -6% pullback. Transports, Energy, Tech, Mid, Small, Semis & Metals got slammed. The $ & commodities suffered as the bond rescue continues.
Positioning the 6 mo with the Aug 9th 25bps bump @ 5.5 to equal fed funds, the 10 yr will go to 5.25.
This could be the pausing point for Benny & the Feds. Energy passthrough will cause additional pain early next year.
Yesterday, the RUT burst up from 670 to 702, as short sellers ran for the hills. Like we said it would, today the RUT fell through MAX PAIN at 683 intraday. Amazing isn't it?? FYI, Aug options MAX PAIN are now at 705.
Next weeks 20 year TIPS, 2yr & 5 yr note auctions could send us down another notch or two. Watch 670 RUT as support and 720-725 as resistance for clues.
We could fall past 670, then another fatty headfake to the upside before the next BIG step down?
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