Market Observations 11/24/06

In our top story tonight, the leader of al-Qaida in Iraq, Abu Musab al-Zarqawi, is STILL dead and someone else has taken his place.

Wen DJIA hit a new all time intraday high 12361, all major indices made new multi year & all time highs, except the XAU, XOI, DJTA, DJUA, SOXX & MID.

After pulling back crude bounced from $55 to $60 and gold at $618 rocketed to $645, as the dollar plunged to a 19 month low over 1.30 Euro and under 116 Yen. After a pullback, bonds rallied hard as the 30 yr pierced 113, dropping the 10 yr yield to 4.53%.

With the dollar caving, asset inflation normally occurs, but foreign investors may back away from dollar denominated equities in favor of bonds to compensate by keeping interest rates low.

In the long run, this could cause a nice market consolidation which will be necessary for any further continuance of this rally. Equities are still ignoring that bonds, dollar & gold are all signaling loudly, that tough times are ahead.

At the moment, SP500 still consolidating sideways 1401-1408 and seems headed for 1415, NDX at 1825 and seems headed for 1860. Perhaps todays pullback will result in another spurt up to these numbers, then??

I sense a major market move coming near term, in which direction I cannot decipher. We are either heading for a top and fall (which would be healthy) or we will rocket to even bigger heights SP500 1440, then fall harder.

Next week, Tues durables goods orders, existing home sales. Wen GDP revision, new home sales Thu PCE deflator. Fri ISM index.

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

tregen said…
crazy stuff out there but I think given the amount of money floating around out there that we are in for more upside before we get a massive slide in late 2007