Market Soapbox & Observations Week Ending 01/26/07

30,000 Hits Hoo Haa, we thank you for your support, indulgence and patience. Often wrong, but never in doubt....

MON, a broadbased downsurge, DJIA -88 on average volume with ugly internals. All DOWN. Bonds up 10 yr 4.76, $ up vs 121.65y & 1.2948E, crude down -1.6% $51.13, gold down $632.80.

TUE, commodities led split tape rebound, DJIA +57 on average volume with nice internals. All UP cept NDX & Tech. Bonds down 10yr 4.81, $ up vs 121.66y & down vs 1.3016E, crude up 4.5% $54.94, gold up 2% $646.60

WEN, broadbased surge, DJIA +88 on lower volume and sterling internals. All UP cept DJTA. Bonds up 10 yr 4.81, $ down vs 121.085y & vs 1.2959E, gold up $648.10, crude up 55.26.

THU, broadbased plunge, DJIA -119 on higher volume with ugly internals. All DOWN BIG. Bonds down 10 yr 4.87, $ up 121.115y & 1.2937E, gold up $652.30, crude down 2% $54.28. Huge aftermarket volume surges.

FRI, wavy gravy, split tape, DJIA -16 on average volume with OK internals. All DOWN cept DJUA, NAZ, MID, RUT, SOXX, XOI, XAU. Bonds down 10yr 4.88, $ up vs 121.595y & vs 1.2914E, crude up 2.2% @ $55.44, gold down @ $650.60.

This week, DJIA -78, since 09/19/05 DJIA +1855. Dollar up vs. Euro 1.2914 & vs. Yen 121.595, XAU up 138.60 & gold up 650.60, XOI up 1141.97 & crude up $55.44, CRB commodities index up 295.86

MAJOR YIELD CURVE INVERSION: This week bonds down BIG with the 30 yr yield rising @ 4.98%; 10 yr @ 4.88; 5 yr @ 4.87; 2yr @ 4.97; 6 mo @ 5.17.

Recent Inversions: 2yr above 10 yr 12/27 - 03/07; 03/20 - 3/29; 06/08 - 07/26. 2yr above 30 yr 02/09 - 03/07 & 03/21 - 3/29; 6mo & 2yr above 30yr 06/13 - 07/20.

2yr above 10yr 08/03 - ?; 6mo above 10yr 06/02 -?; 6mo above 30yr 06/13 - ? 2 yr above 30yr 11/03 - ?

Resistance: DJIA 12625; SP500 1440; Nasdaq 2470; NDX 1810
Support: DJIA 12485, SP500 1422, Nasdaq 2440; NDX 1770

DJIA & SP500 at 25 DMA support, NAZ falling from 50 DMA, NDX barely above 75 DMA, RUT at 50 DMA. VIX jumping from 9.87 to 11.60 in 2 days, volatility uptrend from 12/15 low still intact.

Dollar rising hit 85 going for 86, crude cat bounce from $50 to $55, gold rising as bonds plunge 10 yr 4.88. Mon bounce? or rapid downside? 2 day close below 1420 SP500 would be the signal. Let's see.

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