Market Observations 02/27/07
The Year of The Boar will be anything but a bore, perhaps a pig's year or the pigs will get led to slaughter...
Monday, M&A and leveraged buyout mania exhibit the sheer insanity of global hyperliquidity.... off a cliff....
utility TXU and chemical company DOW are LBO candidates for $45 B and $54 B respectively...
After hours Monday, a large spike in Nasdaq volume and precipitious drop off in AMEX & NYSE volume.
Off a cliff, CAC, DAC & FTSE all down >2.5%.... on news from China... Shanghai -8.8%, single largest decline in 10 years ...
speculation of a fresh round of austerity measures from the Chinese government to slow sizzling economic growth fueled profit taking.
In January, the Chinese government implemented a series of gentle austerity measures targeted at the domestic equity markets in an attempt to slow the rising market.
These measures included the suspension of new issues of mutual funds; the tightening scrutiny over SOE stock trading; and public announcements by some officials that people should be cautious about the domestic stock market.
Why should they be cautious? The Shanghai index was up +14% this year and +130% in 2006 with forward P/E ratios of 26 to 1...
the locals were spooked by rumors the government may impose a 20% capital gains tax and a round of interest rate hikes... just a necessary consolidation in progress or something worse?
Pre market today, off a cliff... a 1.5% drop in the NDX.... in the 1st hour, the DJIA opened with a 155 point drop on higher volume.
A LARGE hourly and daily sell signal in which the severity can be seen in the SP500 19 point drop...
Yesterday, investor anxiety mounted, VIX jumping to 11.44, today leaping off a cliff to 13.1...
Crude holding its own, gold -1%, $ plunging vs Euro & yen, yet bonds roaring cutting the 10 year yield 5 bps in one hour to 4.58.
The plunge is broadbased as the OEX, AMEX major, RUT & MID followed in spades... 3 hours in the DJIA is down 177 and still falling...
Coincidence? The NDX fell from 1808 to 1785, and has bounced to 1791, very close to the seemingly magnetic number 1794... (read yesterdays comments)
Without some kind of rebound in the next day or two, the SP500 could be heading for 1410, 1390, 1370, then 1325.
A nice 10% consolidation would be healthy for the markets long term...
With $4 Trillion in new credit debt created last year alone, $9 Trillion in debt and over $50 Trillion in unfunded pension & SS liabilities...
This means total US Debt is 3.5 times GDP, the 2nd highest level was 2.9 times in 1929... and we know what happened then...
better hope our global partners in economic crime don't start to panic too....
Monday, M&A and leveraged buyout mania exhibit the sheer insanity of global hyperliquidity.... off a cliff....
utility TXU and chemical company DOW are LBO candidates for $45 B and $54 B respectively...
After hours Monday, a large spike in Nasdaq volume and precipitious drop off in AMEX & NYSE volume.
Off a cliff, CAC, DAC & FTSE all down >2.5%.... on news from China... Shanghai -8.8%, single largest decline in 10 years ...
speculation of a fresh round of austerity measures from the Chinese government to slow sizzling economic growth fueled profit taking.
In January, the Chinese government implemented a series of gentle austerity measures targeted at the domestic equity markets in an attempt to slow the rising market.
These measures included the suspension of new issues of mutual funds; the tightening scrutiny over SOE stock trading; and public announcements by some officials that people should be cautious about the domestic stock market.
Why should they be cautious? The Shanghai index was up +14% this year and +130% in 2006 with forward P/E ratios of 26 to 1...
the locals were spooked by rumors the government may impose a 20% capital gains tax and a round of interest rate hikes... just a necessary consolidation in progress or something worse?
Pre market today, off a cliff... a 1.5% drop in the NDX.... in the 1st hour, the DJIA opened with a 155 point drop on higher volume.
A LARGE hourly and daily sell signal in which the severity can be seen in the SP500 19 point drop...
Yesterday, investor anxiety mounted, VIX jumping to 11.44, today leaping off a cliff to 13.1...
Crude holding its own, gold -1%, $ plunging vs Euro & yen, yet bonds roaring cutting the 10 year yield 5 bps in one hour to 4.58.
The plunge is broadbased as the OEX, AMEX major, RUT & MID followed in spades... 3 hours in the DJIA is down 177 and still falling...
Coincidence? The NDX fell from 1808 to 1785, and has bounced to 1791, very close to the seemingly magnetic number 1794... (read yesterdays comments)
Without some kind of rebound in the next day or two, the SP500 could be heading for 1410, 1390, 1370, then 1325.
A nice 10% consolidation would be healthy for the markets long term...
With $4 Trillion in new credit debt created last year alone, $9 Trillion in debt and over $50 Trillion in unfunded pension & SS liabilities...
This means total US Debt is 3.5 times GDP, the 2nd highest level was 2.9 times in 1929... and we know what happened then...
better hope our global partners in economic crime don't start to panic too....
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