Market Soapbox and Observations 02/20/07
MON, market closed, President's Day
TUE, a 50 pt dip then rise, DJIA +19 on lower volume with nice internals.
All UP cept AMEX, XOI, XAU. Bonds up 10 yr 4.68, $ up vs 119.993y & vs 1.3138E, WTI crude down 2.2% $58.07, gold down 1.5% $662.40.
Large premarket volume spike NAZ, large AMEX aftermarket spike on FRI. Some followthrough to last weeks options expiration short covering.
Year of The Pig.... and there isn't enough lipstick in the world, to make this pig look pretty...
Wal Mart beats and issued encouraging Q1 EPS guidance... meanwhile...
Home Depot,the world's largest home improvement retailer, posted a 28% drop in Q4 profit as the weak U.S. housing market depressed sales.
Today, another all time DJIA closing high, the 30th new high since 10/03/06. This rally is now 4.5 years old, the 3rd longest bull run in history.
Only 19 times since 1929 have the DJIA, DJUA & DJTA simultaneously hit new highs. 47 months have passed without a 10% correction.
An example of the global hyperliquidity that puts the yen carry trade in perspective...
The Financial Times reports that homebuyers in Latvia and Romania,are taking out yen based mortgages with interest rates as much as 5% below prevailing rates in the local market.
A symptom of the Yen carry trade... the dollar is artifically high, and domestic interest rates artifically low.
As long as the BOJ keeps their real rate at sub zero, the hyperliquidity should continue to drive equities and most asset classes higher in the near to mid term.
And its not just Japanese private money, a flood of hot Chinese cash is coming our way as Bejing recently announced that China's pension funds, banks and insurers will be able to invest abroad.
Most of the Asian money it getting invested in debt such as MBS (Mortgage Backed Securities).
The real danger is in an unwinding of the debt markets should a major sub prime lender fail.
The Nattering One expects the stock market to keep churning up until April, then the flats of May.
This summer, along with a continued downtrend in construction employment, slumping sales, increasing inventory and plunging prices....
may bring the realization that we may be headed into a prolonged recession with little to fall back on, and the long awaited equities correction could commence, not a collapse but a nice correction.
Last week, SP500 brokeout from 1433 to 1457 and seems headed for 1520. Our Nattering: "A retest of 1445 might be in order before the next surge up to 1465 area."
Today, SP500 dipped to 1450 then closed at 1459. RUT went to 827, heading for critical number 832.
FYI, the BOJ meets WEN, a 25 bps raise would drive markets slightly down before the next surge up, no raise and its up, up, up.
TUE, a 50 pt dip then rise, DJIA +19 on lower volume with nice internals.
All UP cept AMEX, XOI, XAU. Bonds up 10 yr 4.68, $ up vs 119.993y & vs 1.3138E, WTI crude down 2.2% $58.07, gold down 1.5% $662.40.
Large premarket volume spike NAZ, large AMEX aftermarket spike on FRI. Some followthrough to last weeks options expiration short covering.
Year of The Pig.... and there isn't enough lipstick in the world, to make this pig look pretty...
Wal Mart beats and issued encouraging Q1 EPS guidance... meanwhile...
Home Depot,the world's largest home improvement retailer, posted a 28% drop in Q4 profit as the weak U.S. housing market depressed sales.
Today, another all time DJIA closing high, the 30th new high since 10/03/06. This rally is now 4.5 years old, the 3rd longest bull run in history.
Only 19 times since 1929 have the DJIA, DJUA & DJTA simultaneously hit new highs. 47 months have passed without a 10% correction.
An example of the global hyperliquidity that puts the yen carry trade in perspective...
The Financial Times reports that homebuyers in Latvia and Romania,are taking out yen based mortgages with interest rates as much as 5% below prevailing rates in the local market.
A symptom of the Yen carry trade... the dollar is artifically high, and domestic interest rates artifically low.
As long as the BOJ keeps their real rate at sub zero, the hyperliquidity should continue to drive equities and most asset classes higher in the near to mid term.
And its not just Japanese private money, a flood of hot Chinese cash is coming our way as Bejing recently announced that China's pension funds, banks and insurers will be able to invest abroad.
Most of the Asian money it getting invested in debt such as MBS (Mortgage Backed Securities).
The real danger is in an unwinding of the debt markets should a major sub prime lender fail.
The Nattering One expects the stock market to keep churning up until April, then the flats of May.
This summer, along with a continued downtrend in construction employment, slumping sales, increasing inventory and plunging prices....
may bring the realization that we may be headed into a prolonged recession with little to fall back on, and the long awaited equities correction could commence, not a collapse but a nice correction.
Last week, SP500 brokeout from 1433 to 1457 and seems headed for 1520. Our Nattering: "A retest of 1445 might be in order before the next surge up to 1465 area."
Today, SP500 dipped to 1450 then closed at 1459. RUT went to 827, heading for critical number 832.
FYI, the BOJ meets WEN, a 25 bps raise would drive markets slightly down before the next surge up, no raise and its up, up, up.
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