Market Observations 04/20/07
Continued bad news on macro & micro economic levels; the housing engine for jobs & growth cut by 33%; employment dwindling, capital investment tanking...
Earnings report theme: lower margins & forward guidance; falling domestic sales, passenger & freight volumes... The markets mantra: "Ignore the man behind the curtain"...
Treasury Secretary Paulson said the U.S. housing market has had its correction and is "at or near" the bottom and he believes problems in the subprime lending market will be contained. Brings to mind..."we won't invade Poland."
The Nattering One has previously commented that the "final arbitor" (the markets) no longer accurately reflects future value based on organic growth. Then what are the bond & equities markets reflecting?
The knowledge that with economic slowing; interest rates will be lowered again; currencies will be debauched; hyperliquidity (money supply growth & lending) will continue unabated and stagflation will worsen.
If you think the money supply growth over the last 5 years was incredible, you ain't seen nothing yet. Believe it or not, todays commodities & asset prices are going to look cheap after the next debauchery go round.
The only question that remains unanswered: Not if, but when will the long overdue market correction occur? Perhaps July? or after this summer when the Fed cuts and Japan raises shaving 50 bps off the Yen carry trade.
Go to www.prophet.net, pull up a javachart... look at a SP500 chart 2000 to present, compare with Aug 1929 through Mar 1937, then look forward through Mar 1942 to see what could be coming.
A parabolic market, 16 advances in 17 sessions, all indices at all time or multi year highs cept SOXX, XAU. NDX hiting 1856, headed for 1861; SP500 hitting 1484 perhaps headed for 1520.
DJIA closing above 12,900 and coming within 36 pts of 13K; Honeywell, American Express & Caterpillar were responsible for half of today's triple digit gain.
SOX again banging off long term resistance at 490-495 and looking like its time to short Semis again.
This week average earnings reported jumped from 3.2% to 6.1%, still below 18 straight quarters with double digits.
Next week 25% of SP500 reports, Apple, Boeing, Microsoft and others await. Without options inspired short covering we smell a pullback from 13K coming Tues.
Often wrong, but never in doubt, this is the Nattering Naybob and your not!
Earnings report theme: lower margins & forward guidance; falling domestic sales, passenger & freight volumes... The markets mantra: "Ignore the man behind the curtain"...
Treasury Secretary Paulson said the U.S. housing market has had its correction and is "at or near" the bottom and he believes problems in the subprime lending market will be contained. Brings to mind..."we won't invade Poland."
The Nattering One has previously commented that the "final arbitor" (the markets) no longer accurately reflects future value based on organic growth. Then what are the bond & equities markets reflecting?
The knowledge that with economic slowing; interest rates will be lowered again; currencies will be debauched; hyperliquidity (money supply growth & lending) will continue unabated and stagflation will worsen.
If you think the money supply growth over the last 5 years was incredible, you ain't seen nothing yet. Believe it or not, todays commodities & asset prices are going to look cheap after the next debauchery go round.
The only question that remains unanswered: Not if, but when will the long overdue market correction occur? Perhaps July? or after this summer when the Fed cuts and Japan raises shaving 50 bps off the Yen carry trade.
Go to www.prophet.net, pull up a javachart... look at a SP500 chart 2000 to present, compare with Aug 1929 through Mar 1937, then look forward through Mar 1942 to see what could be coming.
A parabolic market, 16 advances in 17 sessions, all indices at all time or multi year highs cept SOXX, XAU. NDX hiting 1856, headed for 1861; SP500 hitting 1484 perhaps headed for 1520.
DJIA closing above 12,900 and coming within 36 pts of 13K; Honeywell, American Express & Caterpillar were responsible for half of today's triple digit gain.
SOX again banging off long term resistance at 490-495 and looking like its time to short Semis again.
This week average earnings reported jumped from 3.2% to 6.1%, still below 18 straight quarters with double digits.
Next week 25% of SP500 reports, Apple, Boeing, Microsoft and others await. Without options inspired short covering we smell a pullback from 13K coming Tues.
Often wrong, but never in doubt, this is the Nattering Naybob and your not!
Comments