Market Observations 05/11/07
Over the last week, some magic numbers... "RUT 830 & SOXX 500 strong resistance." still hovering there.
Monday... "some options unwind and MAX PAIN Tue or Wen." it happened Thurs.
Today, boing, SP500 launced off 15 DMA; 1491 (MAX PAIN) to 1505. SOXX 497 to 505, RUT 818 to 829; NDX 1875 to 1898; add NDX at 1905 to the list.... watch em...
The DJIA up 26 for 31.... and on a parallel with 1989 Nikkei 225: the DJIA is now 33 for 43.... alrighty then, you've been told...
MUST READ missive by Jubak on why Bears being right still hurts.... excerpt:
"This stock market is overvalued...This rally is built on a flood of cheap money. Earnings growth is slowing. There are speculative bubbles all over the world,
And yes, there will be a day of reckoning for the global financial system... BUT in the meantime..."
The Nattering One muses...."Never underestmate the power of denial" - Ricky Fitts - American Beauty
This market has been conned into thinking that inflation is tame, organic economic growth is steady and profit growth (vis a vis) EPS is still healthy.
It thinks $60+ oil is now absorped and priced into the supply chain...
it confuses revenue increases fueled by prices inflated in sickly dollars as organic economic growth...
it also rationalizes that profits are growing based on financed smoke and mirrors stock buybacks that artifically boost EPS....
it cheers a slowing economy because that means no rate increases and perhaps rate cuts (cheaper money)...
it cheers and rewards economically irresponsible corporate behaviour (economic emasculation by labor at the margin & a lack of domestic capex) such as yield chasing & money shuffling...
it pretends that global growth will magically continue unabated as the worlds main economic engine -
the US Consumer gets squeezed into a major reduction in spending and lifestyle.
"It rubs the lotion on its skin. It does this whenever it is told.... it rubs the lotion on its skin or else its gets the hose again." - Jame Gumb - Silence of The Lambs.
The upper end of SP500 1520-1530 is still the next target on short covering by options expiration, perhaps even 1533.
After that who knows, perhaps it gets the hose.... maybe just a small one... for now... Often wrong, but never in doubt, this is the Nattering Naybob and your not!
Monday... "some options unwind and MAX PAIN Tue or Wen." it happened Thurs.
Today, boing, SP500 launced off 15 DMA; 1491 (MAX PAIN) to 1505. SOXX 497 to 505, RUT 818 to 829; NDX 1875 to 1898; add NDX at 1905 to the list.... watch em...
The DJIA up 26 for 31.... and on a parallel with 1989 Nikkei 225: the DJIA is now 33 for 43.... alrighty then, you've been told...
MUST READ missive by Jubak on why Bears being right still hurts.... excerpt:
"This stock market is overvalued...This rally is built on a flood of cheap money. Earnings growth is slowing. There are speculative bubbles all over the world,
And yes, there will be a day of reckoning for the global financial system... BUT in the meantime..."
The Nattering One muses...."Never underestmate the power of denial" - Ricky Fitts - American Beauty
This market has been conned into thinking that inflation is tame, organic economic growth is steady and profit growth (vis a vis) EPS is still healthy.
It thinks $60+ oil is now absorped and priced into the supply chain...
it confuses revenue increases fueled by prices inflated in sickly dollars as organic economic growth...
it also rationalizes that profits are growing based on financed smoke and mirrors stock buybacks that artifically boost EPS....
it cheers a slowing economy because that means no rate increases and perhaps rate cuts (cheaper money)...
it cheers and rewards economically irresponsible corporate behaviour (economic emasculation by labor at the margin & a lack of domestic capex) such as yield chasing & money shuffling...
it pretends that global growth will magically continue unabated as the worlds main economic engine -
the US Consumer gets squeezed into a major reduction in spending and lifestyle.
"It rubs the lotion on its skin. It does this whenever it is told.... it rubs the lotion on its skin or else its gets the hose again." - Jame Gumb - Silence of The Lambs.
The upper end of SP500 1520-1530 is still the next target on short covering by options expiration, perhaps even 1533.
After that who knows, perhaps it gets the hose.... maybe just a small one... for now... Often wrong, but never in doubt, this is the Nattering Naybob and your not!
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