Market Observations 10/19/07
20th Anniversay of 1987 Black Monday.... something ugly & nasty came out of the woodshed and it was all pissed off and weird.
How ugly and pissed off was it? Down volume at the NYSE 19 to 1; on the NAZ 10 to 1.
The opposite reaction of Sept 18th post rate cut DJIA +336 and on a par with 08/09 SP500 44 point plunge.
NDX opened 2188, plunged to 2131, slicing through 15 DMA at 2143. Next 25 DMA 2110, then 2050.
SP500 opened 1540, fell to 1500, slicing through 25 DMA, 50 DMA 1495.
Wen: "We are nearing a very critical juncture." Yesterday: "more chop then a breakout, one way or the other until the Fed meeting." And how, indeed.
Yesterday: "The market is oscillating, but acting resilent despite all the bad news. Another large volume down day would kick it down."
Today qualified in spades to accompany 10/11 on high volume and volatility.
Yesterday: "Will someone step on a land mine?" Many made the number, but under the sheets...
Shhhh! Our dirty little secret... thats being denied, but smells never-the-less... Discretionary spending is declining along with the US economy.
Less toys... Harley Davidson topped earnings estimates. However, a 15.3% YOY decline in Q3 income, equal to $265 million.
Less memory... SanDisk, the world's largest flash memory maker, posted a 26% YOY decline in Q3 income net income.
Waking up and smelling something? Unlike the last 2 quarters, comments regarding weakness, or expected weakness in the US...
or North American markets were finally taken to heart by investors, rather than being ignored with a dismissive wave of the hand.
Steppin in something... UBS' downgrade of HSBC to neutral from buy hurt sentiment toward the banking sector. UBS analysts:
"The market will likely struggle to look through a downturn, the end of which is disappearing into the distance."
Flight to safety... bonds up BIG the last 3 days as the 2 year note saw its largest weekly gain (-44 bps) in 5 years.
Do not carry on... The Yen gained big overnight under 115, as carry traders unwound and liquidated positions. Not a good sign.
Next week... new and existing home sales will be a disaster. Our Dead Pool favourite Countrywide awaits on Friday.
Monday could be a really BLACK day OR a major pivot day. Perhaps a large candle going down or up? OR...
Perhaps a large candle starting down, then rebounding to close substantially above the low on higher volume as the computers kick into buying mode.
Refer to SP500 08/09, 08/16 & 08/17 candle chart for examples. A market fall till Oct 31st guarantees a Fed cut.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not!
How ugly and pissed off was it? Down volume at the NYSE 19 to 1; on the NAZ 10 to 1.
The opposite reaction of Sept 18th post rate cut DJIA +336 and on a par with 08/09 SP500 44 point plunge.
NDX opened 2188, plunged to 2131, slicing through 15 DMA at 2143. Next 25 DMA 2110, then 2050.
SP500 opened 1540, fell to 1500, slicing through 25 DMA, 50 DMA 1495.
Wen: "We are nearing a very critical juncture." Yesterday: "more chop then a breakout, one way or the other until the Fed meeting." And how, indeed.
Yesterday: "The market is oscillating, but acting resilent despite all the bad news. Another large volume down day would kick it down."
Today qualified in spades to accompany 10/11 on high volume and volatility.
Yesterday: "Will someone step on a land mine?" Many made the number, but under the sheets...
Shhhh! Our dirty little secret... thats being denied, but smells never-the-less... Discretionary spending is declining along with the US economy.
Less toys... Harley Davidson topped earnings estimates. However, a 15.3% YOY decline in Q3 income, equal to $265 million.
Less memory... SanDisk, the world's largest flash memory maker, posted a 26% YOY decline in Q3 income net income.
Waking up and smelling something? Unlike the last 2 quarters, comments regarding weakness, or expected weakness in the US...
or North American markets were finally taken to heart by investors, rather than being ignored with a dismissive wave of the hand.
Steppin in something... UBS' downgrade of HSBC to neutral from buy hurt sentiment toward the banking sector. UBS analysts:
"The market will likely struggle to look through a downturn, the end of which is disappearing into the distance."
Flight to safety... bonds up BIG the last 3 days as the 2 year note saw its largest weekly gain (-44 bps) in 5 years.
Do not carry on... The Yen gained big overnight under 115, as carry traders unwound and liquidated positions. Not a good sign.
Next week... new and existing home sales will be a disaster. Our Dead Pool favourite Countrywide awaits on Friday.
Monday could be a really BLACK day OR a major pivot day. Perhaps a large candle going down or up? OR...
Perhaps a large candle starting down, then rebounding to close substantially above the low on higher volume as the computers kick into buying mode.
Refer to SP500 08/09, 08/16 & 08/17 candle chart for examples. A market fall till Oct 31st guarantees a Fed cut.
Often wrong, but never in doubt, this is the Nattering Naybob and you're not!
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