Market Soapbox 11/07/05
Resistance: DJIA 10600; SP500 1225; Nasdaq 2200; NDX 1640
Support: DJIA 10200 ; SP500 1175; Nasdaq 2000; NDX 1500
In our top story tonight, Generalissimo Francisco Franco is STILL dead.
In other news, over the last two weeks gasoline prices pulled back .23 per gallon, over four weeks .48 per gallon. After Fridays short covering spike, today Crude oil extended its pull back 1.8% by falling under $59 intraday.
Crude & Heating Oil are at 90 day lows, and we still think $55 is the first stop on the way to $52, as there are elephant tracks all over this unwinding of energy positions.
Today's SOOHEY PIG PIG award goes to buyers of Advanced Micro Devices. HP announced that it would use AMD chips in its new blade PC's, AMD jumped 1% and is close to a near term high. Our advice, take a peek under the covers first.
Stock option grants by AMD as a percentage of company earnings are around 33%, when they report this Q106 as required by FASB using GAAP numbers, poof!! there goes 33% of your earnings. What do you think will happen to the stock?? SOOHEY, PIG!!! PIG!!!
7 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 6 weeks ago, DJIA +148, lacking conviction. 5 weeks ago, DJIA -281 crashing down on higher volume. 4 weeks ago, large swings DJIA -6. 3 weeks ago larger swings, DJIA -77, 2 weeks ago, even larger swings, DJIA +186. Last week, broadbased gains on higher volume DJIA +128. This makes two consecutive weeks of gains totaling DJIA +314 as the upward grind started 10/13.
From Friday: "The inertia of equities following the underlying commodity is still with us." Today a weak attempt with DJIA +55 on so-so internals, leaking into the close on lower volume. A repeat of Friday and October's behaviour as an extended pullback in energy futures taking crude below $60 sparked profit taking in the XOI & Commodity sectors. This week, DJIA +55, over the last 8 weeks DJIA -117.
DJTA & NAZ tried to provide leadership on the 6th day of the tech rally. DJTA, NAZ & XAU up, XOI pounded down 1.9%, SP500, NYSE, OEX, XMI, MID, RUT, AMEX XAX weak or flat. CAC, DAX, FTSE up, Hang Seng down BIG 1.5% & Nikkei 225 down.
Dollar up vs. Euro & Yen, XAU & gold up, XOI & crude oil down 1.8% @ $59.47, CRB commodities down & bonds up. Contra trend: Gold & $ up. Sectors: Energy, Natural Gas, Oil, Oil Services, Commodity & Telecom got slapped down. Tobacco, Transports, Cyclical, Retail, Reits, Financial & Banking all up nicely.
On Friday bonds hit 3 year lows, today, a bounce with bond prices UP the 10 year yield FALLING @ 4.64% & the 30 year @ 4.83. The 2 & 5 year gap @ 9 basis points; the 5 & 10 year gap @ 9 basis points; the 10 & 30 gap @ 19 basis points.
From Friday: "It appears the resistance we just pierced is trying to act as support, we need a few more up and steady days." Today seemed to be one of those days, but lacking conviction, making me very suspicious and cautious. In my opinion we are witnessing a large and slow unwinding of energy positions prior to year end which is destabilizing the market.
From Friday: "Looking ahead at potential market influences, options unwind around Nov 9th, Nov 10th: Export & Import prices, Treasury budget & Trade balance. Nov 15th: PPI & Retail Sales; Nov 16th: CPI & Net Foreign Purchases; Nov 17th Philly Fed, Capacity Utilization, Industrial Production. Nov 18th: Options Expiration.
Add to the above lis the following auctions: Tue Nov 8th;, 3 year note; Wen Nov 9th; 5 year note; Thurs Nov 10th; 10 year note. Depending on how these reports are received, and the liquidity drain from the auctions (depending of foreign participation), we could see another consolidation from Nov 8th through Nov 18th."
From Friday: "The NAZ is having its best week in 14 months, and we still suspect that this is a bull trap being set." In its 6th day, the SOX rally underlying the NAZ has risen from 413 to 455 since 10/28, resting on top of the previous support level of 450.
If the SOX fails to advance, and there is a market consolidation this week & next, near term it could fall back to the 440 range and perhaps further. A November 440 @ 2.50 put might be a good play this and next week, it could come into the money around $6-7 quickly and maybe more.
Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong and Hey! Hey! Lets be careful out there...This is The Nattering Naybob and your NOT!!!
Support: DJIA 10200 ; SP500 1175; Nasdaq 2000; NDX 1500
In our top story tonight, Generalissimo Francisco Franco is STILL dead.
In other news, over the last two weeks gasoline prices pulled back .23 per gallon, over four weeks .48 per gallon. After Fridays short covering spike, today Crude oil extended its pull back 1.8% by falling under $59 intraday.
Crude & Heating Oil are at 90 day lows, and we still think $55 is the first stop on the way to $52, as there are elephant tracks all over this unwinding of energy positions.
Today's SOOHEY PIG PIG award goes to buyers of Advanced Micro Devices. HP announced that it would use AMD chips in its new blade PC's, AMD jumped 1% and is close to a near term high. Our advice, take a peek under the covers first.
Stock option grants by AMD as a percentage of company earnings are around 33%, when they report this Q106 as required by FASB using GAAP numbers, poof!! there goes 33% of your earnings. What do you think will happen to the stock?? SOOHEY, PIG!!! PIG!!!
7 weeks ago, DJIA -270 on higher volume, plunging below all major DMA's. 6 weeks ago, DJIA +148, lacking conviction. 5 weeks ago, DJIA -281 crashing down on higher volume. 4 weeks ago, large swings DJIA -6. 3 weeks ago larger swings, DJIA -77, 2 weeks ago, even larger swings, DJIA +186. Last week, broadbased gains on higher volume DJIA +128. This makes two consecutive weeks of gains totaling DJIA +314 as the upward grind started 10/13.
From Friday: "The inertia of equities following the underlying commodity is still with us." Today a weak attempt with DJIA +55 on so-so internals, leaking into the close on lower volume. A repeat of Friday and October's behaviour as an extended pullback in energy futures taking crude below $60 sparked profit taking in the XOI & Commodity sectors. This week, DJIA +55, over the last 8 weeks DJIA -117.
DJTA & NAZ tried to provide leadership on the 6th day of the tech rally. DJTA, NAZ & XAU up, XOI pounded down 1.9%, SP500, NYSE, OEX, XMI, MID, RUT, AMEX XAX weak or flat. CAC, DAX, FTSE up, Hang Seng down BIG 1.5% & Nikkei 225 down.
Dollar up vs. Euro & Yen, XAU & gold up, XOI & crude oil down 1.8% @ $59.47, CRB commodities down & bonds up. Contra trend: Gold & $ up. Sectors: Energy, Natural Gas, Oil, Oil Services, Commodity & Telecom got slapped down. Tobacco, Transports, Cyclical, Retail, Reits, Financial & Banking all up nicely.
On Friday bonds hit 3 year lows, today, a bounce with bond prices UP the 10 year yield FALLING @ 4.64% & the 30 year @ 4.83. The 2 & 5 year gap @ 9 basis points; the 5 & 10 year gap @ 9 basis points; the 10 & 30 gap @ 19 basis points.
From Friday: "It appears the resistance we just pierced is trying to act as support, we need a few more up and steady days." Today seemed to be one of those days, but lacking conviction, making me very suspicious and cautious. In my opinion we are witnessing a large and slow unwinding of energy positions prior to year end which is destabilizing the market.
From Friday: "Looking ahead at potential market influences, options unwind around Nov 9th, Nov 10th: Export & Import prices, Treasury budget & Trade balance. Nov 15th: PPI & Retail Sales; Nov 16th: CPI & Net Foreign Purchases; Nov 17th Philly Fed, Capacity Utilization, Industrial Production. Nov 18th: Options Expiration.
Add to the above lis the following auctions: Tue Nov 8th;, 3 year note; Wen Nov 9th; 5 year note; Thurs Nov 10th; 10 year note. Depending on how these reports are received, and the liquidity drain from the auctions (depending of foreign participation), we could see another consolidation from Nov 8th through Nov 18th."
From Friday: "The NAZ is having its best week in 14 months, and we still suspect that this is a bull trap being set." In its 6th day, the SOX rally underlying the NAZ has risen from 413 to 455 since 10/28, resting on top of the previous support level of 450.
If the SOX fails to advance, and there is a market consolidation this week & next, near term it could fall back to the 440 range and perhaps further. A November 440 @ 2.50 put might be a good play this and next week, it could come into the money around $6-7 quickly and maybe more.
Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong and Hey! Hey! Lets be careful out there...This is The Nattering Naybob and your NOT!!!
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