Market Soapbox 01/20/06

DJIA 11050; SP500 1295; Nasdaq 2330; NDX 1765
Support: DJIA 10550; SP500 1250; Nasdaq 2200; NDX 1650

Still on the road.. Michgan Sentiment up, who cares after today.

17 weeks ago, DJIA -270 breaking key support. 16 weeks ago, DJIA +148, lacking conviction. 15 weeks ago, DJIA -281 crashing down. 14 weeks ago, large swings DJIA -6. 13 weeks ago larger swings, DJIA -77. Five weeks of downturn totaling -486.

12 weeks ago, recovery begins with larger swings, DJIA +186. 11 weeks ago, broadbased gains DJIA +128. 10 weeks ago, DJIA +154. 9 weeks ago, a slowing, DJIA +79. 8 weeks ago, DJIA +165. Five weeks of gains totaling DJIA +712.

7 weeks ago, DJIA -53, breaking the up trend. 6 weeks ago, DJIA -99, two straight down weeks. 5 weeks ago DJIA a deceiving +99. 4 weeks ago a weak DJIA +8. 3 weeks ago DJIA -168. Five weeks of downturn totaling DJIA -213

2 weeks ago DJIA +242 on a broadbased new year buy in. Last week DJIA Flat +0. Mon. Market Closed; Tues, another broad based sell off, DJIA -64 on lower volume with horrible internals.

Wen, a broad based vortex opened up and sucked the market down, DJIA -41 on higher volume with butt ugly internals. Thur, a broad based bounce, DJIA +26 on higher volume with pretty internals.

Today, Friday bloody Friday as the vortex that opened Wend and started forming Jan 12th gave the markets a WWF slapdown and body slam. DJIA -213 in a take no prisoners selloff on drastically increased volume. This week DJIA -292 over the last 16 weeks -37.

AMEX composite up, XOI weak, all major indices slammed, SOX -4%, NDX -3%. CAC, DAX, FTSE, Hang Seng & Nikkei 225 all down. Sectors: Everything deep sixed except energy, natural gas & oil.

Dollar down vs. Yen & Euro , XAU & gold down @ 553.80, XOI up & crude up BIG @ 68.35, CRB commodities up.

Yield curve INVERTED BIGTIME bonds up with the 30 yr yield falling @ 4.52%; 10 yr @ 4.34; 5 yr @ 4.28; 2yr @ 4.35; 6mo @ 4.46; 3mo @ 4.35. 3mo, 6mo & 2yr above the 10 yr.

Looking ahead at potential market influences: Jan 23 Leading Indicators; Jan 25 Existing Home Sales, EIA Crude; Jan 26 Durable Orders; Initial Claims; Jan 27 Chain Deflator; New Home Sales; GDP.

Reporting: Monday BofA, Ford Motor, Eaton; Tues 3M, J&J, Centex, McDonalds, United Technologies, Cingular, Corning, DuPont, Northrop Gruman.

From 01/12/06 Market Soapbox: "add in lowered forward guidance and disappointing EPS from stock options expensing during reporting season and we could see a consolidation which would give up almost all of this years gains by January 31st."

From Yesterday: "The next few days are critical and any loss of traction will be very costly. GE reports tomorrow and the key will be forward guidance. Afterhours the NYSE volume went from 19M to 38M."

From Market Soapbox Update 01/17: "Look out below: It appears from options open interest that MAX PAIN is at 1265 SP500; 10725 DJIA; 685 RUT; 1685 NDX; 495 SOX."

Todays massacre erased all of this years gains, along with the gains since mid November. Technically speaking we are negative on the DJIA for the last 16 weeks.

The DJIA 10667, SP500 1261, Nasdaq 2247 & NDX 1676 all pierced their long term support levels on higher volume and acheived MAX PAIN on options expiration day.

The RUT 704 & SOX 513 are not at MAX PAIN, but they will be for FEB options sometime next week. The elephants headed for the exits today, but all of them could not fit through the doors at the same time.

If we breech 1650 on the NDX, this market will cave in and head for the May lows. Last year we commented that a pullback on the DJIA to 7500 would not be out of the question for 06.

My hunch is that we are witnessing a redux of Mar - May 2000, the market may attempt to pop back up, but in the end it will get flattened in a big way. This is one wave you dont want to get caught out of position on.

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, this is The Nattering Naybob and your NOT!!!

Comments