Market Soapbox 07/13/06

Resistance: DJIA 11775; SP500 1335; Nasdaq 2380; NDX 1750
Support: DJIA 10650, SP500 1210, Nasdaq 2050; NDX 1475

Ford Motors halved its dividend. June U.S. treasury budget a $20.5B surplus vs June 05 +$22.9B on a surge of corporate and individual tax receipts.

YTD deficit -17% to $206.5B vs $249.5B June 05. YTD Receipts +13% to 1.81 trillion; Outlays +9% to 2.02 trillion. Full Report

YIELD CURVE INVERSION: Bonds UP with the 30 yr yield falling @ 5.11%; 10 yr @ 5.07; 5 yr @ 5.04; 2yr @ 5.12; 6 mo @ 5.25.

Recent Inversions: 2yr above 10 yr 12/27 - 03/07 & 03/20 - 3/29. 2yr above 30 yr 02/09 - 03/07 & 03/21 - 3/29.

6mo & 2yr above 30yr 06/13 - ?; 6mo above 10yr 06/02 -?; 2yr above 10yr 06/08 - ? 6mo above 30yr 06/13 - ?

MON, DJIA +13, a split tape day on lower volume with midlin internals.

TUE, DJIA +31 on higher but average volume with decent internals. Started down big then a 90 point reversal into the close.

WEN, no followthrough, a triple digit burial DJIA -122 on slightly lower volume with ugly internals.

THU, followthrough, another triple digit broadbased slapdown. DJIA -167 on higher but average volume with devastating internals. This week DJIA -245, since 09/19/05 DJIA +194.

Indexes UP: NONE. DOWN: Everything crushed like a tin can, RUT -2%, DJTA -2.6%, XAU -3%.

Sectors UP: NONE DOWN: Everything beaten like cheap conga drums, Airlines -6.25%.

Overseas: FTSE, CAC, DAX, Hang Seng & Nikkei 225 ALL DOWN BIG.

Dollar UP vs. Euro 1.2696 & vs. Yen 115.31, XAU DOWN & gold UP @ 654.4, XOI DOWN & crude UP 2.3% @ 76.70, CRB commodities index UP @ 355.91

Israel vs. Lebanon, Nigerian rebels, Iranian nukes, Iraqi insurgents, N. Korean Missle Tests, Terrorist attacks, GM BK, $75 crude, How about none of the above?

Lower interest rates must be maintained at ALL COSTS and the multiplier effect is working in reverse with liquidity drying up. The worst is yet to come.

I know it, they know it and you should too. High anxiety?? Today VXN +11%, VIX +20%. Market Observations and economic news in todays other posts.

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