Economic Reports & Market Observations 11/21/06
Oct. Leading Indicators +0.2% vs prior +0.4% Full Report
Inside the number: and this is no surprise, the largest positive contributors; real money supply (lots of funny and dumb money) & stock prices (it keeps grinding up to everyones glee).
The largest negative contributors; building permits (the new economy), manufacturers' new orders for nondefense capital goods (the old durable economy) and the interest rate spread (the non durable economy or money shufflers nightmare).
Market Observations
Tech bellweather Google crossed over the $500 line today. Dell (under SEC investigation) will report delayed (and probably negative) Q3 results after the bell today.
Nigerian rebels and OPEC production cuts could not be ushered out from under the bed for the fear based energy speculation crowd, so...
Crude saw a small bounce on news of restrictions which have been imposed on the Trans Alaska Pipeline System due to high winds that will cut capacity by 25%.
Clearly demonstrating that this whole energy "boogey man" media spin really blows...
Bonds and gold are seeing minor pullbacks which could drop bond prices, bringing the 10 yr yield back up to 4.70 and gold down to $600.
We sense that this pullback would be a refueling stop before a continuance of the recent rally, with golds near term upside well over $650 and the 10 yr yield under 4.50.
We see little on the horizon to discourage this, as the central banks, US Treasury and Fed despite statements to the contrary, will continue their debaucherous and inflationary policies.
The bond market is telegraphing a major economic slowdown and future Fed rate cuts, but stocks are not paying heed. You can't fix stupid...
Investor complaceny is "at large and in charge" as the VIX went single digit on Monday. Perhaps the VIX low and a near term market top will coincide?
The market is drifting sideways, perhaps gaining energy for a burst to SP500 1415? Or will it need a fall to 1390 to reload first? Or is it topping at 1405?
The markets post Thanksgiving reaction will be critical for any continuance (1430-1440?) of the rally which started in mid June and the larger uptrend which began in Nov 2002.
We will continue upwards if this market maintains its behaviour pattern.
Typified by, slow sideways movement (3-5 days), upwards spikes (1-2 days), occasional intraday pullbacks and 5-6 day consolidations, all on average volume and low volatility.
Wheres your exit sign? If this rally runs out of gas and the uptrend is to be broken it will be done on atypical behaviour and reaction...
A very large broadbased hourly intraday swing of price and volume, coinciding with a major spike in volatility...
which plunges through critical near term support, and persists into a daily, then weekly trend.
We sense that in a topping market, such intraday action and the near term daily trend will dictate the longer trend. Just our opinion, we could be wrong.
Inside the number: and this is no surprise, the largest positive contributors; real money supply (lots of funny and dumb money) & stock prices (it keeps grinding up to everyones glee).
The largest negative contributors; building permits (the new economy), manufacturers' new orders for nondefense capital goods (the old durable economy) and the interest rate spread (the non durable economy or money shufflers nightmare).
Market Observations
Tech bellweather Google crossed over the $500 line today. Dell (under SEC investigation) will report delayed (and probably negative) Q3 results after the bell today.
Nigerian rebels and OPEC production cuts could not be ushered out from under the bed for the fear based energy speculation crowd, so...
Crude saw a small bounce on news of restrictions which have been imposed on the Trans Alaska Pipeline System due to high winds that will cut capacity by 25%.
Clearly demonstrating that this whole energy "boogey man" media spin really blows...
Bonds and gold are seeing minor pullbacks which could drop bond prices, bringing the 10 yr yield back up to 4.70 and gold down to $600.
We sense that this pullback would be a refueling stop before a continuance of the recent rally, with golds near term upside well over $650 and the 10 yr yield under 4.50.
We see little on the horizon to discourage this, as the central banks, US Treasury and Fed despite statements to the contrary, will continue their debaucherous and inflationary policies.
The bond market is telegraphing a major economic slowdown and future Fed rate cuts, but stocks are not paying heed. You can't fix stupid...
Investor complaceny is "at large and in charge" as the VIX went single digit on Monday. Perhaps the VIX low and a near term market top will coincide?
The market is drifting sideways, perhaps gaining energy for a burst to SP500 1415? Or will it need a fall to 1390 to reload first? Or is it topping at 1405?
The markets post Thanksgiving reaction will be critical for any continuance (1430-1440?) of the rally which started in mid June and the larger uptrend which began in Nov 2002.
We will continue upwards if this market maintains its behaviour pattern.
Typified by, slow sideways movement (3-5 days), upwards spikes (1-2 days), occasional intraday pullbacks and 5-6 day consolidations, all on average volume and low volatility.
Wheres your exit sign? If this rally runs out of gas and the uptrend is to be broken it will be done on atypical behaviour and reaction...
A very large broadbased hourly intraday swing of price and volume, coinciding with a major spike in volatility...
which plunges through critical near term support, and persists into a daily, then weekly trend.
We sense that in a topping market, such intraday action and the near term daily trend will dictate the longer trend. Just our opinion, we could be wrong.
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