Market Observations Week Ending 12/01/06
In our top story tonight, the leader of al-Qaida in Iraq, Abu Musab al-Zarqawi, is STILL dead and someone else has taken his place.
The dollar fell to a 14 year low vs the sterling pound and a 20 month low vs Euro & Yen. The dollars fall since Oct: 115 vs 120 Yen/$; 1.33 vs 1.25 $/Euro; Gold $650 vs $580; Bond Yields 30yr 4.55 vs 4.90 10yr 4.43 vs 4.79
With the dollar getting a facial and headed to test 82 ($ index) or 1.38 vs Euro, gold is loaded to seriously test $650 and $660 in the near term.
30yr bond broke 113 and should head to 115. This would send the 30yr to 4.50 (see TYX & TNX chart), putting the 10 year at 4.40 and ultimately leading to the 30yr at 4.43 and the 10yr at 4.33.
Oil is rising to compensate for a devalued dollar, over $63 and at a 2 month high after gaining 7% last week. Should oil top $70, that will be the tipping point or straw that breaks the camels back for a stagflated, weak and non durable economy.
With the dollar caving and bonds rallying, equities at some point should take a serious plunge. Foreign interests should continue to back away from dollar denominated equities in favor of bonds to keep interest rates low for the American consumer.
An additional "benefit" to the dollar debauching would be to lower the twin deficits by stimulating export sales and servicing the debt with deflated dollars. Of course, the public gets robbed blind in the process.
Equities to date are ignoring bad micro & macro economic news, a plunging housing market, and the fact that bonds, dollar & gold are all signaling loud and clear, that tough economic times are ahead.
The SP500 hit 1408, dipped to 1377 in dramatic order, then bounced to 1405, failed and fell to 1387, then bounced to 1396. Alot of oscillation means either a double top and fall, or a reload for new highs.
Should it succeed at 1395-1408, this would signal a little more gas in the tank for the upside. 1415 would be the next stop, possibly on the way to 1440.
Should it fail at 1395, another fall back to 1377 would be in order. A sharp plunging failure at 1377 would take the market to 1355 and could develop into a nasty correction retracing back to the 1300 level.
Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong, this is The Nattering Naybob and your NOT!
The dollar fell to a 14 year low vs the sterling pound and a 20 month low vs Euro & Yen. The dollars fall since Oct: 115 vs 120 Yen/$; 1.33 vs 1.25 $/Euro; Gold $650 vs $580; Bond Yields 30yr 4.55 vs 4.90 10yr 4.43 vs 4.79
With the dollar getting a facial and headed to test 82 ($ index) or 1.38 vs Euro, gold is loaded to seriously test $650 and $660 in the near term.
30yr bond broke 113 and should head to 115. This would send the 30yr to 4.50 (see TYX & TNX chart), putting the 10 year at 4.40 and ultimately leading to the 30yr at 4.43 and the 10yr at 4.33.
Oil is rising to compensate for a devalued dollar, over $63 and at a 2 month high after gaining 7% last week. Should oil top $70, that will be the tipping point or straw that breaks the camels back for a stagflated, weak and non durable economy.
With the dollar caving and bonds rallying, equities at some point should take a serious plunge. Foreign interests should continue to back away from dollar denominated equities in favor of bonds to keep interest rates low for the American consumer.
An additional "benefit" to the dollar debauching would be to lower the twin deficits by stimulating export sales and servicing the debt with deflated dollars. Of course, the public gets robbed blind in the process.
Equities to date are ignoring bad micro & macro economic news, a plunging housing market, and the fact that bonds, dollar & gold are all signaling loud and clear, that tough economic times are ahead.
The SP500 hit 1408, dipped to 1377 in dramatic order, then bounced to 1405, failed and fell to 1387, then bounced to 1396. Alot of oscillation means either a double top and fall, or a reload for new highs.
Should it succeed at 1395-1408, this would signal a little more gas in the tank for the upside. 1415 would be the next stop, possibly on the way to 1440.
Should it fail at 1395, another fall back to 1377 would be in order. A sharp plunging failure at 1377 would take the market to 1355 and could develop into a nasty correction retracing back to the 1300 level.
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!
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