Market Soapbox 03/01/07
THU, broadbased followthrough down, DJIA -34 on higher volume and ugly internals.
All DOWN cept DJUA. Bonds up 10 yr yield -1 bps 4.55, $ down vs 117.595y & up vs 1.3184E, gold down $666.60, WTI crude up $61.83.
On 02/21 we noted the BOJ raised 25 bps and "it will take at least 4 months for the Bank of Japan to follow up with a subsequent tightening,
thus, offering ample opportunity for traders to place fresh carry trades with a medium term horizon."
The yen rallying 1% to a 2.5 month high, after the Japanese Vice Minister for Finance said "the yen carry trade is not one way."
A redux of the 2% yen rally on Tuesday that also accelerated stock declines as speculators dumped stocks in order to pay off yen loans.
Makes you wonder what kind of unwind awaits if our late summer scenario plays out... the BOJ raises 25 bps and the Fed lowers 25 bps, cutting the carry trade margin from 4.75 to 4.25....
Yesterday, "portfolio managers made month end adjustments and scooped up some "bargains"... facilitating a B wave bounce up from SP500 1398 to 1416 intraday".
We nailed it across the board... bad economic news, slowdowns in ISM, Auto Sales, Construction Spending, and an increase in Initial Claims.
More important than the news itself or the spin, how would investors react after yesterdays tepid rebound? We urged paying heed to foreign markets overnight and after/ pre-market volumes.
NAZ aftermarket spiked to over 1 Billion shares, Asian & European markets were downtrodden again, pre market the NDX gapped down 1.8%.
In a broadbased followthrough to Tues debacle, investors sent the DJIA on a 200 point plunge in the 1st hour, then a computer aided PPT (plunge protection team) bounce off of 1380 SP500 to 1400-1405 range.
The VIX hit 19 on Tues 500+ drop, fell to 14.5 Wen, gravitated back up to 19.4 on this mornings 200 pt drop, then fallen back to 16.
Yeah, investors are nervous and we are herkin and jerkin. Afterhours Dell reported a decline in revenue and a 33% drop in Q4 profits.
Dell said its earnings and gross margins would be under pressure for several quarters as it implements restructuring efforts. Do ya think?
SP500 has closed under 1435 3 straight days. Closing under 1395 for 2 straight days would signify a mid term consolidation is in process and further downside.
All DOWN cept DJUA. Bonds up 10 yr yield -1 bps 4.55, $ down vs 117.595y & up vs 1.3184E, gold down $666.60, WTI crude up $61.83.
On 02/21 we noted the BOJ raised 25 bps and "it will take at least 4 months for the Bank of Japan to follow up with a subsequent tightening,
thus, offering ample opportunity for traders to place fresh carry trades with a medium term horizon."
The yen rallying 1% to a 2.5 month high, after the Japanese Vice Minister for Finance said "the yen carry trade is not one way."
A redux of the 2% yen rally on Tuesday that also accelerated stock declines as speculators dumped stocks in order to pay off yen loans.
Makes you wonder what kind of unwind awaits if our late summer scenario plays out... the BOJ raises 25 bps and the Fed lowers 25 bps, cutting the carry trade margin from 4.75 to 4.25....
Yesterday, "portfolio managers made month end adjustments and scooped up some "bargains"... facilitating a B wave bounce up from SP500 1398 to 1416 intraday".
We nailed it across the board... bad economic news, slowdowns in ISM, Auto Sales, Construction Spending, and an increase in Initial Claims.
More important than the news itself or the spin, how would investors react after yesterdays tepid rebound? We urged paying heed to foreign markets overnight and after/ pre-market volumes.
NAZ aftermarket spiked to over 1 Billion shares, Asian & European markets were downtrodden again, pre market the NDX gapped down 1.8%.
In a broadbased followthrough to Tues debacle, investors sent the DJIA on a 200 point plunge in the 1st hour, then a computer aided PPT (plunge protection team) bounce off of 1380 SP500 to 1400-1405 range.
The VIX hit 19 on Tues 500+ drop, fell to 14.5 Wen, gravitated back up to 19.4 on this mornings 200 pt drop, then fallen back to 16.
Yeah, investors are nervous and we are herkin and jerkin. Afterhours Dell reported a decline in revenue and a 33% drop in Q4 profits.
Dell said its earnings and gross margins would be under pressure for several quarters as it implements restructuring efforts. Do ya think?
SP500 has closed under 1435 3 straight days. Closing under 1395 for 2 straight days would signify a mid term consolidation is in process and further downside.
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