Market Soapbox 05/23/07

WEN, broadbased whipsaw, DJIA -14 on average volume with poor internals. All DOWN cept DJTA, XOI, XAU.

Bonds down 10yr yield +1bps 4.84, $ down vs 121.575y & up vs 1.345E, WTI crude up $65.86, gold up $662.7

As we have nattered before in so many words... China is a house of cards waiting to collapse...

Ex Fed Head Alfred E. Greenspun joins China's central bank governor Zhou Xiaochuan and Li Ka-shing, Asia's richest man, in voicing concern about a China stock "bubble".

"It is clearly unsustainable... there is going to be a dramatic contraction at some point." Asian stocks traded lower for the first time in four days...

Another of our oft natterings... we catch a cold, they catch the flu...

Japan's exports to the U.S. fell for the first time in two years. Shipments to the U.S. dropped 4.8%, the steepest decline since May 2004.

The slump reflects the slowest growth in four years in the U.S., the destination of a fifth of Japanese exports, led by cars. Meanwhile, shipments to all other regions rose.

Concern about declining demand in the U.S. has already made itself felt in Japan. Machinery orders fell 4.5% in March and companies said they expect orders to plunge 11.8% this quarter.

Despite all appearances and media spin, we as in US of A are still the 800 pound gorilla on the block...

No surprise here... Semi's collapsing the last week... Analog Devices (ADI) missed expectations with a 14% profit decline and warned that Q3 earnings will miss estimates.

Threepeat DJIA down, DJIA up 30 for 39; 45 record closes since Oct.; 23 YTD; and on a parallel with 1989 Nikkei 225: the DJIA is now 37 for 51. The Naz crawled over 2600 for the first time in 7 years.

Over the last 3 weeks, some magic numbers with strong resistance... SOXX 500-505. it still stands...

and RUT 830, NDX 1905 are still magnets. SP500 reached our 1533 target...around 1PM 1532.43 then fell to 1522.

Monday: "This market is looking "thin", we suspect over 1527 closing basis & possibly 1533, but then? Fee-Fi-Fo-Fum we smell Tues or Wen con-sol-id-ation..."

We suspect the market may not take kindly to existing & new home sales confirming further collapse in housing. This pullback may last until the end of May...

Often wrong, but never in doubt, this is the Nattering Naybob and your not!

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