Market Observations 06/22/07
Yesterday: "a choppy sideways pennant waving pattern with large herks & jerks is emerging and looking like Twin Peaks.
Fed repo injections, spin & groupthink are keeping it afloat, question is: what will unwind in the CDO-MBS debt market and how will yields react?"
SP500 sitting on 50 DMA 1505, downside 75 DMA 1475 is support. DJTA & especially DJUA reveals another picture...
Yesterday: "breech of DJUA 485 on bond selling means more downside". Today, DJUA fell through 120 DMA to hit 485...
Today only $4B in Fed reanimation; SP500 plunging from 1522 to 1502. Yesterday: "if 10 year breaks, closes and stays above 5.25 start bailing water with both hands as fast as you can."
Not so fast Joe... FYI Japans interest & divident income is 4X their trade income. With all their US holdings, guess the Japanese better hope for a strong dollar vs Yen.
Well, they got it....Dollar at 5 year high vs Yen; Euro at all time high. In order, German & British (late Dec & mid March), Japanese and US bonds (May 24th) have plunged. Since May 28th the Yen is free falling.
Whats that sound? Japanese printing presses cranking out Yen for more carry trade. Higher bond yields and a plunging Yen mean more Japanese bond & stock purchases?
However, with a CD yielding 5.25% one would only buy a bond if they think rates ARE NOT going higher. Maybe those Yen know something we don't? watch where they go or don't.
Often wrong, but never in doubt, this is the Nattering Naybob and your not!
Fed repo injections, spin & groupthink are keeping it afloat, question is: what will unwind in the CDO-MBS debt market and how will yields react?"
SP500 sitting on 50 DMA 1505, downside 75 DMA 1475 is support. DJTA & especially DJUA reveals another picture...
Yesterday: "breech of DJUA 485 on bond selling means more downside". Today, DJUA fell through 120 DMA to hit 485...
Today only $4B in Fed reanimation; SP500 plunging from 1522 to 1502. Yesterday: "if 10 year breaks, closes and stays above 5.25 start bailing water with both hands as fast as you can."
Not so fast Joe... FYI Japans interest & divident income is 4X their trade income. With all their US holdings, guess the Japanese better hope for a strong dollar vs Yen.
Well, they got it....Dollar at 5 year high vs Yen; Euro at all time high. In order, German & British (late Dec & mid March), Japanese and US bonds (May 24th) have plunged. Since May 28th the Yen is free falling.
Whats that sound? Japanese printing presses cranking out Yen for more carry trade. Higher bond yields and a plunging Yen mean more Japanese bond & stock purchases?
However, with a CD yielding 5.25% one would only buy a bond if they think rates ARE NOT going higher. Maybe those Yen know something we don't? watch where they go or don't.
Often wrong, but never in doubt, this is the Nattering Naybob and your not!
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