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Bull Pen - June 2006
- Thread starter Griffin
- Start date
Griffin
Well-known member
The Brits jacked up the pound with a quarter point hike and now the FTSE is taking a beating while the pound is gaining strength. While the relative value may cushion the blow to a small extent, it’s looking like a rough day. This is not Tuesdays slap but more like a full punch in the nose. We will see how the day progresses, but I am not expecting the market to find support before the deadline.
I was expecting the S&P to muddle around 1280 for another one day flip flop (I was actually considering trying to make the play, but I think that’s off the table now). Coupled with the news out of Ford, it looks like the end of the current rally.
The question on my mind and assuming that this continues through Monday: will there be enough time and drop to set up FOMC day for a rally, three trading days is a short time to find and establish a bottom, may not be enough. Will the surprise rate hike by the Brits and the expected rate hike by the European central bank, influence what happens on Tuesday?
I think most folks are expecting a rate hike on Tuesday, but with this news out of the automakers, the Fed has the reality of economic disaster staring it in the face, and the housing numbers aren’t exactly encouraging, either.
So my question to the board, do you go all in before the FOMC? and if so, domestic or international? Note, nothing you say here constitutes a commitment, I just want to open the floor early.
I was expecting the S&P to muddle around 1280 for another one day flip flop (I was actually considering trying to make the play, but I think that’s off the table now). Coupled with the news out of Ford, it looks like the end of the current rally.
The question on my mind and assuming that this continues through Monday: will there be enough time and drop to set up FOMC day for a rally, three trading days is a short time to find and establish a bottom, may not be enough. Will the surprise rate hike by the Brits and the expected rate hike by the European central bank, influence what happens on Tuesday?
I think most folks are expecting a rate hike on Tuesday, but with this news out of the automakers, the Fed has the reality of economic disaster staring it in the face, and the housing numbers aren’t exactly encouraging, either.
So my question to the board, do you go all in before the FOMC? and if so, domestic or international? Note, nothing you say here constitutes a commitment, I just want to open the floor early.
Griffin said:
Regardless of what the Fed does on Tesday, I think there will be a rally, possibly brief, maybe longer, once its done. Attention will turn immediately to the future and if the feeling is "we are finally, really, honestly done" prevails, it will be like a weight lifting off our sholders. Barring events that I can't forsee between now and then, I'll go all in Monday morning.
Pilgrim said:
This is a good theory. In fact it has me thinking I may jump by Monday as well. But I am concerned that the futures are figuring a less than 40% chance that the Fed will raise rates. That means if they do raise rates, the majority of traders will be both surprised and disappointed. Could spell trouble.
Dave
<><
Griffin
Well-known member
Griffin said:
Well that is happening. So much for the big punch in the nose.
I actually don't enjoy playing the one day flip flop crap, but a one day foray into the I fund may be too good to pass up.
Whoever said huricane season was bad for the stock market? :nuts:
The other side of this is if we do get a bounce back tommorrow, we go into Monday, riding the top of the channel. That will make the FOMC call tricky.
Too bad staples doesn't make an easy button for the stock market. :cheesy:
I utterly despise Fridays Jobs reports. Tomorrow the market could tank and drop more than a percent, or could gain just as much. Totally unpredictable and everything else will not temper the effect of that one number.
Surely, somewhere, there is a pointy-head academic who estimates this number on his own and has a track record that makes him (her) worth listening to.
Has anyone got a clue about what's coming??
Surely, somewhere, there is a pointy-head academic who estimates this number on his own and has a track record that makes him (her) worth listening to.
Has anyone got a clue about what's coming??
nnuut
Moderator | TSP Legend
Nope, the estimate for the Jobs report by Briefing.com thinks it will be higher, but is that too high and will freak the FED? Somebody knows, but not I!
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm
nnuut
Moderator | TSP Legend
And the Fed's next move will be ...
For the first time in a while it's a cliffhanger: Will the central bank pause or make it 18 straight rate hikes?
http://money.cnn.com/2006/08/03/news/economy/fed_preview/index.htm?cnn=yes
For the first time in a while it's a cliffhanger: Will the central bank pause or make it 18 straight rate hikes?
http://money.cnn.com/2006/08/03/news/economy/fed_preview/index.htm?cnn=yes
D
Dave M
Guest
I'll Be Watching
...from the sidelines, as things now stand. Unless I read something definitive, by noon tomorrow I'll be in cash.
Dave
...from the sidelines, as things now stand. Unless I read something definitive, by noon tomorrow I'll be in cash.
Dave
Griffin
Well-known member
The data against continued rate hikes is mounting. Even if the Fed does another hike, and doesn’t come flat out and say that this IS the last hike, they will likely telegraph it to some degree. Given the market’s reaction to similar statements over the past couple of months, that is about all the market needs to hear for the money to start moving back into stocks. At this point, I would be shocked if the policy statement remains the same (and I think the market would be too), but I don’t think that is likely – there has been to much evidence of a weakening economy.
I want to be leaning towards a rally next week and apparently the majority of you do to since the TSP talk survey is giving a bullish sentiment 2:1. I like the S-fund for the long term (a halt to the rate hike's would be the breath of life to the small caps), but I may go into Tuesday in the C-fund and make the switch over later in the week. Today, I am in the I-fund but I expect to move out tonight.
I don’t really have a plan yet as to where I want to be on Monday. Any suggestions?
I want to be leaning towards a rally next week and apparently the majority of you do to since the TSP talk survey is giving a bullish sentiment 2:1. I like the S-fund for the long term (a halt to the rate hike's would be the breath of life to the small caps), but I may go into Tuesday in the C-fund and make the switch over later in the week. Today, I am in the I-fund but I expect to move out tonight.
I don’t really have a plan yet as to where I want to be on Monday. Any suggestions?
Griffin said:
If today continues higher and Monday stays flat or rises, then Tuesday could be setting up for a classic buy the rumor sell the news scenario. Especially since stocks will be very overbought by then.
Of course this might be wishful thinking on my part since I bailed into the G earlier this week and I would like to be able to get back in at prices that are at least close to what they were on Monday.
Dave
<><
Griffin
Well-known member
Wheels said:
Dave,
Never forget that what's done is done, your position on Monday should not have any bearing on what you do today. That is the number one cause of people hanging onto a bad position or missing a good one.
I know you know this, but a friendly reminder can't hurt.
As far as the "sell the news" concern, that is in part why I was considering going into the FOMC in the C-fund. Your point is well taken: I have been moderately aggressive of late, and I don't think it is prudent to ramp up the aggressiveness. I am still leaning towards taking the risk to be in stocks through Wednesday but that is shifting. The S&P is now bouncing off of early Junes resistance and the DWCP is setting the next high point in that descending triangle. If these patterns persist, I will probably take it off the table for Monday.
