Market Talk / August 13 - 19

[Birchtree]

Mil-man,

At least you are not alone - the BULL likes to run without the crowd. And you have the #3 Wheels to keep you company. Have you noticed the strong smoke flume coming from the S fund - just look up. But don't hurt your neck.

Dennis -permabull#1

 

[mlk_man]

I look up, but I also don't forget to look down either. Don't wanna step in anything ya know...................

 

[FundSurfer]

Should of stayed in I guess................

Don't forget about options expiration Friday/Monday.

I'm with ya Birchy but it usually isn't a B-line up. There are a few wiggles. I'm just trying to dodge a wiggle and will be back in soon. The S-fund and the I-fund do still seem to be out pacing the C-fund if you look at the trend since the pullback. Actually the pace of each of the funds is taking on a upward slope very similar to pre-pullback levels.

I keep hearing about a rotation into the large caps but I don't see it in the numbers (gains) yet. I expect the effect will become more evident if we do see more signs of slow-down. If that occurs, I think we'll begin to see the c-fund doing some catch up.

(It's nice to have internet access again. There still are some hotels out there with crappy access.)

 

[mlk_man]

[FONT=Arial,Geneva,Verdana,Sans-Serif]I would say the rotation has already occurred and if you are a buy and holder, I'd be large caps. But, since I am a timer, I prefer the S because although it will always fall farther faster, it'll also gain more quicker.

[/FONT]

 

[mlk_man]

Dollar just strengthened, what's he saying.............

Fisher speaks for the Fed at 1pm. Does anyone know if he's dovish or hawkish? Could tell the story of what happens later today. Wish I had noticed earlier................

 

[Fivetears]

Market missles; Heads up!

 

[Fivetears]

We need to put gags on all those NOT the HMFIC. Where's Ben?

 

[nnuut]

Big Mouth, just like his boss!

 

[Spaf]

What happened at about 2PM ET for the big drop...........

 

[FundSurfer]

What happened at about 2PM ET for the big drop...........

"Dallas Fed President Fisher reminded listeners in a speech today in Shreveport that central bankers cannot let inflation out of the bag. That is pretty much stating the obvious as it relates to the Fed's responsibilities, but nonetheless, it offered a sobering reminder that the market might be getting ahead of itself with respect to expectations about monetary policy."Yahoo Market Overview

 

[TiCKed]

Hmmmm.....Looks like those who dove for the sidelines at COB today may have gotten it right. Dell is tanking afterhours due to SEC concerns, and quarterly reports "only" meeting expectations.

Throw in the Fed (old) news, and it looks ripe to be down tomorrow.

 

[Spaf]

Daily Yak

The Kingdom of TSP
Daily Edition
August 17, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak...................................4th day up for socks! Krude on 2 month low!

Con-Yak..................................We gotta stop and take on water.

Jester-Yak...............................Stoke the fire box!

Doodles:
Socks [$SPX] Closed at..............1297.48, up +2.05
Volume (CMF) (money flow).........+0.064, increasing.
Averages (MACD) (trend)............+6.983, increasing.
Momentum (S-STO) (signal).........88.73, increasing.
Strength (RSI) Overbought/sold....[70] 64.23 [30]

Lube (NYM) Closed at..................70.06, dn -1.83
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Charts & Stuff............................Green / Green [doodles +5-0 / Lube = 70]

Tin Box:
Position....................................100% socks
Stops [$SPX].............................Alert: 1284. Trail: 1271.

 

[Birchtree]

The NYAD is at all time highs. More indexes to follow like dominoes.

 

[tsptalk]

All time?

I have never overstated anything in the history of mankind.

- can anyone tell me what show that line came from? It's a tough one.

 

[Spaf]

The Kingdom of TSP
Addendum
August 18, 2006​

The Double Bottom​

The double bottom is another transition pattern that may lead to good trading opportunities. A double bottom appears as a "W", see chart below. The second low tends to drive out the weaker bulls and makes it easier for the prices to be driven up.

The buy trigger happens when the stocks break above the mid-point peak in between the two troughs. The peak is called the pivot point.

Taking a position in the right hand trough sometimes makes sense, if the fundamentals support it.

RE: The economy may be slowing, granted! But, it's still good. The mideast cease-fire is in place, and the crude prices are falling with end of the summer driving season. So far, fingers crossed, hurricanes have of stayed away, and so may the Fed.

Regards and be careful!................ ....................Spaf​

 

[Fireant]

The Calm Before the Storm
Recent Market Commentary: 8/10/06 The Pause Lays An Egg8/3/06 When the Fed Stops Tightening7/27/06 The Heavy Odds Against A Soft Landing7/20/06 A Fork In The Road7/12/06 It's All About Greed and Fear7/6/06 The "Soft Landing" Myth6/29/06 Perceptions and Reality6/22/06 Fed Still Caught in a Trap6/15/06 Forget the Spin--the Market is Overvalued6/8/06 It's Not About Bernanke

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In our view this is a deceptive rally that is the equivalent of the calm before the storm. Investors are happy that the Fed has paused in hiking interest rates and that the latest monthly numbers show a small diminution of inflationary pressures. They also interpret the solid evidence of an economic slowdown as indicative of soft landing ahead.

The problem is that soft landings are extremely rare in American financial history and the vast majority of economic slowdowns following a period of rising interest rates deteriorate into full-blown recessions. The weight of the evidence strongly indicates that the economic slowdown is already here, as key factors such as housing, payroll employment and output have been weakening. The National association of Home Builders (NAHB) index has dropped 40 points from its recent peak to its lowest level in 15 years. Housing starts are down 13.3% year-to-year while single unit permits are down 26% from their peak. Statements from the nation’s leading homebuilders mention plunging order rates, excessive inventories and extensive cancellations.

The weakness in housing impacts the economy directly through reduced building activity and indirectly through the wealth effect, the hundreds of billions of dollars raised through mortgage equity extraction, and the negative effect on employment growth. Some studies indicate that as much as 30 to 35% of employment growth in the last few years has been a result of activity in the housing market.

Additional examples of economic weakness are numerous. Employment growth has been sluggish for the past few months and July industrial production would have been up by only 0.1% if not for the heat wave and a jump in mining activity. Both business and consumer confidence have been dropping significantly. July truck sales were down 12.5% year to year while auto sales bounced in July only because of increased incentives to clear out inventory. Ward’s estimates a significant fourth quarter decline in vehicle production.

The odds are high that the current softness in the economy will develop into an outright recession. Interest rate increases impact the economy with a six-to-twelve month lead time, meaning that the last few rate hikes are still in the pipeline. The vast majority of yield curve inversions have been followed by recessions. Furthermore, the Conference Board’s leading indicators for July, released today, show a decline of 1.4% in the annualized six-month rate of change. This has happened only 11 times in the last 52 years, and 9 of them were followed by recessions.

In our view the market is in a no-win situation. Since most investors are looking for a benign soft landing in the economy with little inflation, the onset of a recession would be a severe shock with highly negative consequences for stocks. On the other hand, if we are wrong about the economy and it continues to grow at the consensus forecast of 2-to-3%, inflation would climb above the limits of Fed tolerance, and interest rates would therefore continue to rise. Despite the headline numbers in this week’s PPI and CPI reports, a closer look clearly indicates that there’s still plenty of potential inflation in the pipeline that could show up in finished goods if economic growth doesn’t slow down sharply. On a year-to-year basis, core intermediate goods prices were up 7.9% while core crude goods were up 34.6%. In other words, the Fed will most likely be forced into a choice between recession on the one hand or inflation on the other. Either one would be highly negative for stocks. Of course, anything is possible and there is a chance that we can get both a soft landing and low inflation, but we think the odds of that happening are quite low.

 

[Birchtree]

IMHO the bigger risk is being out - not being in. There hasn't been a bull market top with the utilities making new highs. The NYSE breadth and volume MCOs have generated a buy signal. A properly allocated portfolio doesn't need to be rejiggered everytime the weather changes. Bring on the next hurricane.

 

[Fivetears]

OK... we give Tom.

All time?

I have never overstated anything in the history of mankind.

- can anyone tell me what show that line came from? It's a tough one.

 

[Birchtree]

The magic number for the Dow Utilities is 438.21 - so far today we are up to 438.01. I think the buyers will be here after 1500 hours with gusto - or am I wishful thinking again.

The answer to Tom is the Jack Benny Show.

 

[tsptalk]

OK... we give Tom.

Quote:
Originally Posted by tsptalk
All time?

I have never overstated anything in the history of mankind.

- can anyone tell me what show that line came from? It's a tough one.

It's a show called "Corner Gas". A Canadian sitcom that has made it's way to U.S. via DVD. It's a riot.