Market Talk / Jan. 1 - 7

[Birchtree]

Skip,

Great information - send along more.

The NYSE composite cumulative advance/decline breadth line went to new all time highs on Wednesday. An idea of how strong this current bull market continues to be from the internal lows of 2000.

Dennis

 

[JOVARN]

Dennis: What is your thought on the S&P during this Bull run, Small daily gains lasting a while or do you see a large move to the up side lasting a few days?
Joe

 

[Fivetears]

LONDON, Jan 5 (Reuters) - The dollar recovered its poise against the euro and the yen on Thursday after a two-day battering driven by growing expectations that the Federal Reserve is close to ending its campaign of U.S. interest rate rises.

Traders said that after a sell-off that pushed the dollar down 2.5 percent against the euro and 2 percent versus the yen since Tuesday, investors were waiting for more clues on the U.S. monetary policy outlook before selling it any further.

The euro gained slightly against the dollar and hit 5-month highs against sterling after Thursday's data showed the euro zone and UK service sectors grew at their fastest for 23 and 20 months respectively.

Euro zone economic sentiment improved to 100.5 in December from 99.9 in Nov.

"The results confirm the view that the euro zone export/investment-led recovery is graduating to a more self-sustainable level, supporting expectations of rising interest rates in 2006," Tullett Prebon G7 market economist Lena Komileva said.

 

[Birchtree]

1995 all over again

Jovarn,

My anticipation is that we blow through Jan and Feb without much difficulty - two steps forward and one step backwards to consolidate gains. This year could be a repeat of 1995 and 2003 - a scenario that Tom has also been projecting. The 4 - year cycle low should be mild. I'm watching for any type of divergences that could offer a signal to the potential top - but they never make it easy. Anyway my S&P 500 top is 1700 - so I currently have a fair degree of breathing room. But first we need to penetrate 1368 and we will.

Dennis

 

[CheapShot]

I Fund When Should I Bail

I've been riding the I Fund 100% since 12/19 was actually in London for a week before xmas, where I found the dollar was pretty wimpy compared to the pound. I don't mind the bumps so I tend to leave my money in places to long before I move it, but what is the long term forecast for the dollar say the next 3 to 6 months? Last year I probably made to many moves, would like to move it less this year.

 

[Wheels]

They may not have "corrected" all the way. they may shave a few more cents off tommorrow.

I fund down 7 cents today. I feel vindicated. The MSCI EAFE went up .097% today but they still needed to knock a few cents off from the other day. It should be exact now for as much as a few weeks.

Dave
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[Spaf]

Daily Yak

The Kingdom of TSP​

Daily Edition
Jan. 05, 2006​

Yak, Doodles, Tea Leaves, and Fortunes.

Kingdom Yak.

Market Yak............ The misplaced rally.

Other Yak.............. Money is buying, but buying what?

Doodles, and Tea Leaves.

Doodles:

S&P 500 ($SPX)
Closed at................ 1273.48, up +0.02
Money flow............. -0.095, up.
Stops..................... Alert: 1261, Trailing: 1249.
Averages................ +4.93, up.
Overbought/sold....... [70] 60.6 [30]

Light Crude (NYM)
Closed at................. 62.79, dn -0.63
Markers:.................. <60 = ok, 60-64 = worry, >64 = critical.

Tea leaves:.............. Yellow.

Fortunes.

Position.................... 100G

 

[Skip]

Chips, Retailers Lead Nasdaq To 3rd Straight Up Day

BY JONAH KERI

INVESTOR'S BUSINESS DAILY

Posted 1/5/2006

Chips and retailers scored big gains, leading the Nasdaq to its third straight up day Thursday.

The composite rose 0.6%, outpacing the rest of the market. The S&P 500 closed flat for the session, as did the Dow.

Volume ended slightly lower across the board for the second day. It was again above average, though, a good companion for the Nasdaq's gains.

Each passing day seems to reinforce a consistent point: It's a stock picker's market. The bullish action shown by leading stocks in the last few weeks has overshadowed gains notched by the broad indexes. The Nasdaq has stepped on the accelerator this week with a 3.2% gain in three days. But the strongest stocks have put up comparable or better gains in the span of a single day, or even a few hours.

The Nasdaq's move shoved the index to a 4 1/2-year closing high. The S&P 500 had outpaced the Nasdaq for much of the latter half of 2005, as materials stocks and other nontechs showed strength. The trend reversed itself in the last few days, with the Nasdaq running ahead of the rest of the market.

On Thursday several tech-related groups fared well. Chip stocks led the Nasdaq's charge. The Philadelphia semiconductor index zoomed 2.4%. Chips and chip equipment makers were among IBD's top-five performing groups of the day.

The chipmaker group has vaulted 13.3% the last eight weeks. Standard Microsystems (SMSC) and Marvell Technology Group (MRVL) nabbed solid gains in brisk volume, moving close to 52-week highs.

It was also a red-letter day for retailers, as bullish same-store sales results fueled gains. Jos. A. Bank (JOSB) surged 9% in huge volume. The men's clothing retailer reported a 20.7% surge in December same-store sales, crushing estimates.

Guess, (GES) another leader in the Retail-Clothing/Shoe group, logged an all-time high after clearing a short consolidation. The firm reported a 17.5% December same-store sales advance. Its stock has soared 65% since a double-bottom breakout two months ago.

Upscale department store chain Nordstrom (JWN) and ultra chic jeans maker True Religion Apparel (TRLG) both gapped out of bases in massive turnover.

Crude oil prices suffered a moderate decline. But several oil- and gas-related stocks took harder hits. Many stocks in the energy sector have mounted massive run-ups and may be forming late-stage bases or struggling to hang on. If you're holding any stock that's already had a big run, make sure it's not violating any key sell rules.

Home builders fell from grace in 2005, as skyrocketing housing prices and rising interest rates curtailed the onslaught of home buying. But Beazer Homes (BZH) has defied the odds, rolling to an all-time high Thursday. Beazer's resilience, coupled with its best-possible 99 Earnings Per Share Rating, shows the value of picking stocks that sport the best fundamentals. However, even the best leaders may struggle to overcome broader market or industry trends.

 

[Greg]

It should be exact now.

Agreed.

 

[Fivetears]

1731hrs EST

NEW YORK (CNNMoney.com) - Treasury prices closed down slightly Thursday as a significant drop in unemployment claims and positive retail numbers for the holiday season suggested strength for the economy.

The benchmark 10-year note fell 1/32.

The two-year note was down one tick.

The five-year note dipped one tick.

Bond prices and yields move in opposite directions.

The Labor Department also released its weekly jobless claims. The report showed initial claims fell to a five-year low of 291,000 in the latest week.

Traders likely will be focusing more on Friday's jobs report. Economists expect to see the addition of 200,000 jobs during December, down slightly from the 215,000 jobs gained in November.

The dollar gained against the euro, after hitting a two-month low Wednesday.

 

[Skip]

Take your profits now ?

I think I will let them ride ,
Last rally the techs didn't come to the party and we pulled back. Now they are leading... The midcaps will join in then the big guys will follow.... If you look at the dow basting for the year building up steam waiting for the FED to stop rasing rates. Its catch up time as the rest of the world had a great year...
Skip



The propensity to want to take profits after two beautifully up days cannot be ignored," Jim Cramer told his "RealMoney" radio show listeners Thursday.

"But my take right now is -- don't ring the register," he said.


This is because it's time for the U.S. equity market to play catch-up with the rest of the world because the Fed is going to stop raising interest rates soon, Cramer said.

When it comes to thinking about why a market does well or badly, you need to look at that country's central bank, he said.

Why did the Dow end 2005 down while the rest of the world rocked? Cramer said it's because the Federal Reserve raised rates more than a dozen times in a row, and that by the end of the year there was still no sign that they would let up.

But now signs, including the weak housing market, the recently released Federal Open Market Committee meeting minutes and well-placed articles saying that the monetary tightening may soon end have changed the investment playbook.

"When we see these signs, we must change the way we invest," Cramer said, telling listeners to move to a positive strategy from a neutral one.

 

[TiCKed]

I've always been of the opinion that Cramer is more entertainment than financial advisor.

 

[Birchtree]

Melt up type event

This is the most important rally since the 2002 bottom, we may be at the center point of an Elliot third wave - we are getting the technical statistics in which center points are truly made. We need breadth and more volume to expand during this latest rally phase - and that is starting to kick. All time highs on the A/D charts, breadth is now back in all time high territory. The S&P has some divergences -but they will line up with more time. The 4-year cycle low - which is still due in Ocy'06- will more than likely see a price low some what higher than where we are at the current time. What we saw in December was a pause to refresh of a larger overall advance - a plateau. The majority of MCSUM are still above their zero lines. And last but not least we should shortly see primary and secondary confirmation signals from the Dow Theory. And boy there is plenty of cash around to buy this train.

Dennis-perma bull #2

I forgot to mention the termination top is some where out in 2008. Let'er rip.

 

[JOVARN]

The President is making a statement today; that the tax cuts should be made permanent.
This in itself may cause the market to continue its upward climb.
I pulled 60% off the table yesterday, as I was not aware that speech was being made today. Oh well stuff happens, but I can't complain too much about this weeks gains and do not want to give any back.
WaaaWhooo (is that what Cramer says) or is it BAM!!!!
My new plan for the I fund is to dollar cost average my allocation into the I fund as I believe the dollar over the long term will trend lower, as the feds stop raising the interest rates.

 

[Mike]

Not even the jobs report can be straightforward.

December jobs growth was far lower than expectations... market expected roughly 200k, but a little over 100k were produced. That's not all, though - the november numbers were revised sharply higher to over 300k produced, and hourly wages grew 0.3% - more than economists expected.

So, either the Fed will see the weaker numbers and stop hiking rates, or it'll see the faster wage growth and continue on its merry way. Expect volatility today.

 

[tsptalk]

Interesting reaction this morning. Normally the market would sell off on a low number then rebound in the days ahead. Instead we get a big open? I'm started to get that feeling that I am missing the boat. That's usually comes near the top. The actual top will be the day I give up and get in stocks.

 

[tsptalk]

Sounds like the rally is based off of the November revision that Mike mentioned. That makes more sense. Now they can sell the news next week.

 

[draggen3]

It cannot go up forever , a pull back to the 1220 range on sp 500 would be healthy.Besides once the new fed pres comes into office we will correct , it has happened with the fed pres change before. I fund, looks great with dollar falling , but as I said about the stock market it cannot fall forever . This to will correct to around 58.00 for (EFA). my humble opinion. All G for now should have followed my hunch to jump in at end of year, yet last yaers jan kept me from doing this . good luck to all

 

[vectorman]

Interesting, there is a big sell off in the DJTA. Do we really move up from here or would this be a good time to take alittle off the table. Nice ride namor.

 

[Mike]

I feel compelled to do something, but I think I'll sit tight. Next week may be a nice time to pull some more out of the market, though.