Market Talk / Jan. 28 - Feb. 3

Kingdom of TSP
Jan. 29, 2007
Intraday Report​

AGG Bonds (or is it bombs)?​

AGG0129.gif

Courtesy of www.StockCharts.com
 
Daily Yak

The Kingdom of TSP
Daily Edition
January 29, 2007 Closing

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak....................................Well the glass was half full!

Con-Yak...................................Energy losses emptied the advances.

Jester-Yak................................Toss in a little Fed-fright!

Doodles:
Socks ended up for the day.
Stops.......................................Alert (-1%)....Trail (-2%)
.....$SPX.......1420.62 -1.56.........1426X...........1412
.....$EMW.......640.64 +2.77...........637..............631
.....EFA............73.46 +0.08............73.76X..........73.06

Dollar........................................85.12 -0.12 for the day.

Lube (NYMEX) Closed at...............54.01 -1.41 for the day.
Oil Markers.................................<60= ok, 60-65= worry, >65= panic.

Tea Leaves:
Yakndoodles................................Yellow.

Tin Box.
Leaders Ratio / Top 10 .................0.7 ......0.9 ......0.0 ......4.3 .....4.1 ....07 leaders
Leaders Play................................G-fund, F-fund, C-fund, S-fund, I-fund.
 
09:00 am : S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +5.0. A positive bias persists in pre-market action as further analysis of what now looks to be more disappointments on the earnings front than upside surprises take a back seat to Fed policy. Even though it is a foregone conclusion policy makers are not going to cut rates tomorrow afternoon as hoped for over the last couple of months, leaving rates unchanged for a fifth straight time also suggests that, if the economy is good enough, then corporate profits may still be quite healthy. Fourth quarter operating earnings for the S&P 500 are on track for a gain of about 10.5%, which is above the 9.4% average forecast at the start of earnings season.
 
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Audio clip on Marketwatch:

"Sam Stovall, chief market strategist at Standard and Poor's, tells MarketWatch that stock gains have been restrained due to concerns about what the Fed will say this week regarding interest rates. Stovall says the market is "ripe for a 3% to 8% correction" on a technical basis."
 
12:30 pm : The market's ability to withstand a 3.0% rise in oil prices is one thing, but crude futures tacking on another 1.0% to over $56/bbl within the last 30 minutes is now weighing on sentiment. Gains on the Dow and Nasdaq have been halved as the Energy's sector fails to subsequently extend its reach to the upside and act as more of an offset to the commodity's inflationary potential. Natural gas futures soaring 9% as weather remains colder than normal is contributing to crude's latest climb to session highs.
 
The belief is that the Fed will leave rates the same. Bond yields are lower. The VIX is down. Consumer Confidence is good. TSPTalk Sentiment Survey is still a buy for this week. Looks like the dip buyers are back at work.
I agree, it looks like the same old song and dance - S&P found support and is making another move up. But the Fed could surprise us with some hawkish talk tomorrow, and even if they stayed unchanged on rates, it could set up a "sell the news" situation.
 
From briefing.com:

"While the market was pricing in the likelihood of a Fed easing in early 2007, there's also an argument that such a rate cut may jeopardize the Fed's credibility and subsequently renew recession worries. Thus, since the Fed needs to talk tough on inflation-fighting, it is Briefing.com's belief that tomorrow's policy statement will connote a continued bias towards tightening and that the market has been getting a little over-anxious about the possibility of the Fed's next move being a rate hike."

This language would be a surprise to the market making the indices spike higher, correct? How are you all interpretting this?
 
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