Market Talk / Jan. 8 - 14

[Spaf]

The Kingdom of TSP​

Sunday-Weekly​

Early Edition
Jan. 08, 2006

Yak, Doodles, Tea Leaves, and Fortunes.

Kingdom Yak.

Market Yak............ Market changed to giddy-up mode! Hearing that the Cartel will cease payoffs, vester buying renewed. Economy sentiment was up beat. The market sort of bypassed a needed rest and went overjoyed on the Cartel yak.

Other Yak............. Horseman Rats was headed for the barn. Horseman Inflate and Earnie were on vacation. However, horseman Krude was heard to be back in town.

Position Yak.......... Commentaries and Reef Summaries have noted some extremes, and conditions of overbought, the market was to euforic to fast, and suggected keeping a healthy cash position.

Spaf Strategy Yak.. Retiring 08-01-06. Looking for minimum risk. Will not be aggressive. SPAF was my call sign in RVN (Sneaky Pete Air Force/5th SFG); Will now be SPAF (Saving Pennies And Fishing). Will stay with TSP, and this board; heck it's too much fun.

Doodles, and Tea Leaves.

Doodles:

S&P 500 ($SPX)
Closed at............... 1285.45, up +37.16 for the week.
Money flow............ -0.086, rising.
Averages............... +6.29, rising.
Overbought/sold...... [70] 66.4 [30]
Stops.................... Alert: 1273, Trailing: 1261.
Chart.................... 20dMA, 50dMA, MACD, RSI (Attached).

Light Crude (NYM)
Closed at............... 64.21, up +3.17 for the week.
Markers:................ <60 = ok, 60-64 = worry, >64 = critical.

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

Fortunes.

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

TSP Ended: G=11.16 F=10.70 C=13.96 S=16.85 I=18.44
Last Week: G=11.16 F=10.67 C=13.55 S=16.27 I=17.59

 

[Skip]

market outlook

Market outlook from friday's close.

 

[Birchtree]

Saving pennies - get real - making dollars to go

Spaf,

Glad you decided to keep your TSP active and continue to participate on this board - but saving pennies is what Greg likes to do - not making dollars. Actually I think he has become more aggressive so I need to recognize him before he takes me out back. Even looking toward retirement I know the flame still burns to travel at tree top - but take your time.

Good to see the MACD crossover and the RSI trending up. Won't be long before we have record RSI readings to confirm the current breakout. The S&P itself may have another 31/2 months before it reaches its short term peak. I was thinking that unless the MACD now breaks to the upside and creates a new uptrend past its resistance line then this up action could end dramatically fast. That won't happen now too many folks have missed this initial thrust and will begin to buy all the way up.

But there is trouble on the horizon for some - over the five years between 2000 and 2004, the R2K gained 44% versus a decline of 8% for the S&P 500. Some are looking for a sideways market for R2K in 2006 and 2007, earnings need to catch up with the high run the stocks have had.

Since the mid-1950s, price declines of greater than 10% do not begin at cumulative AD line recovery highs. Spaf, can you remember the last time you saw the S&P tack on 37 points in 4 days?

The Primary trend, according to Dow Theory, is now bullish in light of this longer confirmation with the DJIA penetrating 10,940. All three component indexes confirming each other would be classic Dow Theory Confirmation for a continuation of the primary trends moving to even more new highs.

There seem to be more power accounts surfacing and we all need to help each other with guidance - I'm on LRRP looking for a potential top that I think will arrive sometime in 2008 - but vigilance like prudence is the better part of valor especially if you are cruising without lights. Take care.

Dennis

 

[Skip]

last week's summary up + 3.2%

Stock Market Update - 2006/01/06 16:20:01
4:34p ET January 6, 2006 (Briefing.com)

Closing the week with an average 3.2% gain, the equity market's major averages continued 2006's streak today. A mixed interpretation of the December employment report triggered some intra-day melee, but buyers ran back post-lunch and carried the market to a fourth straight day of advances. Each of the ten economic sectors finished on positive ground. A 2.3% surge in the price of crude futures was the Energy sector's gain, with which it closed the week 6% higher. While the energy price action drove that sector, it did little to dampen buying across the broader market. Speaking of commodities, gold futures rose to the highest closing price in 25 years, and helped incite surges across the Materials sector (+1.2%). It was Technology that retained the spotlight today, though; on account of still-surging semiconductors, soaring communication equipment issues, and an altogether general extension of bullishness across the board, Tech rose a weighty 1.4% and continued the 2006 Tech theme. The SOXX index jumped 2% -- up 8% on the week -- and the Nasdaq hit a four and a half year high. Some upbeat corporate news helped to extend the sector's recent rally. Goldman Sachs upped its price target and profit estimates on Google (GOOG 465.15 +13.91) and Yahoo (YHOO 43.20 +1.67) shares, and The Wall Street Journal ran an article discussing those companies' partnership with Briefing.com recommended holding Motorola (MOT 24.47 +0.95) - an example of their efforts to reach consumers beyond the traditional PC. Signifying strong end-market demand, Samsung asserted that it will raise DRAM contract prices by 10%. Garnering particular attention was IBM's (IBM 84.95 +2.45) announcement that it plans to freeze its $48 billion pension plan in 2008. Hardware rallied, and that stock led the Dow, which also hit a four and a half year high today. A lone sore spot was Microsoft (MSFT 26.91 -0.08), which declined following an analyst downgrade. With respect to the jobs data, investors took somewhat of a mixed interpretation. For a market focused upon the interest rate environment, a lower than expected rise in December non-farm payrolls supported the argument that the Fed may end its current monetary tightening cycle sooner than later. Futures trade jumped, and the indices ran upon the market's launch. However, the consideration of November's upside revision, which essentially puts today's data in-line with what had been expected, served as a tempering factor. A greater than expected uptick in hourly earnings was an additional offsetting element; although the rise was unalarming, that caveat nonetheless fanned inflation concerns. As a result, the Treasury market spent another session submerged and bond traders further flattened the yield curve. The rate-sensitive Financial sector took a bearish cue, but banks reversed course and pushed the influential sector to a supportive 0.5% gain. Aside from the four and a half year highs hit by the S&P 500, the Dow, and the Nasdaq this week, the NYSE Composite, S&P Financial, Oil Services, S&P Midcap, and Russell 2000 also touched historic highs.

 

[Skip]

Nasdaq and sp500 rose in volume last week !

With the increase in volume and the chart breakout in the sp500 I think we are in store for more upside to 1300 at least. We have only gained 18 points since the 11/25 peak.
The trading rage has been 20 points 1268 to 1248 est .
so oversold ? breakout ? Now we might have a new 20 point trading range 1275 1295 until we break that 1300 mark...
Of course JMHO
Whats your take ?
Skip
30c 30s 40 I
Nasdaq Nabs More Gains In Brisk Trade

BY JONAH KERI

INVESTOR'S BUSINESS DAILY

Posted 1/6/2006

The Nasdaq kept its perfect 2006 record alive Friday, tacking on more gains in heavy volume.

The index surged 1.3% in sharply higher volume. That capped a banner week for the tech-laden composite, up 4.5% in an abbreviated four-day period.

The Nasdaq's gain was its biggest since the week ended Aug. 20, 2004, when it followed through on a new rally. It's at its highest level since May 2001.

Much of the credit goes to chip stocks. The Philadelphia semiconductor index vaulted 2.2%, a day after a 2.4% bulge. That's the biggest advance for the index since the week ended Oct. 31, 2003. The last two World Series winners were the only other Sox to see comparable success since then.

It's not just the new year that has investors buying stocks with holiday cheer. On Tuesday the Fed released minutes from its latest meeting. Investors took the minutes' wording as a hint that the Fed sees inflation in check and may soon halt its streak of interest-rate hikes.

On Friday the Labor Department released its December jobs report, which seemed to add credence to investors' theory. The economy added just 108,000 payroll jobs last month, the report said, well short of the 200,000 expected. But November jobs were revised up by 80,000 to 305,000, the most since April 2004.

Wage pressures are rising, but still under control. Average hourly pay increased 0.3%, just above Wall Street estimates. Hourly pay climbed 3.1% year over year, the most since March 2003. But wages were rising more than 4% in the late 1990s.

In other words, job and wage growth have been fairly strong, though not overwhelmingly so. Could that be the sweet spot stocks need to keep profits moving but also calm the Fed into curbing its rate hikes?

Fed funds futures remained in their recent range, despite the news. The odds of a January quarter-point rate hike are pegged at 92%. The odds of another quarter-point hike — to 4.75% — are a near toss-up at 54%.

The market's rally extended beyond the Nasdaq. The S&P 500 notched its fourth straight gain, adding 0.9% Friday.

Like the Nasdaq, the S&P rose in above-average volume every day of the last week. It closed with a 3% weekly gain.

Still, big tech names led the charge Friday. The Nasdaq 100 soared 1.7%. Stalwarts Google (GOOG) and Yahoo (YHOO) jumped in heavy volume, with Google clocking an all-time high. Mining equipment maker Joy Global, (JOYG) which joined the Nasdaq 100 on Wednesday, climbed nearly 3% to its own all-time peak.

Even a 2.3% increase in oil prices couldn't slow down the market. Meanwhile, oil-related stocks had a strong day. Transports were among the day's few laggards.

 

[Spaf]

Spaf,

Glad you decided to keep your TSP active and continue to participate on this board
Good to see the MACD crossover and the RSI trending up.

Spaf, can you remember the last time you saw the S&P tack on 37 points in 4 days?

Take care.

Dennis

Dennis,

Really, I'll keep the funds in TSP. I think they will let me take a yearly withdrawl every december.

The MACD was going to be a major trading tool this year. And it's giving me a buy signal. The RSI can overheat above 70, and that has me worried.

1999 it was up in a bubble - 2000 in the basement.

Good hunting my friend! Spaf

 

[Spaf]

With the increase in volume and the chart breakout in the sp500 I think we are in store for more upside to 1300 at least. We have only gained 18 points since the 11/25 peak.
The trading rage has been 20 points 1268 to 1248 est .
so oversold ? breakout ? Now we might have a new 20 point trading range 1275 1295 until we break that 1300 mark...
Of course JMHO
Whats your take ?
Skip
30c 30s 40 I

Hi Skip,

Initially it was euphoric over the FOMC talk to lessen rate increases. However, its stayed several days with advances. It could be the real thing. If Monday looks good. I'll go for it!

Rgds Spaf

 

[Skip]

sp +11% and mid cap +19% gains for 2006

forcasts for 2006

Profit Makers for 2006

A TD Waterhouse exclusive from Standard & Poors,
a leading independent research firm on Wall Street.

Earnings growth overall may be decelerating, but there are still plenty of companies that are poised for healthy gains this year, including the handful of issues highlighted below.

Although the pace of growth has slowed, U.S. corporate profits continue to climb at a good clip. S&P estimates that operating earnings on the S&P 500 in the third quarter of 2005 rose 14% from a year earlier, which would make it the 14th straight quarter of year-over-year double-digit growth. For the full year, we expect a 13% increase and are forecasting an 11% gain for 2006. The outlook is even brighter for the S&P MidCap 400 and the S&P SmallCap 600, which are looking at increases of 18% and 19% respectively in 2006, versus 10% and 17% seen for 2005. Although much of that growth will come from energy-related companies, there are many others without ties to energy that we expect to post above-average profit gains. This includes four of the five companies reviewed below, all of which are ranked 5 STARS by S&P analysts.

CANADIAN NATURAL RESOURCES, LTD. (CNQ). While this oil and gas producer’s Western Canadian operations remain very profitable, we also favorably regard the company’s use of these consistent cash-flow generating assets to finance the Horizon Project, an eight-year $10 billion development of its tar sands holdings. These properties are estimated to contain 6 billion barrels of oil equivalent (BOE) bitumen resources and could produce 230,000 BOE per day when completed. (5 STARS, Strong Buy)

COACH, INC. (COH). We continue to see ample opportunities for COH, as it further penetrates the estimated $4.3 billion U.S. market for luxury handbags and small leather goods, with an emphasis on frequent new product flow and new usage occasions. Meanwhile, COH’s use of limited-edition products should capture the true luxury customer while lifting overall brand positioning, in our view. (5 STARS, Strong Buy)

ELECTRONIC ARTS, INC. (ERTS). We expect this leading entertainment software maker to benefit significantly from the next generation of hardware consoles, the recently launched Microsoft X-Box 360, and Sony’s PlayStation 3, due out in 2006. We also feel that ERTS has the strongest library in the industry and should continue to benefit from a growing installed base of current generation hardware consoles and new handheld gaming platforms Nintendo DS and Sony PSP. (5 STARS, Strong Buy)

MANITOWOC CO., INC. (MTW). S&P has a very positive outlook for this diversified industrial company over the next few years. We believe its principal business, domestic cranes, is in the early stage of what will likely be a multiyear recovery, following several years of weakness in that market. Based on this view and valuation considerations, we regard the shares as attractive. (5 STARS, Strong Buy)

MENTOR CORP. (MNT). The company develops, manufactures, and markets a broad range of products for plastic, reconstructive, and general surgery, as well as urology. In our opinion, MNT should receive FDA marketing approval for its silicone gel-filled breast implants by early 2006, which we believe will generate significant sales and earnings in fiscal 2007 (ending March). (5 STARS, Strong Buy)

 

[Skip]

Just Following the trends.

Hi Skip,

Initially it was euphoric over the FOMC talk to lessen rate increases. However, its stayed several days with advances. It could be the real thing. If Monday looks good. I'll go for it!

Rgds Spaf

Spaf,
After a big increase in sp500 Tuesday and it held up the rest of week and even added to it... Pretty strong I say. . We will see . Just following the trend until it goes south. neither bullish or bearish ! just following the markets.
MACD just going positive so we have some room to the upside yet..
Skip

 

[The_Technician]

Time for a stronger dollar....

I have been watching out for a stronger dollar, it could just be days away........it would give a the I fund a jolt for a moment.....also looking for a softening ease in stock funds over the next several weeks ahead....it remains to be seen though....

 

[ATCJeff]

Dow 11,000

DOW 11,000 and climbing. Now if we can just close above 11K.

Jeff

 

[Spaf]

The Market and TSP Interfund transfers

The IFT delay is like slow motion high diving.

You start the plunge with a pool full of water. But, by the time you get there only a inch of water remains.

When in the hospital, TV news says they are re-filling the pool.

Spaf

 

[steelshark]

Spaf,

That's the funniest thing I've ever heard! So true!

...

 

[Cortez]

11,000 is selling zone not entry point

5 year chart of DOW shows repeat failure around the 11,000 mark. Be wary of the scam artists on CNBC. Time to be thinking exit not entry. Currently 60C 40S but watching for a top to develop this week.

http://www.billcara.com/archives/2006/01/dow_11000_does.html#more

Props on the high diving comparison to the TSP delay. So true, especially in a fast moving market.

 

[vectorman]

If you want to see the importance of the 11,000 mark, look at the 10 year chart. Look how many times 11,000 came into play, 1999 to 2001.
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=DJIA , use 1 decade time frame.
Interesting the number of people who are now moving out of G or taking more out of G to put into the market. The S fund has been positive 5 days in a row, what are the odds of 6. If this isn't the real thing, talk about buying near the very top. Tom's survey so far - 60% Bullish, 19% Bearish. Is this the movement of the herd? Gold at $550.50, highest in 25 years. Oil back up to $63.50. I hope this is the real thing.

 

[Spaf]

The Kingdom of TSP​

Daily Edition
Jan. 09, 2006
​

Yak, Doodles, Tea Leaves, and Fortunes.

Kingdom Yak.

Market Yak............ 5 good days! Horseman Earnie on the run. End of Cartel payoffs will perk up Kingdom growth.

Other Yak.............. Lube is gluttish! Horseman Krude leaves town. More lube piles and mild weather.

Doodles, and Tea Leaves.

Doodles:

S&P 500 ($SPX)
Closed at............... 1290.15, up +4.70
Money flow............ +0.033, up.
Stops.................... Alert: 1278, Trailing: 1266.
Averages............... +7.64, up. Long
Overbought/sold...... [70] 68.4 [30]

Light Crude (NYM)
Closed at............... 63.50, dn -0.71
Markers:................ <60 = ok, 60-64 = worry, >64 = critical.

Tea leaves:............ Green.

Fortunes.

Position................. 50/50

 

[Skip]

I have been watching out for a stronger dollar, it could just be days away........it would give a the I fund a jolt for a moment.....also looking for a softening ease in stock funds over the next several weeks ahead....it remains to be seen though....

If anything I would expect a softer dollar over the next 30 days... You will have ups and downs.... 84 is a good stoping point or resting place in the near term.... Im not the best on the dollar flow... but we used to have a sweet girl on here that was....missing you

Skip

 

[JOVARN]

If anything I would expect a softer dollar over the next 30 days... You will have ups and downs.... 84 is a good stoping point or resting place in the near term.... Im not the best on the dollar flow... but we used to have a sweet girl on here that was....missing you

Skip

Skip, where did she Wonder Woman off to? I know there was some bantering going on, but I didn't think she took part in that unless I wasn't paying attention. Bet ther are many who miss her contribution's to the site.
Thanks

 

[bkrownd]

DOW 11,000 and climbing. Now if we can just close above 11K.

I hope we aren't getting all pumped up for another crash. :/ Everything is going up steeply now, and that makes me worried because that's how every rollercoaster starts.

 

[ATCJeff]

Share Prices

What's up with the TSP site? It's 9:00pm eastcoast time and no update!

Jeff