Market Talk / Jan. 8 - 14

[robo]

Would Iran do...???

Large negative impulses on the three stock funds.....large positive on the F .....so far......

Technician,

That would do!!! I have been watching that closely, I get more concerned when the saber rattling stops. The market looks good, but your concern about Iran is already being felt in oil prices... The first quarter still looks pretty good, but needs some consolidation before moving higher.

 

[robo]

Robo - you got any pretty graphs?

Quips - this massive head fake feels so good - many targets taken out.

James - sorry to see you go so light - each his own money.

Cortez - We'll meet again at the bottom - just be patient and wait for me.

Dennis - perma bull #2

Birchtree,

Hope my graph comes out, and as Bob would say, "The Market is behaving Beautifully!"

Comments from a TA and a Pretty graph:

The average signature of 2000 stocks is clearly starting to lag as the S&P 500 continues to make gains. This is inevitable since the highest possible signature is 1000, and it is most unlikely that enough of the 2000 stocks will reach that number to move the indicator much higher than it is now. Again, I believe we are looking at a pullback any day now.

Average Signature of 2000 Stocks
Through Monday, January 9th

 

[Birchtree]

A ray of sunshine

Robo,

Thanks, just the right amount of sunshine.

Does one have to be a rock climber to traverse that rock wall of worry or can any plain wrapper investor take on the adventure? All it takes is fortitude.


The market wants to give some back today - that would be healthy - but if it decides to move ahead it's because I have my greed finger crossed.


dennid

 

[robo]

Robo,

Thanks, just the right amount of sunshine.

Does one have to be a rock climber to traverse that rock wall of worry or can any plain wrapper investor take on the adventure? All it takes is fortitude.


The market wants to give some back today - that would be healthy - but if it decides to move ahead it's because I have my greed finger crossed.


dennid

The market just shook off bad news today. It's going higher, but all good climbers need a break even if it's just a wall of worry they are climbing. GO GO Birchtree!!!!

 

[FUTURESTRADER]

Equities close at intraday high, VIX closes at intraday low....is that the 'smart money'?

 

[Birchtree]

VIX not applicapable anymore

The theory behind the VIX has apparently not been working for over a year - may have lost its' credability.I'd like to actually know the answer but I don't have time for the search at the moment. Anybody else have the time?

 

[FUTURESTRADER]

The theory behind the VIX has apparently not been working for over a year - may have lost its' credability.I'd like to actually know the answer but I don't have time for the search at the moment. Anybody else have the time?

Birch,

VIX is still very applicable intraday; very close inverse correlation with S&P, my main question, albeit rhetorical for the most part was if 'smart money' was doing the buying at the end of the day today??

 

[robo]

How a Fed halt could hurt you.

Think twice before you celebrate an end to the Federal Reserve's rate hikes. Along with a rally in some stocks, expect higher prices and mortgage rates and a weaker dollar.


http://moneycentral.msn.com/content/P138893.asp

 

[Spaf]

Daily Yak

The Kingdom of TSP​

Daily Edition
Jan. 10, 2006​

Yak, Doodles, Tea Leaves, and Fortunes.

Kingdom Yak.

Market Yak............ Market panting! Socks mixed: two red, one green.

Other Yak.............. Alcoa weighed in heavy today.

Doodles, and Tea Leaves.

Doodles:

S&P 500 ($SPX)
Closed at.............. 1289.69, dn -0.46
Money flow............ +0.078, up.
Stops................... Alert: 1278, Trailing: 1266.
Averages............... +8.56, up. Long
Overbought/sold..... [70] 67.9 [30]

Light Crude (NYM)
Closed at.............. 63.37, dn -0.13
Markers:............... <60 = ok, 60-64 = worry, >64 = critical.

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

Fortunes.

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

 

[Greg]

Jan. 10, 2006
Tea leaves:........... Green.

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

Why are you bearish now?

 

[Skip]

Consolidating..

From OT

Consolidating..
Dow consolidates at key 11,000 level, reloads for next big move.

From prior commentary, "...since the index has covered so much ground in short time, the Dow is likely to hold at the current highs, possibly forming a continuation pattern before new highs are seen...”

The Dow opened the session with a moderate decline to begin the session this morning, but the drop served as the framework for what would become a clear consolidation at the highs of the recent advance, seen in the 15 and 60 Minute Charts. The index traded back and forth throughout the session and ended the day flat, but was able to form a nice consolidation around the key 11,000 level, which could eventually force new highs out of the market.

The Daily and 60 Minute Charts show the consolidation has formed above key resistance at 10,960 and the Dow was able to close above 11,000 for the second straight session. Both of these factors point to a healthy market. Watch for an upside break through the top of the consolidation at 11,025 for continued upside movement tomorrow.

Otherwise, a violation through the bottom of the range at 10,950 will indicate a further retracement ahead of the next move.

Short Term Dow

The Dow closed the day beneath the intraday high of 11,020, seen in the 5 Minute Chart. This level has stood for two consecutive days and will be the primary level to watch tomorrow morning.

Medium Term Dow

In the medium term, the Dow barely touched our stop at 10,950 today, causing us to close the trade with a gain of 175 points. We will watch to watch 11,025 for Longs, and 10,950 for Shorts tomorrow; using 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P traded sideways throughout the session to form clear consolidations at the highs. Look for continued range movement until a solid breakout is seen.

Summary

The Dow closed the day virtually flat today, as the index basically traded sideways throughout the session. The index has formed a key consolidation above resistance and around the 11,000 level, which implies continued strength. A breakout from this pattern should yield key movement.

Thanks for listening, and Good luck in your trading!

Ed Downs
edowns@nirvsys.com

with assistance from..
Frank Ochoa, Sr. Market Analyst
fochoa@nirvsys.com

 

[James48843]

The Bear in the room

Don't ignore the bear in the room:

Oil prices are on their way back north, trade is worse than ever, with China making new records each quarter.
===============
China Says Trade Surplus Triples to $101.9B in 2005, More Than Triple $32B Gap From Year Ago

SHANGHAI, China (AP) -- China's trade surplus surged to $101.9 billion in 2005, more than triple the $32 billion gap recorded the year before, according to customs figures released Wednesday.

Exports rose 28.4 percent year-on-year in 2005 to $762 billion, while imports rose 17.6 percent to $660 billion, the General Administration of Customs said in a report posted on its Web site.

With total global trade of $1.42 trillion, China is now the world's third-biggest trading nation, the report said. China announced earlier that it had overtaken Japan in terms of merchandise trade and remained behind the United States and Germany.
=========================


The market is about to get hit with a dose of reality as the price of oil goes up, corporate lower profits hit the skids, and China puts more Americans out of work.

My guess is that we are in for a bad next month or two while the market begins to digest the facts, and the Santa rally is over.

 

[Wizard]

Another DOW stock missed earnings:

7:06am 01/11/06
DuPont warns of earnings shortfall (DD) By Tomi Kilgore
NEW YORK (MarketWatch) -- DuPont (DD) warned that fourth-quarter earnings would fall short of expectations due to operation disruptions from hurricane's Katrina and Rita, as well as weaker-than-anticipated performances in its crop protection chemical, performance coatings and surfaces businesses. The chemical company now expects to earn 10 cents a share vs. the company's prior forecast of 20 to 25 cents a share. The company said it expects the tax rate for 2005 will be lower than previously estimated. The stock, a component of the Dow industrials, closed Tuesday down 12 cents at $42.55.

0 for 2 so far. Alcoa and Dupont. It is not a good sign when the true industrial stocks miss their earnings and miss them so bad.

 

[Quips]

The Fed

I mentioned Bernanke and the Fed since the Fed usually has a tendency to over do its rate increases. Bernanke should refrain from the projected 4.75% level. It usually takes some time for rate increases to filter into the economy and present hikes should be enough to deter inflation without squeezing those who are over extended that much via adjustable rate mortgages and credit cards and refis/home equity loans.

I would say he needs to put his signature on Fed/Greenspan policy from the get go.

 

[Wizard]

4.75% still is a very low fed fund rate.

If the fed fund rate is held at only 4.75% that would allow housing speculation to continue.

This would also make the U.S. dollar unattractive to foreign investors who in turn will not want to buy our new debt anymore and probably slowly get out of their current U.S. debt holdings and move to a country with a higher return/yield.

Emergency rates are 3% or lower. Neutral is around 6%.

The fed stopping is really not a good thing longer term for the economy.

 

[mayday]

Fed has to raise the rate

Im with you on that wisard. If the fed stopped its rate increases the euro would look more attractive especially if Europe starts raising their rates which I believe they will start to do soon.

 

[The_Technician]

I agree

If we get the end of rate increases, that leaves room for foreign currencies to rise in value to the dollar.....there is an increase in M3 money supply, the dollar is cheap and it takes more to purchase an item.....(I've mentioned this before)......only thing is personal income (fixed) hasn't risen given the effect of lower personal income ......I fully expect this to continue and the dollar to eventually go down some more in the future..... in other words, our economy is toast.....if you got something.... keep it, because later on, its going to cost even more.....just look at locally built autos of late....

heard the Chinese are importing autos next year....new car...$10,000 or less.....that will cut the legs right out from under our high labor costs in the auto industry....reality is fixing to bite a big one here in the US.....

....invest your money in Yuans or other curriencies.......or some commodity.....its going to go up some more....

You can thank your Congressman for all of this economic instability of ours.......CAFTA, NAFTA....one way Global trade......yeah, we're toast.....if it don't change

 

[robo]

Market looks good at the open!!! Still in the S Fund trade and watching the I and C funds. I thought we might get some consolidation Thursday and Friday, but it looks like 1300. It could still happen, but this market justs shakes off bad news. THE TREND IS YOUR FRIEND! All dips are bought up quickly, the Boys are going to take it up some more. GO GO Birchtree!!!!!

 

[Soldat]

Raising the rates too much will slow the economy. Raising them not enough will weaken the dollar in the long run. I expect to see the dollar trade at 105 yen and .792 Euros before EOY. That means the ETF's could see huge gains, upwards of 30% this year. Time will tell, everyone else will sell.

 

[bkrownd]

4.75% still is a very low fed fund rate.

If the fed fund rate is held at only 4.75% that would allow housing speculation to continue.

5% or bust! Do not want overheating economy. Woooah nellie! Slow and steady, girl...