Market Talk / Mar 5 -11, 2006

[Spaf]

The Kingdom of TSP
Sunday Edition
Mar. 5, 2006​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak.............................Choppy! Still in trading range* of about 1300-1250 [$SPX].
Other Yak...............................Lube on a steady crawl up.

Doodles:
Socks [$SPX] Closed at.............1287.23, dn -2.20, for the week.
Volume (CMF) (money flow)........+0.166, increasing.
Averages (MACD) (trend)...........+4.78, decreasing.
Momentum (S-STO) (signal)........79.66, increasing.
Strength (RSI) Overbought/sold...[70] 54.38 [30]

Lube (NYM) Closed at................63.67, up +0.76, for the week.
Oil Markers..............................<64= ok, 64-69= worry, >69= panic.

Tea Leaves:
Charts & Stuff..........................Yellow*.
Attachment.............................S&P chart.


Tin Box:
Position..................................100%G
Stops [$SPX]...........................Alert: NA, Trail: NA

TSP (week ending)......G=11.24..F=10.65..C=14.02..S=17.36..I=18.56
....(1 week past)........G=11.23..F=10.69..C=14.04..S=17.31..I=18.60
....(2 week past)........G=11.22..F=10.69..C=14.01..S=17.18..I=18.29

 

[Wizard]

From Birchy's post last week:

"That darn A/D line is not diverting, and it's very rare the price will top without A/D divergence."

the advancers begin to lag and the decliners begin to expand

http://www.safehaven.com/article-4716.htm

 

[Birchtree]

Not the DJIA brother - put something behind it

The NYAD line went to new all-time highs last week - if one looks at a graph of the NYSE cumulative composite advance/decline line for 2005/2006, there is no distributional top forming yet, the trend line indicates to me that breadth is leading price. The DJIA is too narrow a grouping. The A/D line is not diverting, and it's very rare that price will top without A/D divergence. Bottoms above bottoms continue to control the pattern of NYSE breadth MCO and the NYSE MCSUM continues to chop around - no real damage noted last week. Even the NASDAQ is showing some spunk - everything is turning out bullish - the DJIA will most likely penetrate its previous recovery high this week - then on to the new all-time high above 11,722.98 placed on Jan 14, 2000. This has been a correction for the month of February and not the start of money flow leaving the market on a trending basis. Keep your bear paws pressing on the Dow Transports and watch the explosion upward - there is alot under the radar that is positive.

Dennis - permabull #1 by default

 

[Wizard]

There is no guarantee that there will be a recession in 2006, but if 10Y-3M-YD reaches -0.25% over the next two months the odds will be overwhelming.

http://www.safehaven.com/article-4720.htm

 

[Wizard]

Lehman Brothers Inc. economists raised their forecast for how high the Federal Reserve will increase its interest-rate target this year to 5.5 percent, according to a research note today.

http://www.bloomberg.com/apps/news?pid=10000103&sid=a25chRWlZOJA&refer=us

 

[Birchtree]

So what to do?

Wizard,
Do we hide in the G fund like the choir boys? I would be more concerned about the possible damage resulting from the nesting of the 4-year cycle low. Now if you want to make me nervous that would do it. Presently with our current market character this is not what we would be seeing moving into the nesting of the 4 year cycle bottom. The 4-year cycle bottom will more than likely take place at higher price levels than where we are at the current time. With recent new price pattern breakouts all over the place my gut feeling is the 4-year cycle came and went at the end of October 05. But I'll have to hedge that one. I even think the AMEX composite placed a new all-time high Friday due to energy weight. This is fun - bring on the bear paws. They just refuse to recognize the prevailing trend - and hell even I could be wrong and vulnerable to a blind side - but I'm in to win and will keep my money working. I realize that at 40,000 shares of the G fund at a penny a pop is well you know, ok money. But I'm here to get more silver and not copper - now that silver just put in a ten year high.

 

[Wizard]

Wizard,
Do we hide in the G fund like the choir boys?

I know what that candle meant in March 2000 and I know what it means March 2006. Do you?

http://stockcharts.com/h-sc/ui?s=spx

And I am the one with the bad rep.

 

[Birchtree]

Please educate me

Wizard,

I'm hear to learn so please take some time and educate me in the intricacy of the candles - it would be appreciated. Thanks for your time in advance.

Dennis

 

[Wizard]

Wizard,

I'm hear to learn so please take some time and educate me in the intricacy of the candles - it would be appreciated. Thanks for your time in advance.

Dennis

I rather beat my head against a wall. It would be better use of my time.

 

[SkyPilot]

Wiz,

Don't worry about it...

 

[Birchtree]

Which is it - nemesis or nematode?

Wizard,

We seem to be getting a little ...... today. I wouldn't want you to bruise your head. Why don't you post my picture like you did last year - so others will see who I am? And I'll start arranging you another golden praise party. This could be a real social event - but you sold both your houses, right? Is it really true you've been predicting disaster since the start of 2004 - you are bound to hit one sooner or later. Keep the faith with the G fund. Take care.

Dennis

 

[Spaf]

Candles

Candles anyone!

http://www.incrediblecharts.com/technical/candlesticks.htm

 

[Birchtree]

Yes, I'll take some candles

Spaf,

Thanks for the site - I'll study up on candles and self educate myself so I can be as quick as some more fortuitous individuals claim they are. What a great country - now if I could just get off my couch. Enjoy the lake place - don't be surprised if the Bigdog1 drops in. Talking about dogs - I saw the movie 8 Below last night and it was certainly a feel good cinema. Take care.

 

[Birchtree]

Alright-deleted again

Now that was a totally politically correct term - maybe I should have said testy instead. Thanks for being vigilent - I promise to stay out of trouble.

 

[ATCJeff]

Complacent? Fasten your seatbelts.

Tom wrote 3/6/2006.......

That’s all for today. Currently 100% G. Thanks for reading. See you tomorrow.



Tom,

Pretty sure you are 35% S fund????????????

Jeff

 

[Wizard]

10:00 U.S. Jan. durable orders revised down 9.9% vs 10.2% prev
10:00 U.S. Jan. factory orders biggest drop since July 2000

 

[Wizard]

March 6 (Bloomberg) -- Contracts to purchase previously owned U.S. homes fell for a fifth straight month as higher prices and mortgage rates discouraged buyers.

http://www.bloomberg.com/apps/news?pid=10000103&sid=aDNTB2GR67Jg&refer=us

You think?

 

[teknobucks]

Stock Buybacks At Record Highs; Firms Actually Reducing 'Float'
BY REINHARDT KRAUSE

INVESTOR'S BUSINESS DAILY

Posted 2/27/2006

Flush with cash, many firms are deciding the best thing to do with it is repurchase their own shares.

S&P 500 companies spent more than $325 billion on their own shares in 2005. That's a record and a 64% jump from 2004.

And 2006 got off to a strong start, says researcher TrimTabs. In the first six weeks of the year, 128 companies in the big-cap Russell 1000 index announced buybacks worth about $83 billion, TrimTabs says.


"In 2006, we think companies will continue at this record pace," said Howard Silverblatt, equity analyst at Standard & Poor's. He expects S&P 500 buybacks to again reach $325 billion or more.

In theory, buybacks boost earnings per share by reducing stock outstanding.

In practice, companies, especially tech firms, often use buybacks to offset stock options and grants.

But buybacks increasingly are actually reducing the float. The net shares outstanding of companies in the Russell 1000 fell 2% last year, says Charles Biderman, chief executive of TrimTabs.

"That's a huge amount of float shrinkage," he said.

 

[Birchtree]

Revision?

The decline in durables to 9.9 percent was revised up from a previously reported 10.2 percent drop. Factory orders for December were revised up to a 1.6% rise from an initially reported 1.1% gain. When transportation orders were stripped out, factory orders were up 1.6% in January, the third consecutive monthly increase. Meanwhile, when defense orders were omitted, factory orders fell 3.3 percent, the first decline in four months and the biggest slide since September 2001. Fairly mixed I'd say.

Money.cnn.com

 

[teknobucks]

March 6 (Bloomberg) -- Contracts to purchase previously owned U.S. homes fell for a fifth straight month as higher prices and mortgage rates discouraged buyers.

http://www.bloomberg.com/apps/news?pid=10000103&sid=aDNTB2GR67Jg&refer=us

You think?

wizard

one thing to factor in on real estate....
unlike stox housing is very regional, certain pockets may in fact continue to appreciate while overall nationwide median prices ebb. some areas are in fact not driven by the rising rates at all....many beach front second homes are cash buys and self insured now in florida.
**prices still firm to up with an extra week on two of market time here:
http://www.tayloredwards.com
fwiw: insurance on a "seasonal home" on the water in a hurricane zone can exceed 15-20k per year...more often that not we must go to the state to be underwritten since most of the major carriers have pulled out of this market.

great tax value tool:
runs about 65% of sales price in my area....
http://www.zillow.com