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Market Talk / March 25th - 31st
- Thread starter Spaf
- Start date
Spaf
Honorary Hall of Fame Member
Let"s pull out the Stock Traders Almanac, and a teaspoon of salt!....
April 2, Dow up 9 of last 12. 6 straight winners 1995-2000.
April 3, Bullish.
April 4, ------
April 5, Bullish.
April 6, (market closed)
XXX
April 9, Start looking for the Dow and S&P MACD Sell signal.
April 10, -----
April 11, April is the Best Month for the Dow, Average 1.8% Since 1950.
How's that?................
April 2, Dow up 9 of last 12. 6 straight winners 1995-2000.
April 3, Bullish.
April 4, ------
April 5, Bullish.
April 6, (market closed)
XXX
April 9, Start looking for the Dow and S&P MACD Sell signal.
April 10, -----
April 11, April is the Best Month for the Dow, Average 1.8% Since 1950.
How's that?................
I think this is great information Spaf! If nothing else derails the market we could have a great rally, even if investors get too bullish and then the markets come down for a correction. I know we have to interpret this information carefully, but Monday might be good, if only because a new quarter is beginning. Inflation numbers are still high, as per the core-PCE component of the Personal Income and Spending report, as reported in Yahoo's Market Ovverview. The PCE is the Fed's favorite inflation gauge. It was up 0.3% (consensus +0.2%) which pushed the annual rate up to 2.4% from 2.2% in January. The Fed's target range for core-PCE is 1.0% to 2.0%.(PCE) are still a worry. Moreover, earnings warnings are coming soon though!
Show-me
Well-known member
http://www.briefing.com/GeneralCont...or&ArticleId=NS20070330164544AfterHoursReport
After Hours
Updated: 31-Mar-07 10:44 ET
Weekly Wrap
Last Update: 30-Mar-07 16:45 ET
The fundamentals were almost entirely bearish this week. It is no surprise that all the major indices were lower. In fact, it is a bit surprising that the sell-off was not more severe.
Oil prices were up sharply, the Fed Chairman as much as said that rate cuts are unlikely any time soon, the economic data were mixed at best, and a key inflation measure was higher than expected. There wasn't any significant corporate news to offset the bearish macro-economic issues.
The Fed Chairman's testimony before the Joint Economic Committee of Congress on Wednesday ranked as the most important event of the week. Fed Chairman Bernanke said that inflation remains the predominant concern. He made that absolutely clear.
He did not express significant concern about economic growth, and while recognizing the risk from the housing sector, he also suggested that the impact from the problems in the subprime mortgage market would be contained.
Bernanke's testimony implied that it will take a while for the current level of interest rates to bring inflation down. That means market hopes for a rate cut by the end of the summer are overly optimistic. The S&P lost 11 points on the day of his testimony.
The economic data this week brought mixed news. New home sales for February were down 3.9% despite expectations of a bounce from a sharp drop in January. Consumer confidence in March posted the first drop in five months. February durable goods new orders were up a smaller than expected 2.5% after a 9.3% plunge in January. The housing and manufacturing sectors remain drags on the economy.
More positively, initial claims for unemployment remained at low levels, reflecting a strong labor market. Fourth quarter real GDP growth was revised modestly higher to a 2.5% annual rate from 2.2%. The March Chicago PMI index jumped sharply higher to a strong 61.7 from 47.9 in February, raising hopes of a manufacturing rebound. And February personal consumption expenditures rose a stronger than expected 0.6%, showing that consumer spending remains strong.
The most important economic release, however, was the clearly bearish 0.3% increase in the February core personal consumption expenditure (PCE) price deflator.
This is the Fed's favorite inflation measure. The gain was larger than an expected 0.2%, and follows a 0.1% increase in December and a 0.2% gain in January. It raised the year-over-year increase to 2.4% from 2.2% in January. The Fed's forecast calls for this to get below 2.0% in 2008. It is going in the wrong direction.
This is just one month of data and it shouldn't be over-emphasized. If the core PCE continues at even a 0.2% rate in upcoming months, however, it will keep the Fed in an aggressive inflation fighting mood. Higher inflation is always bad for the financial markets.
Adding to inflation concerns is the fact that oil prices rose to about $66 a barrel this week from $62 last week and $57 the week before. The Iran situation was a factor, but there are concerns that oil prices will remain higher regardless of how that plays out.
The macro economic news therefore amounts to rising inflationary pressures, a tough stance from the Fed, and continued sluggish economic indicators. There isn't a lot of good news. The market could have sold off more following the solid gains last week.
The biggest corporate news this week was that Dell is delaying its 10-K report due to an ongoing investigation into its accounting, but that news didn't hit the stock market very hard since it is a company-specific issue.
The first quarter ended with the S&P nearly flat for the year. It was an up and down quarter with excessive optimism followed by excessive fears. The market has filtered through it all and has assessed that stable interest rates and significantly slower earnings growth warrant little net change.
The market is likely to remain extremely sensitive to economic releases, but an increased focus to corporate news will develop as first quarter earnings reports in mid-April approach.
After Hours
Weekly Wrap
Last Update: 30-Mar-07 16:45 ET
The fundamentals were almost entirely bearish this week. It is no surprise that all the major indices were lower. In fact, it is a bit surprising that the sell-off was not more severe.
Oil prices were up sharply, the Fed Chairman as much as said that rate cuts are unlikely any time soon, the economic data were mixed at best, and a key inflation measure was higher than expected. There wasn't any significant corporate news to offset the bearish macro-economic issues.
The Fed Chairman's testimony before the Joint Economic Committee of Congress on Wednesday ranked as the most important event of the week. Fed Chairman Bernanke said that inflation remains the predominant concern. He made that absolutely clear.
He did not express significant concern about economic growth, and while recognizing the risk from the housing sector, he also suggested that the impact from the problems in the subprime mortgage market would be contained.
Bernanke's testimony implied that it will take a while for the current level of interest rates to bring inflation down. That means market hopes for a rate cut by the end of the summer are overly optimistic. The S&P lost 11 points on the day of his testimony.
The economic data this week brought mixed news. New home sales for February were down 3.9% despite expectations of a bounce from a sharp drop in January. Consumer confidence in March posted the first drop in five months. February durable goods new orders were up a smaller than expected 2.5% after a 9.3% plunge in January. The housing and manufacturing sectors remain drags on the economy.
More positively, initial claims for unemployment remained at low levels, reflecting a strong labor market. Fourth quarter real GDP growth was revised modestly higher to a 2.5% annual rate from 2.2%. The March Chicago PMI index jumped sharply higher to a strong 61.7 from 47.9 in February, raising hopes of a manufacturing rebound. And February personal consumption expenditures rose a stronger than expected 0.6%, showing that consumer spending remains strong.
The most important economic release, however, was the clearly bearish 0.3% increase in the February core personal consumption expenditure (PCE) price deflator.
This is the Fed's favorite inflation measure. The gain was larger than an expected 0.2%, and follows a 0.1% increase in December and a 0.2% gain in January. It raised the year-over-year increase to 2.4% from 2.2% in January. The Fed's forecast calls for this to get below 2.0% in 2008. It is going in the wrong direction.
This is just one month of data and it shouldn't be over-emphasized. If the core PCE continues at even a 0.2% rate in upcoming months, however, it will keep the Fed in an aggressive inflation fighting mood. Higher inflation is always bad for the financial markets.
Adding to inflation concerns is the fact that oil prices rose to about $66 a barrel this week from $62 last week and $57 the week before. The Iran situation was a factor, but there are concerns that oil prices will remain higher regardless of how that plays out.
The macro economic news therefore amounts to rising inflationary pressures, a tough stance from the Fed, and continued sluggish economic indicators. There isn't a lot of good news. The market could have sold off more following the solid gains last week.
The biggest corporate news this week was that Dell is delaying its 10-K report due to an ongoing investigation into its accounting, but that news didn't hit the stock market very hard since it is a company-specific issue.
The first quarter ended with the S&P nearly flat for the year. It was an up and down quarter with excessive optimism followed by excessive fears. The market has filtered through it all and has assessed that stable interest rates and significantly slower earnings growth warrant little net change.
The market is likely to remain extremely sensitive to economic releases, but an increased focus to corporate news will develop as first quarter earnings reports in mid-April approach.
FogSailing
Well-known member
Thought this article was interesting. Found it at Marketwatch. But the real question is whether DOC's decision will have a major impact on Asian markets and the I fund on Monday.
http://www.marketwatch.com/news/story/us-stocks-seen-falling-coming/story
FS
http://www.marketwatch.com/news/story/us-stocks-seen-falling-coming/story
FS
nnuut
Moderator | TSP Legend
Hello FS, Your link leads to an unknown article. If you're talking about China's tariffs the link is below. This is the reason I dropped my 50% "I" fund allocation yesterday.:worried:
Norman
http://www.marketwatch.com/Default.aspx?siteid=mktw
robo
Well-known member
Saturday, March 31, 2007
On Wednesday morning, I wrote the following: ... Futures traders look for weekly S1's to get hit at some point: NQ 1769, ES 1410.75 and YM 12305. Thursday's low for NQ was 1770.25, Friday low for ES was 1418 and for YM it was 12315. Energy held up ES (SPX futures) a little more than I thought, but NQ (NDX futures) and YM (DOW futures) hit my targets.
What now? If the next move by oil is down, it could set up a monster NQ (chart) rally to channel resistance at 1840 and well into the February gap. That is the ultra rosy scenario and is dependent on bulls getting a close above 1802, 10 DMA, which has been resistance Thursday and Friday (blue line). The major obstacle, however, remains the 50 DMA, now at 1807.50. That is the moving average funds are looking at, whether COMP, DOW or SPX, but we get our heads up with futures. In fact, SPX is very close and so watch ES 1440.
The bearish scenario is an escalation with Iran, oil above 70 and a general freak-out with a visit to March lows. As traders, I want you to focus on NQ's weekly pivot at 1794.50. Forget all the noise and just let the action speak for itself. A move on volume above 1794.50 will set up an NQ break of 1802. A consistent inability of NQ to hold above 1794.50 sets up a re-test of 1775, now channel support and monthly pivot at 1776 as well as 38.2% 2007 (that is a solid confluence and can act as a magnet one more time next week). If that holds, it could be a strong buying opportunity going into earnings. If it breaks, look out below. It will be a rocky road, but until all the numbers come in, the markets could be in a range with big spikes both up and down. Having a cushion from extreme entries could be very profitable (it's always my favorite early week set-up), but for the most part stick to buying support and selling resistance. Any break of either, on volume, is to be respected. Stay disciplined, keep your emotions in check and you will be fine. Remember that this is a daytrader's market until a solid trend develops.
http://aheadofthenews.com/
On Wednesday morning, I wrote the following: ... Futures traders look for weekly S1's to get hit at some point: NQ 1769, ES 1410.75 and YM 12305. Thursday's low for NQ was 1770.25, Friday low for ES was 1418 and for YM it was 12315. Energy held up ES (SPX futures) a little more than I thought, but NQ (NDX futures) and YM (DOW futures) hit my targets.
What now? If the next move by oil is down, it could set up a monster NQ (chart) rally to channel resistance at 1840 and well into the February gap. That is the ultra rosy scenario and is dependent on bulls getting a close above 1802, 10 DMA, which has been resistance Thursday and Friday (blue line). The major obstacle, however, remains the 50 DMA, now at 1807.50. That is the moving average funds are looking at, whether COMP, DOW or SPX, but we get our heads up with futures. In fact, SPX is very close and so watch ES 1440.
The bearish scenario is an escalation with Iran, oil above 70 and a general freak-out with a visit to March lows. As traders, I want you to focus on NQ's weekly pivot at 1794.50. Forget all the noise and just let the action speak for itself. A move on volume above 1794.50 will set up an NQ break of 1802. A consistent inability of NQ to hold above 1794.50 sets up a re-test of 1775, now channel support and monthly pivot at 1776 as well as 38.2% 2007 (that is a solid confluence and can act as a magnet one more time next week). If that holds, it could be a strong buying opportunity going into earnings. If it breaks, look out below. It will be a rocky road, but until all the numbers come in, the markets could be in a range with big spikes both up and down. Having a cushion from extreme entries could be very profitable (it's always my favorite early week set-up), but for the most part stick to buying support and selling resistance. Any break of either, on volume, is to be respected. Stay disciplined, keep your emotions in check and you will be fine. Remember that this is a daytrader's market until a solid trend develops.
http://aheadofthenews.com/
Good article Robo. I need help, however, in locating the symbol for the NQ chart in Stockcharts.com. But it is referring to the futures. Spaf, it looks like the symbol could be the $NDX for the Nasdaq 100 Index. But it is referring to the futures. Is there a chart for the futures?
Spaf
Honorary Hall of Fame Member
?? Check out www.stockcharts.com scroll down Tools and Charts, go PerfCharts.
FogSailing
Well-known member
Hi Nnutts:
It was the China artice,guess I copied it incorrectly. I'm hoping a few days of no activity will give this issue some time to cool down. Otherwise, ouch!
FS
It was the China artice,guess I copied it incorrectly. I'm hoping a few days of no activity will give this issue some time to cool down. Otherwise, ouch!
FS
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