Market Talk / May 21 - 27

[Spaf]

The Kingdom of TSP
Sunday-Weekly
Early Edition
May 21, 2006​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak.............................Decline halts! Other oscillators and %B [$SMP] showed a possible bottom bounce; the closing candlestick for last Friday [$SMP] indicated indecision, as worries over rates and a economic slowdown persisted.
Other Yak...............................Lube slips below 70.
Jester Yak..............................Market searches for lost momentum.

Doodles:
Socks [$SPX] Closed at.............1,267.03, dn -24.21, for the week.
Volume (CMF) (money flow)........-0.063, increasing.
Averages (MACD) (trend)...........-7.297, decreasing.
Momentum (S-STO) (signal)........06.81, decreasing.
Strength (RSI) Overbought/sold...[70] 33.02 [30]

Lube (NYM) Closed at................69.25, dn -2.79, for the week.
Oil Markers..............................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Charts & Stuff..........................Red -> Yellow?.

Tin Box:
Position..................................70% socks.
Stops [$SPX]...........................Alert: NA. Trail: NA.

TSP (week ending)......G=11.36..F=10.60..C=13.85..S=17.11..I=19.57
....(1 week past)........G=11.35..F=10.53..C=14.11..S=17.59..I=20.54
....(2 week past)........G=11.34..F=10.57..C=14.48..S=18.24..I=20.75
....(3 week past)........G=11.33..F=10.59..C=14.31..S=17.91..I=20.17
....(4 week past)........G=11.32..F=10.58..C=14.31..S=18.02..I=20.04

 

[James48843]

Pretty NASTY looking chart.

That MACD looks like we might even have more downside in the future, doesn't it? Might even reach down to that 1253 mark of february.

But then again, maybe not- maybe this is the bottom on the next cycle up....

 

[davtrader]

Only thing positive on that chart is the wick on the bottom of that last candle.

 

[JOVARN]

GOOD NEWS
Then on Friday, the department releases data on personal income and spending for April. Income is projected to rise by 0.8 percent after a 0.5 percent increase in March; economists predict spending will grow by 0.7 percent, slightly higher than the 0.6 percent gain the previous month.

The consumer picture could be brightened further by the University of Michigan's consumer-sentiment index on Friday. The consumer-confidence measure is seen inching up 0.5 points to 79.5 for May following two months of declines.

GOOD NEWS/BAD NEWS
"We've had a very abrupt correction, down to an area that provided support for the market in February. You can expect a bounce here," Koesterich said. But, "if you get a modest bounce next week on low volume, you really can't attribute much to it."

BAD NEWS

He also noted that low trading volume throughout the recent sell off "calls into question whether this is the ultimate bottom or not."

http://biz.yahoo.com/ap/060521/wall_street_week_ahead.html?.v=2

 

[Spaf]

The last candle shows some indecision. The %Bollinger on the S&P 500 and the NYSE McClellan oscillator shows a snap back up from the lows. Could be early. I would like to see the MSCD and histogram give a backup signal.

I think it might be played like a breakout, that is to go in on the first higher low. However, that might be rally day?!

Rgds, and be careful!.......... ..............Spaf

 

[Wimpy]

Recipe for a Monetary Crisis:

• Dollar losing its luster and status as a world reserve currency.
• Oil on the rise.
• Ongoing conflict and instability in oil rich nations.
• Evidence of a real estate bubble becoming more apparent day by day.
• Home equity serving as the foundation for consumer spending.
• Trading alliances forming between resource rich nations and those the U.S. has dissed. The Cold War is BACK!
• Triple deficits out of control!
• The FED…damned if they do (raise rates) and damned if they don’t.
• The dollar’s destiny is in the hands of foreigners…some of them friendly…many of ‘em not.
• Few of our remaining manufacturing companies being solvent.
• Company pensions and healthcare benefits are marked ‘account overdrawn’.
• Enron style accounting practices being utilized by government statisticians to hide the realities of inflation (skewing CPI and hiding of M3). Same tactic the U.S.S.R. used before its collapse.
• Protectionism becoming the new mantra of the economically ‘afflicted’ and their political lackeys.
• Negative savings rate and lack of financial elasticity to absorb economic and geo-political shocks.

Many of the above factors are currently converging, but few have connected the significance of this convergence. The significance of this convergence will become apparent as all these factors intensify and continue to converge in the next few months.

The price of gold is the canary in the mine pointing out the hazards on the horizon. I believe the price of gold will touch $850 before the end of July and will be $1200 before the year ends…possibly much higher.

The inverse of the ‘wealth effect’ will make itself very apparent the latter part of 2006 and throughout 2007-2008. The rebalancing of the deficits and wealth transfer will continue through 2012-2013 with most simply putting on their victim faces and accepting that they will get by on less.

I’m contributing only enough to TSP to get matching funds. I’m 100% I-Fund as I feel the dollar is doomed and I-Fund component countries will continue to be less dependent on a U.S. economic engine running on borrowed time. I'm hedging all paper tigers with gold and investing a bit more to make for a comfortable retirement...in 2007 or 2008.

 

[JOVARN]

This will also support Wimpys take on things
click like to read the entire story

NICE READ: http://www.atimes.com/atimes/Global_Economy/HE20Dj01.html

Global economy headed for danger
By John Berthelsen

HONG KONG - The precipitous falls in equities markets across the world this week are raising concerns whether, after years of central-banker complacency, the global economy could be headed for a real crisis. They could be simply hiccups, but if they are, they are vicious ones. The entire year's gains in almost every world equities market have been erased in less than a week.

On Wednesday, the London market registered its biggest one-day percentage loss in three years; Germany's DAX index fell 3.4%; France's CA lost 3.2%; the Dow Jones Industrial Average fell 1.8%; the Nasdaq Composite fell 1.5%; and the broader Standard & Poor's 500 sank 1.7%. Compounding the gloom, prices for US Treasuries fell along with stocks, with yield on the benchmark 10-year note rising to 5.15%. Bond prices and yields move in

At issue are fears that while the world's biggest central banks - the US Federal Reserve Bank, the Bank of Japan and the European Central Bank - have been watching out for interest rates and money growth, they have been ignoring, or at least been complacent about, the rapid proliferation of derivatives and the soaring price of gold and other commodities such as oil and copper.

Geoffrey Barker, economist and macro-fund manager at Ballingal Investment Advisors in Hong Kong, says central banks have forgotten the lessons of the early 1980s, when Fed chairman Paul Volcker applied historic and painful brakes to inflation, driving up interest rates to the point where US five-year T-bills were commanding rates as high as 20% annually.
But raising interest rates in the United States would have several consequences, none of them appetizing. At a time when the US - and world markets - are seemingly welcoming a cheaper dollar to try to control the country's huge and growing current-account deficit, a rise in interest rates means a flood of new money into US Treasuries to take advantage of the higher rates and adds to the deficit.

 

[Dave M]

Just watch the price of copper. Simple. It is used everywhere for everything. D

 

[James48843]

Nikkei 225 stronger on open.

Dollar stronger too.

Be careful

Dead cat "I"?

 

[Wimpy]

Dead cat "I"?

No, Dead cat 'dollar'.

 

[Rod]

Nikkei 225 stronger on open.

Dollar stronger too.

Be careful

Dead cat "I"?

Dunno... it's now down around 100 with a couple more hours to go.

 

[Fivetears]

NIKKEI Down -78.98 @ post

 

[biggdog1]

It has fell over 100+ points and the $$$ index is up +.32 as of 01:35. It does not bode well for the I-Fund today. Glad I'm out !!!

 

[Rod]

NIKKEI Down -78.98 @ post

It's toast. Lost 1.84%.

 

[biggdog1]

NEWS FLASH 03:15 !!! Nicky down 297+, Footsie down 70+. Run away !!! Run away !!!:nuts: :nuts: :nuts:

 

[James48843]

You go to bed thinking that you are crusing along fine, and gaining altitude again.

You wake up to find you are in an inverted flat spin- no, a death spiral, and the ground it getting a lot closer....

LONDON May 22 (Reuters) - Tumbling prices for copper, gold oil and other commodities rattled global financial markets on Monday, sending equity indexes to their lowest levels in months and boosting safe-haven government bonds.

The dollar rallied, rising more than 1 yen against the Japanese currency, as investors switched from riskier assets such as stocks and commodities into cash.

GLOBAL MARKETS-Commodities tumble rocks stocks, bonds rally
UPDATE 6-Gold, silver tumble on dollar-related selling
Attention was focused on metals markets with spot gold <XAU=> crashing as much as $20 an ounce to around $639 an ounce as the dollar firmed and funds booked profits from gold's spectacular rally over the past year.

Three-month copper <MCU3> extended Friday's 6.7 percent fall with another 3 percent decline.

Sometimes it's better to hit the alarm clock snooze button, roll over, and go back to sleep....

 

[Show-me]

Bad Monday. Stay in bed.

Wall Street stares down a selloff

May 22: 6:32a

U.S. stocks looked set for a major selloff Monday after overseas indexes plummeted on continued fears of rising inflation and slowing economic growth. (more)

http://money.cnn.com/2006/05/22/markets/stockswatch/index.htm

 

[Wizard]

It's toast. Lost 1.84%.

Hong Kong down over 3%. :blink:

Chararistic of a bear market is the market opens up great and sucks in the dumb money on the "this is the start of the rally do not want to miss any profits hype" then the smart money sells it off.

As long as the buy on dippers continue to "do not want to miss profits" this will be the action - whipsaw. Dumb money "buys the dip" and smart money "saws them off".

 

[Show-me]

Stealth Inflation

CNBC did an excellent piece on “STEALTH INFLATION”. Grocery producers are making their products smaller while keeping the price exactly the same so that it doesn't look like inflation is showing up in their market. Examples: Mayo went for 32 oz to 30, Kingsford Charcoal 20 lbs to 18 lbs, chips 5 oz bag to 4.5 oz bag, and the price remained the same for each item.:worried:

 

[Wizard]

Re: Stealth Inflation

CNBC did an excellent piece on “STEALTH INFLATION”.

The big reason inflation is "falling" is because of computers and TVs. They have a very high weighting in the inflation index. You may even hear the Fed Heads talk about cheaper computers. Bob Brinker certainly does. What happened is it got to the point that everyone that was going to buy a computer and TV did, so the prices had to fall to get product off the shelves.

Yes, computers and TVs prices have fallen but who buys them every week like groceries?

Anyone that bought a computer before now overpaid big time. It is amazing how the prices have dropped - however it should not have the same weighting as things people need everyday. Not like people run out everytime a computer system falls to buy a new one.

Inflation is going to eat us alive but the weightings by BLS make it seem like inflation is falling. The reason for this is to underpay COLA increases to social security, our pay raises, etc, etc, to help the budget deficiet. Screwing people to save money in the long term never works. Rant off.