Market Talk / May 7 - 13

James48843 · May 9, 2006

Remeber the robot on "Lost in Space"?

Ran around yelling "Warning, Warning. Danger Will Robinson...".

I feel a lot like that robot is following me around for the last few days. Nothing goes up that does't come down, at least eventually. And with the run in "I" fund, I thnk we e due for some kind of correction any day now.

But the momentum on this thing is HUGE, and the dollar keeps going down to compound the move.

I'm on a hair trigger looking for something to peak here, but can't see it.

SkyPilot · May 9, 2006

A "correction" by definition is a remedy for a situation, state or circumstance that is that is somehow out of balance.

At this point, there seems to be little or no evidence that the I fund's gains are ill gotten, but rather a reasonable reaction to trending conditions. So, there is no there, there... and, unless conditions change, the I fund is likely to continue to react over time in the way it has in the past few months.

As rising domestic interest rates do not seem to be having a pacifying effect, what will? If other countries begin to raise their rates now i.e., Japan, this will further effect the gravity of the falling USD.

I think we will continue to see a strong positive environment for the I fund over the weeks and months ahead (if not years).

However, this does not mean there will not be the occassional consolidation, but who can tell when, how much and for how long? If you agree with the outlook of a continuing rising I fund, then it may be riskier to jump in and out to catch dips than to stand fast.

Good luck!

Spartan · May 9, 2006

ECB will most likely raise rates in June.

"The news suggested that the BoJ's upcoming monthly report, slated for next Friday, will indicate a change in economic outlook from recovery to expansionary. This has caused some analysts to speculate that an end to the zero-interest rate policy could come as early as June." - DailyFX Research Team

Big Ben will be neutral at worst today. I dont see the dollar rebounding, and Big Ben really doesnt even want it to. The weak dollar will slow imports and excel exports. And our national deficit will shrink, not in size, but stature.

Look for China to be selling more USDs soon.

Spaf · May 10, 2006

Kingdom of TSP
Market Yak
May 9, 2006

The Internationals seem to be fairly hot as of late...:nuts:

[EFA] and [EWZ] appear to be good buys, however their relative strength indicators (rsi) are pretty well maxed out. So it's a time to maybe hold till there is a decline; correction in the internationals, maybe? If your risk is ok, jump in, if not wait for the possible correction. [EFA] has a correction range of 1.8 - 2.7 averaging -2.2. [EWZ] has a correction range of 3.1 - 5.2 averaging -4.2.

So, after the FOMC (Cartel) speech (Yak) on Wednesday, positions maybe should be re-evaluated; US stocks are doing poorly, international stocks, much better?....

To each their poison! Rgds and be careful.............

.............Spaf

Spartan · May 10, 2006

EFA mentioned in Motley Fool

http://www.fool.com/news/commentary...lnk303100&logvisit=y&npu=y&bounce=y&bounce2=y

JOVARN · May 10, 2006

I was in Port Saint Lucy Florida (PSL) on Saturday. PSL was recently listed as one of the fastest growing counties in the state of Florida. Every block has multiple homes for sale. One builder had ten spec homes on one block and he had to put them up for rent as nothing is moving.
The housing market is really bad and whats worse, many I spoke with are starting to borrow money from their TSP.
It’s a sad state of affairs; price of gas is impacting many.
If this continues the feds will have to stop raising rates sooner then later.

Griffin · May 10, 2006

JOVARN said:
I was in Port Saint Lucy Florida (PSL) on Saturday. PSL was recently listed as one of the fastest growing counties in the state of Florida. Every block has multiple homes for sale. One builder had ten spec homes on one block and he had to put them up for rent as nothing is moving.

Jovarn,
I am a little familiar with that market. The prices in central Flordia are driven by the retirements of DC-Boston corridor. Most locals can't afford the homes, but they are not the target customer - and the sellers are going to hold the prices out of reach - knowing the baby boomers are coming. Florida is the best example of the ripple effect that is going through the housing market. The large northeast metropolitan areas are overvalued - but the price of gas is going to sustain those values due to proximity to industry. The one and half hour commute is going to become a history lesson - it is financially better to dump resources into a mortgage then a gas tank - retiree's will be replaced by the echo boomers. The northeast will hold the line (maybe a couple % either way) and the south (and mountain states) will continue to see the residual growth of inflation at northeast rates. If the Fed ceases the rate hikes it will only allow this cycle to sustain. All of this is by choice and not a real pressure on the Fed. The housing market has cooled, but by no means is it going to collapse.

The_Technician · May 10, 2006

Chinese Yuan and same ole games

Yesterday I mentioned again that the Chinese do have a problem if the dollar sinks....the yuan sinks, what happens here will happen there....inflation due to currency deflation......so I would expect the Chinese economy to drop like ours....:worried: Maybe applies to some other countries as well.....

Also, after all these years watchin Greenspud apply some sort of differential equations to control the dollar and interest rates it seems quiet apparent that the very control they used have been to make a stable buck over an extended period of time. It could have ended in 2000, but I firmly believe that they haven't learned their lessons economic wise and are leading us down the same ole roads that we experienced in the past.....

We seem to be headed to higher interest rates, dull economy etc. as we did in the 40's (not sure of interest rates then), late 70's (as I mentioned yesterday)...the only thing we do have going for us is our technology and I would probably surmise that the future dull economic outlook will be shorter in time versus the past, probably 5-6 years versus 8-10 ......I really can't see how we are going to get out of this quagmire that we are cornered into .......it will take time, some good economic expansion elsewhere in newer technologies.....some things like income verses expenses, personal debt, and so forth will have to equalize for it to happen....

I would be careful of the downstroke we may get sooner or later...in the 70's the Dow dropped something like 35-47%...and someone mentioned that our currency dropped 20%...and it can happen now as well....

Of course I will be playing the funds all the way though.....just waiting for that break to get to it.....

The_Technician · May 10, 2006

The bond play

See outlook on the bonds ....

http://money.cnn.com/2006/05/09/markets/bondcenter/bond_investing/index.htm

James48843 · May 10, 2006

Dollar continues it's downward slide this morning against both the Yen and the Euro.

However, Nikkei 225 is down 1.3% right now, and FSTE 100 is flat.

Look for little change in the "I" fund today, or even slightly down, as the Nikkei's break, offset by the dollar's fall, will mean a potential slight loss today.

Again, I am looking for a jomping off point- as the runup in "I" has been too good too long.

Pigs get fat. Hogs get slaughtered. Waiting for noon today to decide what to do. May be moving into "G" just for safety. A couple more hours and I'll know.

The_Technician · May 10, 2006

James48843 said:
Dollar continues it's downward slide this morning against both the Yen and the Euro.

However, Nikkei 225 is down 1.3% right now, and FSTE 100 is flat.

Look for little change in the "I" fund today, or even slightly down, as the Nikkei's break, offset by the dollar's fall, will mean a potential slight loss today.

Again, I am looking for a jomping off point- as the runup in "I" has been too good too long.

Pigs get fat. Hogs get slaughtered. Waiting for noon today to decide what to do. May be moving into "G" just for safety. A couple more hours and I'll know.

I think its a bit of a turn coming our way after today......of course its all dependent on Fed and dollar value at this point.....but its the right time at the moment......

sugarandspice · May 10, 2006