Market Talk / Oct. 29 - Nov. 4

[Spaf]

The Kingdom of TSP
Sunday-Weekly
Early Edition
October 29, 2006 ​

Yak, Doodles & Tea Leaves

Kingdom Yak:
Pro-Yak....................................Socks higher for the week, but slipped on Friday.

Con-Yak...................................Profit taking or a pull back?

Jester-Yak................................We need to wash the socks?

Doodles:
Socks [$SPX] Closed at..............1377.34, up +8.74 for the week!
Stops [$SPX]............................Alert (-1%): 1376. Trail (-2%): 1363.
Trend (MACD-Hist).....................decreasing at -0.039.
Overbought/Sold (S-STO)...........[80] 89.78 [20] decreasing

Lube (NYM) Closed at..................60.75, up +1.43 for the week.
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Yakndoodles..............................Yellow.

TSP (week ending)......G=11.62..F=11.04..C=15.18..S=18.08..I=21.01
....(1 week past)........G=11.60..F=10.97..C=15.08..S=17.90..I=20.73
....(2 week past)........G=11.59..F=10.94..C=15.04..S=17.93..I=20.44
....(3 week past)........G=11.58..F=10.98..C=14.86..S=17.48..I=20.28
....(4 week past)........G=11.57..F=11.00..C=14.70..S=17.24..I=20.15

Le Chart​

Chart courtesy of www.stockcharts.com​

 

[robo]

Some Market comments Bullish and Bearish:



We need to keep a eye on small caps this week they could be giving us a warning.

Will the dip buyers show up early next week again, or will the Bears try and take it down some more?

Is there any Bears left and do they have any money left?

Maybe the Bulls are getting low on cash?

We could see some window dressing, does that include more selling or more buying? Will the money flow continue to tick up? It slowed Friday.

Seasonally, an excellent time to be in the Market! High odds of gains, but snake eyes can always come up.

Is Good News, No News, and Bad News still being bought? Maybe things have changed? Keep your finger on the mouse button this week.

The trend is up till it's not.

All noise for longer-term investors. Enjoy the ride!

Keep your eye on key support levels NDX drop and hold below 1700 and the S&P 1360.

The economy is slowing down, and possibly headed for a recession. Small caps get hurt quite a bit in that type of environment. One look at the Russell 2000 futures (ER or MR), and you can see the pressures building as it is the only index with a bearish ascending wedge about to breakdown. It also closed below its 10 DMA, again, the only one to do so. Friday's low was critical support, if we fall below those levels, we are out of the wedge and headed for the 755 level. Watch 768 support on Monday and 10 DMA at 770.80.
http://aheadofthenewsblog.blogspot.com/2006/10/economy-is-slowing-down-and-possibly.html


Plenty of market movers on the Economic Calander this week.

http://online.barrons.com/public/page/barrons_econoday.html

 

[robo]

Sunday, October 29, 2006

Economy in Free-Fall
The US Government tried its best to spin it, but the handwriting is on the wall. The US economy is not heading for a "soft landing" -- it's a full-out recession and it's almost here.

Commerce Secretary Carlos M. Gutierrez pointed to a "correction" in housing in rationalizing why economic growth in the US is falling back toward zero at a rapid rate. The downshift has been dramatic, with each quarter in 2006 seeing the growth rate drop by about half or more. And, as many private economists pointed out after the GDP Report was released Friday, had it not been for a statistical quirk, the growth rate would have been less than 1% in the Third Quarter. Wishful thinking by the Administration says housing is about to bounce back, but that's something that is just not going to happen. The housing market has never turned up in similar circumstances in history and it's definitely not different this time.

The stock market dipped on the news, but within the context of the major rally that has been going on for the last fifteen weeks, it was only a minor pullback. Since the lows in July, in fact, the benchmark S&P 500 Index has gained 12%, a rise of 0.8% per week. Wishful thinking is also rampant in the stock market, but it's not that unusual for a short covering rally like this to take place just before the level of economic activity peaks and rolls over into recession.

An old Wall Street adage says that the market discount a recession six months in advance, but the lessons of history disprove that myth as stocks tend to peak almost exactly at the time the growth rate reaches zero and drops below it. That hasn't happened quite yet, though, and that means the stock market probably has room to make some gains yet. That won't make the bears very happy. They have been selling rallies short and losing their shirts. In fact, much of the rally is due to bear-buying pressure, which continues to support each dip.

At some point the bears will be right. But, will they have any funds left by the time the real top in stocks comes? Someone at TradingTheCharts.com said it well: "There won't be a bear left standing at the real stock market top."

http://marketclues.blogspot.com/

 

[nnuut]

HHuumm? What to do?

Stocks: Choppy waters ahead
Sure, there's plenty of reasons to keep rallying. But a lot will depend on this week's earnings and economic numbers, since the bulls clearly are not immune to bad news.

By Alexandra Twin, CNNMoney.com senior writer
October 29 2006: 10:26 AM EST


NEW YORK (CNNMoney.com) -- As an extremely strong month draws to a close, stock investors are in a bit of a pickle. On one hand, there are many reasons to keep the rally going. On the other hand, the rally's been going so long, it might be time to step back.
http://money.cnn.com/2006/10/27/markets/sun_lookahead/index.htm?cnn=yes

 

[Birchtree]

If we get a correction - I say bring it. However a correction plays out, it is a buying opportunity. I'll be doing the DCA thingy all week in the oceanic account. Got my tugboat at $15.18 and could have paid over $15.30 - maybe next time.

As a vivid sign that lower interest rates alone will not revive the housing market; it will take a deeper production adjustment by home builders and larger price concessions before excess inventory is worked off and supply and demand come into better balance. The economy is barely into the fifth inning of the construction down-cycle. Real estate is at risk of deflating. Do I take solace in anothers problems - you bet. I don't want these frozen home owners in this market until we are much, much higher. They are now the casulties of their own greed - let them enjoy the pain of not being able to participate in this secular mega bull run. It's a classic set up. This market is way out in front of all of us because it is omnipotent and will likely do a decoupling from the domestic economy, which means an investor should be thinking about next year - not tomorrow. Tomorrow I will be the casulty run over by the bears but the blessing is DCA dividends at lower prices. Yes, by all means bring it on. Let me feel refreshed - you like that sugar?

 

[Spaf]

Markets brace for flood of economic data
Consumer confidence, leading indicators among upcoming reports​

Associated Press
October 29, 2006​

http://www.msnbc.msn.com/id/15447863/​

 

[nnuut]

Let's hear it for recession!

Slow Home Sales Could Lead to Recession


Sales of existing homes fell almost 2 percent last month and the slumping housing market has some analysts talking about a recession. Trish Regan has more details.
http://us.video.aol.com/video.index.adp?mode=2&guideContext=65.1171&pmmsid=1752736

 

[Birchtree]

I notice where 85% of the shares on the S&P 500 are above their respective 50-day moving average. Some think that is a sign of overbought - they may be correct, but to me it's a sign of the BULL. A very healthy BULL. With lots of stamina that will take us deep into Spring before any serious pain developes. Remember the June/July 2006 bottom had the worst total put/call ratio in the last 12 years. Waiting on the epicenter of wave 3 of 3.

Dennis - permabull#1

 

[coolhand]

I notice where 85% of the shares on the S&P 500 are above their respective 50-day moving average. Some think that is a sign of overbought - they may be correct, but to me it's a sign of the BULL. A very healthy BULL. With lots of stamina that will take us deep into Spring before any serious pain developes. Remember the June/July 2006 bottom had the worst total put/call ratio in the last 12 years. Waiting on the epicenter of wave 3 of 3.

Dennis - permabull#1

You're right Birch. I think this market has some real legs to it. The idea of the S&P being overbought is relative. In the ST it probably is, but beyond that it's got plently of room to move.

 

[The_Technician]

I notice where 85% of the shares on the S&P 500 are above their respective 50-day moving average. Some think that is a sign of overbought - they may be correct, but to me it's a sign of the BULL. A very healthy BULL. With lots of stamina that will take us deep into Spring before any serious pain developes. Remember the June/July 2006 bottom had the worst total put/call ratio in the last 12 years. Waiting on the epicenter of wave 3 of 3.

Dennis - permabull#1

Yeah right Birchy....the bull is getting kicked right in the side by ole Trigger, I'm riding again to round them up....today,.....economics is just a matter of how the market looks at it rather than what the true economic data tells you....and you can make some money in this BS.....lets go boy....

 

[Birchtree]

I see a counteroffensive is indicated. This market move is more than short covering and the longer this market is doubted, the longer it will continue. The individual investor in the last two weeks has started moving out of cash into U.S. stocks and has yet to switch out of overseas markets. I think there is $800 billion in short-term debt instruments. Investors seem to be coming off the sidelines and being more bullish across the board. Hang on Sloopy.

 

[The_Technician]

I see a counteroffensive is indicated. This market move is more than short covering and the longer this market is doubted, the longer it will continue. The individual investor in the last two weeks has started moving out of cash into U.S. stocks and has yet to switch out of overseas markets. I think there is $800 billion in short-term debt instruments. Investors seem to be coming off the sidelines and being more bullish across the board. Hang on Sloopy.

yeah, those are the succkers.....u know the ones left holding the bag.....u know I'm right Birchy....its a sucker play till eoy.....its just a matter of when does it start.....elections and all....

 

[James48843]

The good news-

the bloodshed today is nothing like what I feared. I thought it was going to be a bloodbath on the open. With Tokyo down 1.90% overnight, I figured the Dow was also going to tank along that size of a decline. No such fall. Only about 5 points so far. Amazing. Simply amazing.

Again, the staying power of this market is incredible. Yes, maybe a small pullback, but no big fall here.

 

[Oldcoin]

The good news-

the bloodshed today is nothing like what I feared. I thought it was going to be a bloodbath on the open. With Tokyo down 1.90% overnight, I figured the Dow was also going to tank along that size of a decline. No such fall. Only about 5 points so far. Amazing. Simply amazing.

Again, the staying power of this market is incredible. Yes, maybe a small pullback, but no big fall here.

Last market pullback started on May 8th and bottomed out on June 15th. It was about 7%. We’re still overbought and it may take some time to get the indicators back in line. I use the 20 day MA as resistance. Currently at 1364.08.

So if that holds the market may have some legs left. Birch Tree will be very Happy

 

[fedgolfer]

fast stochs are starting to show some life... hopefully today's buying signal is a continuation of the bull... don't see many clear signals before the deadline... hope its not a fake out.

 

[nnuut]

The good news-

the bloodshed today is nothing like what I feared. I thought it was going to be a bloodbath on the open. With Tokyo down 1.90% overnight, I figured the Dow was also going to tank along that size of a decline. No such fall. Only about 5 points so far. Amazing. Simply amazing.

Again, the staying power of this market is incredible. Yes, maybe a small pullback, but no big fall here.

Of course you know, it's not over until it's over?

 

[Oldcoin]

Of course you know, it's not over until it's over?

 

[Oldcoin]

Whoa! that turned out big.......sorry, guess I need to learn some more about posting a pic.

 

[Birchtree]

She looks great! Ferdinand would be pleased.

 

[nnuut]

Wow! that's a big one, it must be over?