Market Talk

[Spaf]

imported post

The Kingdom of TSP

Sunday-Weekly

Early Edition

Kingdom News, Doodles, Tea Leaves, & Yak Date: Nov. 13, 2005


Kingdom News.

Kingdom Talk:. This week could be the washboard that Grandma threw out!

Bear chasing season suspended Tues - Thurs! Warden unsure on who will be chasing who! However, pasture remains open for the bulls!

Lube at 5 month low.

Elsewhere:...... This week, likely market moving yak comes out. Busy week! Casters see both good and bad stuff. Horsemen Krude and Rats could be slowing the train. However, outlook is moderately bullish!

See Economic Calendar link:
> http://www.briefing.com/Silver/Calendars/EconomicCalendar.htm


Doodles, and Tea Leaves - Weekly, and ending.

Doodles:
S&P 500 (Index)
Closed at.................... 1234.72,up +14.58 for the week.
CMF (money flow) at...... +0.113, up +.089 for the week.
RSI (strength) at............. 63.2, up +5.3 for the week; [O.B.=70, O.S.=30].
MACD (trend)...... bullish
S-STO (signal)..... -------
P-SAR (signal)..... bullish
ROC (change)..... bullish

Light Crude (NYM)
Closed at............ 57.80, dn -3.05 for the week.

Attachment:. S&P (3mo) chart ending 11/11. Added: 20dMA, P-SAR, RSI, MACD, S-STO, and ROC.

Tea leaves:................... Green


Yak.

Remarks:................... Holding 0/100 (0-0/35-35-30).
Stops (C:S&P):............ Alert: 1223, Trailing: 1211.

Lube Markers:.............. <64 = ok, 64-69 = worry, >69 = critical.

Weekly TSP Returns:...1 Wk: G=+.01, F=+.06, C=+.12, S=+.11, I=-.03
(ending Thurs 10th) 2 Wk: G=+.01, F=-.01, C=+.34, S=+.64, I=+.31

 

[Skip]

imported post

[font="Verdana, Arial, Helvetica, sans-serif"]Up or down this week? Looks like we got our work cut out for us...
Skip


Watch 10,700[/font] [font="Verdana, Arial, Helvetica, sans-serif"]Dow sustains gains, rallies up to major 10,700 level.[/font] [font="Verdana, Arial, Helvetica, sans-serif"]
From prior commentary, "...If the Dow can continue holding above 10,600, we could see a test of the August highs at 10,720 in no time..." [/font] [font="Verdana, Arial, Helvetica, sans-serif"]The Dow continued its upside momentum today above the 10,600 level, as the index edged to within 4 points of the major 10,700 resistance level, seen in the Daily and 60 Minute Charts. The index pushed slowly higher on light volume throughout the session and eventually closed the day up by 46 points. However, the index must now contend with 10,700. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]The Daily Chart shows the Dow bounced off 10,700 many times during the summer months and this is its first trip back to this zone since early September. If the Dow can clear this hurdle, we could be on our way to a nice Christmas rally back toward the year's highs. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]However, a breakout at this point may be premature. Look for the Dow to feel out the 10,700 level, possibly forming a consolidation at around this zone before establishing direction. More likely, we could see a re-test of the 10,600 level before an actual breakout through 10,700 is seen. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]As we've mentioned before, the Dow should be considered bullish above 10,500 in a longer term sense. However, a break back below 10,650 may introduce a bit of near-term weakness. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]Short Term Dow [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]The Dow has formed a steep lower trend line beneath the lows of the today's advance, seen in the 5 Minute Chart. A break of this line at 10,680 will indicate early weakness Monday morning. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]Medium Term Dow [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]In the medium term, we are still Long the Dow from 10,600 and currently have 85 points in the position. We will hold stops at the entry in hopes that the Dow will establish itself above this zone before potentially taking out 10,700. We will want to stay Long above 10,725 and will hold off on medium term Shorts at this time. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]NASDAQ & S&P [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]The NASDAQ and S&P each held recent gains throughout the session, with the S&P actually tacking on additional points to the upside. Look for a potential continuation pattern to form to indicate continued strength. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]Summary [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]The Dow closed the day at the highs of the session after pushing toward 10,700 the entire day. The index is now holding at this level, which represents strong resistance for the past five months. Watch for a possible continuation pattern to form before a breakout attempt is seen. [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]Thanks for listening, and Good luck in your trading! [/font]
[font="Verdana, Arial, Helvetica, sans-serif"]Ed Downs
edowns@nirvsys.com [/font]

 

[Quips]

imported post

Preaching to the choir article:

http://www.nytimes.com/2005/11/13/business/yourmoney/13reti.html?pagewanted=2

Leveraged buy outs by private equity firms and later flipping 'em http://www.nytimes.com/2005/11/13/business/yourmoney/13buyout.html

 

[robo]

imported post

Skip wrote:

Up or down this week? Looks like we got our work cut out for us...

I voted down next week... I'm one of the 17% bears for next week. The market is close to rolling over and needs a rest to take us to the 1260's... We might take a shot at 1245, but some consolidation would be healthy.... Some dips will bring in new money....Some sectors and stocks are getting shorted, but not tomany investors arewilling to short the indexes at this point....I still haveplenty ofcash if we get the dips.... If not, oh well!!! That's the risk you take when your a conservative investor!!!! You don't make as much, but you don't lose as much!!!!

 

[Birchtree]

imported post

Robo,

I remember back in 3/03 when the 3,000 point Dow run began - during one of those weeks the S&P actually went up 70 points. The internals are feeling strong - to include new highs on iShares Transportation Index and NASDAQ Transportation Index. All the indexes where the McCllelan Oscillators are prevalent for both price and breadth are in up cycles and many will breech their zero lines Monday, This also includes the McCllelan Summation indexes for both volume and price. This thing is just about ready to explode from a nice strong base - remember we have been in the process of getting ready for over two years. There are record levels of short odd lot individuals out there - again it's classic. The BULL does not need the G money - he'd actually prefer to leave them behind. I think Quips (?DMA) mentioned China- thanks in large part to the pegging of the yaun to the U.S. dollar, the U.S. trade imbalance with China has swelled to over triple that of Japan. It has now soared to a record 20.1 billion. If the consumer wasn't spending that would not be the case. As the Technician would say, dump all cash immediately and buy the C fund. Really!!!

Dennis-perma bull #2

 

[Skip]

imported post

I believe the week will finish up for the week... We closed strong friday but on low volume... Monday will be a tossup.. but we have been holding on to the small gains pretty good....and basting a the top of trading range... Glad I got in Oct 20th so got some room to play.... If we break 10700 on the dow that will be a big bull sign and the bears will be running

Skip

 

[Quips]

imported post

Foreign Investors Lose Appetite for Treasuries as Deficit Rises
Nov. 14 (Bloomberg) -- The U.S. government is growing more dependent on investors from abroad just as their appetite for Treasury securities is waning.

Overseas investors, who own half of all U.S. government debt, bought 14 percent of the $79 billion in benchmark 10-year notes auctioned this year, down from 21 percent in 2004, Treasury Department data show. Bidders including foreign central banks purchased a smaller percentage of the $44 billion in three-, five- and 10-year notes the Treasury sold last week than they did a year ago.

A drop in demand may extend the slump that pushed Treasury yields to the highest this year, raising the government's borrowing costs to finance a $319 billion deficit. The U.S. will borrow a record $171 billion from January to March, about double the amount this quarter, to help pay for relief efforts after Hurricanes Katrina and Rita.

``I'd wait before buying because there is still more upside for yields,'' said Masayuki Yoshihara, a Tokyo-based investor who helps manage the equivalent of $25 billion at Sumitomo Life Insurance Co., Japan's fourth-largest life insurer. Investors ``are cautious about buying too aggressively right now with yields rising so quickly,'' he said in a Nov. 10 interview.

The yield on the benchmark 10-year note rose to 4.68 percent on Nov. 4 from 3.98 percent on Sept. 1, just after Katrina struck the Gulf Coast. The yield, which moves inversely to the note's price and is used to help determine corporate and consumer borrowing costs, ended last week at 4.57 percent.

Foreign Participation

Foreign investors bought about 21 percent of the $218 billion of two-year notes auctioned this year, down from 31 percent in 2004, according to Treasury data. They also purchased about 21 percent of the $154 billion of five-year notes sold by the Treasury, compared with 30 percent last year.

The figures don't include the results of last week's sales, which will be released in December. Indirect bidders, a larger group that includes U.S. institutional investors, foreign central banks and overseas investors, bought 34.9 percent of the debt sold. The percentage is down from 47.4 percent at the quarterly auction of three-, five-and 10-year notes a year earlier.

``Foreign buying is a very important source of demand for Treasuries and the market is concerned by evidence that it is waning,'' Joseph Di Censo, a bond strategist at Lehman Brothers Inc. in New York, said Nov. 11. ``This would obviously put upward pressure on yields. The Treasury will always be able to finance the budget deficit. The real question is at what cost.''

Foreign investors increased Treasury holdings by 9 percent this year, compared with more than 23 percent in each of the past two years. The current pace is the lowest since 2001, when net purchases rose 2.45 percent.

`Haunting' Deficit

Overseas investors owned $2.06 trillion, or half the $4.11 trillion in tradable Treasuries as of August, up from less than 40 percent three years ago and 34 percent in 2000.

Debt strategists have credited foreign investors with keeping U.S. yields in check as the budget deficit ballooned to a record $412.8 billion in fiscal 2004 ending Sept. 30 and the Federal Reserve raised interest rates 12 times. Since 2002, foreign purchases have reduced 10-year Treasury yields by 19 basis points, according to Banc of America Securities LLC. A basis point is 0.01 percentage point.

``You can't build in these constant deficits without having them come back to haunt you,'' said Richard Fisher, president of the Federal Reserve Bank of Dallas, on Nov. 3 at Harvard University in Cambridge, Massachusetts.

Japan, the largest foreign owner of Treasuries, cut its holdings of the securities this year to $684.5 billion in August from last year's peak of $699.4 billion in August, according to the latest Treasury data.

An update on international demand comes in two days with the Treasury International Capital report for September. The median forecast of three economists surveyed by Bloomberg is that net purchases of stocks, bonds and other financial assets slowed to $70 billion from $91.3 billion in August.

`Better Places'

There's little incentive to invest in U.S. debt with inflation accelerating and the Fed forecast by most economists to keep raising rates into 2006, said Don Quigley, co-manager of the $209 million Julius Baer Total Return Bond Fund in New York.

``The better places to go are overseas,'' said Quigley, who invests around the world. ``The Fed has really wanted to get ahead of inflation and stay ahead of it. You're going to see higher yields.''

Quigley's fund is up 3.1 percent over the last 12 months, the best among 23 similar funds, according to data compiled by Bloomberg. Quigley on Nov. 7 said he prefers German government debt to Treasuries even with yields on U.S. 10-year notes exceeding bunds by about the most in six years.

The median estimate of 63 economists surveyed by Bloomberg this month is for the Fed to raise its target rate to 4.75 percent by mid-2006. In June, the estimate was 4 percent.

`Good Value'

Treasury yields are the highest among the Group of Seven nations, which may help temper sales by foreign investors. The 10- year Treasury yields 105 basis points more than the German government security with a similar maturity. The difference, or spread, reached 123 basis points last month, the widest since July 1999.

``Treasuries are pretty good value,'' Douglas Roberts, who helps oversee $117 billion at Standard Life Investments Ltd. in Edinburgh, Scotland, said Nov. 9. ``I would recommend getting in at these levels.''

The rise in the U.S. dollar to a two-year high against the euro and yen may work against Treasuries, said William Prophet, an interest-rate strategist at the securities unit of UBS AG, Europe's biggest bank by assets. Gains in the currency make it more expensive for foreign investors to finance their purchases of U.S. debt.

``We have seen some Japanese accounts shunning dollar assets,'' the Stamford, Connecticut-based Prophet said Nov. 9. ``Foreign investors look at purchasing U.S. assets as two pieces: buying dollars and then buying the securities. If one of these pieces gets too rich, then the transaction becomes less attractive.''

The Fed's daily average holdings of Treasuries for foreign central banks and international accounts has climbed just 2 percent in 2005, after rising by almost 25 percent each of the last two years and 14 percent in 2002.

 

[Birchtree]

imported post

I need to stand corrected on the MCO and MCSUM references - they deal with volume and breadth - not price. Price routinely follows breadth. They are all shouting quietly that there is an impressive rally on the way. Dow 10,997 will be the first objective confirmed by further new highs in the Transports for a Dow Theory confirmation. Most TAs see this coming with enough momemtum to carry to Dow 11,722.98. I will try and remain focused on the 4 year low due in September'06 - will it be shallow or down right deep - gotta be prepared for this one.

 

[Skip]

imported post

Those 4 year forcasts always get in your way sometimes....
Of course things come about that blow those guys out of the water.... when that was made they didn't see half of the south get blown away and the billions of dollars in added sales for building companies and tech sectors also...or the rise and fall of oil prices.. We will be buzzing by early spring with alot of added sales and earning.. Of course JMHO
I trade a little shorter term than that anyway... My style is buy when they start up and sell when they start down.... Keep it simple... Sometimes I get whipsawed but thats part of the game... Get the most out of the trend that you can...and cut your loses short.

Happy Trading
Skip

 

[robo]

imported post

The RSI indicates overbought and sentiment seems to Bullish,but I have to admit the trend is up!!!!!

http://vtoreport.com/index.html

 

[Spaf]

imported post

The Kingdom of TSP

Re-post Emotions Chart

Re-post of TSPTalk Cycle of Market Emotions Chart.................Where are we at?

 

[Soldat]

imported post

We are at optimism.

 

[JOVARN]

imported post

Hope someone calls me when the curve gets between Euphoria and anxiety and then make another call when we hit depression

Thanks in advance for making the call.

LOL

Joe

 

[Mike]

imported post

I bought when I was at despondency in October.

Right now, I'm at optimism and will hit the excited stage if we hit a new high on the SPX.

 

[JOVARN]

imported post

Nice article that just touches on the US Dollar if interested. I know many are in information overload including myself.

My boss gave me the week off as I am in use or loose category. They are finishing my roof from last years Hurricane damage so I have to keep an eye on these guys.

A tip to the wise; if you are looking for a roofer, and a company called Gold Coast Roofing based out of Minnesota knocks at your door just sends them packing


http://news.yahoo.com/s/nm/20051111/bs_nm/markets_forex_dc

 

[Soldat]

imported post

JOVARN, I wont make the call but I'll make the post. Roll with me and lets make some bread.

 

[Soldat]

imported post

I have one thing to say, this market is a sleeping giant. BUYER BEWARE.

 

[robo]

imported post

The Program Trading Indicator reached a new high last week that was higher than either the one reached in July or August. .

There was a small decrease in public short selling on the NYSE, as reported in the figures released last week. However, the four-week average charted below (pink line), continued to advance following the penetration of its trendline, as the market reached its low two weeks ago. So far this new approach to the traditional short selling data is successfully identifying useful entry points following market slides.

Another reliable indicator gave a buy signal when the number of new highs as a percentage total of new highs and new lows climbed above 25% after having first dropped below. The buy signal will continue until it reaches 75% when it will turn neutral. It shows that there is still time for the market to advance.o

 

[JOVARN]

imported post

Soldat wrote:

JOVARN, I wont make the call but I'll make the post. Roll with me and lets make some bread.

Bread and Atlanta I wonder if the Atlanta bread company is traded on the exchange. I like to eat there cant be bad and a good reason to buy

 

[puertorico]

imported post

I see everybody in the forrum is hitting to G ?

Thebaby step indicator says that.....
when everybody go G the market can rally
very very green tomorrow tuesday The
bus dont like to many people in . They prefer
goeasyemty to the top... Just a contrarian view