After taking a three-day beating, US investors struck back with a vengeance, sending the Dow up more than 150 points in a broad-based rally that took all indices higher.
Dow 13,424.39 +157.66; NASDAQ 2,573.54 +32.16; S&P 500 1,507.67 +16.95; NYSE Composite 9,826.07 +105.13
Even though the volume wasn't quite as brisk as yesterday's, it's worth pointing out that money is on the move. The same stocks that were beaten down on Tuesday, Wednesday and Thursday were not bought up on Friday. Sector rotation - and migration from blue chips to techs - and repositioning is what this week was all about.
Investor confidence was buoyed this morning by news that the trade balance in April shrank to a point that we imported only $58.5 billion more than we export. Most analysts were looking for upwards of a $63 billion imbalance. While the number is still shocking, any improvement is positive for the US business and labor markets, and, to some degree, the country as a whole.
Advancing issues overwhelmed decliners by better than 2-1, and while new lows still outdid new highs (159-108), that reading is less frightening than a day ago. Understandably, stocks were moving in both directions, but there was still some leftover selling to be done on some of the dogs. What would be good to see in the high-low reading is a period of fluctuation, indicative of a market settling in, readying for another leg higher, which is undeniably in the cards.
The dollar strengthened against the Euro on the day, which was another good sign and the price of crude was drubbed back to a more realistic level, losing $2.17 to close the week at $64.76.
Once again, the metals took a beating. Gold was down a whopping $14.90 to $650.30. Silver lost 44 cents to close at $13.04. This signals defeat for the proponents of $800 gold and $20 silver. That bull has all but died a painful death.
Overall, it was a week of readjustment, albeit lower, but the markets are primed for some colossal gains in coming months.
Friday, June 8, 2007
Thursday, June 7, 2007
Stocks Rocked Again
This week is turning into one big downer for investors. The Dow is down over 400 points on the week and the other indices have experienced similar losses. What's troubling is that each day has been worse than the preceding one. If this trend continues into Friday, it could be a serious melt-down.
What has changed on Wall Street is nothing more than perception. The US economy didn't suddenly implode, only the point of view from the standpoint of institutional investors. There are two drivers currently: interest rate fears and profit taking. And while the latter is likely the main cause of the three-day downturn, either is cause for serious alarm over the long term.
Dow 13,266.73 -198.94; NASDAQ 2,541.38 -45.80; S&P 500 1,490.72 -26.66; NYSE Composite 9,720.94 -174.07
Some cause for concern in the internal indicators as declining issues outdid advancing ones by nearly a 5-1 margin. That's steep. Also, the new highs / new lows indicator has flipped to the negative, with 126 new highs and 197 new lows. That's the first negative reading in over 6 weeks.
The highs/lows indicator is of particular interest if it is persistent. If this current spate of selling is going to last, we would like to see this indicator negative for at least 3 straight days and this is only the first. It may just be a short-lived summer swoon, and the overall heavy volume today would seem to be indicative of that. There's money being taken off the table. It will soon be searching for a new home and there likely location will be in US equities.
Lost amid all the stock selling and bond wrangling (the 10-year topped 5% on Wednesday and hit 5.13% on Thursday), is the recent strength in the dollar against selected foreign currencies, especially the British Pound and the Euro. It's shown some stability for a change and change, in that regard, is good.
The sore spot still remains. Oil jumped another 97 cents on the day to close at $66.93, and with that kind of pricing in place, there will be no relief at the gas pumps this summer. The wear and tear on Americans' pockets and psyches is palpable. If consumer spending takes another hit - coupled with inflationary pressures - the Big Oil companies can be singled out as villains, and rightly so.
Gold tumbled nearly $10. Silver lost 24 cents. Food prices continue to escalate.
Tomorrow will be the most interesting day of the week to see if the trend continues or buyers find bargains in the bushes.
What has changed on Wall Street is nothing more than perception. The US economy didn't suddenly implode, only the point of view from the standpoint of institutional investors. There are two drivers currently: interest rate fears and profit taking. And while the latter is likely the main cause of the three-day downturn, either is cause for serious alarm over the long term.
Dow 13,266.73 -198.94; NASDAQ 2,541.38 -45.80; S&P 500 1,490.72 -26.66; NYSE Composite 9,720.94 -174.07
Some cause for concern in the internal indicators as declining issues outdid advancing ones by nearly a 5-1 margin. That's steep. Also, the new highs / new lows indicator has flipped to the negative, with 126 new highs and 197 new lows. That's the first negative reading in over 6 weeks.
The highs/lows indicator is of particular interest if it is persistent. If this current spate of selling is going to last, we would like to see this indicator negative for at least 3 straight days and this is only the first. It may just be a short-lived summer swoon, and the overall heavy volume today would seem to be indicative of that. There's money being taken off the table. It will soon be searching for a new home and there likely location will be in US equities.
Lost amid all the stock selling and bond wrangling (the 10-year topped 5% on Wednesday and hit 5.13% on Thursday), is the recent strength in the dollar against selected foreign currencies, especially the British Pound and the Euro. It's shown some stability for a change and change, in that regard, is good.
The sore spot still remains. Oil jumped another 97 cents on the day to close at $66.93, and with that kind of pricing in place, there will be no relief at the gas pumps this summer. The wear and tear on Americans' pockets and psyches is palpable. If consumer spending takes another hit - coupled with inflationary pressures - the Big Oil companies can be singled out as villains, and rightly so.
Gold tumbled nearly $10. Silver lost 24 cents. Food prices continue to escalate.
Tomorrow will be the most interesting day of the week to see if the trend continues or buyers find bargains in the bushes.
Wednesday, June 6, 2007
Another Tough Day for Traders
If you thought Tuesday was a downer, Wednesday was worse, though grizzled veterans will tell you that this kind of mini-correction was necessary. To say that the market was overbought would be a gross understatement. The Dow was setting new records just about every day for roughly a month and the S&P fitfully followed suit recently.
This was mostly profit-taking, some re-positioning of portfolios and a little fear factor - a good thing, a little fear is. It keeps everyone honest and markets orderly.
Dow 13,465.67 -129.79; NASDAQ 2,587.18 -24.05; S&P 500 1,517.38 -13.57; NYSE Composite 9,895.01 -106.46
This brief hiatus from mad-cap shopping for stocks shouldn't last long as the fundamentals haven't changed. It's actually providing a nice opportunity to jump in on recent downturns because the market is almost certain to leap higher over the summer months... unless the Fed decides it's time for a rate hike. Their June meeting is less than 2 weeks away and with energy and food prices on the rise, there are murmurings of a 25 basis point hike.
The drop today was more broad-based than yesterday's action. Declining issues led advancers by nearly a 3-1 margin and the number of new lows (125) nearly matched that of the new highs (157). If the high-low indicator goes negative, we may see a longer, deeper trough than is expected, but with the hordes of cash taken out today, that's less than a 50-50 proposition.
Oil remains the key inflator, up again today another 35 cents to close at $65.96. Gold and silver were marginally higher as well. It's the new paradigm - spend to live. A lot of precious metals traders are losing faith and keeping a lid on the usual inflation hedges.
The Fed may have no choice but to raise rates a little as the EU Central Bank hiked their key rate today to 4%. If the Fed is smart enough, they should see a neutral stance as bullish for the dollar. It's been steady of late and a turn-around - or at least some show of strength - would be beneficial to US interests.
This was mostly profit-taking, some re-positioning of portfolios and a little fear factor - a good thing, a little fear is. It keeps everyone honest and markets orderly.
Dow 13,465.67 -129.79; NASDAQ 2,587.18 -24.05; S&P 500 1,517.38 -13.57; NYSE Composite 9,895.01 -106.46
This brief hiatus from mad-cap shopping for stocks shouldn't last long as the fundamentals haven't changed. It's actually providing a nice opportunity to jump in on recent downturns because the market is almost certain to leap higher over the summer months... unless the Fed decides it's time for a rate hike. Their June meeting is less than 2 weeks away and with energy and food prices on the rise, there are murmurings of a 25 basis point hike.
The drop today was more broad-based than yesterday's action. Declining issues led advancers by nearly a 3-1 margin and the number of new lows (125) nearly matched that of the new highs (157). If the high-low indicator goes negative, we may see a longer, deeper trough than is expected, but with the hordes of cash taken out today, that's less than a 50-50 proposition.
Oil remains the key inflator, up again today another 35 cents to close at $65.96. Gold and silver were marginally higher as well. It's the new paradigm - spend to live. A lot of precious metals traders are losing faith and keeping a lid on the usual inflation hedges.
The Fed may have no choice but to raise rates a little as the EU Central Bank hiked their key rate today to 4%. If the Fed is smart enough, they should see a neutral stance as bullish for the dollar. It's been steady of late and a turn-around - or at least some show of strength - would be beneficial to US interests.
Monday, June 4, 2007
Not Great, But Good Enough
US indices registered another positive session on Monday, even though the gains were marginal at best. Still, investors shrugged off weekend terrorism threat news and another big drop in China's markets.
Dow 13,676.32 +8.21; NASDAQ 2,618.29 +4.37; S&P 500 1,539.18 +2.84; NYSE Composite 10,064.45 +21.45
While investors in China's emerging market adjust to the realities of government intervention and an overheated environment, US shareholders are singing the praises of being old, established and considered ultra-safe.
As America slept, the Shanghai Composite divested itself to the tune of an 8.3% drop, the largest one-day decline since
Please send Alan Greenspan a note that he's no longer relevant.
Even though overall market gains were negligible, internal numbers were solid. Advancing issues outperformed losers by roughly a 5-4 margin. New highs trounced new lows, 545-69, an eye-popping differential.
As long as the A-D and High-Low lines remain so heavily positive, this market has no possibility of turning lower any time soon. Despite high gas prices and an inept, ineffectual federal government (that may be a good thing), stocks continue to be superb short term instruments.
One reason for the unprecedented long bull run may be summed up in three words: supply and demand. The heavy handed private capitalists have been snapping up shares and taking them private. At the same time, a slew of companies have been engaged in huge stock buy-back programs. While each of these activities indicates some degree of underappreciated value in US shares, they both dilute the number of shares available to the investing public.
Money has to go somewhere, and those shares previously invested in companies which have been taken private, gets re-invested elsewhere. Stock buy back programs takes more shares away from the investing public. According to Keynes, insufficient availability always results in higher prices, every time, and stocks are no different than apples or iPods.
With those two trends in place, expect public shares to continue rising for some time to come.
Checking commodities, those things which actually are in somewhat limited supply, oil gained another $1.13 to $66.21. Gold and silver barely budged. Grains and other foodstuffs were equally somnambulant.
Today was not a great day, but by any measure, it was a good one.
Dow 13,676.32 +8.21; NASDAQ 2,618.29 +4.37; S&P 500 1,539.18 +2.84; NYSE Composite 10,064.45 +21.45
While investors in China's emerging market adjust to the realities of government intervention and an overheated environment, US shareholders are singing the praises of being old, established and considered ultra-safe.
As America slept, the Shanghai Composite divested itself to the tune of an 8.3% drop, the largest one-day decline since
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Choose your own colors, dates and message for maximum impact.
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the 8.8% collapse in late February that triggered market selloffs throughout the global financial community. The Dow lost over 400 points then, but today's reaction was more of a yawn than a shriek.Choose your own colors, dates and message for maximum impact.
dtmagazine.com/customtext.html
Please send Alan Greenspan a note that he's no longer relevant.
Even though overall market gains were negligible, internal numbers were solid. Advancing issues outperformed losers by roughly a 5-4 margin. New highs trounced new lows, 545-69, an eye-popping differential.
As long as the A-D and High-Low lines remain so heavily positive, this market has no possibility of turning lower any time soon. Despite high gas prices and an inept, ineffectual federal government (that may be a good thing), stocks continue to be superb short term instruments.
One reason for the unprecedented long bull run may be summed up in three words: supply and demand. The heavy handed private capitalists have been snapping up shares and taking them private. At the same time, a slew of companies have been engaged in huge stock buy-back programs. While each of these activities indicates some degree of underappreciated value in US shares, they both dilute the number of shares available to the investing public.
Money has to go somewhere, and those shares previously invested in companies which have been taken private, gets re-invested elsewhere. Stock buy back programs takes more shares away from the investing public. According to Keynes, insufficient availability always results in higher prices, every time, and stocks are no different than apples or iPods.
With those two trends in place, expect public shares to continue rising for some time to come.
Checking commodities, those things which actually are in somewhat limited supply, oil gained another $1.13 to $66.21. Gold and silver barely budged. Grains and other foodstuffs were equally somnambulant.
Today was not a great day, but by any measure, it was a good one.
Saturday, June 2, 2007
Dow, S&P, NYSE Composite Reach New Highs
Dow 13,668.11 Up 40.47 (0.30%) Nasdaq 2,613.92 Up 9.40 (0.36%) S&P 500 1,536.34 Up 5.72; NYSE Composite 10,042.60 +63.96
Advancers led decliners by a 2-1 margin. 641 new highs, 79 new lows.
Oil was up $1.07 to $65.08. Gold levitated $10.20 to $676.90 and silver was higher by 27 cents to $13.74.
The Bull continues to run. Have a nice weekend.
Advancers led decliners by a 2-1 margin. 641 new highs, 79 new lows.
Oil was up $1.07 to $65.08. Gold levitated $10.20 to $676.90 and silver was higher by 27 cents to $13.74.
The Bull continues to run. Have a nice weekend.
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