Where is the Dow & others heading in 2005?

[kriesau]

Any predictions for today, up/ down/ sideways??

Personally I reckon up by close but not by any great percentage, certainly nothing like y'day. Basis for that being continuation is more likely than change, & completely ignoring the fundamentals

Oil has slipped below $66 but productivity gains at 1.8% came in below expectations and labor cost increases were above expectations. Beige Book due out at around 7.00pm. We should see a pullback against yesterday but the current market seems so irrational almost anything could happen.

If the market is to resume its upward track it will need to break through resistance in the 10615 - 630 area and if it does then it should retest 10700. Conversely if it convincingly breaches 10500 heading south then that could produce a significant reversal.

On the other hand it may just consolidate between 10500 - 10600 :!:

 

[Pat494]

[If the market is to resume its upward track it will need to break through resistance in the 10615 - 630 area and if it does then it should retest 10700. Conversely if it convincingly breaches 10500 heading south then that could produce a significant reversal.

On the other hand it may just consolidate between 10500 - 10600 :!: [/QUOTE]

That just about covers it :-0

 

[vocalist]

Just have to post this......

I was flicking through some old video tapes the other day,no not dodgy ones but old recordings of movies,soaps and the like.Anyhooooo,as I was doing this I came across an old recording of Tom Houugard on Bloomberg from about early 2003 and I couldnt help looking at the ticker at the side of the screen.It read approximately,

NDX-Mid 900's
SPX-Mid 800's
DJX-Low 8000's

Man, did this look so strange when I had just been looking at a live ticker,in fact I had to look twice.It got me thinking,at that rate IF the bull run did continue into the future we could expect the Dow in 2 years time at about 12-13000,the spx at 1400 and the Nasdaq 100 at 2000,lol.The 10600's were talking about now would seem just as strange as it did the other day when I checked the 2003 ticker.Wow if only I had a 2007 traders almanac or a delorian.

 

[macbonzo]

A bit like a very evenly balanced tug of war on the Dow. MCD up 1.59%. Oh well Americans can always munch their way out of an economic downturn. MRK and PFE would benefit from the increased sale of heart drugs.

 

[Racer]

MCD up 3.4% on upgrade


MARKET TALK: Folks Still Need To Eat


9:07 Bear Stearns upgrades the restaurant sector, saying the industry's recent weakness over concerns about higher fuel costs represents a buying opportunity. "Restaurant sales have proven resilient in the face of negative macro developments in the past, and we expect this to occur again." The firm upgrades McDonald's (MCD) and Yum Brands (YUM), citing sales trends and brand positioning. It also ups Brinker (EAT), saying the company is starting to benefit from a change in product and marketing development. On the other end, though, it downgrades Applebee's (APPB), saying the company is more vulnerable to gas prices "given a lower income demographic." (GS)

 

[mickandpete]

Anyone watching Bloomberg about 16.00 BST
Wasnt paying too much attention untill I picked up on what guy was saying (was so stunned missed his name sorry)
"Huge dollar bear,US borrowing via budget defeceit/trade defeceit
borrowing not financing growth just consumption
the time is coming when rest of world says enough
asked if R>O>W surely look on US as engine room of world economy "its not,its the caboose being dragged along by R>O>W
In his opinion inflation heavily understated running at 5-10%
PPT will be sending the boys round me thinks

 

[Racer]

'As the Fed grapples with its understanding of the extent of Katrina's impact, Moskow noted that, even before the hurricane, high energy prices, rising core inflation and a possible decline in housing prices represented "three notable risks to the near-term forecast."

Echoing comments made in previous speeches, Moskow said that rising oil prices could impact economic growth. At the same time, rising oil prices can feed through to underlying inflation, he said.

"Putting it all together, I'm concerned about core inflation running at the upper end of the range that I feel is consistent with price stability," Moskow said.

Moskow said that a string of higher inflation numbers may cause people to permanently expect higher inflation, which could become self-fulfilling if it becomes built into the behavior of households and businesses.

"And this would have adverse effects on longer term economic performance. If this occured, the Fed would need to respond accordingly in order to restore price stability," Moskow said.

"Even without an increase in inflation expectations, it will take appropriate monetary policy to keep inflation well contained," he added. '

 

[Racer]

And the inflating kitchen sink is still not knocking the Dow!

 

[kriesau]

Moskow and Santomero, both of whom vote at the FOMC meetings, say the 'measured pace of interest rate rises' should continue despite the consequences of Katrina.

Market has not reacted negatively to these statements.
Consolidation so far today in the narrow 10570 - 10620 range.

Looks as though we could see the Dow move up to maybe test 10800 over the next few days IF it can convincingly break through the 10620 - 10640 area of resistance. Ultimately however, this market is going down. The only question is when and how far.

User - you've been absent for a while - what's your take on the current scenario ?

 

[macbonzo]

Moskow and Santomero, both of whom vote at the FOMC meetings, say the 'measured pace of interest rate rises' should continue despite the consequences of Katrina.

Market has not reacted negatively to these statements.
Consolidation so far today in the narrow 10570 - 10620 range.

Looks as though we could see the Dow move up to maybe test 10800 over the next few days IF it can convincingly break through the 10620 - 10640 area of resistance. Ultimately however, this market is going down. The only question is when and how far.

User - you've been absent for a while - what's your take on the current scenario ?

As I said yesterday, I felt the Dow could see 10600. Today's action seems pretty meaningless. One needs conviction. Do you really really think the Dow is going to see 10800 that easily? I don't. There is going to be a barrage of poor data coming.

Only the brave will walk alone.

 

[houdani]

And the inflating kitchen sink is still not knocking the Dow!

be patient,the downstairs toilet has still to be thrown

 

[Racer]

be patient,the downstairs toilet has still to be thrown

And the longer they wait the higher the wages will be to throw it...

Labour costs revised to +2.5% from +1.3%

 

[kriesau]

As I said yesterday, I felt the Dow could see 10600. Today's action seems pretty meaningless. One needs conviction. Do you really really think the Dow is going to see 10800 that easily? I don't. There is going to be a barrage of poor data coming.

Only the brave will walk alone.

Just consider the following.

The price of oil has been established above $60 for a while now prior to the loss of production and refining capacity post Katrina.

Inflation has been climbing for months now but is being disguised by the BS figures for 'core' inflation that are being released by the Fed. Todays rise in labour costs are just another symptom of that.

Interest rates have risen for 10 consecutive months and will carry on rising.

There is a housing bubble in the US which the Fed is now obliquely referring to as opposed to their previous description of 'froth' in certain sectors of the market.

This years trade deficit is likely to exceed $750bn and the budget deficit will be further inflated by the cost of the reconstruction post Katerina.

Consumer savings in the US are zero. They are living on credit and spending the equity in their houses. Economic growth in the US is now consumption driven not investment driven.

We have a 'conundrum' in relation to inverted bond yields !!!

Bush is on the ropes as a result of both Iraq and the response to Katerina. He is in great danger of becoming a lame duck President for the next 3 years.

So why isn't the Dow already below 10,000 ? You tell me !

This market is irrational and headed for a decline. It's only a matter of when and how far. In the meantime investors are still bidding up the market in the fantasy that everything will be okay. You saw that yesterday with a 140pt rise in the Dow - what do you think prompted that ! Volume was comparatively low yesterday so the big boys weren't buying !

This will play out a little longer and we will most probably see another move up before it moves down. In the meantime officers of the larger Dow & SPX companies are becoming net sellers of their own stocks not buyers !

It's a crazy world out there !

 

[Racer]

Beige book

 

[karmit]

added to shorts again!

 

[kriesau]

added to shorts again!

Karmit - you must either be using very long stops or closing out short stops and booking more stop shorts, since this is up 180pts over the last 2 days !

 

[karmit]

Well.. I actually use long stops - part of the "strategy".

I placed the last short around 100 points before this one.

 

[boy]

Well.. I actually use long stops - part of the "strategy".

I placed the last short around 100 points before this one.

I hope it works out Kermit, dont want to see you on the telly taking hostages at the NYSE and demanding they lower the Dow,

 

[karmit]

I hope it works out Kermit, dont want to see you on the telly taking hostages at the NYSE and demanding they lower the Dow,

nah... for the amount that I trade with, they'll not even take a second look :cheesy:

 

[seguna]

Karmit

nah... for the amount that I trade with, they'll not even take a second look :cheesy:

Are you trading the reality of the market or your 'hope' of it? Be careful of shorting too early. Why not let the market signal a downmove first? By most consensus, oil will continue to rise and take the oil majors with it. These boys are so big they weigh heavily on the rest of the market - both in terms of weighting and ultimately sentimentally.

When folks ask why the DOW is not below 10,000 - think two things: oil majors and a strengthening dollar (rising interest rates).

By the way, at what point will you know if your short is definitely 'wrong' ?

Peace
:-0