Dear Reader, Remember This Projection from December 2006? Well Now see the update. Picture speaks for itself(drk DOW, Red ProjectedDOw). So how do you S(m)ell Top? Just learn how to smell YEN... Good Trading
I agree we've seen the top. To be blatantly honest, I don't think earnings growth will be anywhere near what the market has priced in for this year due to the weakening economy and I think the market has sensed the miscalculation.
I think next week's economic numbers will prove me correct, and now that the dollar has had a chance to bounce and gold has been slammed, we will go back to "weaker dollar, better buy gold while there is any to buy" this week by the time it hits high $620's. That bottom number seems to get a little higher each time we play the slam gold game, I've noticed. If nothing else kills the dollar first this week, jobs and trade deficit on friday will, I think.
I saw on your other entries a chart showing buying pressure. What is that a chart of?
PS: what are your thoughts for Monday? I expect the non-mfg survey to show continued growth. We seem to do very well at increasing the level of burger flipping, number shuffling, and selling made in wherever junk to each other every month.
But from Tuesday on, I think we'll see weak numbers, and the market has finally realized that bad numbers are bad, not good, because the Fed can't easily lower rates when we are trying to borrow an additional $2.5 billion from the world every day.
Dear Cheapybob, welcome to our house. I agree to the high probability that this is the top for next 15 months, But would not rule out one more leg up ( perhaps not new high) centered into June. And I do agree to your comments about GOLD, my target low is 5/6 March. perhaps just around the levels you mention. Also agree that given the possible run on DOLLAR will not give the FED chance to drop the Irates down too much. Now the Pressure charts, they are proprietary caclculations about the stocks that "are ready to jump up" and the stocks that "are ready drop down" ( are proprietary caclculations ). Pressure is a simple count of these stocks. In one of the Safehaven.com articles ( archive) you will find terms of using these charts. Please look it up. Or simply look at daily comments about pressure and see how I interpret them.
Monday... I expect there to be a strong rebound day in next 2/3 days... given the big drop last week it could come on Monday and then strong down move again. Now the way we approach the day is as follows. We publish the daily limits for securities and watch those limits for turnaround events at those limits. So, please tune in. Now, I would like to appreciate your very perceptive thoughts about the markets. Seems to me that you correct instincts/tools for reading these markets. Good Trading to you Dear Cheapybob.
---------------- U.S. Treasury Secretary Starts Asia Tour Monday March 5, 2:05 am ET By Hans Greimel, Associated Press Writer U.S. Treasury Secretary Paulson Starts Asia Tour in Japan Amid Regional Market Volatility
TOKYO (AP) -- U.S. Treasury Secretary Henry Paulson was expected to kick off a three-nation Asian tour in Tokyo on Monday amid turmoil in regional stock markets and the dollar's sudden drop against the yen.
Paulson will also meet top leaders in China and South Korea during his five-day swing through Asia, where most markets have plunged ever since Chinese stocks tumbled 9 percent last Tuesday.
Tokyo's Nikkei 225 index was down 3.5 percent in Monday afternoon trading, while the U.S. dollar has meanwhile dropped to around 115 yen from above 120 yen less than a week ago.
In Tokyo, Paulson was expected to meet Finance Minister Koji Omi on Monday evening. Although Japanese officials have declined to give details of their agenda, discussions will likely include the outlook for current fluctuations in regional stock markets and the dollar's value against the Japanese currency....
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I find it intriguing that The Secretary of the US Treasury - Hank Paulson is over in Japan. I have no doubt that the subject of their discussion is about intervening in the currency market to slow down the carry trade unwind. I find it also intriguing that Paulson and high powered bankers including the Fed Central Bank Bernanke visited China back in Dec of 2006. Was that right after a sudden rise in the 10 yr rates? Good indication of the weakness of US financials health.
IMHO, the US will head into recession. Record foreclosures, subprime lending is imploding on itself. This in no doubt will spread to prime because so many people were involve in the RE market in the past 5 years levering millions to buy homes and also incurring more debt through refi + cash outs. I don't know exactly how this will affect the dollar and how the stock market in the near future. I suspect put downward pressure on the dollar since the FED may cut interest rate in fall of 2007. But we will see.
ELLTOP.jpg)
5 comments:
I agree we've seen the top. To be blatantly honest, I don't think earnings growth will be anywhere near what the market has priced in for this year due to the weakening economy and I think the market has sensed the miscalculation.
I think next week's economic numbers will prove me correct, and now that the dollar has had a chance to bounce and gold has been slammed, we will go back to "weaker dollar, better buy gold while there is any to buy" this week by the time it hits high $620's. That bottom number seems to get a little higher each time we play the slam gold game, I've noticed. If nothing else kills the dollar first this week, jobs and trade deficit on friday will, I think.
I saw on your other entries a chart showing buying pressure. What is that a chart of?
PS: what are your thoughts for Monday? I expect the non-mfg survey to show continued growth. We seem to do very well at increasing the level of burger flipping, number shuffling, and selling made in wherever junk to each other every month.
But from Tuesday on, I think we'll see weak numbers, and the market has finally realized that bad numbers are bad, not good, because the Fed can't easily lower rates when we are trying to borrow an additional $2.5 billion from the world every day.
Dear Cheapybob, welcome to our house. I agree to the high probability that this is the top for next 15 months, But would not rule out one more leg up ( perhaps not new high) centered into June. And I do agree to your comments about GOLD, my target low is 5/6 March. perhaps just around the levels you mention. Also agree that given the possible run on DOLLAR will not give the FED chance to drop the Irates down too much.
Now the Pressure charts, they are proprietary caclculations about the stocks that "are ready to jump up" and the stocks that "are ready drop down" ( are proprietary caclculations ). Pressure is a simple count of these stocks. In one of the Safehaven.com articles ( archive) you will find terms of using these charts. Please look it up. Or simply look at daily comments about pressure and see how I interpret them.
Monday... I expect there to be a strong rebound day in next 2/3 days... given the big drop last week it could come on Monday and then strong down move again. Now the way we approach the day is as follows. We publish the daily limits for securities and watch those limits for turnaround events at those limits. So, please tune in.
Now, I would like to appreciate your very perceptive thoughts about the markets. Seems to me that you correct instincts/tools for reading these markets. Good Trading to you Dear Cheapybob.
Boris,
I saw this headline from Yahoo
----------------
U.S. Treasury Secretary Starts Asia Tour
Monday March 5, 2:05 am ET
By Hans Greimel, Associated Press Writer
U.S. Treasury Secretary Paulson Starts Asia Tour in Japan Amid Regional Market Volatility
TOKYO (AP) -- U.S. Treasury Secretary Henry Paulson was expected to kick off a three-nation Asian tour in Tokyo on Monday amid turmoil in regional stock markets and the dollar's sudden drop against the yen.
Paulson will also meet top leaders in China and South Korea during his five-day swing through Asia, where most markets have plunged ever since Chinese stocks tumbled 9 percent last Tuesday.
Tokyo's Nikkei 225 index was down 3.5 percent in Monday afternoon trading, while the U.S. dollar has meanwhile dropped to around 115 yen from above 120 yen less than a week ago.
In Tokyo, Paulson was expected to meet Finance Minister Koji Omi on Monday evening. Although Japanese officials have declined to give details of their agenda, discussions will likely include the outlook for current fluctuations in regional stock markets and the dollar's value against the Japanese currency....
------------
I find it intriguing that The Secretary of the US Treasury - Hank Paulson is over in Japan. I have no doubt that the subject of their discussion is about intervening in the currency market to slow down the carry trade unwind. I find it also intriguing that Paulson and high powered bankers including the Fed Central Bank Bernanke visited China back in Dec of 2006. Was that right after a sudden rise in the 10 yr rates? Good indication of the weakness of US financials health.
IMHO, the US will head into recession. Record foreclosures, subprime lending is imploding on itself. This in no doubt will spread to prime because so many people were involve in the RE market in the past 5 years levering millions to buy homes and also incurring more debt through refi + cash outs. I don't know exactly how this will affect the dollar and how the stock market in the near future. I suspect put downward pressure on the dollar since the FED may cut interest rate in fall of 2007. But we will see.
Dear Rent, Apreciate your comments.
Thoughtfull for sure.
Good Trading
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