STOCK MARKET WATCH, Monday 14 August

[ozymandius]

Monday August 14, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 891 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2060 DAYS
WHERE'S OSAMA BIN-LADEN? 1760 DAYS
DAYS SINCE ENRON COLLAPSE = 1721
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 6
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON August 11, 2006

Dow... 11,088.03 -36.34 (-0.33%)
Nasdaq... 2,057.71 -14.03 (-0.68%)
S&P 500... 1,266.74 -5.07 (-0.40%)
Gold future... 644.40 -1.60 (-0.25%)
30-Year Bond 5.09% +0.03 (+0.53%)
10-Yr Bond... 4.97% +0.04 (+0.81%)






GOLD, EURO, YEN, Loonie and Silver


PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Tim W. Wood

THE DOW REPORT
A Look at the Transports

The recent action seen in the Transportation sector is not good and considerable technical damage has been done. According to Dow theory, the Secondary Trend of the Transports is now bearish. From a cyclical perspective the outlook has been bearish for a month or so and everyday since has just been added confirmation of the now well established bearish trend.

-cut-

The bottom line is that the weakness within the Transports is pretty much across the board. There is a little more hope for the Marine sector, but even there the picture is not good. From a Dow theory perspective, the entire Transportation sector and sub-sectors are now in confirmed bear markets. Short-term, the Transports are oversold and could bounce. But, it is now very doubtful if any such bounce will be anything other than a counter-trend affair before the next leg down begins. This longer-term break down by the Transports is telling us that something is wrong within the economy, and until this technical picture is mended, caution is definitely advised as the “Stock Market Barometer” continues to see stormy conditions.

http://www.financialsense.com/Market/wrapup.htm

[specimenfred1984]

25. See any UFOs Lately Timmy Boy?

--- Others talk about the Plunge Protection Team (PPT), which allegedly comes into the market and buys futures to “control” the market. This is something that I can’t prove or disprove. Therefore, to form an opinion about any manipulative efforts of this degree would not be based on fact. Without a basis of fact, I see this no differently than guessing about UFO’s or any other urban legend. ---

http://www.financialsense.com/Market/wood/2006/0331.html


This clown lost all credibility after that comment.

[specimenfred1984]

29. Somebody's (UFOs Maybe) Pumping the Market

I won't cite any hard evidence since it'd just be like talking about UFOs!

[specimenfred1984]

30. Could Be Dump Time

Either that or Timmy has some other probe stuck up his ....

[AnneD]

33. I actually have a long history in the marketplace

that goes back before the crash of 1987. While I did not have the knowledge I do now or the resources-the market acts/reacts differently now. The depth of the Otc 1987 crash was startling. The feeling was-hey we put all the 'improvements' in place after the Depression, we shouldn't lose this much ground in just one day. Now the daily drops seem to be tempered. The market acts like two beakers of water on a scale. When fluid is added to one side, it seems to only drop so far before water is added. Sometimes there is not much water added to obtain equilebriem...just enough water to slow the rapid decent until the close of the day. The market just seems different now than what it use to. Daily losses were real losses and you didn't have so quick a recovery.

[ozymandius]

2. no major economic releases due today n/t

[54anickel]

13. Well that should improve the shot at a rally for the day. No news is

good news, and there's just so much "good news" out there today!!! I'll have to get out my dancin' shoes. :eyes:

A strong start looms
Lower oil, Mideast cease fire could combine to lift U.S. stocks at Monday's open.

http://money.cnn.com/2006/08/14/markets/stockswatch/index.htm

NEW YORK (CNNMoney.com) -- Lower oil prices and the start of the Israel-Hezbollah cease fire could combine to give U.S. stocks a solid jolt upward at the start of trading Monday.

At 7:45 a.m. ET, Nasdaq and S&P futures were higher, indicating a strong gain for the major indexes.

Oil was lower, due to the cease fire as well as BP's announcement late Friday that it will be able to keep half the Prudhoe Bay, Alaska, oilfield operating while replacing corroded pipelines. U.S. light crude was down $1.16 to $73.19 a barrel in electronic trading, while Brent crude in London slipped $1.29 to $74.34.

David Kelly, economic advisor for Putnam Investments, said that while BP's ability to keep some of the Alaskan supply flowing is important, the cease fire is more important to markets Monday.

"It's important that holds because there isn't a Plan B. The longer and stronger it holds, the better it is for the markets," said Kelly.

"Markets hate uncertainity, and if the fighting resumes, the greater the chance of the conflict spreading to Iran," he added. "But oil could fall below $70 a barrel within a week or two if the cease fire holds."

more...

[AnneD]

28. Morning Marketeers,

:donut: Well, today is the first day of school here. I actually had a few kids come in my office and give me hugs and tell me about their summer (no one every remembers the school Nurse-so I was pleasantly surprised). The funniest thing I saw was the kinder boy that actually stopped and stared at the ground for some time. Mom was unaware, but the boy looked as if there was some magical line and once he crossed it-that was it. He didn't move too fast once he stepped on the school grounds either. Kids are so funny sometimes.

What isn't funny is what happened to hubby this weekend. He had a BIG wedding that he preformed at in Orlando. The family was very wealthy and had many in attendance from all over the world. The wedding party and guests took 3/4th of the better hotel rooms in Orlando. He flew Continental. Now I know Continental is based in Houston but they are the worst when it comes to respecting ethnic diversity (being a tad bigoted). For example-several years ago, they let a cello player take his instrument on board without question OR additional charges. When my husband stepped up and asked to take his sitar on board (smaller but much more fragile.....they said we would have to put it in the cargo hold AND we would have to pay extra.:mad: We argued that we witnessed them letting a cello aboard etc...they became even ruder. This was the start of our tour so we just gave up. Now, if a cello is broken in transit-you can find another fairly easily in the western world. If your sitar is broken...you're screwed because there are not many places to get a replacement(they are only made in India).

We have traveled many air lines (British Airways, Lufthansa, Delta, Singapore, Air Emirate) and have never been handled so rudely and disrespectfully as Continental. Other airlines have always handled out instruments with care.

Hubby check in Friday morning and once again they hassled Hubby about his sitar. We finally got a wonderful (expensive) fiberglass case for it so we're thinking...no problem. Well, when we went to pick it up, someone had ripped it open at the hinge lock.:nuke: This case has a hinge lock and can be opened by pressing the button on the hinge-it cannot be 'locked' in the traditional way. When he went to to pick up his sitar, he complained about the hole and was again treated rudely.:nuke: One of his student (and the students dad) had gone to pick him up and witnessed the entire event. The dad is a prominent pediatrician at Texas Children's and he latched into them.:spank: By the time it was over they were apologizing and handing him a damage report. This Doc's wife is a lawyer so she will be handling the matter for us. I am glad for this and I hope this results in some serious training for some folks and we get the case replaced.:evilgrin:


Happy hunting and watch out for the bears.

[ozymandius]

3. Oil prices drop on Mideast cease-fire

SINGAPORE - Oil prices dropped nearly a dollar Monday as traders anticipated the upcoming Mideast cease-fire and responded to the positive news that BP would be able to maintain half of its production at a large oil field in the U.S. state of Alaska.

Light sweet crude for September delivery fell .92 cents to $73.43 a barrel in mid-afternoon Asian electronic trading on the New York Mercantile Exchange.

September Brent at London's ICE Futures exchange slipped .73 cents to trade at $74.90 a barrel.

"It's a very volatile market, but this week is starting with a lot of good news," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "We face some calming news, so the market is moderating. "

more

[ozymandius]

4. Gas prices inch up to hit another high

CAMARILLO, Calif. - Nationwide gas prices hit yet another record in the last three weeks, rising just over one cent to nearly $3.03 per gallon, according to a survey released Sunday.

The national average for self-serve regular stood at $3.025 a gallon Friday, up 1.06 cents since July 21, according to the Lundberg Survey of 7,000 gas stations across the country.

-cut-

Nationwide, the lowest price for regular was $2.82 a gallon in Charleston, S.C., while the highest — $3.29 a gallon — was in Chicago.

more

[Roland99]

9. Not here. Some parts of town have dropped $0.40 in the last 10 days

Down to $2.79 in some places.

[54anickel]

14. We came down to $3.09 from last weeks high range of 3.23 - 3.28. The

2 local stations in my little town are still holding at $3.17, they haven't budged in either direction for the month of August. They are still in that game of chicken to see who moves first.

[UpInArms]

19. Sept Crude @ $ 73.05 bbl - NatGas @ $6.80 mln btus

10:02 AM ET 8/14/06 SEPT. CRUDE DOWN $1.30 AT $73.05/BRL IN EARLY NY TRADING

10:02 AM ET 8/14/06 SEPT. NATURAL GAS DOWN 46.9 CENTS, OR 6.5%, AT $6.80/MLN BTU

[ozymandius]

5. European stocks poised for higher open

European equity markets were expected to open higher on Monday, thanks to oil prices falling after it was hoped a UN-brokered ceasefire would end five weeks of fighting between Israel and Hizbollah.

Spread betters in London were expecting the three main European indices - London's FTSE 100, Frankfurt's Xetra Dax and the CAC 40 in Paris - to open between 20 and 35 points higher.

Although oil prices fell on the announcement of the Middle-East ceasefire - Nymex WTI down 74 cents to $73.61 a barrel - there was some good news for the energy sector after Britain's BP said it was keeping the western half of its Prudhoe Bay oilfield online. This would keep about half the field's 400,000 capacity output online as maintenance work was carried out on damaged pipelines.

It also looked like being another rough day for airline stocks, which will cut around 20 per cent of flights departing from London's Heathrow Airport due to problems with handling tougher security measures.

more

[ozymandius]

8. Europe's Economy Grows at Fastest Pace in Six Years (Update1)

Aug. 14 (Bloomberg) -- The economy of the euro nations grew the most in six years in the second quarter, making it likely that expansion this year will beat the European Central Bank's forecast and lead to further increases in interest rates.

The $10 trillion economy expanded 0.9 percent from the first quarter, when it grew 0.6 percent, Eurostat, the European Union's statistics office in Luxembourg, said today. Growth will probably reach about 0.7 percent in the next two quarters before slowing to 0.5 percent at the start of 2007, the European Commission said.

The second quarter is the first time since early 2001 that Europe's economy outpaced the U.S. Accelerating growth prompted the ECB to increase interest rates four times since early December to curb inflation. While the economy is poised to expand at the fastest pace since 2000, a combination of rising borrowing costs, higher oil prices and a stronger euro risks slowing growth later this year and into 2007.

-cut-

Economists had expected growth of 0.8 percent in the second quarter from the previous three months, according to the median of 38 surveyed by Bloomberg News. From a year earlier, the economy expanded 2.4 percent.

more

[Ghost Dog]

11. European market sentiment lifted by Middle East ceasefire

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=38943.1803703704-880377685&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European equity markets were higher on Monday, thanks to oil prices falling after it was hoped a UN-brokered ceasefire would end five weeks of fighting between Israel and Hizbollah. In early trade, the FTSE Eurofirst 300 was up 0.7 per cent to 1,340.60, while Frankfurt’s Xetra Dax gained 0.9 per cent to 5,677.31. In Paris, the CAC 40 added 0.9 per cent to 5,030.38 and London’s FTSE 100 climbed 0.7 per cent to 5,861.6. Although oil prices fell on the announcement of the Middle-East ceasefire - Nymex WTI down 74 cents to $73.61 a barrel - there was some good news for the energy sector after Britain’s BP said it was keeping the western half of its Prudhoe Bay oilfield online. This would keep about half the field’s 400,000 capacity output online as maintenance work was carried out on damaged pipelines. BP shares gained 1 per cent to 617p, while France’s Total was up 0.8 per cent to €53.10 and Royal Dutch Shell added 0.8 per cent to €27.77.

/...

[ozymandius]

6. Glitch stops Nikkei updating for first time ever

TOKYO (Reuters) - A computer glitch halted calculations of Japan's Nikkei share average for the first time ever on Monday, the latest technical problem to snarl Tokyo stock market trade.

Publisher Nihon Keizai Shimbun, which compiles Tokyo's benchmark Nikkei 225-stock average (^N225 - news), said the suspension was caused by a system error related to power outages that hit large parts of the Japanese capital earlier in the day.

It was not yet known whether calculation of the Nikkei would resume on Tuesday. Nihon Keizai said it would hold a briefing at 7:30 p.m. (1030 GMT).

Trading of individual stocks was not affected.

more

[Ghost Dog]

12. Tokyo stocks unfazed by power outage

http://www.ft.com/cms/s/9c55b3e0-2b44-11db-b77c-0000779e2340.html

Japanese shares climbed on Monday, unfazed by an early morning power outage in Tokyo. Instead, investors took heart from last week’s data showing continued strength in the Japanese economy and expectations that the yen would remain weak relative to the dollar.

Those hopes fuelled a 1.5 per cent rise to 1,601.02 in the Topix, the index used by the majority of fund managers – its highest close in more than a month.

The Nikkei 225 – the other main Japanese index – did not have an official closing price because the outage created a computer problem in the afternoon at the Nihon Keizai Shimbun, the Japanese newspaper that compiles the index. But brokerages, many of whom independently calculate the Nikkei’s value every day, estimated that it jumped 1.9 per cent to 15,857.11.

In keeping with expectations on the domestic front, local plays such as financials and construction were strong.

/...

[ozymandius]

7. Wall Street is back on inflation watch

NEW YORK - Investors got their long-awaited pause in interest rate hikes from the
Federal Reserve last week. But perhaps they should've looked up the definition of the word "pause" before wishing so hard.

In reality, they were looking for a stop.

The Fed, while indeed holding off on a rate hike for the first time in 18 meetings, didn't give Wall Street the sense of finality it was looking for. There are still inflationary pressures in the market, according to the Fed. If they increase, then the pause could last just five more weeks, until September's Fed meeting.

While it's now more likely that the Fed will hold off, never underestimate Fed Chairman Ben Bernanke's fervor in trying to quash inflation. He's new to the job, and wants to gain the kind of confidence his predecessor, Alan Greenspan, inspired in the marketplace.

more

[ozymandius]

10. Have a great day folks!

:donut: :donut: :donut:

Good luck at the Casino.

Ozy :hi:

[UpInArms]

15. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 85.52 Change +0.13 (+0.15%)

(from Friday)

The US Consumers Surprising Resilience Sends the Dollar Higher

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/The_US_Consumers_Surprising_Resilience_1155330689073.html

US Dollar

Surprisingly strong US economic data has sent the US dollar higher once again. However the rally has been limited as traders and analysts question whether the economic strength exhibited in today's reports can repeated. US consumers spent voraciously in the month of July buying everything in sight from cars to air conditioners, fans and summer clothing in the second warmest July in over 100 years. More specifically, retail sales increased 1.4 percent last month, which was the strongest pace of spending since January. Import prices also increased 0.9 percent in July while business inventories increased by a more than expected 0.8 percent in June. The fact that spending remained so strong in the face of higher gasoline prices and mortgage payments should keep some traders positioned for another rate hike by the Federal Reserve this year. Fed fund futures are currently pricing in only a 58 percent probability of a quarter point rise in interest rates by the end of the year with the percentage shrinking to 25 percent for the September meeting. The latest data suggests that we are on track to see solid GDP growth in the third quarter. However spending will not be enough to convince the Fed to resume its rate hikes and instead inflation will be key. In the week ahead, we are expecting both the producer and consumer price reports along with the Philly Fed Manufacturing Index, Housing Starts, Building Permits, Industrial Production, Leading Indicators and the report on Net Foreign Purchases of US Securities. Individually these reports can move markets, but collectively, they have the potential to drive the EUR/USD out of its latest trading range. The EUR/USD is sitting at a key support level and it will be next week’s data that determines whether we make a run for 1.25 or rebound back towards 1.30.

...more...

from today:

Dollar Soars On Flight to Safety

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Dollar_Soars_On_Flight_to_1155529469878.html

News that British authorities arrested a number of people in connection to a terrorist plot to smuggle explosives on board several airplanes which they planned to blow up mid-flight, caused national threat levels to spike in both the US and UK. The greenback experienced a marked flight to safety demonstrating once again that politics trump economics in the currency markets. EUR/USD made a freefall drop of 60 points immediately on the threat news, and plunged an extra 100 points during the rest of the day. Traders appeared to ignore the FOMC's policy statement which deviated substantially from prior communiqués by noting that "growth has moderated from its quite strong pace". However, Richmond Fed's Lacker served as the sole dissenter of the group by voting for another 25 basis point hike, and giving hawks a glimmer of hope that the tightening cycle may not be over just yet. To second that thought, Advanced Retail Sales closed out the week at 1.4%, higher than the anticipated 0.9% and much stronger than last month’s downwardly revised -0.4%. The remarkable improvement pushed the EUR/USD further down, and could lend support to a dollar bias in the week going forward if the market continues to believe that that rate hikes aren’t off the table completely.

With the Fed decision now behind us, event risk has declined greatly. This week, however, could still prove to be dollar-critical as July CPI is expected to rise 0.4% from 0.2% in June, indicating that the FOMC may have faltered in their decision to hold rates at 5.25%. Additionally, the increasingly-watched TICS data is anticipated to post weaker at $63.2B, which still won't be enough to cover the ever-expanding trade deficit of $64.8B. Empire manufacturing will start out the week for sentiment data, and may to slip to 15.1, while the U of M survey should follow suit by dipping to a reading of 84. Sky high energy prices have hurt businesses and consumers alike, but the Philly Fed may indicate otherwise, as the reading could bounce back to a reading of 8.



...more...

[54anickel]

22. Losing Credibility?....Today's Pfenning

http://www.kitcocasey.com/displayArticle.php?id=888

snip>

Well... What do we have here? The Fed did go ahead and pause last week... And now they have to see the color of the CPI on Wednesday... This could really all just blow up in their collective faces, for if CPI does post the .3% rise for July that the "experts" are forecasting, then the Fed has egg all over its collective faces, and the credibility factor takes a great big hit...

So... In the end... The dollar was going to lose a prop in the rate hikes... Or... It will take a hit because of shaky credibility in the Central Bank... Recall, back in 2000 and 2001, I talked about how shaky the credibility was in the European Central Bank (ECB), basically because it was so new. But nonetheless it was shaky and that was a prime reason for the euro's decline in its infancy... Once then-ECB President Wim Duisenberg convinced the markets that the ECB would follow the Maastricht Treaty's edict that they provide price stability... That shakiness went away, and the euro has not looked back!

I know that Chris mentioned this last week, but what did you think of that revision to the Trade Deficit that everyone ballyhooed when it was first printed as "narrowing"? What a bunch of bunk! Just for the record... The May deficit was $65 billion... And June's pre-revision number was $64.8 billion... Show me the narrowing!

Right before I left on vacation, the ECB and the Bank of England (BOE) had raised interest rates... I think the data since then has given them a shot in the credibility arm... This morning it was announced that the 2nd QTR European economy grew at the fastest pace in 6 years... And in the U.K. there were reports that not only did Retail Sales grow at a 13.8% clip vs. a year ago in July, they also reported that factories were raising prices for a seventh consecutive month... There are more rate hikes to come from these two central banks... And while they may not be something that you can count on every 6 weeks, like the Fed carried on with for 2 years... They will, in my opinion, keep coming...

more...

[54anickel]

23. The Fed's Big Bluff

http://www.kitco.com/ind/Schiff/aug112006.html

This week, as the Fed came through with its highly anticipated pause, it conspicuously left the door open to future rate hikes. Apparently the rhetorical vigilance took most currency traders by surprise, sending many scrambling to buy dollars. However, given that any weaker statement would have caused a stampede out of the dollar, how surprising should the tough talk have been? Any indication that this was not a "wait and see" pause would have sent both long-term interest rates and consumer prices up, undermining the “benefits” of the pause. So in an apparent attempt to have its cake and eat it too, the Fed “paused” while pretending that it really had not done so.

The Fed’s claim that it is concerned about inflation, and that it will act decisively to contain it, is just a bluff. Any real commitment would have prompted the Fed to have already raised rates much higher. For the Fed to suggest that it stands ready to raise rates in the future, if the data warrants it, completely misses the point that the data warrants it right now!

The flawed CPI is nonetheless a lagging indicator of inflation. There is so much inflation already in the pipeline that its effect on consumer prices will be seen for years to come. For now, the Fed’s private concern is to keep the markets from understanding just how bad inflation already is, and how little resolve it actually has to do anything to contain it. Far from being concerned, the Fed likely views inflation as the only solution to America’s problems; a monetary “get out of jail free card.” The U.S. now owes so much to foreigners that not only is legitimate repayment impossible, but the very act of servicing the debt will soon become unbearable. Debt repudiation through inflation likely appears to be the most politically palatable “solution.”

Perhaps out of fear of being blamed for an economic downturn, the Fed’s overriding concern now appears to be keeping the U.S. from falling into a recession. Without a pause, this would likely be impossible, so pause it must, inflation be damned. My guess is that the Fed will continue to ignore evidence of worsening inflation, using growing signs of a weakening economy as cover for its complacency. All the while it will continue to brag about its “vigilance” and commitment to hiking rates further should inflation become a threat.

bit more...

[UpInArms]

16. 9:49 EST happy numbers and pre-opening blather

Dow 11,153.50 +65.47 (+0.59%)
Nasdaq 2,075.12 +17.41 (+0.85%)
S&P 500 1,273.73 +6.99 (+0.55%)
10-Yr Bond 4.991 +0.024 (+0.48%)

NYSE Volume 105,280,000
Nasdaq Volume 84,929,000

09:15 am : S&P futures vs fair value: +7.3. Nasdaq futures vs fair value: +10.7.

09:00 am : S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +11.2. Stage remains set for the indices to kick off the week on an upbeat note as futures indications continue to trade well above fair value. Further deterioration in oil, especially after the Fed recently cited the lagged effects of increases in energy prices as inflation risks that could lead to additional monetary tightening, continues to offer some early relief, especially ahead of several inflation reports this week which begins tomorrow at 8:30 ET with the Producer Price Index.

08:30 am : S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +11.7. Early indications continue to suggest that stocks will regain some momentum at the onset following last week's dismal performance; the major averages were off at least 1.0% while the Russell 2000 plunged 3.2%. Added emphasis on the cease-fire, in the absence of notable economic or earnings data, should pave the way for bargain hunters to get back into equities, especially underperforming areas like Industrials and Technology. The latter looks to get an extra boost after Cisco Systems (CSCO) was mentioned favorably in Barron's while lower oil prices should restore some enthusiasm for transportation stocks.

08:00 am : S&P futures vs fair value: +7.6. Nasdaq futures vs fair value: +12.2. Futures versus fair value are signaling a sharply higher open for stocks. News of a cease-fire between Israel and Hezbollah, which has helped push oil prices down 1.6% to a two-week low, is easing much of the geopolitical-related nervousness that has plagued the market over the last several weeks. BP plc (BP) saying it will keep the Western half of the Prudhoe Bay oil pipeline online while making repairs is also prompting consolidation in crude.

[UpInArms]

18. updated blather

09:40 am : One week ago today, stocks opened lower as surging oil prices overshadowed the positives of a possible pause in monetary tightening. Crude futures surged 3.0% to a new record close of $77.05 a barrel last Monday as reports of a shutdown at BP plc's Prudhoe Bay oil field, the nation's largest, raised concerns that higher energy costs will curb profit growth as the economy slows. Escalating tensions in the Middle East were also acting as an overhang and raising the risk premium for crude oil futures. Fast forward to this morning and that scenario has reversed course, as stocks have opened sharply higher and kicked off the week on a positive note. A UN-brokered cease-fire between Israel and Hezbollah overnight is alleviating much of the geopolitical-related nervousness that has weighed on investor sentiment since the crisis began over a month ago while BP plc (BP 69.94 +0.62) saying it will keep the Western half of the Prudhoe Bay oil pipeline online while making repairs eases supply concerns, pushing oil prices to two-week lows. Crude oil futures are trading at $73.20 a barrel, down 1.6% today but now 5% below record levels. That is especially comforting since the Fed recently cited higher energy prices as putting upward pressure on overall inflation and with investors keying in on influential inflation data out this week. DJ30 +62.19 NASDAQ +16.67 SP500 +6.99 NASDAQ Vol 70 mln NYSE Vol 68 mln

[54anickel]

20. Whoo-hoo! PAR-TEEEEE! Time to boogie on!!!

[UpInArms]

17. Treasurys lower on Mideast cease-fire

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B6F8249E9%2DB580%2D4971%2D9634%2D4713B6F9A2AE%7D&symbol=

NEW YORK (MarketWatch) - Treasury prices were under pressure early Monday, sending yields higher, after news of a cease-fire between Israel and Lebanon dented safe-haven interest in bonds and other safe-haven instruments.

A rally in stocks at Monday's opening should keep money flows out of the fixed-income market.

The 10-year benchmark Treasury note last was down 3/32 at 99-4/32 with a yield ($TNX : 49.89, +0.22, +0.4% ) of 4.988%, up from 4.958% at Friday's close. Prices and yields move in opposite directions.

The 30-year long bond last was 5/32 lower at 90-25/32 with a 5.108% ($TYX: 51.10, +0.18, +0.4% ) yield.

The 2-year note fell 2/32 to 100 with a 4.995% yield.

The focus of the day is likely to remain the Middle East. Israel stopped its offensive against the Hezbollah group when a United Nations cease-fire went into effect at 1.00 a.m. Eastern.

There were early indications that the cease-fire was being respected by both sides.

"Treasuries faded overnight, in tandem with global bond losses, with news of a cease-fire in Lebanon reducing risk premiums," Action Economics said. The research firm said there were reports of selling by both funds and central banks.

...more...

[54anickel]

21. What Greenspan Had that Bernanke Doesn't

http://www.hussmanfunds.com/wmc/wmc060814.htm

Answer: DIsciplined fiscal policy.

Sometimes a picture is worth a thousand words. Greenspan's term began in 1987. Only recently did inflation turn persistently higher. This isn't hard to understand. During Greenspan's term, the fiscal discipline of both Republican and Democratic leadership brought the growth rate of the U.S. gross public debt down from 16% at an annual rate, to just 2% annually. It's relatively easy for the economy to thrive and for inflation to fall, provided the government isn't sopping up the economy's resources and issuing liabilities in return.

The Fed's job is essentially to decide whether government debt should be forced into the hands of the public as Treasury securities, or purchased by the Federal Reserve (thereby creating currency and bank reserves instead). So while the Fed can control the form that the U.S. government's liabilities take, it has no control over the total quantity of those government liabilities (which is determined solely by fiscal policy). Fiscal discipline can make a genius out of any Fed Chairman. Fiscal irresponsibility, on the other hand, cannot even be rescued by genius.

Dr. Greenspan will undoubtedly be glad that his exit was so fortunately timed. Dr. Bernanke, probably not so much. His main fault, most likely, will be in believing that the Fed can actually exert much power independent of fiscal policy.

Fresh inflation figures are due on Tuesday (PPI) and Wednesday (CPI). Though month-to-month figures have a certain amount of noise, we've observed persistent surprises in other recent data, including wage inflation, unit labor costs, and import prices.

It's clear that the prevailing thesis in the market is that slower economic growth will be coupled with slower inflation. That thesis is most probably responsible for the market's resilience in the face of recent day-to-day news events. While resilience in the face of negative news certainly can be a favorable sign, it's notable that we're really not seeing anything resembling “sponsorship” on the basis of price/volume behavior. Instead, the market is meandering on relatively tame volume, which suggests more of a “wait and see” attitude than any robust preference to accept market risk.

more...

[54anickel]

24. 11:07 How high will she go?

Dow 11,176.23 +88.20 (+0.80%)
Nasdaq 2,081.84 +24.13 (+1.17%)
S&P 500 1,275.00 +8.26 (+0.65%)
10-yr Bond 4.987 +0.02 (+0.40%)
30-yr Bond 5.106 +0.014 (+0.27%)
NYSE Volume 633,158,000
Nasdaq Volume 420,757,000

11:00 am : Equities are still on the offensive as buyers remain in complete control of the action. The Nasdaq (+0.9%) has regained some upward momentum and is back to outpacing its blue chip counterparts to the upside. Spearheading the resurgence has been strength in semiconductor stocks, as evidenced by the PHLX Semiconductor Sector Index hitting at an intraday high and now up 1.5%; all 19 components are in the green (e.g. TSM +3.0%, BRCM +2.6%, MRVL 1.9%). DJ30 +74.36 NASDAQ +18.78 SP500 +6.33 NASDAQ Dec/Adv 948/1799 NYSE Dec/Adv/Vol 929/2071/370 mln

10:30 am : Blue chip averages are holding steady near session highs but the Nasdaq, albeit still posting a respectable gain, continues to pare its early advance. Apple Computer (AAPL 63.63 -0.02) was up as much as 1.4% earlier after requesting a hearing to keep its Nasdaq listing, but uncertainty tied to the filing delay of its Form 10-Q recently pushing the stock into the red has taken some steam out of the tech-heavy Composite's attempts to recoup part of last week's 1.3% decline. DJ30 +66.03 NASDAQ +13.06 SP500 +5.95 NASDAQ Dec/Adv/Vol 802/1781/278 mln NYSE Dec/Adv/Vol 846/2023/280 mln

10:00 am : Indices are holding onto the bulk of early gains as nine out of 10 sectors remain positive. Pacing the way higher is Industrials (+1.1%), as plummeting oil prices help renew some enthusiasm for the struggling Dow Jones Transportation Average. Consumer Discretionary is also trading higher, in part at the expense of oil's decline, while an analyst upgrade on Ford Motor (F 7.58 +0.21) is offering additional sector support. Also attracting early bargain hunting interest is Technology which, with the help of an upbeat article in Barron's lifting bellwether Cisco Systems (CSCO 19.90 +0.36) a noticeable 1.8%, is paring some of its year-to-date 9.9% decline. Energy, however, is off 1.5% as the pullback in crude has left Refiners (-1.6%) and Explorers (-1.4%) as this morning's worst performing S&P industry groups. DJ30 +62.03 DJTA +1.3% NASDAQ +15.29 SOX +0.9% SP500 +6.25 XOI -1.6% NASDAQ Vol 170 mln NYSE Vol 158 mln

[54anickel]

26. A TRUER MEASURE OF AMERICA'S BALLOONING DEFICIT

http://cooper.house.gov/newsroom/byjim/050106_truermeasure.htm

The federal government keeps two sets of books, but the Bush administration only wants you to see one of them. There is the highly publicised "President's Budget" issued by the Office of Management and Budget, and the almost-secret "Financial Report of the United States" issued by the Department of Treasury. The budget says that the 2005 US fiscal deficit was Dollars 319bn (Euros 254bn), but the Financial Report claims it is Dollars 760bn.

Which view is correct? Is the deficit a mere 2.6 per cent of gross domestic product and shrinking, as the former OMB director and now White House chief of staff Joshua Bolten claims, or an alarming 6.2 per cent of GDP and growing, as John Snow, Treasury secretary, writes in the Financial Report?

The budget that is hand-delivered to every congressman's and senator's office is calculated on a cash basis, that is, the government only counts dollars as they are received from taxpayers and spent by government agencies. This says the "deficit" for 2005 was Dollars 319bn. In contrast, the financial report was issued without a press release and measures government activity on an accrual basis - when income is earned or expenses are incurred, although no cash may have yet been transferred. According to the report, the US obligated itself to spend Dollars 760bn more than it collected from taxpayers in 2005, so the "net operating cost" was Dollars 760bn.

The congressional budget process uses cash accounting almost exclusively. This is convenient for Republicans because it makes the deficit look much smaller than it is under modern, accrual accounting. In spite of the harmless-looking Dollars 319bn cash deficit, the Republican Senate and House leadership has had trouble passing any budget at all. If budgeting were based on the larger accrual number, budgeting would be impossible without big reforms.

What is the true deficit? Which accounting method is better? Most businessmen laugh at the question because cash accounting has been illegal in their world for many years due to its ease of manipulation. Accrual does a better job of measuring our credit-card economy in which debts are incurred long before interest or principle must be paid. Even accrual accounting fails to account for gigantic Social Security and Medicare liabilities because these are not contractual liabilities of the government.

snip>

Many Americans have a hard time believing that our first MBA president and our pro-business Congress would betray sound business principles when it comes to financial statements and national budgeting. After all, their speeches call for government to be run like a business. Congress can begin correcting these mistakes by using honest, accrual-based, numbers. The House budget committee voted unanimously this year to include accrual accounting in next year's budget process. The truth hurts, but it is the only way to start honouring America's promises to our seniors and veterans.

more...

[54anickel]

27. Analysis Of Open Interest Put/Call Ratios On US Stock Indices

http://www.321gold.com/editorials/captainhook/captainhook081406.html

In an attempt to further define the larger process concerning this subject matter now, we would like to take you on a journey into the internal workings of the US stock market from a sentiment perspective, where it should be understood that as an end result, how hedgers and speculators bet in the derivatives market(s) largely effects general price direction as participants react to the manifestations of their wagers set against the totality of influences. More specifically, and in realizing how market participants are betting essentially constitutes the ultimate measure of sentiment towards future prospects for respective markets, here it's important to realize contrarian thinking plays a big role in terms of how the intelligent observer (that's you) should shape his or her views. That is to say, if a majority of participants are betting on a bearish outcome in a particular market, chances are the opposite will occur as gamblers are forced to alter their views as process unfolds.

Here, primary components of the process involve administrators not only knowing the rules of the game, where we will liken them to being the 'house' in a casino; what's more, they actually write the rules, where brokers write put options the hedgers / speculators acquire in betting on an outcome in a particular market. And of course because the reality of current economic circumstances would have a reasonable man betting against a positive outcome for equities, where a majority of participants naturally have a penchant for betting in this fashion because it's logical, add into the equation efforts on the part(s) of central bankers and politicos to thwart economic irregularities, where opportunistic money supply creation and government spending work to counter natural market forces, and you then have a formula for what is termed a 'short squeeze', where market participants are systematically forced out of what turn out to be 'bad bets' set against a backdrop of what appears to be never ending liquidity.

It should be understood then it's this dynamic that formulates the basis of market forces most heavily influencing general price direction, where the ratios of bullish bets (calls) set against bearish bets (puts) create factors that can be utilized is ascribing outcome probabilities in the various stock markets we follow, allowing us to not only avoid potentially nasty spills when sentiment appears euphoric, but also capitalizing on shorting opportunities as well. And while such endeavors might possibly involve hedging activities associated with profitable long positions, naked shorting (not owning a long position in a security / market you are short) is an activity that can be quite profitable for the real risk takers also, where if approached in a systematic fashion, one aimed at removing as much risk out the formula as possible, successful outcomes are not the impossibility most experience. Here, our experience has taught us not only is it necessary for one to have market direction right, but because of the mature nature of the current environment, one where the establishment works to thwart natural corrections in process out of increasing necessity to their own survival, a successful speculator must be equally concerned with execution and instrumentation, meaning attempting not to put positions on too early, and when you do, make sure one buys enough time to allow for delays known to be a likelihood due to interventions.

Moving into practice now that we have a theoretical foundation for this study established, from a practical perspective at this juncture it makes a great deal sense to take an in depth look at the world of put / call ratios on US stock market indices we follow because not surprisingly they appear to have evaded their true destiny once again, and are apparently set to rally. Or are they? Well, as you will see, and as with the larger analysis provided above, again, it all depends on how you look at it.

more...

[54anickel]

31. 2:47 and loosing altitude

Dow 11,137.49 +49.46 (+0.45%)
Nasdaq 2,080.25 +22.54 (+1.10%)
S&P 500 1,272.06 +5.32 (+0.42%)
10-yr Bond 4.997 +0.03 (+0.60%)
30-yr Bond 5.116 +0.024 (+0.47%)
NYSE Volume 1,531,967,000
Nasdaq Volume 1,092,647,000


2:30 pm : Market continues to hit fresh afternoon lows, perhaps amid growing uncertainty as to what tomorrow morning's influential PPI data may say about inflation at the wholesale level. To wit, Treasuries are now trading near session lows, inching the 10-year note (-06/32) yield toward the psychological 5.00% level for the first time in about two weeks. As a result, the PHLX Housing Sector Index has turned negative while the rise in borrowing costs has also stalled recent momentum in rate-sensitive areas like banks, which as evidenced by the PHLX Banks Index, are now flat on the day. DJ30 +51.78 NASDAQ +22.75 SP500 +5.60 NASDAQ Dec/Adv/Vol 1037/1941/1.03 bln NYSE Dec/Adv/Vol 1119/2100/954 mln

2:00 pm : Indices break out of their afternoon trading range and begin to modestly consolidate intraday gains, but market breadth remains bullish. As reflected in the A/D line, advancers on both the NYSE and Nasdaq continue to outpace decliners by at least a 2-to-1 margin while a 3-to-1 ratio of up to down volume also signals that a short-term bottom has been put in place after the market closed lower four out of the last five days. However, below average volume, which is typical for this time of the year, is lending less conviction behind today's broad-based rally.DJ30 +72.12 NASDAQ +25.02 SP500 +7.52 NASDAQ Dec/Adv/Vol 916/2032/940 mln NYSE Dec/Adv/Vol 1015/2215/864 mln

1:30 pm : Major averages are off their best levels but the bulk of industry leadership continues to trade in positive territory. Of the 147 S&P industry groups, Electronic Equipment Manufacturing (+4.7%) is pacing the day's gains as Agilent Technologies (A 28.59 +1.39) surges 5% ahead of its Q3 earnings report after the bell. Another 2006 disappointment regaining some momentum has been Internet Retail (+3.4%), which ranks second among today's top performers, while Food Retail (+3.3%) is turning in the third best performance, benefiting primarily from an analyst upgrade on Whole Foods Market (WFMI 50.91 +3.54).DJ30 +93.81 NASDAQ +29.20 SP500 +9.89 NASDAQ Dec/Adv/Vol 886/2049/852 mln NYSE Dec/Adv/Vol 962/2228/788 mln

1:00 pm : No real change in sentiment as traders make their way through the New York lunch hour. As has been the case throughout most of the session, the Tech sector (+2.0%) is largely accountable for the market's recovery following last week's dismal performance. To wit, the Nasdaq is up 1.6% to lead the majors. Notable Nasdaq gainers include CSCO +3.2%, INTC +3.2%, GOOG +1.6%, QCOM +2.4%, DELL +3.6%, AAPL +1.9% and ORCL +3.1%. DJ30 +101.12 NASDAQ +32.23 SOX +2.4% SP500 +10.67 NASDAQ Dec/Adv/Vol 862/2068/792 mln NYSE Dec/Adv/Vol 940/2244/732 mln

12:30 pm : Stocks have barely budged since the last update but buying remains widespread across most areas. Bonds, however, remain under pressure as news of a cease-fire diminishes the appeal of Treasuries as a safe haven for nervous investors; the 10-yr note is off 4 ticks to yield 4.98%. Bond traders may also be exhibiting a sense of caution ahead of this week's inflation data, as the possibility of another strong 0.3% rise in core CPI Wednesday raises worries that policy makers have at least one more rate hike in them before the end of the year. The November fed funds futures contract now prices in about a 50% probability for a hike by the October 24/25 FOMC meeting while the January contract currently puts the probability at around 60% for a hike by the December 12 meeting. DJ30 +109.11 NASDAQ +34.43 SP500 +11.53 NASDAQ Dec/Adv/Vol 847/2074/720 mln NYSE Dec/Adv/Vol 914/2251/664 mln

12:00 pm : Market remains in rally mode midday as a cease-fire and subsequent decline in oil prices to three-week lows help pave the way for bargain hunters to get back into equities.

With escalating tensions in the Middle East acting as an overhang for more than a month, news of a cease-fire between Israel and Hezbollah has helped ease much of the geopolitical-related nervousness partly responsible for oil prices trading at historic levels. Also prompting some of today's consolidation in crude futures has been reassuring news out of BP plc (BP 69.83 +0.51), which said it will keep the Western half of the Prudhoe Bay oil pipeline online while making repairs. That news mitigates supply concerns that fueled a 3.0% surge in oil to a new record close of $77.05 a barrel one week ago today and is especially comforting to investors since the Fed recently cited higher energy prices as putting upward pressure on overall inflation and remains focused on incoming data like this week's key inflation reports (e.g. PPI, CPI).

As a result, the only sector trading lower today is Energy, as investors lock in some of the sector's leading 18% year-to-date surge and rotate into underperforming areas like Industrials, Technology, and Consumer Discretionary. With regard to the latter, retail has gotten a lift from oil's 2.0% decline and an impressive earnings report from Dillard's (DDS 32.91 +1.59), while Transports are also benefiting from oil's pullback, helping the Industrials sector (+1.8%) climb back into positive territory for the year.

Pacing the way higher among the nine sectors posting gains and providing even more influential leadership, though, has been Technology (+1.9%). To wit, Internet Software & Services and Semiconductors -- two of this year's biggest laggards -- are among today's best performers while an upbeat article in Barron's lifting bellwether Cisco Systems (CSCO 20.06 +0.52) a noticeable 2.7% has also helped the tech-heavy Nasdaq pare some of its year-to-date 6.7% decline. DJ30 +111.28 DJTA +2.1% NASDAQ +34.34 SOX +2.2% SP500 +11.38 XOI -1.5% NASDAQ Dec/Adv/Vol 850/2007/644 mln NYSE Dec/Adv/Vol 949/2188/598 mln

[54anickel]

32. Closing time

So sorry for the sparse posting of news items today. Looks like it was a pump 'n dump day heading into the inflation reports. Looks like Chopper Ben's credibility is on the line again this week.

Dow 11,097.87 +9.84 (+0.09%)
Nasdaq 2,069.04 +11.33 (+0.55%)
S&P 500 1,268.21 +1.47 (+0.12%)
font color=red]10-yr Bond 5.001 +0.034 (+0.68%)
30-yr Bond 5.118 +0.026 (+0.51%)
NYSE Volume 2,081,371,000
Nasdaq Volume 1,517,271,000

4:20 pm : What was shaping up to be a respectable recovery for equities Monday, spurred by a Middle East cease-fire and subsequent sell-off in oil, shaped up to be little more than a modest bounce from oversold conditions, as ongoing inflation concerns resurfaced late in the day to close the market at session lows.

When oil prices were off as much as 2.4% intraday and back below $73 a barrel, as news of a cease-fire between Israel and Hezbollah helped ease some of the geopolitical unrest partly responsible for oil recently hitting historic highs, the major averages were also at their best levels. Separately, an improved production outlook for BP plc's (BP 69.34 +0.02) Prudhoe Bay oil field helped mitigate supply concerns and also factored in to the drop in crude prices.

The Nasdaq was up 1.7%, more than erasing last week's 1.3% decline, while a 0.96% gain on the S&P 500 at session highs had the broader market nearly reclaiming the 1.0% it lost since kicking off last week on a lower note due largely to an uptick in oil prices.

However, as oil prices pared their losses into the close of trading on the NYMEX, amid growing uncertainty about the solidity of the UN-brokered truce, so too did stocks pare much of their intraday performance. Crude oil futures closed down 1.1% at $73.53 a barrel.

Oil's rebound, and the specter of this week's inflation data, which includes core-PPI tomorrow morning and the more influential core-CPI data on Wednesday, contributed to the afternoon selling activity. Prior to the pullback, though, below average volume, which is typical for this time of the year, provided little confidence that the stronger gains seen earlier in the day could be sustained into the close.

Bond yields closing at session highs, amid the possibility that "incoming" inflation data may warrant the need for another rate hike before the end of the year, also took some steam out of early recovery efforts.

One area though that still finished the day on a strong note was Technology, as evidenced by the tech-heavy Nasdaq posting a respectable gain compared to its blue chip counterparts, which struggled to close in positive territory. While finishing well off its highs, the decline in oil prices allowed investors to lock in some of the Energy sector's leading 18% year-to-date surge and and prompted a rotation into underperforming areas like semiconductors, networking, and software.

The latter got a boost as Oracle Corp (ORCL 15.29 +0.30) surged 2.0% to match its 52-week high while Communication Equipment was among today's best performing S&P industry groups after tech bellwether Cisco Systems (CSCO 20.06 +0.52) was mentioned favorably in Barron's. With the PHLX Semiconductor Index off more than 15% for the year, a sense that a short-term bottom has also formed among chip stocks provided additional sector support. DJ30 +9.84 DJTA +0.5% NASDAQ +11.33 SOX +1.1% SP500 +1.47 XOI -1.7% NASDAQ Dec/Adv/Vol 1362/1654/1.50 bln NYSE Dec/Adv/Vol 1475/1803/1.40 bln

3:30 pm : Blue chips finally find some support near the unchanged mark while the Nasdaq is still posting a respectable gain but remains well also off its best levels. The Composite, amid a sense that everything from semiconductors to software has been oversold, was up 1.7% at session highs and is now up 0.7%. The Dow and S&P 500, however, are clinging to paltry gains as buyers continue to show some reserve going into the close. DJ30 +3.76 NASDAQ +13.34 SP500 +1.52 NASDAQ Dec/Adv/Vol 1311/1685/1.29 bln NYSE Dec/Adv/Vol 1501/1737/1.20 bln

3:00 pm : Market continues to lose its footing heading into the final hour of trading. Aside from rising bond yields and uncertainty ahead of tomorrow's PPI report stalling some of the momentum that had blue chips more than halving last week's declines and the Nasdaq completely erasing its 1.3% pullback, oil prices paring their losses into the close of trading on the NYMEX has also contributed to diminishing enthusiasm for a stock rally that more aggressively embraced oil prices when they were down as much as 2.4% and back below $73 a barrel. Crude oil futures closed down 1.1% at $73.53 a barrel.DJ30 +19.45 NASDAQ +14.17 SP500 +2.08 NASDAQ Dec/Adv/Vol 1104/1892/1.15 bln NYSE Dec/Adv/Vol 1189/2043/1.07 bln

2:30 pm : Market continues to hit fresh afternoon lows, perhaps amid growing uncertainty as to what tomorrow morning's influential PPI data may say about inflation at the wholesale level. To wit, Treasuries are now trading near session lows, inching the 10-year note (-06/32) yield toward the psychological 5.00% level for the first time in about two weeks. As a result, the PHLX Housing Sector Index has turned negative while the rise in borrowing costs has also stalled recent momentum in rate-sensitive areas like banks, which as evidenced by the PHLX Banks Index, are now flat on the day. DJ30 +51.78 NASDAQ +22.75 SP500 +5.60 NASDAQ Dec/Adv/Vol 1037/1941/1.03 bln NYSE Dec/Adv/Vol 1119/2100/954 mln

[AnneD]

34. A no news day...

is a no news day. No fluffy (Suri Cruise etc) filler here. As I tell the new Nurse I train....adrenelin is a highly overrated hormone.

[Roland99]

35. What happened to the big positives? Cease fire! Oil dropping!

Hmmm...

[AnneD]

36. Sorry Roland....

In that area of the world , a cease fire means those folks have stopped to 1) reload or 2) they are out of ammo and need to go get some more.

Oil dropping: while that may be good in the short run-it is not good in the long run for either 1)our country 2)the enviroment 3)the DEM's come election time.

Gosh, I'm starting to sound like Eyore. Well pin a tail on my butt and give me a slice of Birthday cake.

[Roland99]

37. Ha! Is this you??

:D

[AnneD]

38. An ass by any other name...

would STILL be a Democrate.