Thread: Market Talk

Spaf,

My thought is are we going to walk the tight rope at 1220 (1219.71) or break to the upside. I think we got one like the Nikkei 225 on the way. Straight up for the next several months with a gain of ...you pick a top.

Dennis

Dennis,

She is gonna dance, if lube doesn't send her on her [bleep]. Spaf

Tidbits from Bloomberg I thot interesting:

France would be in a recession if it wasn't for the strength of the dollar and its effect on French imports to the U.S. A stonger dollar is a tonic to the EU economies ... and to the I fund.

The other tidbit is a little more disconcerting. For every month this year except June Walmart has made more $$ from its food/grocery operations than its retail. Some say that is because after its customers go food shopping there is little left over for other things.

Walmart's stock price is down 15% this year while Target's is up 26%. The average shopping family at Target earns on the average $15 to 20K more than the average at Walmart.

Walmart has got to be concerned about that. And I don't believe tax cuts given to the upper income levels have helped that. If those cuts were geared more to those who spend their entire paycheck just on living expenses, a Walmart would see much of that on its balance sheet. Instead those tax cuts were given to those who will not or need not spend it on such expenses. The short term effect of those tax cuts on an entity like Walmart has not been good.

Odds Of Reversal by Bob Colby

Over the past 105 years, stock prices have tended to trend most of the time. But since the S&P 500 made its price low of 768.63 on 10/10/2002, the market has exhibited an unusually persistent choppy behavior pattern, where the trend of today has been unlikely to carry over into tomorrow.

Specifically, over the past 719 trading days (1042 calendar days) from 10/10/2002 through 8/17/2005, the S&P 500 has followed the previous day’s trend only 323 times and has reversed that trend 396 times.

This means that if a trader would have attempted to follow the trend on a day-to-day basis, he would have had a 44.92% chance of making a winning trade and a 55.08% chance of making a losing trade.

If one had attempted to flip positions (long to short, or short to long) on every one of the 396 reversals in order to follow the trend change, he would have made a profit only 118 times, and he would have lost 278 times.

This means that if a trader would have attempted to follow all the daily trend changes, he had only a 29.80% chance of making a winning trade and a 70.20% chance of making a losing trade. These are poor odds.

Furthermore, if one could actually trade the S&P 500 index, one would have lost 48.44% of his capital by playing for follow through of today’s trend. Conversely, trading against today’s trend would have produced a significant paper profit of 83.79%, before trading costs and taxes.

http://www.investorshub.com/boards/r...age_id=7435763

bond/equity flo... http://www.amgdata.com/

bleak outlook 4 the I fund ???

Aug. 19 (Bloomberg) -- The dollar was poised for its biggest weekly advance against the euro in more than two months on reports that said international investors are buying more U.S. debt.

The U.S. currency is set to end a six-week slide against the euro and a two-week drop versus the yen after the government said foreign investors increased their purchases of U.S. assets such as bonds and stocks. The Federal Reserve said yesterday its holdings of Treasury and agency debt for foreign central banks and international accounts rose to $1.468 trillion in the past week.

``I am positive about the U.S. dollar,'' said Hiroyuki Yamada, who helps oversee the equivalent of about $1.29 billion in fixed income securities at Daiwa SB Investments Ltd. in Tokyo, a unit of Japan's second-largest brokerage. ``The spread of yield is wider.'' Yamada said he bought U.S. Treasuries earlier this month.

The U.S. currency this week advanced 2.2 percent to $1.2164 per euro and rose 1.1 percent to 110.56 yen as of 3:23 p.m. in Tokyo, according to currency-dealing system EBS. It was the dollar's biggest weekly gain against the euro since the period ended June. 3. The dollar traded at $1.2175 per euro and 110.54 yen late yesterday in New York.

The New York branch of the Fed said it held a daily average of $1.099 trillion of Treasuries, an increase of $7.207 billion from the previous week. Holdings as of Aug. 17 totaled $1.470 trillion, consisting of $1.101 trillion in Treasuries and $369.130 billion in agency debt, according to the Fed's report.

International investors added a record amount of corporate bonds in June, the U.S. Treasury reported on Aug. 15. Foreigners bought a net $71.2 billion of U.S. financial assets in June.

`Demand for Dollars'

U.S. 10-year Treasuries yield 1.03 percentage points more than similar maturity German bunds, above the 60 basis point average over the past 12 months.

The Fed on Aug. 9 raised its benchmark rate to 3.5 percent and repeated a pledge to keep lifting rates at a ``measured'' pace. The European Central Bank has left its benchmark at 2 percent since June 2003, and the Bank of Japan has kept borrowing costs near zero for more than four years.

``There's demand for dollars because U.S. yields are definitely higher than those in Europe,'' said Satoshi Asai, who helps oversee $1 billion of bonds at Sompo Japan Asset Management in Tokyo, a unit of Sompo Japan Insurance Inc., the nation's third- largest casualty insurer. Asai said he may buy the dollar should it weaken significantly.

The Philadelphia Fed's general economic index for August increased to 17.5 from 9.6 in July. Economists expected a reading of 14, based on the median of 48 forecasts in a Bloomberg survey. The New York Fed's Empire index, another regional manufacturing index, four days ago beat the median forecast of economists.

The Labor Department on Aug. 17 said U.S. wholesale prices rose in July by the most in nine months, up 1 percent. Consumer prices gained 0.5 percent in July, the most in three months, a separate report showed on Aug. 16.

Yen Bulls

Japan's currency may gain on the day after a government report yesterday said foreign investors bought the largest amount of Japanese stock in 17 months.

Foreign investors purchased a net 721.9 billion yen ($6.5 billion) in Japanese equities, according to a report released by the Ministry of Finance in Tokyo. The amount was the largest since the week ended March 19, 2004, when foreigners purchased 1.15 trillion yen worth of equities.

``I am bullish on the yen,'' said Xinyi Lu, chief strategist of the international treasury and trading department in Tokyo at UFJ Bank Ltd., a unit of Japan's fourth-biggest lender. ``Foreigners will keep buying the Japanese stocks and the data show Japan's economy is in a good shape.'' The yen may rise to 108 per dollar in a month, he said.

Japan's gross domestic product will probably expand 2 percent in the year ending March 31, 2006, accelerating from 1.9 percent last fiscal year, according to the median forecast of 14 economists compiled by Bloomberg News on Aug 16. That's up from a 1.5 percent prediction in a July survey.

`Housing Bubble'

Akihiro Tanaka, a senior currency dealer in Tokyo at Resona Bank Ltd., said rate increases by the Fed will underpin demand for the dollar rather than cause a surge in the currency.

Higher interest rates in the U.S. ``will support the dollar's upward momentum, although it's not going to be a straight line up,'' he said. ``The Fed might want to increase interests much faster and higher than people have expected, especially in order to tackle the possible housing bubble.''

U.S. builders broke ground on 2.042 million housing units at an annual rate in July compared with a revised 2.045 million a month earlier that was higher than previously reported, the Commerce Department said Aug. 16.

June Eurodollar futures yield around 4.405 percent, up from 4.250 percent a month ago. The futures settle at a three-month lending rate that has averaged about 21 basis points more than the Fed's target over the past 10 years.

A higher interest rate ``translates into the stronger U.S. dollar story,'' said Craig Ferguson, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. Currency ``markets do move on a basis of yields.''

The U.S. currency may rise to $1.17 against the euro and 115 yen by year-end, he said.

Tekno,

U noticed dat!

Git a DJIH chart $INDU or ^DJI. Add the P-SAR. And wait for the long signal!

I could be wrong, but I feel that we will be O/S for a while. Why, oil has to remove the drag. Now that I've said that watch it bounce like [bleep]. Spaf

Spaf,

I may have stumbled onto the solution for our refinery problems - read on.

Saudi Aramco is in talks with China Petroleum and Chemical, or Sinopec to join a second major Chinese refinery, this one under construction in the country's north. Aramco is negotiating for a 25% stake in the project, which will have a capacity to refine 200,000 barrels of crude a day. The vast majority of the oil would be supplied by Aramco. Didn't we build Aramco?

The Qingdao negotiations are the latest sign of increasingly close energy cooperation between China and Saudi Arabia. Saudi Arabia has become China's biggest supplier of foreign oil. Aramco and Sinopec which is China's largest oil refining company also have a project in Saudi Arabia to explore for and produce natural gas. Saudi stakes in Chinese refineries will help seal bilateral energy ties for the long term. Such arrangements give Aramco the exposure it has been seeking in "downstream" businesses such as producing and selling refined oil products. For Beijing, the arrangement helps guarantee Saudi Arabia will earmark part of its oil production for the Chinese market. I thought Saudi Arabia was in our strategic national interest. The military is no longer in Saudi Arabia - will al Qaeda take on China - they certainly don't believe in Allah. Will China let Iran have a nuclear bomb?

Last week Aramco and Exxon Mobil Corp. announced they were proceeding with a joint $3.5 billion refinery and petrochemical project with Sinopec in China's southern province of Fujian. Exxon and a unit of Aramco each will hold a 25% interest in the Fujian Refining & Ethylene Joint Venture Project, while the remaining half will be equally owned by the Sinopec and Fujian province.Can you speculate where this might be going. Do we need to let China come here and build us a new refinery. Perhaps the liberal Democratic side would be less obstructionist knowing that the Communist Party was here to help them - think about where blame should reside because we are now so backwards - both in education and national strategic interests. China has plenty of used bicycles they can sell my democratic friends - what the hell am I saying - I don't have any friends that are Democrats. Maybe one.

Dennis

Goods Orders Fall, Home Sales Near Record: U.S. Economy Preview
Aug. 21 (Bloomberg) -- U.S. orders for durable goods barely retreated in July after a three-month surge while home sales were the second-highest ever, evidence that businesses and consumers are taking spiraling energy prices in stride, economists said reports this week may show.

Orders for goods that last at least three years, such as autos and furniture, probably fell 1.2 percent last month, according to the median forecast of 49 economists surveyed by Bloomberg News. The drop would retrace just an eighth of an April through June increase that was the biggest since comparable records began in 1992. New and existing homes combined sold at an 8.575 million annual pace in July, second only to the record 8.704 million reached a month earlier, economists expect other reports will show.

Low interest rates and an accelerating economy are giving companies the confidence to buy new equipment and hire more workers to meet demand. Brighter job prospects and rising incomes are helping prospective home buyers overcome record gasoline costs and will give the economy a lift in coming months, economists said.

``The current acceleration in manufacturing activity could surprise on the upside,'' said Dean Maki, chief U.S. economist at Barclays Capital in New York. ``Most indicators point toward solid economic performance.''

BT,

So China gets the oil and the refineries. What about a new refinery here? The ones we have are kind of old, some in disrepair from what I hear. I don't understand what we are doing at all!!

High gasoline prices don't hurt some people.Hummers are still selling! If they got a bicycle from China they would just give it to Good Will!

Rgds, :? Spaf