Friday, July 07, 2006

An Interesting Pre-Open

All eyes were on the jobs report before the open this morning. It came in weaker than expected, and the markets soared higher (hmmm, so a dying economy is good for stocks? OK). This is the market's bizarre obsession right now - the short term direction of interest rates.

Anyway, the market has "un-soared" in the pre-market now, with all indices showing a loss. Should be interesting to see how this shakes out.

31 comments:

Anonymous said...

The market has been in a "bad news is good news" mentality for months now. EVERYONE is so obsessed with what the Fed will do in August that the market is jumping on every little report and inuendo in the press. They're so scared of that next 1/4 point rate hike, it's insane. What investors REALLY need to worry about is the Yen carry trade and what the ECB will do next, not what the Fed will do next.

If someone can tell me why avoiding another lousy 1/4 point hike is SOOOOO important to stocks, I would appreciate it. Let's face it, the economy is slowing, inflation is rising, yet people want to BUY into the stock market at its peak???

Kapil Khanna said...

Anonymous,
Thats precisely what markets are :).

Tim Knight said...

Tons of morons rushed into stocks in March 2000. Only in retrospect do people sober up.

downosedive said...

stockshaker summed up the current bull mentality well in yesterdays post. Basically its human nature to want market prices to go up all the time so that each can increase his/her personal wealth and all that that would bring - part of the aspiration of 'the american Dream'. What the drone bulls seem to over look is that you can make more money and much much quicker through plunging prices. But it seems so few know how to gamble on falling prices or else the concept is something too alien to them to understand or even experiment with

Anonymous said...

Market up becuase of the job number. Market down because the hourly wage was up 0.5% and Fed will definitely raise 1/4 again.

bsi87 said...

Tim,

I know this is off topic but can you create/plot two items against each other in Prophet? Like the DJIA against gold?

TIA

cristri25 said...

"Market up becuase of the job number. Market down because the hourly wage was up 0.5% and Fed will definitely raise 1/4 again. """


Errrrr, I think the market was up PRE MARKET on the JOBS report then it tanked on the 3m report ...

ANyone see the warnings from AMD and SBUX.

Tim Knight said...

With ProphetCharts (not yet released!) you can plot two disparate items with their own axes. It's going to be part of the new Toolbox.

bsi87 said...

Tim,

I don't think I made myself clear. In stockcharts.com, you can create a interstock or intermarket plot by putting in $indu:$gold (DJIA against spot gold) BUT you can look only look in days or weeks and you can't draw trendlines. It's John Murphy stuff.

Thx

costas1966 said...

Markets are so obsessed with interest rates that they are buying home builders and mortgage reits. As if the slight pull back in interest rates will bring back the mania and investors will start buying condos 30 times their rent.
What a joke. It seems to me that it is automatic, programmed kind of trading, interest rates down, buy hommies and financials. It got to be program related because noone with half brain would buy these stocks at this point of the cycle with fundamentals turning down, especially reits with many of them hitting new highs with all time low divident yields. It just blows my mind.

spinning_head said...

"noone with half brain would buy these stocks at this point of the cycle"

true...but those with half a brain or less can and do trade stocks..often as head of a mutual fund! After all, their analysts told them it was a great buy!

dsantos said...

I just want the DJIA to hit 10,850 in the next two weeks. That's all I need. You will see the happiest kid on the planet if that happens.

Sanjay Sola said...

3M and AMD warnings. retail is down and likely to continue down. even SBUX is down, so the high end stuff could be vulnerable. The 3M warning on slower growth in LCD displays means Corning and Best Buy should be affected.

my breakouts reversed yesterday, so i was in cash. the market is way overbought still.
It looks like the rally failed. the rally was partly caused by end of the month window dressing and short covering. the confirmation was on day 11, rather late.

most confirmation days are on 4-7. this week we've had 2 distribution days (including today). so that's 2 distributions in 3 days since the rally confirmation.

So there's no conviction in the rally. maybe some bounces though. i'm guessing there's a lot more warnings coming. do i hear Nasdaq 2000?

PB said...

Well, just over an hour to go and the market seems to be acting 'rational' These latest episodes of weak eco numbers are good for the markets have really made me question the intelligence of the bulls. Looks like the 'smart' market players are always looking for a way to screw the 'average' guy. This idiocy has not only over taken the markets, but the way the US is run as well. Interest only mortgages, Bush as president are all signals of the apathy of the US populace.

Anonymous said...

what a day, I think the dow dips easily below 11k next week and the nasdaq 2100. CNBC talking abut another pause hahahaha, they dont know when to keep quiet, rates going up .25 in august and 6% by the end of 2006. MMM didnt help things or did AMD. I have been saying to sell sell sell....who knows what next week brings.

Long PSQ

G2006

Anonymous said...

bsi87...go to "Tools"..."Comparison Chart" in Java Charts.

Trendlines will only show up on the chart you are comparing the second chart to.

Tim Knight said...

bsi - what does it do? Compute the difference? ProphetCharts is able to do that, too.

Anonymous said...

Just FYI, the SPX bounced off its 200-day SMA today at 1263. Don't know if this will hold up next week, but it should provide some nice support in the short term during early earnings season and could prompt some technical buying starting on Monday.

The DJIA looks like it's got some support at 10,900. If we do see a breakdown in the coming week or so, it could bounce there. However, the reverse H&S is forming quite nicely here...

-Tony

Anonymous said...

great day for the bears, unfortunately it only got me even to the beginning of the rally....still happy to make it back. thought it was going to be ugly day since job numbers were much lower than the consenus. Have a good weekend all.

bsi87 said...

Tony,

DJIA has 6 lows since March IMO, using a weekly chart. Average works out to 11056. If that gives way and DJIA closes below that, next ST target works out to 10,300.

What's more critical IMO is Nasdaq's lack of performance. I don't see how SPX or DJIA could do much if the Naz is running higher. Support is pretty much busted. 2000 near term target.

You don't wanna know what the LT targets are.

downosedive said...

Good postings from all the regs on this site as always. Have you seen the latest blurb the analysts are attaching to days plunge? They are saying 3M warning is a one off and that all other earnings reports should come in with healty growth/profits. The thing is this time round the analysts just MAY be right, BECAUSE high interest rates/wages/oil/other commodity costs have all yet to really bite. I cant help continuing to think that the analysts etc will tout their 'expertise' and the next thing we know is that good old phase 'the market rallied sharply on bargain hunting' will be heard. I hope Im wrong, but it just seems that we need something more than just the many bad economic data circulating - who knows perhaps Im wrong and there will be a spate of high profile profit warnings and then, well if my names not downosedive, then ..............

cristri25 said...

i tell you who are just a tad more retarded than analyst .... the ECONonmist !

they all had jobs targets of 200K and tame wage growth. THEY ARE over paid hacks. I have no degree and I could figure out jobs growth is increasing.

cristri25 said...

""The thing is this time round the analysts just MAY be right, BECAUSE high interest rates/wages/oil/other commodity costs have all yet to really bite. ""

have you seen DD ? i would tend to disagree. OIL is feeding in . Those killer FDX numbers posted a couple weeks ago ... read the 10K they added surcharges to everything.

Anonymous said...

The market was going to rally until 3M dropped some news. The markets "wanted" a lower job number. The talking heads at CNBC still calling for a pause at the next meeting. Are they serious, they have been talking about a pause for the last 12 months and nothing has changed. Federal Reserve goes to 5.5% in August and by end of 2006 6%. Cnbc has to stop their pathetic talk. Today right before the announcement of the job numbers they all put in their prediction as to where the numbers would be, the lowest prediction was good old rob insana with 185,000, all the rest had 225,000+ due to the fact that the ADP figures came in north of 350,000. They are so pathetic. I remember when they were talking about new all time highs on dow in april, they sounded so stupid. I think the markets head lower especially if companies down deliver. The nasdaq looks like it cant put in one good day. Most tech stocks are done, cant even find a way to move higher. Without the nasdaq coming back markets really have no where to go. I think the nasdaq trades 2000-2050 sometime in August and the DOW below 10850.

Joe

Anonymous said...

cristri those overpaid hacks get paid alot of money to GUESSSSSS? I dont know why they are paid 6 to 7 figures. ITS PATHETIC. Imagine you had a job where everything you do is just guess. Amazing that they get paid that much money.


Joe

Panhandle Pete said...

Hey Tim,

I placed market orders on most of the picks you recommended Weds. I cashed out of all of my positions this afternoon for a 30% return on my total account.

Now that's what I'm talking about. I think I will take a vacation.

Thanks!!

Anonymous said...

shorted some of tim's recommendations. bni paid some, others i gave back to the longs.

market is a dog attempting to climb a tree. will stay short...

Anonymous said...

I own PSQ, when the nasdaq 100 dips PSQ rises and vice versa. Daytraded QLD today also, If you can time QLD just right you can do well. IF the nasdaq dips at the open for instance a 15-20 point drop ill add some shares for a a mini reversal sometime in the day. Worked out twice this week. QLD is a little risky. Moves 2X the amount of the nasdaq 100.

Anonymous said...

Tim,
Will your new prophet charts have the ability to calculate pivot points and have their corresponding S/R lines appear on the charts? Also, will the charts have the NASDAQ advance/decline line as a tool/study?
Thanks
Jim

dmsullivan said...

Hi all
Very educational reading for me as I am new to trading. Can't help but mention that we loose good comments with harsh arguments. I will miss john wheatcroft who has recently stopped his input to the site.
Granted Bulls and Bears may have differing opinions but lets make use of all the experience and knowledge we have on this site and not drive each other away with our comments.

Super Bull said...

Well, it looks like I may have praised Hurricane5 prematurely. I am surprised by how weak the unemployment report is. It doesn't bode well for the future. This market's got more moves than Michael Jackson but short term I would say the direction is down. Short Tech Names.