1-6-10
I need to be a bit briefer today, as I find the snow here has put a crimp in the need of a family member. So, bear with me today. But, even as it is, there is not a lot to cover when I tell you that the S&P range today was only 5.8 points. That is less than all but one day of the Christmas holiday. However, even more interesting is the fact that there were over 1.25 million E-mini S&P futures contracts, quite a respectable day for volume.
So, what do those two numbers tell us? Simple. The impact of the Friday employment number is building to quite a crescendo. If, as some believe the numbers show even a tiny bit of a positive outcome (more new jobs than jobs lost), I look for a rush of buying that will send the S&P to at least the target of 1220-40 I told you the charts predicted last July. If they fall well short . . . . . well, I have told you several times that we are substantially “overbought” in the stock market and some sort of relief is needed to restore balance. Is this it?
Today the MOMENTUM SECTION green line (fast sto) stands at 86.57 and has been in the high 80 area (scale is 0-100) for over 10 trading days. To get to even a neutral situation (where buyers and sellers are pretty well balanced) we need to see that number in the 40-60 area. So, … bad number Friday and we go to the “neutral area,” at least. Good number and we continue to “walk the 90’s,” as I have said. It will be a fascinating day. Tomorrow should be pretty much like today, except for the last hour when everyone finally MUST put down their final bets. Yeah, I know. It’s Vegas on steroids, isn’t it?
The story on bonds today, despite the speeches by Fed chairman Bernanke and other Fed reps, was a big selloff – again. The Big Guys see rates going higher. The Fed begs to differ. One of them is wrong. I put my money with the Big Guys. The Fed isn’t big enough to control the world’s bond market. This is a story that you need to watch very closely. I will be sure to keep you right up to date on it. I will have a chart in a few days, too. You need to see the Keyline continues to say bond prices are going lower. Hummmmm. More later.
The Rest of the Story
Gold had a heady day again, up over $19. Of course, the dollar slipped a bit more, down .15. No big shakes here, but continues lower, as I told you it would for a bit. But, remember what I said earlier. The world has a huge stake in seeing the U.S. currency doesn’t fall out of bed. Lower is OK, but they will do all they can to keep it from nose-diving. The key reason which I already have stated is stability. If the U.S. dollar dies, every economy in the world goes into the tank. So, weak, but no collapse – at least this year. Dr. Copper continues to climb. Bad news. But, the commodity inflation is not a joke. This is a harbinger of the fears in investors considerations all across the board. But, it is still not a reality, just the outcome of fears. I suspect that the hype that the Fed will fail to control inflation will abate by mid-year and much of the bubble being created in commodities will be deflated, much like it was July 2008, just not as big. But, we need to watch the charts closely to be sure that is what they keep saying. So far, that is the story they are telling. More in the next Weekly Keyline Report on this subject.
Well, that is about it for today. One more day to endure until Friday, so grin and bear it, as they say.
And, as ever, do hope your trading day was a profitable one. Will be back tomorrow with more, Lord willin’ and the creek don’t rise.
Need Something to Talk About Tonight?
SIX MAJOR IMPACTS ON THE MARKET TODAY
1. Politicos stepping down in a rush! What do they know we don’t? Biggest one, Dodd announced today!
2. ISM report was in positive territory today – just barely – but was a good sign.
3. New York Governor lays into the lawmakers for gross neglect, cheating, etc. They all yawned. Humm.
4. U.S./China tensions over protectionism move to new level, as WTO gets into the act. Trouble here!
5. Wishful thinking. GM Boss Whitacre predicts GM makes 2010 profit. Many dealers to be reinstated.
6. Google enters iphone competition. Apple confident. Microsoft, too. How many can market support?
#1 is a real shocker to me. Dodd leaving sets up a real confrontation with the White House over Health bill. Now, some that won’t be there in 2011 may rebel against Reid’s pressure tactics. This could get really ugly. #5 almost made me laugh, but I cried first. I will miss the Pontiac. And #4 needs your attention. This is serious business and could affect job creation in the U.S., meaning the stock market will be dragged into this soon, quite possibly.
THE NUMBERS SECTION
DAILY CHANGES DAILY WEEKLY
Closes as of Mon. 1-4-10 CHANGE (cash) KEYLINE# ABV/BLW
DOW INDU. 10,573.68 +1.66 points 9,844.77 ABV +727.25
S&P 1,137.14 +0.62 points 1,059.91 ABV +76.61
30 YR BONDS 115 – 28 ticks 116 21/32 BLW – 1 20/32
NASDAQ 2,301.09 -7.62 points 2,118.55 ABV +190.16
GOLD $1,139.20 +$19.70 $936.11 ABV +$183.39
OIL $83.10 +$1.17 $84.77 BLW -2.84
DOLLAR INDEX 77.49 -.15 79.70 BLW -2.06
COPPER $3.4300 +$.0670 $2.6816 ABV +.7414
DOW DAILY PRICE RANGE 62.04 points (Pretty quiet folks!)
S&P DAILY PRICE RANGE 7.6 points (pretty quiet here too. Hummm)
EOD BOND YIELDS 1 YR. 0.35% -.010 10 YR. 3.82% +.061 30 YR. 4.69% +.083
Note: All closes at 4pm using continuous cash contract results
*The name Super Chart Keyline is a registered Trademark of Max Whitmore.
*** Disclaimer ***?Max Whitmore, The Keyline Report, and MUNCHIN’ On the Numbers does not endorse or suggest any of the securities which are mentioned in any way in their reports. They are provided purely for informational and research purposes. Max Whitmore, The Keyline Report, and MUNCHIN’ On the Numbers does not recommend particular securities to anyone. Max Whitmore, The Keyline Report, and MUNCHIN’ On the Numbers, as well as any source that might be used by them to initially provide information materials to them prior to the writing of their reports, shall not be liable for any errors of any description in the content, or for any actions taken by any third party based on the content therein.
Related posts:
About BawldGuy
Max,
I agree that the inflation-bears are wrong due to excess slack in labor, services and manufacturing. Do you expect the S&P to drop significantly (>20%) if commodities drop a lot?
Thanks,
John