Where are the markets heading?

[wayneL]

If you cant explain or understand something.

Just invent something that fits!

Financial reporting in a nutshell.LOL

That's all BubbleVision does all day

 

[Damuzzdu]

If you cant explain or understand something.

Just invent something that fits!

Geez Tech, u always get it right on......PMSL!!!

The PPT are really working hard at present to stop it going lower. You would wonder how much more ammo they have got left. I suspect quite a bit.

Cheers
Muzz

 

[zuluwarrior08]

LMAO man that crash protection team is some of the funniest stuff ive seen in a while. Glad the fed left rates at 5.25.

I like to "fade the open" on the XJO but with huge volatility this week its kicked me up the bum. Looks like we'll open slightly higher today with SPI futures slightly up, but an intraday dip b/n 10:30-11:30 back to open levels looks a slight short for me.

they say that you've got to be in it to win it, and its been hard to remove emotion, greed and fear, for me this week.

PS reece very nice blog

 

[Buffettology]

I wouldnt call this a correction, but if it is, trading my safe stocks is getting me by quiet nicely. I am making a killing with this volatility.

Just lately:

Buy, JST 3.89 now 4.40.
Buy, SDG 3.65 sell 4.00
Buy, TOL 13.00 I think it was, sold 14.00
Buy, BKL 20.00 now 21.00 or might have closed lower.
Buy, EQN 3.70 now around 3.90
Buy, BXB 11.70 now over 12.00

All mine are going totally against the market, just buying safe companies at the right time. Other than EQN which is my long-term spec buy.

Too bad I missed out on WTF (bought more JUST instead), but there is still room for this one.

I have grown my portfolio by over 10% in the last month, in a market which has moved sideways.

 

[stoxclimber]

Sorry, usual bears, but no 4 week correction, or short term bearish..onwards to 6400 we go!

Maybe next time..October 2007 is not far away!

 

[gfresh]

Looks like it.. Friday ASX was less positive than it may have been with the nice rise in the Dow thursday night. The 6400 resistance level is I think maybe at the moment a bit of psychological one with concern about the next 12-18 months... but i think on the whole at the moment there is more positive news than bad.

US Friday time was a small positive movement, and looks like 13600 may be forming as a support level there?? Or just a rest for the the wave back down again??

A small push up there early next week may give rise to the formation of a support level at 6400 for the XAO too.

It seems like any gain in the Dow is ignored, and any drop in the Dow gives us a bit of a kick down. My thoughts anyhow.

It's almost a mirror at the moment between dow and xao.. the following two show this.. note arrows are no indication of extent of move, just the direction.

 

[steven1234]

What i find interesting is that many are expecting a large correction sometime later this year. Some have even gone as far as selling their holdings and shifting the money into savings accounts ready to pounce when the market corrects. What i don't understand is that if this was going to be the case, why are the so called professional investors and private equity holders launching takeovers and making other acquisitions at this stage of the market?

I believe that the simple fact that there are so many aquisitions taking place is evidence that we are in a bull market and it is not going bear for a long time yet. Had such confidence not existed many would wait for a longer term correction or marker collapse before launching any takeover bid.

 

[gfresh]

Aren't wild takeovers the first sign of the bubble before a big correction?

up, and back down we go... good old US too jittery..

 

[Uncle Festivus]

What i find interesting is that many are expecting a large correction sometime later this year. Some have even gone as far as selling their holdings and shifting the money into savings accounts ready to pounce when the market corrects. What i don't understand is that if this was going to be the case, why are the so called professional investors and private equity holders launching takeovers and making other acquisitions at this stage of the market?

I believe that the simple fact that there are so many aquisitions taking place is evidence that we are in a bull market and it is not going bear for a long time yet. Had such confidence not existed many would wait for a longer term correction or marker collapse before launching any takeover bid.

Irrational exhuberance is a sign of a top, more so with private equity buy-outs & takeovers, who's focus is mostly short term gain. Only this time some will be left without a chair when the music stops. They are professional only in that they can see opportunities to make short term money with someone elses money, so they have little to loose themselves. Good work if you can get it.

Tripple top needs to be confirmed but these types of market jitters will feed on themselves, not to mention worsening fundamentals eg US real estate & derivatves, which will now have to be valued on the big companies books at huge losses. Even S&P now admits a lot of these property related derivatives are crap.

 

[wayneL]

The USD is taking it where it hurts too.

http://www.bloomberg.com/apps/news?pid=20601080&sid=a8u82J6kK_cA&refer=asia

Dollar Falls to Record Against Euro on Housing Slowdown Concern

By Bo Nielsen and Ye Xie
Enlarge Image
The portrait of Benjamin Franklin on a US 100 dollar bill

July 10 (Bloomberg) -- The dollar fell to a record against the euro and dropped the most since March versus the yen on speculation the housing market's slump will worsen.

The U.S. currency also sank against the Swiss franc, British pound and Danish krone after Standard & Poor's warned it may cut ratings on $12 billion of bonds backed by subprime mortgages, diminishing the appeal of dollar-denominated assets. Futures contracts show traders forecast the Federal Reserve will keep borrowing costs on hold through year-end.

``We still have some questions about whether growth is returning to the U.S. market,'' said Tom Fitzpatrick, global head of currency strategy at Citigroup Global Markets Inc. in New York. ``The U.S. was the anchor for global growth. We're now seeing the dollar losing ground against an awful lot of currencies.''

The dollar dropped to $1.3718 per euro at 2:32 p.m. in New York, from $1.3626 yesterday. The U.S. currency broke the April 27 record of $1.3681 and traded as low as $1.3740, the weakest since Europe's common currency started trading in 1999. The dollar fell 1 percent to 122.12 yen, the biggest tumble since March 13, as traders exited riskier assets.

S&P is preparing to lower the ratings on 2.1 percent of the $565.3 billion of subprime bonds issued in late 2005 through 2006 because the housing slump is worse than the company anticipated, it said in a statement today.

`Growth Situation'

The euro got a boost from comments by Luxembourg Prime and Finance Minister Jean-Claude Juncker, who said at a meeting in Brussels today that the region's ``growth situation is excellent.''

The Fed held benchmark borrowing costs unchanged at 5.25 percent on June 28 for an eighth straight meeting. The European Central Bank may lift its key refinancing rate from a six-year high of 4 percent, according to interest-rate futures.

The dollar index, a gauge of its value against six other currencies, earlier fell to a 2 1/2-year low of 80.822. It traded at 80.908, from 81.433 yesterday.

The dollar declined after Fed Chairman Ben S. Bernanke said inflation expectations ``remain imperfectly anchored'' in part because the public doesn't know the central bank's goal for prices. He spoke at the National Bureau of Economic Research in Cambridge, Massachusetts.

`Appeal Will Deteriorate'

``There are two main factors at the heart of the dollar's weakness -- its yield appeal will deteriorate against its major counterparts and there are lingering concerns about the possible contagion of the subprime crisis into the broader economy,'' said Omer Esiner, an analyst at currency-trading company Ruesch International Inc. in Washington. ``It's reflective of broader negative sentiment against the dollar.

The yield advantage of a benchmark 10-year U.S. Treasury note over a comparable-maturity German bund was 46 basis points, close to the lowest in almost three years. It has dropped 19 basis points since April. A basis point is 0.01 percentage point........................

 

[Lachlan6]

Overnight the surge to new highs in the DJIA is suggestive of a new strong run in the index. The consolidation pattern lasted from the start of June so there might be a few investors champing at the bit to jump on board. Only real uncertainty at this stage is the big negative divergence in the MACD giving a cautionary signal at this stage. However there is no denying the underlying strength of last night's move, especially the huge volume supporting it.

A projection of the first target from the range gives us a figure (100% of the range) of 14,140.

 

[gfresh]

definitely looks like the best chance of a breakout since Mid-May.. As long as positive profit reports are coming out over the next few days over there, it may keep the bears at bay.

Chances of a run up to the election over there are also probable. So many want to see the back of Bush it will be a market mover imo.

 

[vishalt]

am, AM I MISSING SOMETHING?

did the fund managers and private equity sleep in today? why is our market so weak?

 

[zuluwarrior08]

Will be very interested to see how the US goes tonight. A couple of record days thurs/fri, and with the asian markets hovering around their records today.....

Im not so sure how the whole sub-prime rout will show its ugly head either?
Will the investment banks reveal the extent of damage in their yearly reports? Either way, I think tonight may keep the bulls chugging along nicely just holding back the nervous whatifs, or if it cant keep the record run going and it loses 1-2%, I think our market tomorrow will head for a nice dive.

What does everyone else think?

Thoughts on the housing crisis? Subprime woes? Record earnings? Both here and the US....

Just a newbie trying to make sense of this wonderfully exciting and challenging economic times. Help to educate me.

 

[wayneL]

Will be very interested to see how the US goes tonight. A couple of record days thurs/fri, and with the asian markets hovering around their records today.....

Im not so sure how the whole sub-prime rout will show its ugly head either?
Will the investment banks reveal the extent of damage in their yearly reports? Either way, I think tonight may keep the bulls chugging along nicely just holding back the nervous whatifs, or if it cant keep the record run going and it loses 1-2%, I think our market tomorrow will head for a nice dive.

What does everyone else think?

Thoughts on the housing crisis? Subprime woes? Record earnings? Both here and the US....

Just a newbie trying to make sense of this wonderfully exciting and challenging economic times. Help to educate me.

The US market is having a bout of cognitive dissonance at the moment.

The say that the SM is a discounting mechanism... and that's true, it is discounting all the negatives. Watch any segment including Peter Schiff on BubbleVision and you'll see what I mean.

 

[zuluwarrior08]

Im sorry to be such a newbie...

are you able to explain/describe what cognitive dissonance is in this context?

SM?

 

[wayneL]

Im sorry to be such a newbie...

are you able to explain/describe what cognitive dissonance is in this context?

SM?

Main Entry: cognitive dissonance
Function: noun
: psychological conflict resulting from simultaneously held incongruous beliefs and attitudes (as a fondness for smoking and a belief that it is harmful)

My use of the term is more metaphorical than medically accurate.

The market acknowledges the sub-prime and dollar apocalypse, trade deficit, credit bubble etc as negatives, yet is extremely bullish.

The psychological conflict is evident in the Bobbleheads on Bubblevision. Their argument (when faced with these negatives) is couched in terms of derision, ridicule and satire, rather than logic, fact and mathematics. In these arguments, and in the intensity of them, fear is evident. A truly comfortable bull (though perhaps cognitively biased) would have a more reasoned, less desperate argument.

 

[zuluwarrior08]

I find this psychological conflict fascinating. Its incredible how mass groups can behave in such a way, yet hold completely conflicting beliefs about things. Is this how corrections start?

A tiny push in the negative direction and the whole group rushes over to that side of the see-saw... Perhaps this touches on recent volatility.

S&P futures up 2 pts at the moment.