FetteredChinos
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apologies for the "high quality" chart...
Greenspan is due to speak to the JEC in Washington today ay 10.00EST. The markets have been edgy over the past few months and have often reacted sharply to either what he has said or even omitted to say.
The focus will inevitably be upon the future course of Fed Rate hikes. If he implies that a moratorium is close then this could push the market up over 10600. If he says or implies that the rate hikes will continue then it could send the market down below 10400. It just shows how volatile the situation is when one mans interpretation of current economic trends can have such an immediate a major market impact.
It will be interesting to see whether he comments on the declining bond yield curve. Yields have declined by 15% since the Fed rate hikes started a year ago and so far he has been unable to explain why.
Inflation is on the rise and is currently averaging somewhere between 3% and 5% depending upon whose figures you want to believe and what is included or excluded from the calculation. Labour rates are going up and domestic manufacturing is declining. Even if the Chinese were to revalue the Yuan by 10% this will not help US manufacturing and will add to inflation by increasing the retail prices of imported Chinese goods.
The housing bubble continues to expand with nationwide prices up 12% over the past year but with up to 30% price increases in real estate hotspots like Florida and California. This is being fueled by low interest rates and has resulted in a quarter of all new mortgages over the last year being interest only. This means that the proportion of interest only mortgages has now quadrupled from the previous 6% level just 3 years ago and this indicates how vulnerable housing is to further rate hikes.
I just cannot see the Fed being in a position to call a moratorium on rate hikes. The question is whether Greenspan will address this today or whether his remarks will be so cloaked in jargon that he manages to evade any real indications on this issue.
In the meantime Futures were just 7pts below last nights close at 10.40am this morning and oil was just above $52.60.
The focus will inevitably be upon the future course of Fed Rate hikes. If he implies that a moratorium is close then this could push the market up over 10600. If he says or implies that the rate hikes will continue then it could send the market down below 10400. It just shows how volatile the situation is when one mans interpretation of current economic trends can have such an immediate a major market impact.
It will be interesting to see whether he comments on the declining bond yield curve. Yields have declined by 15% since the Fed rate hikes started a year ago and so far he has been unable to explain why.
Inflation is on the rise and is currently averaging somewhere between 3% and 5% depending upon whose figures you want to believe and what is included or excluded from the calculation. Labour rates are going up and domestic manufacturing is declining. Even if the Chinese were to revalue the Yuan by 10% this will not help US manufacturing and will add to inflation by increasing the retail prices of imported Chinese goods.
The housing bubble continues to expand with nationwide prices up 12% over the past year but with up to 30% price increases in real estate hotspots like Florida and California. This is being fueled by low interest rates and has resulted in a quarter of all new mortgages over the last year being interest only. This means that the proportion of interest only mortgages has now quadrupled from the previous 6% level just 3 years ago and this indicates how vulnerable housing is to further rate hikes.
I just cannot see the Fed being in a position to call a moratorium on rate hikes. The question is whether Greenspan will address this today or whether his remarks will be so cloaked in jargon that he manages to evade any real indications on this issue.
In the meantime Futures were just 7pts below last nights close at 10.40am this morning and oil was just above $52.60.
It is very likely that at one time or another Alan Greenspan and Socrates had the same mentor which is why nearly every statement seems cryptic. That is the way it is supposed to be, there is no such thing as a FREE LUNCH, one has to do some work in order to profit.
The markets cannot expect Greenspan to come out and say that the economy is tanking in the medium term but he has to keep tinkering with short term rates to ensure that inflation does not rear its ugly head. The members of the FED know exactly what is going on and how they intend to tackle the problems, the "cononudrum" they have is based on if the measures will work or not.
The markets cannot expect Greenspan to come out and say that the economy is tanking in the medium term but he has to keep tinkering with short term rates to ensure that inflation does not rear its ugly head. The members of the FED know exactly what is going on and how they intend to tackle the problems, the "cononudrum" they have is based on if the measures will work or not.
SOCRATES
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You are quite right Lion, and additionally the conundrum is that the FED know exactly what it is they are doing but do not explain as they are not obligated to, and so leaving everybody baffled, until, after the event, all becomes clear.LION63 said:
Incidentally I might add that this is the correct professional way of handling things and not the opposite by endlessly disseminating what is best left undisclosed or not discussed in public, but instead acted upon in private.
Kind Regards.
frugi
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Gaps can stay open for a long time, indeed some are never filled. However if the price is in the vicinity of one then it can act as a magnet and provide a useful potential support (or resistance in the case of a gap above the market) area as the gap is closed. The market often gaps up then backs and fills before continiuing on up (opposite for down). Just another tool in the box really. I suspect this one will be closed soon as it looks like a distribution top is in play, but I'm not betting the cottage on it.
roguetrader
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INDU 200 day sma may be in play at 10,430
SOX 200 week sma also in play at 426
Internals bearish though not excessive.
Total Volume at 11am EST running slightly ahead of yesterdays pace on NYSE and lagging yesterdays pace on Nasdaq
SOX 200 week sma also in play at 426
Internals bearish though not excessive.
Total Volume at 11am EST running slightly ahead of yesterdays pace on NYSE and lagging yesterdays pace on Nasdaq
FetteredChinos
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yup, straight into resistance from the close a couple of days ago
fc
fc
FetteredChinos
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also hitting the trendline connecting wednesday and tuesday's highs....
longs look doubtful.
fc
longs look doubtful.
fc
FetteredChinos
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also Dow at 10,500 round number s/r
FetteredChinos
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hmm spoke too soon, yet again..
back in my box i go..
back in my box i go..
roguetrader
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Internals moved to positive on bothe markets now, this is however a low volume lunchtime breakout and would require confirmation.
Cheers Kris,
to a point I'd actually agree with the sentiment that it doesn't really matter whether it's a shorter bull move in a longer term bear market, or a 'real' bull market, as long as I'm trading in the same direction as the market over the very short term I'm happy.
Looking at your figures I'm satisfied where you are getting them from, mine are a bit more generous... but TA's very much in the eye of the beholder so as long as we're both happy with what we're using who cares?
I tend to ignore Greenspan etc - yes this sort of thing does impact on the market, but I defy anyone to actually work out how in advance for the most part, easier to trade what occurs and to stay out until you see the effect if you're worried a big change is going to follow an announcement. The current movement just suggests to me that nobody is quite sure what anything means, so they all stampede up and down following the herd... giving opportunities at each limit.
Have fun,
Dave
to a point I'd actually agree with the sentiment that it doesn't really matter whether it's a shorter bull move in a longer term bear market, or a 'real' bull market, as long as I'm trading in the same direction as the market over the very short term I'm happy.
Looking at your figures I'm satisfied where you are getting them from, mine are a bit more generous... but TA's very much in the eye of the beholder so as long as we're both happy with what we're using who cares?
I tend to ignore Greenspan etc - yes this sort of thing does impact on the market, but I defy anyone to actually work out how in advance for the most part, easier to trade what occurs and to stay out until you see the effect if you're worried a big change is going to follow an announcement. The current movement just suggests to me that nobody is quite sure what anything means, so they all stampede up and down following the herd... giving opportunities at each limit.
Have fun,
Dave
Nobody can work out the market impact prior to what Greenspan has to say. Today is a good example. The Dow dropped 40 pts in the first half hour as he delivered his prepared deposition and then climbed 60 pts in the next hour during his Q & A session. What he actually said was nothing that he hadn't already said before other than dispel the Fisher 'ninth innings' comment. The herd mentality at its best !DaveJB said:
Having digested that the markets are now going to do what they were going to do anyway during the course of this afternoon. The only relevance that it has is if you are holding any open positions. I closed out my Dow short as the market went up, once it cut my running profit in half, but held my NDX short which is still well in the money.
I still think that the move out of this consolidation range is most likely to be down. Whatever the next move is I think that it will occur either tomorrow or Monday.
Good luck with your trades.
