Registered User
Joined: 10/7/2004
Posts: 2,126
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Today was a good day on the street. Breath very positive loopsided to about at least 2 to 1 in both NAD, and Dow. A substantial retracement of about 68 points (dow) and 22 for NAD on volume above average. In fact looks like the first accumulation day in over a month.
NOW A GOOD DAY BASED ON WHAT? There is no good news at the present time or indications of a promesing near future.
Oil has no indication of retracing; Refine crude (gasoline) is raising exponentially, and the impact of Katrina may no derail the economy, but as you can certainly imagine the impact is going to be strong enough to depress it.
People are not going to be doing lots of driving (not lots of shopping) at this gasoline prices; Airlines already pushing their botton lines will suffer further more, not to mention business in general . The GDP of the nation already coming down, and Chicago PMI is showing signs of manufacturing contraction, not to mention the already troubled real state market.
So what pushed the market today? Charity or deception? May be fuzzy math.
Don't let the fuzzy math fuzz you. Today was not what it seemed, and tommorow will be a lot fuzzier than today, but if you keep clear view of the facts you can still make lots of money in those markets.
good luck.
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Registered User
Joined: 8/21/2005
Posts: 8
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I think there is some speculation that the fed may stop hiking interest rates in lieu of Katrina and the anticipated economic loss. Many of my personal investments are commodity related, so I had a very good day today.
Jefferson
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Registered User
Joined: 10/7/2004
Posts: 2,126
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Cobb I have a hard time believing that a temporary stop in interest rates is going to solve the energy crisis not to mention what is going to cost rebuilding the debastated areas due to Katrina. Just those 2 things will overrule steady rates.
Such a speculation may hold for short term.
At a any rate, the ability to keep borrowing is not going to fix the savings problem in the US. In the long run it will deteriorate the economy more.
How many people in New Orleans didn't have insurance on their homes or business?. I think we have to get priorities strait. You and I will be paying for that one way or another. You can not fix a borrowing problem by inciting people to borrow more to keep spending - there is a limitation to everything.
Anyways I cannot explain just yet the market reaction today. Not that I care much, but I am bothered by nonsense.
I would had rather trade short today, instead of long. It sure felt unconfortable.
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Registered User
Joined: 1/2/2005
Posts: 132
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I thought the bounce was somehow related to the President saying he would release part of the Strategic Petroleum Reserve to fend off missing percentanges of the US Oil needed that are missing due to Katrina problems.
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Registered User
Joined: 10/7/2004
Posts: 2,126
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Howard the release of strategic reserve should had not been a logic reason for sheering. This is just a "quick try to stop the panic fix". That oil has to be replaced later and the prices for such a replacing will be substantially higher. Also this will not aliviate the price of gasoline much, since a primary problem still is refining that oil to get gasoline.
Katrina hit hard on refinaries because the area was housing lots of them. So the fix has done the number on the market, but for how long.
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Registered User
Joined: 8/21/2005
Posts: 8
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As you wish. I stopped having beliefs about why the market does what. Its less confounding that way. However, I do feel the need that I wasn't promulgating a personal belief but passing along a speculation I had heard.
Regards
Jefferson
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Registered User
Joined: 10/7/2004
Posts: 2,126
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Jefferson don't take my response as agressive, it wasn't. I appreciate your comments. In a way, I do not care much about what the market has to say, I trade it by the day. Sometimes like today it is just nonsense, and so I try to find a reason - may be there isn't one. It is simply nonsense.
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Registered User
Joined: 12/19/2004
Posts: 457
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BigBlock,
I'm inclined to believe two things:
1. The decline for the past month was pricing in some of the things you alluded to in your post: ie. Oil, economy slowing, etc.
2. As long as 10 year rates remain low, I don't see the market selling off sharply in the near future. These negatives imply the Fed will stop with the hikes sooner rather than later.
In the time horizon of Wall street, that means things can remain higher for a bit longer.
When things seem bleak, and the market rallies, that is my signal to get long.
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Registered User
Joined: 12/11/2004
Posts: 3
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I agree with all the posts, but most of all, I think it was a Presidential rally. Not just the oil thing, we all know the oil squeeze will go until something breaks and nothing will stop it. I think we were relieved that this caught the attention of the Administration. And much sooner than the Tsunami or 9/11. I think the market was saying thanks Mr. President. And you people owe him two vacation days. And the entourage is heading back to Washington.
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Registered User
Joined: 11/13/2004
Posts: 1
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Hi all ... as bad as Kitrina may be (and ultimately, it will be more severe then any of us can imagine today) there is a lot of financial benefit in many sectors. Factory homes, oil, gas, construction, etc. many industries will be driven to profits from this HUGE disaster. Gold is up, silver is up, construction is up........ Many sectors will profit.
Buy CHAR I need to make up my curent loss.
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Registered User
Joined: 10/7/2004
Posts: 2,126
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Hallison, the question is - will this reconstruction operation employ more people than the cities that fell to the hurricane?
Will it cover the super premiun we are paying now for energy?
Will this profits put back into the economic stream or will it be pocketed by a few already millionares.
Who will take economic care or the uninsured, which is reaching astronomical numbers - Federal goverment = You + I.
Will comodities go down in price after the port is reopened?
Will the refineries and oil infrastructure be up an fully running in a few days, months ??
The economy is not going to be able to bear for very long.
Let me tell you - when the tsunami hit I saw lots of stock go up just to give all up in no time.
I will certainly benefit from this - I go by the day. For those looking at longer time frame - watch out. I am very doubtfull that the markets will pull up.
good luck
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Registered User
Joined: 12/11/2004
Posts: 3
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I don't think we should get too bearish. President Bush talks directly to God. And I think President Bush and God have a plan. With the Republicans in charge of Congress, the Military, the Civil Service, the Supreme Court, and the White House, how can anything go wrong? Better to listen to Kudlow on CNBC, cover your shorts, forsake your charts, and go blindly long. Well, maybe hold a little bit back....
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Registered User
Joined: 10/7/2004
Posts: 2,126
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Well it takes time for the market to guess what is coming.
Today most indexes are dropping hard in accelarated volume and stinky breath. This is the 2nd day of sell out.
Keep stops tight, and get ready your shorts.
Good luck
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Registered User
Joined: 8/21/2005
Posts: 8
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QUOTE (BigBlock) Well it takes time for the market to guess what is coming.
Today most indexes are dropping hard in accelarated volume and stinky breath. This is the 2nd day of sell out.
Keep stops tight, and get ready your shorts.
Good luck
I never try to predict the indexes, but I do have a bottle of Listerine to help out with the stinky breath. And all of my shorts, boxers and briefs, are freshly cleaned and ready.
Jefferson
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