Open Thread
Its a holidy weekend, and I have to think that even though not much is happening, you good folks have something to say.
Here's your forum: What are you thinking will be the dominant theme in the coming weeks? A drift upwards? The return of the One & Done crowd? Real Estate going from hot to warm to cold to ice?
What say ye?
Monday, July 03, 2006 | 07:24 PM | Permalink
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happy holiday reading
B.S. is Wall Street's official language
Funny how the bulls' talking points are the same, cycle after cycle
Marketwatch:
B.S. is Wall Street's official language
Posted by: Bob A | Jul 3, 2006 7:28:17 PM
This summer will reveal how many pundits and prognostigators are working without a net. "I thought you said 'soft landing' in the housing market." Why are mortgage rates still rising even though the Fed paused in August? How many more companies backdated options and what other reporting is reliable if this could happen? Is every market rigged to favor certain outcomes? Why were there supposedly tight commodity supplies when prices were high but plenty of resources and capacity at lower prices? How come the Fed is proving so ineffectual at controlling inflation?
Posted by: Robert Cote | Jul 3, 2006 7:54:48 PM
Barry: The Joe Besecker and BR was a good show I miss the big guy, ok ok ok so he walks around with a steak in his pocket all day we just have to over look some things.
This fall why not have a wine tasting and stock bash, maybe upstairs at Patsy's you could meet all of us hot dog traders.
BR now that your a TV guy does it help get a good table in any of the midtown restaurants???
Posted by: MASH | Jul 3, 2006 8:01:10 PM
Great idea MASH.
But how about this amendment: Why don't we put together the bash and invite Barry and his wife as the honored guests?
It would be our Thank You for hosting this great blog.
Posted by: ~ Nona | Jul 3, 2006 8:34:09 PM
Barry and his entourage, inspiration and life partner(s), progeny, etc. are welcome here on the Left Coast anytime. Not much to offer; perspective that isn't NYcentric, AMGN insider access, insights into immigration, agriculture, and housing but nothing uniquely special. Nonetheless quality guests are blessings not burdens.
This is an open thread. Barry, you got Ventura County covered. I hope others step up and stake out possibilities for your future itineraries.
Posted by: Robert Cote | Jul 3, 2006 9:01:32 PM
Since Barry is cutting back content due to the new fee based services, I had suggested via email to him that he establish a "forum" section on the blog site. People could post issues and get dialog without him bringing it up on a post. For example, Anandarko's takeover wasnt discussed by BR, although it was, in my opinion, a big deal. I played it by buying mining companies since i believe that is the trade to make for another industry ripe for consolidation. Also, interesting it was a cash deal instead of stock [even though a clueless talking head analyst said that meant "a top"-- sorry, but companies use their stock when it's overvalued, not cash] But the point is, I think the forum idea would be valuable. Similiarly, no real discussion regarding the Feds response, and its impressive impact on commodities etc. Barry, PLEASE dont make me start a blog site to pick up the slack!!
Posted by: HT | Jul 3, 2006 9:48:27 PM
Barry, you should look into creating a trader/financial www.digg.com. Most of Digg's audience is tech related proggrammer kinda males. So we traders, money lovers, could enjoy our own "digg:.
Posted by: bharat | Jul 3, 2006 9:50:39 PM
The dominant theme in the coming weeks will be the slowing economy. You can see it starting already: GM "brutal" sales month for June, WMT same store sales up only 1%, housing slowdown stories galore (I would expect some questioning of the soft landing theory as the summer progresses), "Consumers Face Challenges in Handling Debt" on Yahoo finance home page tonight, construction spending declines, etc. etc. etc.
I think the long overdue retail slowdown will be hitting soon.
Posted by: John | Jul 3, 2006 9:51:41 PM
nice catch, Bob A, good column and a reminder of why the expression is bullsh*t, not bearsh*t.
It have never ceased to amaze me how people immediately start looking for (and usually pronouncing) a bottom when things start to fall apart. They are never that quick to look for a top and I guess it's all just human nature to try to whistle past the graveyard.
As it happened, I got out of the market in August 2000 once it became pretty obvious what was in store. But most of the people I knew were "snapping up bargains" if they hadn't gotten a margin call and rode the thing down for another 6-12 months and a lot of pretend money they were trying to recover wound up vaporizing a lot of real money.
This time around, I'm being more aggressive by buying puts instead of just getting out of the way, but am still in a heavily non-equities mode overall. I can think of lots of reasons for the market to go down over the next 3-9 months and not many for it to go up for long.
Posted by: whipsaw | Jul 3, 2006 9:53:53 PM
This recent ramp feels like a bogus push on light volume, something to dress up the books and suck in the little guy.
Everything is running into resistance, Japan is still more likely to tighten than not, an August fed pause would be good news attached to bad, cash yields are starting to look competitive, and there's a lot of overhead left to work through.
Time to play whack-a-mole. Got some solid gains in GDX, IYT and XLE, probably gonna kick those out on Thursday and start looking for attractive short entries in tech and retail.
Posted by: trader75 | Jul 3, 2006 10:01:20 PM
Wednesday, not Thursday... forgot what day it is. These midweek holidays are goofy.
Posted by: trader75 | Jul 3, 2006 10:02:20 PM
Looking over the charts in TC2005 tonight, it's interesting how much the market managed to go from oversold to very overbought in the past 3 days.
5 and 14 daily stochastics over 80 on the major indexes. Mcclellan Oscillator at 195. Zweig Breadth Thrust at 60. New High/New Low Ratio up from 12% to 83% in just 3 days.
Well, Charles Nenner said the S&P would rally up until July 10th, then resume the downtrend. If that's the case, it's getting set up for a fall.
Posted by: Craig H | Jul 3, 2006 10:15:11 PM
per Craig H:
"Well, Charles Nenner said the S&P would rally up until July 10th, then resume the downtrend. If that's the case, it's getting set up for a fall."
I'm not so sure about Nenner, but NFP is the 7th and I think the BoJ interest rate announcement is the 14th, so it should tank on one or the other or both of those unless we are still in "investors shrugged off" mode.
At any rate, one of the guys at minyanville observed that the NYSE Bullish Percentage Index had formed a Bear Catapult for the first time since 1955. I am not a big PnF guy so I had to go look that up, but it's basically a Bad Thing and the implication is that it is also an Ominously Bad Thing. We'll see, I just sense some bad juju ahead.
Posted by: whipsaw | Jul 3, 2006 10:36:34 PM
a Bear Catapult and baaad juju. I love it!
All signs seem to point to a renewed downward plunge sometime in the near future. It really seems so obvious, but it's often hard to act on the obvious...
Posted by: Detroit Dan | Jul 3, 2006 11:10:07 PM
Dow on it's way to 3800!
Dan
Posted by: Dan Weber | Jul 3, 2006 11:20:42 PM
I suspect the Fed will come out sometime soon with more hawkish talk to try and kill the gold rise/inflation expectations. However, since they realize they are stuck between a rock and a hard place it will turn out to be just that "talk". My guess is it will work 1 more time and on the third attempt it will be like the boy who cried wolf....and everyone knows what happens to the boy in that tale.
Does anyone have an opinion on when/if the miners will start acting independently from the market. I am a big believer that this commodity cycle will be sending prices much higher over the intermediate/long term. I am concerned however that they have seem to trade along with the general market thus far.
Posted by: Sammy20 | Jul 3, 2006 11:29:22 PM
The world doesn't revolve around the Fed. Historically speaking we still have very cheap money, and they are obviously terrified of strangling the housing market so their anti-inflation hands are bound.
Right now we've got a number of serious geopolitical probelms on our hands:
1. Israel has thrown half the PA govt in jail. Don't forget that Hezbollah shot Katyusha rockets at Israel a few week ago. IAF hit a car moving Katyusha rockets in Gaza after that. PLO says they have Katyusha rockets in the West Bank. That situation looks quite unstable and is slowly deteriorating.
2. Iran is clearly not going to freeze uranium enrichment. They've pre-empted us by introducing gasoline rationing, so much for painful sanctions. This situation could also deteriorate quickly.
3. Venezuela's Chavez is increasing his public fraternizing with North Korea and Iran. It's pretty clear that he is preparing to cut oil exports to us, and send them over to China.
I would not bet a nickel on Bush backing down on Iran. Certaintly not a penny on Iran backing down. We've been in a cold war with these guys for 25 years. A hot war is now clear on the horizon.
All of these factors point to a continuation of the "Commodity Super-Cycle." Gold's correction in finished, $1000 is just a question of when. Silver, God knows. That's my two cents.
Posted by: sell_the_10_year | Jul 3, 2006 11:31:15 PM
Looks like the perfect set-up for serious whackage later this month and lord knows that's where I've placed my bets but as a wise man once said, the market's ability to act irrationally can easily outlast my ability to remain solvent...
I'd be interested to know if anyone has thoughts on whether gold will bust through its 50 day MA to test recent highs or simply bounce off it and head lower for more consolidation.
Posted by: drey | Jul 3, 2006 11:37:16 PM
per Detroit Dan:
"a Bear Catapult and baaad juju. I love it!"
Hey, get in the spirit of things! The Hindenburg Omen that Barry mentioned twice seems to be coming to fruition, so why not the Bear Catapult?
Actually, I'm not entirely sold on the NYSE Catapult since it is a sentiment indicator of sentiment indicators, but most of the things that I follow suggest that prices are rising while growth is slowing which is pretty much the definition of stagflation, so....
Posted by: whipsaw | Jul 3, 2006 11:42:14 PM
What happened to B?
Posted by: fred hooper | Jul 4, 2006 1:26:37 AM
This economy has some serious fundamental problems that are going to be hard to solve in the coming years. The deficit is not going to be decreasing but this economic slowdown is going to cause it to increase significantly. That is going to cause the dollar to depreciate more and cause instability in the treasury markets. The housing market is going to get hit extremely hard and there is not going to be a "soft landing". The consumer is going to be bombarded from all angles. I hope to God there isn't a conflict with Iran.
It's time to end this pointless War in Iraq that is accomplishing nothing, cut spending, raise taxes and start restoring fiscal sanity! It's time to put pressure on China to float their currency and stop competing unfairly in the global marketplace. And it's time to get control of the border and raise the minimum wage so that salaries can increase and these wealth effect bubbles are not needed to sustain the consumer.
Posted by: Ryan | Jul 4, 2006 1:45:24 AM
well said Ryan. Yea, speaking of re-setting mortgages, the guvmint is sitting on the Mother Of All option ARMs with regard to our National debt (it seems we'll all go together when we go...The Housing bubble and the house of financial cards that's been so painstakingly assembled over the last 5.5 years)
Posted by: brian | Jul 4, 2006 3:03:00 AM
"Does anyone have an opinion on when/if the miners will start acting independently from the market."
When inflationary pressures are recognized to be independent from the "cyclical" slowdown, ie when the market realizes that inflation is STRUCTURAL, miners will divorce themselves from an ongoing equity downdraft.
Posted by: Mark | Jul 4, 2006 6:08:58 AM
Gold is seriously under-valued --- it will hit $2000/oz. before this decade is over. North Korea will keep stirring the shit pot, and China might start flexing it's muscles over Taiwan. Never mind that the Muslim world is at war with the west ... but all this doesn't matter right? until it does ... keep buying you dumb bulls!!! You will lose that much more in the end! There is now more USD floating around than toilet paper!! So good luck and happy fourth of July!
Posted by: Ricardo | Jul 4, 2006 9:52:20 AM
If you all haven't noticed...you're all on one side of the investment table. That's not a good sign.
Best,
LB
Posted by: LB | Jul 4, 2006 10:20:09 AM
