STOCK MARKET WATCH, Monday December 8.....(#1)

THE DOW REPORT
"Is It Just Too Big To See?"

The chart below is a daily chart of the DJIA. If we just look at the price action since January 2003 and take it at face value, obviously we see that price is advancing and that all looks well.

Now if we back away from the daily chart and look at the weekly chart of the DJIA, the picture is quite different. We can equate this to looking at crop circles. When you are standing on the ground they are just too big to see. All we can see at ground level is that the crop has been mashed to the ground. However, when we can back away from this mashed crop by looking down on the field from above, the picture then becomes clear. To illustrate this phenomenon, I have included a second chart below. This is a weekly chart of the DJIA. I have drawn on it what is known as a Rising Wedge. This Rising Wedge encompasses the same time frame as the daily chart above. However, when backing away from the day to day price action, the picture is much different.

<cut>

Now look at the indicator that I have included at the top of the weekly chart. This is a moving average of advancing volume. Look at the divergences between price and volume. Advancing issues are diverging in the same way. Now, I have to ask, is this not clearly a sign that the internal strength of this market is growing weaker and weaker just as explained by Edwards & Magee? Have the talking heads on TV not been saying that we are in a “New Bull Market” just as explained by Edwards & Magee? Have Sir John Templeton and Warren Buffett not warned about the economy? Yet, we sit with sentiment readings at the highest levels in over 10 years and the average investor continues to believe that all is well. This is just simply nuts! If you are in doubt LOOK AT THE WEEKLY CHART! It does not take a rocket scientist to see that price has been advancing on less positive volume and that this has happened in the context of a historically bearish chart formation. Denying this is like going to the doctor and he x-rays your leg. He shows you the x-ray and explains that you have broken your leg. Because it really doesn’t hurt that bad and you can still walk on it, you tell your doctor. “Nah, everything is ok. That’s not really a break you see there doc that’s just a bad x-ray. See? I can still walk. Your little x-ray machine must not work any more.” Now that would be nuts and the situation with this market is now to that point. Please, step back away from the day to day hope and hype of TV crowd and look at this picture from a distance. It’s just like the crop circles or the x-ray. When you back off and look at reality the picture is quite different.

http://www.financialsense.com/Market/wrapup.htm

As usual. Love the crop circles analogy. All signs point to trouble. I'm taking cover.

But look at gold go!! :-)

Julie

haha Great toon Ozy! <snarf>

So did you see gold this morning ? Whoo-hoo!! The markets abroad do not seem happy and CNBC actually admitting it's because of crappy job #s from the US.

The Yen and Euro aren't being particularly cooperative either. Hence the lack of sunshine in the futures market. This could be an interesting day. ;-)

Julie

The Nikkei also looks to be suffering from the Japan's dollar buying binge. The yen rose against the dollar and that was the equivalent of a bucket of ice water being thrown on their markets. The possible consequence of rising prices on Japan's more profitable exports like electronics looks like some ice water will be shared with US retailers during the holiday season.

Speaking of job numbers: I drove past a mall yesterday - one of the big ones in the Atlanta area. The local Kids-R-Us is proudly flying its "going out of business" banner. Smaller stores in the same area are following suit. Closer to where I live, the only K-Mart in the downtown Atlanta area is cosing. It is a bad omen that these big box stores will soon stand empty.

TOKYO (Reuters) - The dollar fell to three-year lows against the yen and was mired near record lows versus the euro on Monday as last week's weaker-than-expected U.S. jobs data added fuel to the currency's broad-based downtrend.

The dollar, which had plumbed record lows against the euro for six consecutive trading days by Friday, stood within a whisker of the latest lows in the absence of strong enough factors to turn around the dominant trend.

"The U.S. economy may not necessarily be in that bad a shape but the downward momentum in the dollar, initially blamed on geopolitical risks and the U.S. current account deficit, has been relentless," said Mitsuru Sahara, vice president of currency dealing at UFJ Bank.

Why didn't Bush also take credit for this in the weekly radio address?

WASHINGTON (Reuters) - Federal Reserve (news - web sites) officials are set to hold interest rates steady at 45-year lows on Tuesday but analysts disagree on whether the central bank will use this meeting to ditch a controversial commitment to holding rates down.

<cut>
Minutes of a September Fed gathering showed some officials were uncomfortable with language that appeared to link policy to the passage of time rather than the economy's evolution.

Many analysts believe a decision to jettison the pledge would simply reflect this intellectual discomfort and would not indicate officials felt it would soon be time to boost borrowing costs from their current 1958 low of 1 percent.

NO CLEAR CONSENSUS

Most of the 22 large Wall Street firms that deal directly with the Fed in the markets expect rates to be on hold until at least mid-2004, according to a Reuters poll conducted on Friday. None expect a rate move on Tuesday.

story

Bush hails economic program but avoids steel in weekly radio address

WASHINGTON (AFP) - US President George W. Bush (news - web sites) underlined a drop in the unemployment rate in his weekly radio address, as he played up his economic successes -- however, there was no talk of steel.

Citing a slew of recent reports that indicate the world's largest economy is roaring into a higher gear, Bush said the "economic signs are positive."

"In November, our nation added 57,000 new jobs and the unemployment rate fell to 5.9 percent. In the past four months, 328,000 Americans started work at new jobs," Bush stressed.

Bush told radio listeners his economic program was yielding results. HAHA

"In November, our nation added 57,000 new jobs and the unemployment rate fell to 5.9 percent. In the past four months, 328,000 Americans started work at new jobs," Bush stressed.

This comes out to roughly 80,000 jobs a month. Isn't there a barrier of over 100,000 a month, that if not met, means there aren't enough jobs created to keep up with those just entering the job market? This doesn't include those that have lost their jobs to foreign competition, just those newbies looking for their first job?

just to keep up with those entering the job market etc. When you figure in the big UE hole we've dug the number is actually higher if you're talking about net job growth.

Julie

Bush is. This rhetoric is called lying by ommission.

This was posted by Maeve on Friday:

"But the job growth so far is unlikely to be much help to President Bush, whose re-election effort in 2004 depends in large part on how Americans feel about the economy, and the job market.

When pushing for tax cuts earlier this year, Bush promised his proposals would create 300,000 jobs a month. And more recently, Treasury Secretary John Snow suggested the economy could start adding 200,000 jobs a month in October.

So far, neither rate has been approached, and Friday's report seemed certain to draw fire from the left, including Democrats seeking to replace Bush."
http://money.cnn.com/2003/12/05/news/economy/jobs/index.htm

And another post from Maeve:

Just to keep up with the population growth (120-170K, estimates vary within that range), so the hole is still expanding.

As for the media-types who trumpet new jobs in this economy, I am reminded of the waiter listening to a speech in which a politician bragged about creating new jobs. "Yeah," said the waiter. "And I'm holding down three of them!"

Quantity does not equal quality. Someone should be asking "what kind of jobs?"

I went looking for a source for the jobs needed figure ozy quotes me quoting and came up with some very interesting articles...including one from 1999 when job creation was "down" to 235K that month <sigh>.

Anyway---from CNN Money--Nov. 6, 2003
What's more, the economy still seems to be months away from creating the 150,000 or so jobs a month needed to help bring unemployment down. Without such growth, the unemployment rate likely will stay flat or rise.

"If job growth is just 50,000 a month, you can be sure that the unemployment rate is going to rise at some point in the coming months," said Ethan Harris, chief economist at Lehman Brothers.
http://money.cnn.com/2003/11/06/news/economy/jobs_walkup/index.htm

And this little warning back in October--
The Truth About Job Growth
"While many celebrated, the numbers indicate that things have not improved for most workers; in some cases, workers are earning 43 percent less," said Challenger.
Instead of working in manufacturing, where Challenger says the average job pays $650 per week, many of the displaced workers have taken retail positions, which pay an average of $373 a week, or jobs in business services, which pay $579 per week.
"We've lost 2.5 million manufacturing jobs since the recession hit," says Challenger.

in a document put out by Swiss Life (brought up by Google.) We can be sure, however, that the cheering is wishful thinking because this economy is only growing through military spending. And that's like throwing money down a rathole.

NEW YORK (CNN/Money) - Continued dollar weakness and the impact of this weekend's Northeast snowstorm on the economy -- particularly on the retail sector in the midst of the holiday session -- will be among the things on Wall Street's mind as the trading week begins.

At 5:20 a.m. ET, futures pointed to a weak start for the major indexes.

The dollar touched a record low against the euro for the seventh consecutive trading session as investors reacted to the weaker-than-expected employment figures released last Friday. The euro stood at $1.2179, up from $1.2166 late Friday. Against the yen, the dollar tested a three-year low at ¥107.63.

more

Something smells funny at this pre-session hour. The feeling I get is the same as opening the fridge and finding a plastic container holding a mysterious item. I don't remember what it is or how long its been there but it's a safe bet that I do not want it anymore. Much the same with many stocks today: they smell and look funny.

The bond market smells funny too because of withering faith in the US government's ability to cover its long-term obligations.

Even better: the Fed appears poised to hold interest rates until the middle of next year. Correct me if I am off-base here, but if rates rise by next summer I believe it stands to reason that the impact of such a move would spur a negative ripple effect and effectively dash Bush's election hopes. Agree? Disagree?

I'll be listening to the news updates for word at the Casino.

Be well folks.

I think the Fed will raise rates early next year so as to avoid any appearance of playing politics with interest rates.

Julie

You know it's time to clean out the refrigerator when the bacon starts grazing on the lettuce - Garfield....

But seriously, I'm wondering if the Iraqui Strike wasn't prompted by their intent to switch to the Euro from the Dollar and undermining the US presence in the area? That may account for the occupation in the short term.

and the numbers don't look so good today

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 88.84 Change -0.30 (-0.34%)

other people's words

http://servihoo.com/channels/kinews/v3news_details.php?id=25802&CategoryID=47

The dollar sank to a new all-time nadir against the euro as negative sentiment towards the US unit showed no sign of abating on the eve of a US Federal Reserve monetary policy meeting.

<snip>

Although a change in interest rates was not expected, investors were waiting anxiously for any change in the tone of the Federal Reserve's comments that could pave the way for a rate hike next year.

"The dollar once again enters a new week on a precarious footing," said Baweja Bhanu, strategist at UBS Warburg.

"This week's statement accompanying the FOMC result will be key for near-term dollar sentiment," he added.

...more...

http://www.forbes.com/business/newswire/2003/12/08/rtr1172546.html

The greenback dipped to a three-year low against the yen, thumped to a seven-year low against the Swiss franc and plumbed a fresh five-year low against the British pound.

Analysts said Friday's jobs data coupled with concerns that U.S. assets would struggle to attract enough foreign capital to offset the downward pressure on the dollar from the huge current account deficit played on investor sentiment.

They noted the latest warning sign had come from a Bank for International Settlements report overnight showing OPEC countries, which mainly earn in dollars, had repatriated funds at an accelerated pace in the first half of this year.

"The market is continuing to focus on the U.S. external deficit," said Ryan Shea, senior international economist at Bank One.

...more...

my words - or just kind of a story -

has anyone ever seen a really bad infestation of termites? I mean a case where they have been left to do all the damage possible while painting the building and planting flowers around so that one merely wonders about that flying swarms early in the spring?

Well, termites just love to eat most everything a building is made of - but they don't really like paper. They think that sheetrock tastes like cotton candy. So you walk around the building and it looks just fine. Then you think everything is wonderful until you grow just a little weary or you get a stone in your shoe and you lean up against a wall for a rest and find that there is no wall behind the paper. Your hand and shoulder just go shooting right through the wall!

Only then does one realize that the whole building is about to go away.

That's our dollar and our economy - it's all painted and pretty flowers are out advertising it goodness and beauty, but the termites have been having their way, gutting the building and not caring about those that need a place to live.

Have a great day Marketeers! Let's see if the markets want to party on!

can happen if this continues...banks are leveraged in many way and a substantial drop/up in rates, currency & gold are or will hit at the same time

our monetary system at this moment -

I don't know whether to contrast this to The Great Depression or to the failed Johnson administration - he did the Great Society and the Vietnam War (oops Conflict) simultaneously - it definitely put the US in negative financial territory -

with this mal-administration propping up the corporate fascists and basically shifting all funds to their cronies, it is quite different in many ways -

the dollar is continuing its rapid decline this morning - current numbers

Last trade 88.67 Change -0.47 (-0.53%)

and I don't know where the next point of resistance will be - Japan lost over 300 points on the Nikkei last night and China's market also fell -

those two markets depend on the US consumer in many ways - it may be a forewarning about what the day will bring -

the PPT has basically shot its wad (no more rabbits in the hat) playing up the market for the illusion of "economic growth" and now will be faced with an ugly reality.

Will it be today's market or tomorrow's that shows the fissures in the facade?

Will the corporate media whores ignore the news or will they take a candle to the darkened corner and only tell a tiny part?

Will they have a choice?

this is happening a bit too quickly to give the impression there is much control involved. Gold will be good to watch, as well as currencies. Treasuries too. Will there be a sell off in T's?

How knows where we'll be at 4 pm today? Not I.

Julie

Dow 9,869.86 +7.18 (+0.07%)
Nasdaq 1,940.62 +2.80 (+0.14%)
S&P 500 1,061.65 +0.14 (+0.01%)
10-Yr Bond 4.215% +0.000

There's bulls and bears in that pit today. We'll see who survives.

Julie

Well, I'm betting on a slippage by the top of the hour.

Dow 9,874.75 +12.07 (+0.12%)
Nasdaq 1,947.50 +9.68 (+0.50%)
S&P 500 1,062.85 +1.35 (+0.13%)
10-Yr Bond 4.223% +0.008

Maybe my seer hat got mixed up with my Santa hat!
Dow 9,893.49 +30.81 (+0.31%)
Nasdaq 1,946.85 +9.03 (+0.47%)
S&P 500 1,064.26 +2.76 (+0.26%)
10-Yr Bond 4.237% +0.022

'cause all is rosy and I must be just an elf

Dow 9,890.31 +27.63 (+0.28%)
Nasdaq 1,935.03 -2.79 (-0.14%)
S&P 500 1,062.22 +0.71 (+0.07%)
10-Yr Bond 4.238% +0.023

edit: PS--nice hat, UIA!

Dow 9,899.20 +36.52 (+0.37%)
Nasdaq 1,933.37 -4.45 (-0.23%)
S&P 500 1,062.93 +1.43 (+0.13%)
10-Yr Bond 4.265% +0.050

Nasdaq dropping, DOw and S&P moving sideways.

After an ugly 5 days at work last week, I hope I can get back to my normal posting progress 'round lunchtime.

Dow 9,896.23 +33.55 (+0.34%)
Nasdaq 1,929.13 -8.69 (-0.45%)
S&P 500 1,061.57 +0.07 (+0.01%)
10-Yr Bond 4.260% +0.045

Sorry - I guess read your posts and then plagerized when I quit paying attention. :+ :crazy:

:D
Big push upwards, there!
Dow 9,926.60 +63.92 (+0.65%)
Nasdaq 1,936.65 -1.17 (-0.06%)
S&P 500 1,064.59 +3.09 (+0.29%)
10-Yr Bond 4.276% +0.061

Sideways movements on both markets.

Dow 9,896.23 +33.55 (+0.34%)
Nasdaq 1,929.13 -8.69 (-0.45%)
S&P 500 1,061.57 +0.07 (+0.01%)
10-Yr Bond 4.260% +0.045

funny how that works in the world of the gold cabal...using all your resources...the problem is the institutions are buying the weakness.

http://iw.thomsonfn.com/iwatch/cgi-bin/iw_active?ind=134

In the last 45 minutes, a quick rise:

Dow 9,927.35 +64.67 (+0.66%)
Nasdaq 1,936.88 -0.94 (-0.05%)
S&P 500 1,064.64 +3.14 (+0.30%)
10-Yr Bond 4.275% +0.060

Yahoo Fi says they are worried about interests rates at tomorrow's Fed meeting, and that is making the markets hesitant:

Yahoo Fi Updates:
"1:30PM: The Dow has set a new session high since the last update, while the Nasdaq and the S&P 500 have also improved their standing a bit... With the major averages trading within reach of their 52-week highs, the market maintains its hesitancy ahead of tomorrow's FOMC meeting... It's widely expected that the Fed rate will be left at its current level of 1%, but the market is likely to pay an exaggerated amount of attention to the directive and to whether the committee will elect to drop its promise of an accommodative policy "for a considerable period of time"...
The market's hesitancy is reflected in today's volume, which is running at its lowest level in at least three weeks, with 630 mln and 910 mln shares traded on the NYSE and the Nasdaq, respectively, up to this point... Breadth figures are mixed, with advancers leading decliners on the NYSE, but the opposite being true on the Nasdaq... Down volume is outpacing up volume on both exchanges..."

Look like we lost that head of steam from the last hour.

Dow 9,906.45 +43.77 (+0.44%)
Nasdaq 1,928.25 -9.57 (-0.49%)
S&P 500 1,062.29 +0.79 (+0.07%)
10-Yr Bond 4.282% +0.067

Also, it looks like money is leaving the 10 year (if I have my up is down and down is up understanding of the 10 year rate correct now).

So if the markets are slow (low volume), and money is leaving treasuries, where's the all the money going thats leaving "normal" investments? Gold? Silver?

Dow 9,929.42 +66.74 (+0.68%)
Nasdaq 1,934.41 -3.41 (-0.18%)
S&P 500 1,064.88 +3.38 (+0.32%)
10-Yr Bond 4.271% +0.056

2:57 Kinda interesting mix in this bag. They were to announce today how much in Treasuries will hit the block later this week, I didn't catch it but I'm sure we'll hear.

Julie

http://www.forbes.com/markets/newswire/2003/12/08/rtr1173276.html

NEW YORK, Dec 8 (Reuters) - U.S. Treasury prices slid on Monday as investors took profits on last week's mammoth gains and adjusted positions ahead of the Federal Reserve's last policy meeting of the year.

The Treasury said on Monday it would auction $16.0 billion in five-year notes on Wednesday and $12.0 billion in reopened 10-year notes on Thursday.

...which in recent history is not all that much.

There could simply be a lack of selling. Folks standing pat and keeping money in what they already have. I read a few weeks that low volumes can be indicator (though not guarantee) such behavior. My amateur guess is that the more active traders are holding out until the Fed decision tomorrow.

but the market is so happy!

It's like it's on drugs!


Dow 9,959.34 +96.66 (+0.98%)
Nasdaq 1,942.25 +4.43 (+0.23%)
S&P 500 1,068.22 +6.72 (+0.63%)
10-Yr Bond 4.278% +0.063

dollar not so excited

Last trade 88.73 Change -0.41 (-0.46%)

As my somewhat folksy, soft-spoken, to-the-point, financial advisor friend has said "Yeah, the markets are up/down, but that's only because people are buyin'/sellin'".

3:32

Market Summary

Dow 9,960.23 +97.55 (+0.99%)
Nasdaq 1,943.23 +5.41 (+0.28%)
S&P 500 1,068.25 +6.75 (+0.64%)
10-Yr Bond 4.278% +0.063

Late-in-the-day rally strikes again!

Dow 9,962.38 +99.70 (+1.01%)
Nasdaq 1,946.20 +8.38 (+0.43%)
S&P 500 1,068.90 +7.40 (+0.70%)
10-Yr Bond 4.278% +0.063

The ax is stayed another day. ;-)


Dow 9,960.82 +98.14 (+1.00%)
Nasdaq 1,947.79 +9.97 (+0.51%)
S&P 500 1,068.91 +7.41 (+0.70%)
10-Yr Bond 4.278% +0.063

Bit of a bruising in Treasuries. Hmmm. That could mean something re: The Fed.

Catch you marketeers in the AM! :hi:

Julie