Markets have been largely looking past the increasingly ugly debt situation in Europe. Sovereign spreads continue to widen. Yesterday, Spain got a debt downgrade from Moody's.
Reminiscent of 2007 before the mortgage dominos starting falling...
position in TLT
Thursday, March 10, 2011
Tuesday, March 8, 2011
Dollar Index
Since markets began sniffing out QE2 last summer, the US dollar has been declining. The dollar index (USD) has lost about 20% of its value since last June.
The USD is now sitting on support marked by a gentle sloping multi-year uptrend. A bounce around these levels would not be surprising.
position in TLT
The USD is now sitting on support marked by a gentle sloping multi-year uptrend. A bounce around these levels would not be surprising.
position in TLT
Monday, March 7, 2011
Head and Shoulders Patterns
Am seeing more head-and-shoulders patterns (representative one below) than I've seen in a while.
When this pattern becomes apparent across many stocks/sectors, it's often a sign that the tape is changing its tone.
position in SPX
When this pattern becomes apparent across many stocks/sectors, it's often a sign that the tape is changing its tone.
position in SPX
Wednesday, March 2, 2011
Tobin's q
Generally speaking, Tobin's q is the market value of an asset divided by the replacement value of an asset. While the devil can be in the details of accurately determining both the numerator and denominator, hopefully you can see that the higher the value of Tobin's q, the more expensive an asset is.
As such, Tobin's q represents one approach to securities valuation. Tobin's q for the broad stock market appears below.
What do current levels of Tobin's q suggest about the general value of stocks here--cheap, fair value, or expensive?
position in SPX
As such, Tobin's q represents one approach to securities valuation. Tobin's q for the broad stock market appears below.
What do current levels of Tobin's q suggest about the general value of stocks here--cheap, fair value, or expensive?
position in SPX
Trading Crude Oil
FYI, sold a chunk of crude exposure into this morning's spike higher.
Could oil move higher from here? If unrest continues to heat up in the Middle East, the answer is most definitely yes. On the other hand, if peace suddenly breaks out, then crude will likely take a sizeable hit.
If oil does march higher from here, I have some 'secondary' exposure in the form of DBE and RJI that I have 'tagged' w/ longer horizon intentions.
Meanwhile, seemed prudent to reel in a portion of this trade after a gappy 10% move in crude.
position in DBE, RJI
Could oil move higher from here? If unrest continues to heat up in the Middle East, the answer is most definitely yes. On the other hand, if peace suddenly breaks out, then crude will likely take a sizeable hit.
If oil does march higher from here, I have some 'secondary' exposure in the form of DBE and RJI that I have 'tagged' w/ longer horizon intentions.
Meanwhile, seemed prudent to reel in a portion of this trade after a gappy 10% move in crude.
position in DBE, RJI
Tuesday, March 1, 2011
Trannies Update
Last month we discussed the importance of the Dow Jones Transportation Index ($TRAN) to what is known as 'Dow Theory.'
Today, the 'Trannies' are trading down. On a weekly chart, the pattern suggests a topping pattern to the index.
Support resides below in the 4800-4900 zone.
position in SPX
Today, the 'Trannies' are trading down. On a weekly chart, the pattern suggests a topping pattern to the index.
Support resides below in the 4800-4900 zone.
position in SPX
Bank Index
The Bank Index (BKX) has retreated back down to near term support at 52ish.
Given the leveraged, financially centric nature of our economic system, the banks often provide a useful 'tell' on general market direction.
The BKX has already broken thru its 50 day moving average. Should the index break decisively thru support, some market participants may regard this as a sign that the tenor of the tape is changing.
position in SPX
Given the leveraged, financially centric nature of our economic system, the banks often provide a useful 'tell' on general market direction.
The BKX has already broken thru its 50 day moving average. Should the index break decisively thru support, some market participants may regard this as a sign that the tenor of the tape is changing.
position in SPX
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