Click charts to enlargeWe're just holding the Ag names as usual, waiting for prices where it's worth taking some profits. In the meantime, couldn't help but notice that we haven't gotten anywhere in the last 3 months. If you go back to mid March, Bear Stearns had just collapsed and people were worried about Lehman being the next major financial firm to go under. Then, along came the Fed, who swooped in and made everything all better. Now here we are, 3 months later, worrying about Lehman again. The chart at the top (LEH) shows little or no technical improvement from mid March. The chart still has that "about to fall off a cliff" look to it. LEH's chart tells the story of the economy in a glance... 8,350 layoffs at GM, massive job losses in the financial services sector, foreclosures biting into the normally bulletproof Hamptons market, and gas surcharges popping up everywhere in one form or another.
The chart below LEH is a chart of OIL. Although it is well above its moving average, it has formed a short term trend channel (an uptrending one, of course). It is due for another run up, which would take the Dow down another few hundred points. At some point, it will break the green support line and stabilize for some time, but until then, its staggering uphill climb is very much intact.
We don't trade on broad market timing (only on individual stock timing), but we enjoy guessing at the market's next move. At this point, we think that the catalysts are in place for a potential drop in the market. LEH may be on the brink of disaster, and OIL may be headed for a relief rally, if not a substantial move to new highs. With these two threats looming, the market by no means has a green light to prosperity over the short term.
6 comments:
Snot, i am watching a cup and handle figure in the Dow, the S&P and the nasdak.
Maybe you can tell us your perception.
If this is true all this index are going to break up.
It seems like the market and our economy are like twins right now.....both built out of shoddy materials. If they were a construction-in-progress, I can't find a way either of them would meet code inspection, or be able to stand up to a good storm.
NYX is getting punished like it's the CME! Anywhere under 60 the NYX is money in the bank.
whats up with the nasdaq?
I think the NDAQ has been getting unjustly punished by the downdraft caused by everyone worrying about the CME, NMX & ICE. Will the CME/NMX merger go through? Will the CME & ICE get their wings clipped by Congress if they tighten up the commodity rules for the so-called speculators?
Whatever the outcomes of those issues it seems like commodity exchanges will be hurt by more regulation, not equity exchanges like the NYX & NDAQ.
what in blazes is going on with SQM?
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