Others   

Bull Market Continues

Dow Notches First Close Above 12,000

Associated Press
Friday, October 20, 2006; Page D03

 

An over-dosed of  redbull can kill the Bull and bring back the honey loving Bear.

BTW, the cut in productions announced by OPEC is to prevent over-supply as stock-pile is still high. This is just to prevent further falls of  the oil pxs. More of a stablization move than to create a shortage of demands. Cheers!

 

Well Done to the wake up Bull, feed him more red bull to cheong faster ! Good Luck, but be careful, may be a bit too hot liao, heard Opec just announce will cut down 1 million barrel of out put daily, thus might create a demand in oil and thus oil price will move above 60 bucks !

 

After the bull run-ups recently, so much for a rate cut at the FOMC next week (25th Oct). Dow still above 12,000 mark at 12,005 now! Shiok!

 

Seems that all signs are green again. Up UP UP

Leading indicators turn higher; weekly jobless claims lowest since July Updated 10/19/2006 10:26 AM ET E-mail | Save | Print | Subscribe to stories like this

ECONOMIC CALENDAR Click here to see what economic reports are coming up WASHINGTON (AP) ? A closely watched gauge of future economic activity rose in September after two consecutive declines, as consumer expectations improved, an industry-backed research group said Thursday The Conference Board said its index of leading economic indicators edged up 0.1% to 137.7 last month. The index had slipped 0.2% in July and August. The index is designed to predict economic activity three to six months in the future. Separately, the Labor Department reported that 299,000 people filed for jobless benefits, a decline of 10,000 from the previous week. It was the lowest level for jobless claims since the week ending July 22. The decline was bigger than analysts had been expecting and provided evidence that employers are still reluctant to lay off employees even though economic growth is slowing. The decline in jobless applications last week pushed the four-week moving average for claims down to 307,750, the lowest point since late June. After starting the year at a sizzling pace, the economy slowed sharply in the spring as consumers were battered by surging gasoline prices, rising interest rates and a cooling housing market. Analysts believe growth slowed even further during the summer but concerns that the country could tumble into a recession have been eased by recent declines in energy prices, which have lifted consumer confidence and are expected to bolster consumer spending in the closing months of this year. The Federal Reserve, after raising interest rates for two years, called a pause in the credit tightening at the August and September meetings. The central bank is widely expected to leave rates unchanged at next week's meeting given recent signs that the slowing economy is helping to relieve inflation pressures. While employers have not boosted layoffs significantly, they have slowed hiring. For September, employers added just 51,000 jobs, the weakest showing in 11 months. The unemployment rate, however, dipped slightly to 4.6%

 

Hi robinpang,

I agree that the retail investors in Singapore are not market movers and the institutional investors have more control over the market. However, I find that the TA charts still do work. The charts don't care about who's buying or selling. They just measure buying and selling pressure on a stock.

Usually, investors (institutional or otherwise) will take up positions over time on a counter and this will become apparent in the charts.

 

Hi, it is interesting what you written Livermore senior! I totally agree wit the bull market in place, and and agree with 99% of your article. But i have one nagging questions. The herd are not market movers. In fact, its the instituitional investors who have control in terms of huge volume trades? I am curious that technical indicators all indicate overbought, and i want to ask, wouldnt the correct catch us unaware when we are all caught up in the heat of the rally? Wouldnt this be the best time for institutional investors to "Sell" all of a sudden, one morning, when we are all drunk on the rally? What i am saying, isint this the best time for us to sell first, and wait out the correction, rather than shrug the correction off, as many of us did in the earlier correction a few months back?

 

After 6 years Dow breaks through 12,000. Previous high was 11800 somewhere in 2000.

Time for another bull run towards 13,000. By year end???

 

Rate cut??   The Market woud be pleased if there isn't any hike as of now!  Any rates cut should be an added bonus. Cheers!!!

 

no rate cut liao!!

 

10/17/2006 - Updated 10:43 AM ET

Inflation jitters take their toll Core producer prices in shock rise; Eli Lilly to buy Icos in $2.1 bln deal By Leslie Wines, MarketWatch & Mark Cotton, MarketWatch NEW YORK (MarketWatch) -- U.S. stocks fell Tuesday after the latest producer-price report raised concerns about inflation, and prompted some investors to lock in profits in the wake of rally that has lifted the Dow Jones Industrial Average to record highs. The Dow industrials [$INDU] fell 58 points to 11,922 after a record closing high in the prior session. A 3.5% slide in shares of Intel Corp. [INTC] , sparked by a broker downgrade ahead of its quarterly earnings release weighed heavily on the blue-chip index The Nasdaq Composite Index [$COMPQ] was down 28 points to 2,336, while the S&P 500 Index [$SPX] was off 8 points at 1,361. Ahead of the bell, the latest producer-price report reignited concerns about inflation. Core producer prices, which excludes food and energy costs, rose a surprising 0.6% in September, the most since January 2005, as prices for motor vehicles jumped at the fastest rate in more than 15 years. Economists forecasts by MarketWatch had been looking for a rise of only 0.2%. "We're seeing a reaction to core producer prices coming in a bit hot but the rise nearly all comes from an increase in auto prices," said Jeffrey Kleintop, chief investment strategist at PNC Advisors. "I think it's due to the change in model years but it's certainly not the start of a new trend of rising auto prices." Kleintop said investors are more worried about the implications of the producer-price report for consumer prices. The September consumer price index is released on Wednesday. Economists polled by MarketWatch are forecasting a 0.3% decline compared with a rise of 0.2% in August. Core consumer prices are expected to have ticked up 0.2%.Check economic calendar. At the same time, said Kleintop, the producer-price report is also "an excuse to take a little bit of profit" after the recent run of gains, especially in areas like technology that have outperformed. There was further bad news on the economy for investors to digest. The U.S. industrial sector slowed sharply in September, capping the worst quarter in a year, the Federal Reserve. Industrial production from the nation's factories, mines and utilities dropped 0.6% last month, the biggest decline since the previous September, when Hurricane Katrina disrupted the economy. Economists polled by MarketWatch had been looking for a much smaller decline of 0.1%. And due out at 1 p.m. Eastern, the homebuilders' index for October will also bear scrutiny. MarketWatch is projecting a reading of 30, which would be unchanged from September. Other markets On the bond market, Treasury prices rallied, sending yields lower, after the Treasury Department reported that net capital inflows into the U.S. surged to $116.8 billion in August, up dramatically from $32.9 billion in July. The report eased concerns that foreigners are backing away from U.S. assets. The dollar fell 0.4% to 118.68 yen as Japan's currency continued to benefit from news that the Russian central bank will place more of its reserves in that currency. The euro, meanwhile, rose 0.2% to $1.2547. Crude for November delivery was last up 11 cents at $60.05 a barrel. Gold was slightly lower, with the front-month contract off 20 cents at $598.30. On Monday, gold for December delivery reached its highest level since early October due to concerns about escalating tensions with North Korea.

 

The market continued its bull run last week as earnings season got off to a so-so start. Mixed economic data fueled the continued rally, as sidelined investors continued to trickle cash into equities, driving the Dow Jones Industrial Average (DJIA ? 11,960.5) to a new all-time high just short of the 12K mark. As a result of this bullish activity, we are seeing a market that appears to be growing more resilient.



The Top 50 Inside Secrets - Free
"The Top 50 Inside Secrets to Successful Trading" from New World Trading is the complimentary report you need if you want to get going with futures. Yes, futures can be very profitable as inflation grows and the dollar wobbles but you need to know the rules of the game before you start.

Qualify now.


Technically, the market continues to provide reason for the bulls to maintain their run, as little to no overhead resistance stands in the way. The upcoming 12K level for the Dow is more than likely to induce some hesitation, as all round numbers normally do with traders and investors taking stock of their portfolios and engaging in some profit taking. Typically, the market pauses while investors reflect on market rallies that take the Dow or other indices to round number levels. But once the resistance of these round numbers is taken out, the market clicks back into rally mode as those who hesitated begin to edge back into the market.

This is a great time to review the sentiment stages of a rally because the market is likely to shift stages soon. As some may have read in these pages before, we find that there are four stages to any market rally - disgust (normally when stocks make a long-term bottom), disbelief (when investors doubt a market rally), acceptance (the point at which investors begin to "believe" in a rally), and finally euphoria (the point at which investors appear to think nothing can go wrong with a rally). It is important to be aware of where we are within this cycle to see how much longer a rally can last. For instance, when the market hits the euphoric stage it is often best to begin cutting back on long positions. Why? If everyone is euphoric, it often means that the majority of cash has been allocated to the market, meaning that there is little catalyst left for stock prices to go higher. This also means that there is more selling potential priced into stocks, as negative news tends to spook investors into selling.

Putting this knowledge to work, the current market appears to be at the tail-end of the second, or "disbelief," stage. Evidence of this comes in more than a few measures of sentiment. First, take recent quotes from analysts and investors. We heard the battle cry last month that September was the worst month of the year to be in the market. This came on the heels of a relatively strong July and August, which of course falls under the "sell in May and go away" heading. Fast forward five weeks later and the Dow is making new highs, pulling the S&P 500 Index (SPX ? 1,365.62) and Nasdaq Composite (COMP ? 2,357.3) with it. Now, conveniently, the market is looking for a pullback as the Dow edges near 12K. The disbelief from investors that the current rally is legitimate should be considered a bullish catalyst as long as the technicals and fundamentals remain strong, as they have.

As I mentioned a few weeks ago, October is the gateway to the strongest seasonality period for the market, with November, December, and January averaging the best historic yields for stocks. This plays well within the context of the four sentiment stages, as a break above 12K will likely spur further migration of sideline cash into the market as we begin to move into this seasonal strength. This migration will likely cause a shift from disbelief to acceptance as market participants begin to commit more assets to equities. This acceptance phase can be powerful for stocks, and bolsters the short-term bullish potential for the market.

Further evidence of the continued disbelief in the market rally is seen in the CBOE equity put/call ratio. This telltale sentiment indicator has remained near its relative highs as put volume continues to weigh heavily in daily options trading at the CBOE. The ratio's short-term trend is beginning to turn lower, indicating that options traders are increasing the number of calls traded relative to puts. A continuation of the trend would suggest that investors may start unwinding their pessimistic sentiment, which often correlates with higher equity prices.

Another sign of belief that the market rally is real, though not yet over-extended, comes from Investors Intelligence. Last week's poll results show that 52.2 percent of participants consider themselves bullish, while 30.4 percent are bearish. This represents a bull-to-bear ratio of 1.72. This ratio has been on the rise for the past nine weeks, as poll participants continue to see brighter skies ahead. Despite the increase, the ratio remains below the "danger zone" of readings above 2.0.

Earnings kick into full swing this week, with 99 of the 500 SPX companies reporting their quarterly results. Of these 99, 13 have current "whisper numbers," or investor expectations, that are more than two percent higher than current analyst expectations. These companies are thus at risk for exaggerated selling if they don't hit these optimistic expectations. On the other side of the coin, there are another 13 of the 99 that have whisper expectations below analyst numbers by more than two percent.

Wrapping it up, considering current technical and sentiment conditions, the market continues to be more likely to advance than decline. The major indices continue to operate in overbought territory, indicating that a mild pullback would be healthy. Such a well-deserved rest would be likely viewed as an opportunity to step into the market by those who have been waiting on the sidelines. Earnings and a heavy flow of economic data will act as the catalyst for market direction and should be watched closely this week. That said, this market appears to be strong enough to withstand some negative news without derailing from its bullish course.

 

Trading terminology are full of sexual overtones. Just think about selling climaxes, breakouts, penetrations (of moving averages etc), head-and-shoulders, double tops (what does that resemble?), cup-and-handles --- all innuendoes. Even the bull, the epitome of a rampant market, is also the epitome of sexual virility. Perhaps the excitement that traders experience when trading the market stems from the same energy source that gives rise to sexual desires.

 

I agree with Singaporegal... Isn't this about bears and bulls?

 

I think you need help...

 

why do i read sexual inneundo into everything you guys post?

 

Actually I'm quite happy with this minor correction today. Its healthy and relieves some stress on the bull. It went up too high too fast.

 

I'm waiting for the Bull to take a rest anytime soon before going back in again for the final thrust for the year. The Bull deserves a good break. Cheers!

 

May be is over when the 2nd blast just done !

 

Four years after hitting a low of 777 on Oct. 9, 2002, the Standard & Poor's 500-stock index has risen 87%, assuming dividends and gains were reinvested.

Some mutual fund winners:

? If you owned funds that invest in beaten-up small-company stocks, you probably outgained the S&P index. The top such fund, Pacific Advisors Small Cap (PASMX), soared 309%. Funds that invest outside the USA also outpaced the S&P.

? Among all diversified U.S. funds, the standout was Fidelity Leveraged Company Stock (FLVCX). That fund, which invests in midsize companies that issue low-quality debt, soared 341%.

? Some funds that specialize in certain sectors fared even better. Latin America funds, for example, leaped an average 407%. And the top-performing fund of the bull market, iShares MSCI Brazil (EWZ), samba'd to a 628% return, aided by red-hot gains in Brazil's currency, the real. Foreign stocks become more valuable to U.S. investors when their countries' currencies rise vs. the dollar.