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A Modest Pullback in Equities
Posted on 09/25/2006 16:39:00 | Link | Post Comment
0920 EST Tuesday March 21 2006
Good Morning: Seems as if CNN's Report on the sobering outlook for Crude Oil gave traders an opportunity to hammer down Oil prices yesterday and it is important to know that we were commenting on the long term implications for Energy, not the shorter term, wherein we did predict a while back the inventory bulge that yesterday helped ease Energy prices quite considerably, perhaps heralding the first day of Spring and along with it, the fact that we got off light this winter as being one of the warmest on record for North America. Not so in Europe and Asia where they had one of coldest winters ever. The fact that Crude is now sitting right at the critical $60 level, makes this look more like a short than a buy, as each successive rally of late has been sold into, implying a developing short term glut in Oil and that could help Equities further, especially Transportation issues, which yesterday closed almost at new all time record highs again. The Banking Index also closed at a new record high, defying conventional wisdom that Fed hikes are bad for Banking stocks. So today will be interesting to see just how equities play out and could be significant as to how today's close may factor in. A higher close today, could be very bullish.
Gold and Silver and Metals in general are marking time with Copper once again making a run to test its all time highs of Sunday night. As we suggested, the US Dollar did rally some off the recent short term lows established post last week's rout. A further breakdown in the US unit from here would have to be helpful to stocks and probably Metals too. But that may take a day or two to play out. We'll have to see.
Microsoft is creeping up towards the highs of recent ranges and appears poised for an upside breakout. We recently recommended the purchase of Microsoft near the low end of recent ranges and so far its upmove has been impressive and its multi-year base looks bullish. Intel looks terrible, as does the SOX or Semi-Conductor Index, but in the event these two should turn up, that could ignite Equities further. The Nasdaq looks interesting, because a reasonable nudge to the upside could have it setting multi-year highs again soon. A big positive.
Trade Well
From the Desk of Savant
Good Morning: Seems as if CNN's Report on the sobering outlook for Crude Oil gave traders an opportunity to hammer down Oil prices yesterday and it is important to know that we were commenting on the long term implications for Energy, not the shorter term, wherein we did predict a while back the inventory bulge that yesterday helped ease Energy prices quite considerably, perhaps heralding the first day of Spring and along with it, the fact that we got off light this winter as being one of the warmest on record for North America. Not so in Europe and Asia where they had one of coldest winters ever. The fact that Crude is now sitting right at the critical $60 level, makes this look more like a short than a buy, as each successive rally of late has been sold into, implying a developing short term glut in Oil and that could help Equities further, especially Transportation issues, which yesterday closed almost at new all time record highs again. The Banking Index also closed at a new record high, defying conventional wisdom that Fed hikes are bad for Banking stocks. So today will be interesting to see just how equities play out and could be significant as to how today's close may factor in. A higher close today, could be very bullish.
Gold and Silver and Metals in general are marking time with Copper once again making a run to test its all time highs of Sunday night. As we suggested, the US Dollar did rally some off the recent short term lows established post last week's rout. A further breakdown in the US unit from here would have to be helpful to stocks and probably Metals too. But that may take a day or two to play out. We'll have to see.
Microsoft is creeping up towards the highs of recent ranges and appears poised for an upside breakout. We recently recommended the purchase of Microsoft near the low end of recent ranges and so far its upmove has been impressive and its multi-year base looks bullish. Intel looks terrible, as does the SOX or Semi-Conductor Index, but in the event these two should turn up, that could ignite Equities further. The Nasdaq looks interesting, because a reasonable nudge to the upside could have it setting multi-year highs again soon. A big positive.
Trade Well
From the Desk of Savant
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