tag:blogger.com,1999:blog-59691442011-04-21T16:51:29.036-04:00IMRA Daily ThoughtsIntermarket Updates for the IMRA
Inter-Market Relationships Analysis
http://www.krk-imra.com
email: Kevin Klombies krk@krk-imra.com
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comBlogger3461100tag:blogger.com,1999:blog-5969144.post-1125327112973659842005-08-29T10:47:00.000-04:002005-08-29T10:51:52.980-04:00Just a quick observation:One of the major ratios that we have been following involves the S&P 500 Index divided by the Dow Jones AIG Commodity Index. The equity/commodity ratio has bottomed along a support line consistently over the past 20- 25 years.At present the support line runs through around 7.15 to 7.2 times. In other words, for any given level for the commodity index and assuming that theKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1122914495463766752005-08-01T12:33:00.000-04:002005-08-01T12:41:35.473-04:00Monday comment:This is one tough market to figure out.On the one hand...A host of stocks that I have been following look much better including many of the autos, some of the airlines, and even a few financials. Stocks like Mitsubishi Financial (MTF) are very close to breaking higher and this was supposed to occur as the yield curve stopped flattening and began to steepen.The yield curve steepenedKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1122400351619171932005-07-26T13:45:00.000-04:002005-07-26T13:52:31.656-04:00Tuesday comment:There are so many 'if this, then that' issues on the go at present the only way I can make sense out of things is to have at least one 'hard' view. Currently I have a number but the anchor is likely the negative view on the Canadian dollar.The basic idea is that as long as the Canadian dollar remains nicely below .835 then any rally in copper or crude oil prices is basically a Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1121361520780694142005-07-14T13:15:00.000-04:002005-07-14T13:18:40.786-04:00Thursday comment:Not often that everything comes together on the same day but this is certainly a nice example.Crude oil- Finally over the top. Could be sub-50 within a few days (briefly).Corn- nice break out. As mentioned many times I am not only positive on corn but also patiently positive. 3.90 is definitely possible later this year.Equity markets- SPX through 1230 is a break out that should Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1119981519497261802005-06-28T13:55:00.000-04:002005-06-28T13:58:39.523-04:00Tuesday Comment:The conviction is that the end of this quarter should mark the lows for long-term interest rates for years to come. 30-year yields should rise from roughly 4.25% back to around 5.5% by next spring.The conviction is that commodity prices have peaked. That the next time oil prices decline they will not rally back to new highs. That commodity prices will decline through 2006.The Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1118942824522736892005-06-16T13:22:00.000-04:002005-06-16T13:27:04.526-04:00Thursday comments:The markets are replaying 2004 in many respects. The focus of tomorrow's IMRA issue is going to be the way certain sectors are moving in exactly the same fashion as June of last year. We had a peak in the Aussie dollar ahead of the top in the mines and metals and now with stocks like PD surging higher the markets' message is that the euro and shipping rates are bottoming.FranklyKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1117812744038228272005-06-03T11:26:00.000-04:002005-06-03T11:32:24.046-04:00Friday thoughts:1) There is a tricky little sequence that still appears to be on the go. Bonds are rallying on the expectation now that the Fed is going to stop raising rates after the June Fed meeting. Fine. The yield curve is flattening as short-term rates move higher and long-term rates move lower. Fine. The end of yield curve flattening typically occurs after crude oil prices have broken Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1117736646384081172005-06-02T14:16:00.000-04:002005-06-02T14:24:06.390-04:00Thursday comments:In no particular order these are some of today's markets thoughts:The Airlines are flying. The Oil Index/Airline Index ratio peaks with crude oil prices and it made a high last March and is still falling. The argument here is that crude oil made a cycle peak months ago and that the trend remains lower.The SPX continues to struggle with 1200.The grains are down across the board Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1117642742282214982005-06-01T12:13:00.000-04:002005-06-01T12:19:02.300-04:00Wednesday comments:These are a few of the things that I am pondering today...The spread between crude oil and 10-year yields is out to around 14 (crude at 53 and yields at 39). That marks a new extreme in the negative equity markets back drop but the SPX is pushing through 1200. One or more of these markets (crude, yields, equities) is into a short-term divergence.The break out in the U.S. dollarKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1117038805677524152005-05-25T12:29:00.000-04:002005-05-25T12:33:25.683-04:00Second Comment:On two occasions I have put a comparison between the TBonds and crude oil in the IMRA. It wasn't a relationship that I liked but it was tight enough to at least mention.The idea was that as crude oil prices have declined bond prices have risen. The break out point for crude oil was 50.75 and that was taken out today. All of a sudden... bonds are starting to weaken.I was Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1117036197179689902005-05-25T11:41:00.000-04:002005-05-25T11:49:57.186-04:00Wednesday comments:If you are unfortunate enough to have CNBC on most of the day, two thoughts come to mind. First, it is a dead heat for most annoying voice between Maria B. and Suze Orman. Second, I wish they would just rent the stupid apartment on Park Street and be done with it.The sense is that the dollar and euro are at critical levels. As of yesterday the SOXX was at or perhaps just above Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1115995672907204152005-05-13T10:41:00.000-04:002005-05-13T10:47:52.913-04:00Friday comment:I haven't updated the blog in... a long time. This seems like a good time to do so.The big view has been that the U.S. dollar would resolve upwards (so far, so good), commodity prices would peak mid-year with crude oil and copper prices turning lower in advance and the grains swinging higher as dollar strength spreads to include the Latin currencies.The equity market view is mixed Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1114096866630329792005-04-21T11:06:00.000-04:002005-04-21T11:21:06.633-04:00Thursday comments:I just wanted to quickly go over a few of today's thoughts and fixations.First, crude oil futures have rolled from the May to the June contract. To remain 'neutral' crude oil needs to end the day around 52 to 52.50. For that to happen the June contract has to close the day down 1.50 to 2.00.Second, I am getting interested short-term in going negative on the euro. If it can driftKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1112976932361513322005-04-08T11:57:00.000-04:002005-04-08T12:15:32.363-04:00Friday observations:Looks like crude oil is going to have go below 52.50 to get things heated up once again. Early airline strength has faded with some of the oils catching a bid.Still like the dollar. It is getting hammered today but one argument is that when the dollar actually begins to consolidate we should see the grains begin to rally. No sign of strength in the grains so far so the dollar Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1112380146811050702005-04-01T13:25:00.000-05:002005-04-01T13:29:06.813-05:00Friday comment:We remain within the grips of pressures created by rising energy prices. You can see the way stocks like Wal Mart are literally buckling as gasoline prices surge upwards.This is both a near-term problem and a wonderful opportunity. As long as energy prices are climbing the equity markets look negative. Once they stop climbing, however, we should see prices snap upwards once Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1112367884919166292005-04-01T10:01:00.000-05:002005-04-01T10:04:44.920-05:00Friday comment:The best number that we can find for U.S. Dollar Index futures resistance/break out would be 84.75. Last seen it is 84.30 up .25.Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1112304526852835852005-03-31T16:25:00.000-05:002005-03-31T16:28:46.853-05:00Thursday after the close comment:Goodness... this is quite a challenge. I rather liked the analogy that someone used today when he said, in essence, that he felt like an American League pitcher who had been traded to the National League and was now trying to hit. If you have ever watched a pitcher flail away with a bat with little chance of making contact that is pretty much how the markets feel Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1112282654622740132005-03-31T10:20:00.000-05:002005-03-31T10:24:14.623-05:00Thursday a.m. commentA total dog's breakfast this morning. We were right at the point where crude oil prices should break lower to help push the equity markets upwards... and Goldman Sachs publishes a comment that crude could spike to $105.The bond market should break out on weaker crude oil. The TBonds were through 111 4/32 which, of course, muddies the waters completely.Dollar weakness early isKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1111673978376059622005-03-24T09:14:00.000-05:002005-03-24T09:19:38.376-05:00Thursday a.m. comment:Gasoline futures remain strong. What we wanted to mention is that through into May the ratio of gasoline to crude oil tends to swing upwards. A relatively normal peak ratio in the spring would be 3.6:1 to 3.9:1. At, say, 1.50 gasoline and 50 crude oil the ratio would be 150/50 = 3:1.Our point is that at yesterday's closing prices the ratio was still below 3:1. The ratio can Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1111593823069202462005-03-23T10:54:00.000-05:002005-03-23T11:03:43.070-05:00Wednesday comment:Things are coming together very nicely. The dollar is gathering strength and looks higher. The equity markets are still being pressured lower by falling commodity prices without the clear positive impact of a break down in oil prices. Crude oil is lower, of course, but not quite to the point where the non-commodity equities really start to push upwards.Keep in mind that once oilKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1111511774980177622005-03-22T11:50:00.001-05:002005-03-22T12:16:14.980-05:00Tuesday correction:I think I was moving too fast when I did the comment above. The numbers are, of course, incorrect.The SPX Index hit an intraday high of 1229.11. It has since fallen around 50 points to the intraday low yesterday of 1178.82. The idea was that we have gone through a series of corrections of around 50 to 65 points that have lasted 13 to 15 trading days from the start of the Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1111510599912429652005-03-22T11:50:00.000-05:002005-03-22T11:56:39.913-05:00Tuesday comment:If you look at the SPX from the spring of last year forward you can see a number of sharp but relatively short periods of price correction. Excluding the longer correction into last August there were four declines of 50- 65 SPX points that lasted 13 to 15 trading days.If we use this as a rough rule of thumb today would be the 11th day of the correction with the SPX futures fallingKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1111160046593149122005-03-18T10:29:00.000-05:002005-03-18T10:34:06.706-05:00Friday comment:We have mentioned a few times recently that one of the worst times for the equity markets is that time BETWEEN the top for the oil stocks and the actual break lower by crude oil. Without the upward momentum from the big oils and in front of the positive reaction from those stocks that rise as oil prices decline there is a bit of a 'dead zone'.The strange lagged relationship betweenKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1111075566787587102005-03-17T10:58:00.000-05:002005-03-17T11:06:06.790-05:00Thursday comments:The SPX/commodity ratio closed at 7.18:1 yesterday. The support line is almost right at 7:1. This suggests that with flat commodity prices the downside risk for the SPX is 1155- 70.Strong oil prices are both a problem and a reflection of strong economic growth. When oil prices get at or near a peak the techs tend to run upwards. This is about the time when the SOXX should mount Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1110985855144936812005-03-16T10:03:00.000-05:002005-03-16T10:10:55.146-05:00Wednesday comment:The U.S. dollar has been bombed today on GM's profit warning. That, we suppose, is the bad news.The good news is that the ratio of equities to commodities is getting close to a bottom. From the start of the 1980's through last October's equity market bottom the ratio of the S&P 500 Index to the Dow Jones AIG Commodity Index has held a solid trend line. At present that line cuts Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1110827251485612402005-03-14T14:04:00.000-05:002005-03-14T14:07:31.486-05:00Monday comments:Crude oil still appears to be chopping. Better action in the airlines so far today suggests that crude oil has the potential to be topping.Bonds may rally short-term here. The June contract (110 25/32) may rally up over 111 today or tomorrow.Better action in the dollar today but nothing too exciting. AUD remains stuck between .775 and .80.SPX futures currently 1202.00 with supportKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1110572855129066282005-03-11T15:04:00.001-05:002005-03-11T15:27:35.130-05:00Friday second comment:If you have been following along with the 'crude oil minus 10-year yields' spread chart that is in the IMRA every day on page 5... the idea is that two things have been creating stock market declines. Those two things are falling yields (as money rushes away from equities) and rising crude oil prices.Over the past couple of days the spread line has finally topped. This tendsKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1110571726471996792005-03-11T15:04:00.000-05:002005-03-11T15:08:46.473-05:00Friday comment:With an hour to go in trading today the DJII is down around 90 points with the SPX futures at 1198.The following comment stands the risk of being wrong in a hurry. Still, we thought it might be worth the effort:This is really an inappropriate time for a broad and meaningful stock market decline. This should be a period of general consolidation and 'chopping' with the equity marketsKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1110471015827362402005-03-10T10:56:00.000-05:002005-03-10T11:10:16.143-05:00Thursday a.m. comment:The markets are really quite fascinating these days. Definitely better than most reality-based TV shows.The Amex Oil Index slammed down another 18 so points this morning. The lows at 844.22 are in the area that looks like it could be channel support. I am very interested in going negative on the oils but... not yet. Think of it this way: the best time to go short a 'bubble' Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1110298237821829452005-03-08T09:29:00.001-05:002005-03-08T11:10:37.823-05:00Tuesday second comment:Obviously lots of stress today from both crude oil and the dollar.Not too much of a surprise that crude oil is tracking back to the recent and October highs in the 55's. That isn't a big concern unless the SPX breaks below 1195.A stable equity market means that oil prices are not an immediate problem. What we are worried about is something like 1990 when oil prices ramped Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1110292476131031992005-03-08T09:29:00.000-05:002005-03-08T09:34:36.133-05:00Tuesday a.m. comment:It may be that the dollar's weakness has something to do with Texas Instruments negative profit comments after the close yesterday. True or not... the decline in the U.S. dollar this morning is vexing.The yield spread (5-year minus 3-month) tends to go with the dollar. If the long end of the bond market was up 24/32 instead of down 24/32 (at time of writing the TBond futures Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1109954168746078172005-03-04T11:29:00.000-05:002005-03-04T11:36:08.750-05:00Friday comment:Nothing like the monthly U.S. employment report to spice things up just a bit.There are a few rather glaring inconsistencies and/or divergences on the go this morning. The rally in bonds and decline in the dollar in the face of a 110 point rally in the Nikkei futures to 11945 is perhaps the most obvious.The Nikkei tends to be strong when bond prices are weak. Bond prices are weak Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1109694827657381222005-03-01T11:26:00.000-05:002005-03-01T11:33:47.660-05:00Tuesday comment:Today has the look of 'Day 1'. The Airline Index (XAL) is finally showing a bit of oomph (up 1.61 to 47.76) and the Amex Oil Index (XOI) is lower (down 12.61 to 848.71).This indicates that crude oil is finally topping. What we are looking for, however, is the way the XAL behaves over the next few days. A slow or tepid rally would likely indicate that crude oil is going to fade Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1109347671357665622005-02-25T10:58:00.000-05:002005-02-25T11:07:51.356-05:00Friday comment:Lots going on beneath the surface today.1) The chip sector (SOXX) has been trading inversely to gold since 2000. As the dollar firms the chips look better. The last short-term peak in the SOXX was 445. At time of writing it is 438.8 up around 4.6 points. The intermarket view is if it moves up through 445 then gold should test support at 417 and then 412.2) The spread between Bank Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1109262075192756942005-02-24T11:16:00.000-05:002005-02-24T11:21:15.193-05:00Thursday Comment:One of my favorite indicators at this time is the collection of moving averages (shown daily lately on page 5 of the IMRA) of the spread between crude oil and 10-year yields. For the spread a yield of, say, 4.0% is shown as '40'.Peaks in the moving averages occur when crude oil has been rising and/or yields have been declining. In the post-2000 period the moving averages have Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1109093178247979082005-02-22T12:17:00.000-05:002005-02-22T12:26:18.250-05:00Tuesday comment:Today is apparently one of those days when almost anything the markets make you do is likely going to be wrong. It has long been our view that when the markets run us in or out of something by creating a sense of panic we would have invariably been better off to have done the exact opposite.Crude oil is up big. The dollar is down big. Gold is up 7. The Amex Oil Index (XOI) is up Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1108140890419013002005-02-11T11:49:00.000-05:002005-02-11T11:54:50.420-05:00Friday comment:In today's issue I wrote that it looks like were are getting set to do an equity market run up towards 1250 on the SPX over the next 7 to 8 trading day. It certainly seemed like a less than intelligent comment at the start of trading but it is looking better now.Early in 2004 the dollar was running higher and then, as the bond market began to 'top', the dollar started to weaken offKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1107529463155775382005-02-04T09:59:00.000-05:002005-02-04T10:04:23.156-05:00Friday thoughts:
Still very interested in going short the long end of the bond market. Patience, however, is required.
Underneath the surface today notice that MU is pushing back towards 11 and the spread between TXN and BNS (last seen 24.10 and 38.76) has a breakout/resistance line at 14.8. In other words, we are doing a 'stealth sneak' back towards tech even as the bond market appears to be Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1107449082695212272005-02-03T11:33:00.000-05:002005-02-03T11:44:42.696-05:00Thursday comments:
It is still very hard to be negative on the equity markets. Lumber is up around 8 to 403 with crude oil in the low 46's. That takes the lumber/crude oil ratio back to the highs seen at the start of January when the SPX was 1215- 20.
The equity markets relationship (BNI/XAL) that we were using for crude oil did a nice job of indicating the top but lacked the 'oomph' that it Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1107360203305588512005-02-02T10:57:00.000-05:002005-02-02T11:03:23.306-05:00Wednesday a.m. comment:
We are through the oil inventory numbers with crude oil down .20 at 46.92. The Airline Index looks a bit better (XAL up .75 to 49.15 with BNI down .36 to 47.78 (last seen)).
JBLU is a bit stronger (20.28 up .54). Punch it above 20.85 with crude oil going sub- 46.15 and the trends look short to intermediate-term positive once again.
Ocean shipping rates have turned down Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1107287324073069142005-02-01T14:46:00.000-05:002005-02-01T14:48:44.073-05:00Tuesday comment:
Still view the lumber/crude oil ratio as the 'key' or 'driver' behind the equity markets. So far it is positive and getting more positive by the day.
Best case is that oil prices move lower with crude going at least sub-44 as the Nikkei breaks up through 11550. That would be a very bullish signal for equities.
KK
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1106933994557266982005-01-28T13:29:00.000-05:002005-01-28T12:39:54.556-05:00Friday comments:
I have neglected the blog for a few weeks. Not on purpose, I expect, but rather because I didn't have much to add to the daily IMRA reports.
However... perhaps it is time to do a bit of summary.
If we were to build a foundation it would start with the dollar. When the dollar turns upward it indicates a number of things.
First, it should mark the start of a change in trend Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1106760140121266412005-01-26T13:18:00.000-05:002005-01-26T12:22:20.120-05:00I am having email problems today. In fact, I may be having email problems for another day or two.
I am hopeful that I can get around this in some way this evening when Thursday's issue goes out. However, I haven't received any email to either krk@krk-imra.com or kevin@krk-imra.com since Tuesday evening so things are looking a bit grim at the moment.
If you wish to contact me you can use kevin@Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1105634113848553782005-01-13T11:29:00.000-05:002005-01-13T11:35:13.850-05:00Thursday comment:
Sort of a bad news/good news kind of day.
The bad news is that crude oil prices are on the rise once again. Most equity market problems that we can see going forward are linked to renewed strength in crude oil. Our 'up and out' chart of the potential trading range for crude oil had a top edge of 47.55 so last trade at 47.90 is starting to pinch.
The good news is that while Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1105471640900932752005-01-11T14:19:00.000-05:002005-01-11T14:27:20.900-05:00Tuesday comment:
The S&P 500 Index is 'flagging' sideways between roughly 1180 and 1195. One combination (will show tonight) that I am watching is the spread between BNS and TXN. It goes nicely with the short-term trend of the SPX and is marginally negative today but not to the point where the SPX is in imminent danger of breaking below 1180.
The point is that today is marginally negative and Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1104866697245280712005-01-04T14:19:00.000-05:002005-01-04T14:24:57.246-05:00These are indeed strange times. Over the long run weaker copper prices tend to go with stronger bonds. Not the case today, however.
The U.S. dollar has turned higher and much of the U.S. equity market's strength has been due to dollar weakness so ideally we would see market leadership switch over the Europe now.
Weakness in bonds and the gold miners (XAU) looks appropriate. The combination of aKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1104341151221012832004-12-29T13:18:00.000-05:002004-12-29T12:25:51.220-05:00Thursday comments:
1) crude oil topped out in mid-October and is firmly in a down trend.
2) coffee futures tend to start to run after gold tops out for the cycle.
3) coffee futures actually turned higher in mid-October.
4) to us this suggests that gold prices may be well over due for a price correction (along with copper). First good support is 413 (and 1.305 for copper).
5) gold trends withKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103729997814276752004-12-22T10:35:00.000-05:002004-12-22T10:39:57.813-05:00Wednesday comment:
Better (lower) action in energy prices today following the inventory numbers. Crude last seen down 1.36 at 44.40. First support at 40.25 with the channel bottom now into the 37's.
Below 40 should pinch the stock prices of the oil producers. Below 35 and the trend that has remained positive since early 1999 should turn negative.
What has been interesting over the past few Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103301164012064902004-12-17T09:47:00.002-05:002004-12-17T11:32:44.013-05:00One intermarket curiousity features the ratio of lumber to crude oil prices.
From the equity market's recent bottom in late October (SPX 1090- 1100) through trading yesterday the ratio of lumber to crude oil has risen. We showed this in today's issue.
The ratio appeared to be at support yesterday (around 7.3:1). A similar support line for the SPX futures would cut through at 1189.
The point isKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103296948087736582004-12-17T09:47:00.001-05:002004-12-17T10:22:28.086-05:00Friday second comment:
Coffee futures are thrusting higher today. Coffee tends to do this after gold futures have made a cycle high. The action in coffee argues that gold has topped which means that the markets are building in a top for the euro/bottom for the dollar even as the dollar appears once again to be turning lower.
Still considerable strength in heating oil versus unleaded gasoline. Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103295217684080902004-12-17T09:47:00.000-05:002004-12-17T09:53:37.683-05:00Friday a.m. comment:
Pfizer is going to get bombed at the opening today. The one comment I wanted to make was that the stock price of Merck (MRK) gapped lower by roughly 10 1/2 points at the end of September to create a 'gap rule' downside projection of 24.
MRK reached 25.60 in November before rallying back up through 30.
I have never mentioned the drugs in the IMRA because gap rule Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103213801198463282004-12-16T09:47:00.001-05:002004-12-16T11:16:41.196-05:00Thurday second comment:
Would still be a bit careful with the bond market here. TBonds are down a point but there is still a bit of room for higher prices.
On dollar strength the Treasuries seem to catch a bid as short Treasury positions are liquidated.
The yield spread could be a bit tighter.
Heating oil is still outperforming gasoline.
However... bonds should be much lower into 2005. What Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103208677004287452004-12-16T09:47:00.000-05:002004-12-16T09:51:17.003-05:00Thursday a.m. comment:
One market stands out this a.m. The euro/yen cross rate is down 1.14 to 137.93.
The cross rate number declines when the yen strengthens against the euro. The strong euro against both the dollar and yen has contributed to higher bond prices, higher metals prices, the perception of strong commodity markets, capital flows out of the U.S., etc. Weakness in the euro against Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103130462354750942004-12-15T13:03:00.000-05:002004-12-15T12:07:42.353-05:00Wednesday comment:
It has been difficult to have much in the way of conviction for most of this year. However, the conviction today is as follows:
This week (through Friday) bond prices should peak, the dollar should bottom, and the price of gold should top.
As for today... a number of interesting cross currents. Gold and crude oil are stronger but OJ and coffee futures (which tend to be Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1103068625704791452004-12-14T18:46:00.000-05:002004-12-14T18:57:05.703-05:00Late Tuesday comment:
I am getting close to finishing Wednesday's issue. I suspect that it is going to be one of 'those' issues that needs to be read more than once. However, since it covers a topic (or twelve) that is extremely important hopefully it will worth the effort.
The one point that I didn't get to but probably should have is... the more bullish equity outlook into 2005 goes directly Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102962622967830422004-12-13T13:27:00.000-05:002004-12-13T13:30:22.966-05:00Monday comment:
Crude oil has so far held the support area around 40.25- .35. Gold and copper are now rallying with stocks like PD and TK pushing upwards.
Looking for a better dollar on a break under 40 by crude oil. Should also roll the commodity cyclical equities over.
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102689769150404082004-12-10T09:32:00.000-05:002004-12-10T09:42:49.150-05:00Friday a.m. comments:
Don't want to look a gift dollar rise in the mouth but today's intermarket action is a bit mixed. In general crude oil and metals prices should decline as the dollar rises. Crude is up .61 along with higher copper and platinum while gold is lower.
Euro/yen cross rate is 139.69 up another .46 as the yen continues to weaken.
We recently made the case that bond prices would Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102523783517679092004-12-08T11:26:00.000-05:002004-12-08T11:36:23.516-05:00Wednesday second comment:
Still believe that the dollar's turn upwards is 'real'.
Will show in tomorrow's issue the relationship between bonds and the dollar. It is an odd one because while bond prices decline when the dollar rises there has recently been a period of a few weeks where bonds move upwards before hooking lower once again.
Two commodities to keep an eye on- OJ and coffee.
When Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102519671084876332004-12-08T10:23:00.000-05:002004-12-08T10:27:51.083-05:00Wednesday a.m. comment:
Well... at least it isn't boring.
Looks like a better equity markets day. Quite a bit of strange action within the equity markets. As of time of writing Transport stocks that go with crude oil (like TK and BNI) are flat to higher, oil service stock SLB is up,PD is into support in the 87's, Alcan is higher while Barrick is lower, the airlines are sloppy, etc. Not exactly Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102448459528297392004-12-07T14:38:00.000-05:002004-12-07T14:40:59.530-05:00Tuesday comment:
Still a nasty market to sort through.
This looks like the sort of action that would reflect the end of the Asian and Latin growth cycle. It looks like the top for metals and energy prices and an impending bottom for the U.S. dollar.
Crude oil has support at 41.30 and then 35.50. Minor weakness in many of the oils down to 35.50 and a big problem below that unless the Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102085786573377892004-12-03T09:27:00.001-05:002004-12-03T09:56:26.573-05:00Friday second comment:
There is a small hint of a short or even long-term trend change in the markets action this a.m. The SOXX has been declining relative to the price of gold since early 2000. This goes directly with both a weak dollar and rising bond prices.
Between September and today the gold/SOXX ratio has been making a small top. With the SOXX last seen at 450.30 and gold around 451- 52 Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102084481125535352004-12-03T09:27:00.000-05:002004-12-03T09:34:41.126-05:00Friday comment:
Back to weaker dollar trend today. Japanese bond futures closed flat over night and it appears that the U.S. bond market has once again failed in an attempt to 'go it alone' to the down side.
Generally going to need one of two sides- commodities (i.e. copper) or tech/Nikkei- firing before bond prices are going to decline significantly. Intel is up nicely this a.m. and Cisco Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1102003590510455862004-12-02T10:55:00.000-05:002004-12-02T11:06:30.510-05:00Thursday comment:
Gut check time.
The U.S. bond market is weaker again today. Fair enough. The problem is that from the start of 2000 through to the present day the U.S. bond market has pushed upwards in concert with the Japanese bond market. The spread between the price of Japanese and U.S. 10-year bond futures has traded back and forth within a reasonably well defined channel. The channel Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101925152933262142004-12-01T11:19:00.001-05:002004-12-01T13:19:12.933-05:00Wednesday second comment:
Still like the airlines but the broad equity market looks 'iffy'.
The SPX is struggling with 1190. It tends to rise until crude oil prices have bottomed so if it makes it more than a few points above 1190 today then crude oil should continue to weaken.
If 1190 holds, however, then today's blasting of energy prices would mark a short-term bottom once again.
Good Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101918413076543282004-12-01T11:19:00.000-05:002004-12-01T11:26:53.076-05:00Wednesday comment:
Crude oil is lower with the equity markets higher so far today. Fair enough but... if you dig deep enough there are some amazing similarities between the current markets environment and that of the summer of 1987. Will show a few of the in tomorrow's issue.
The one that stands out at this moment is the relationship between crude oil and the equity markets (S&P 500 Index). Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101832536823381272004-11-30T11:27:00.000-05:002004-11-30T11:35:36.826-05:00Tuesday comment:
Something potentially important happened yesterday. Longer-term bond prices broke down. In fact, if yesterday's lows of 111 10/32 had held today it might not have been a big deal but with the low of 110 30/32 this appears to be a trend change.
It isn't bond prices per se that we are concerned with but instead the slope of the yield curve. More specifically... the spread betweenKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101750965241502172004-11-29T10:23:00.001-05:002004-11-29T12:56:05.240-05:00Quick comment on coffee and gold.
On a broad basis coffee and gold are rising together. However... usually the exposive moves for coffee futures occur after gold has topped out.
Coffee has a resistance point at 95.20. If it manages to break through it could be indicating that gold has finally topped out.
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101742125975284612004-11-29T10:23:00.000-05:002004-11-29T10:28:45.976-05:00Monday comment:
The Nikkei was up 144 points with JGB yields marginally higher (1.45% vs. 1.43%). The two pressures that have been working on the markets have been largely absent this a.m. The dollar was higher while crude oil prices were reasonably quiet.
As mentioned in today's issue the flip side of inflationary pressure from the weak dollar is deflationary pressure from the weak yen. On Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101480911997637972004-11-26T09:51:00.000-05:002004-11-26T09:55:11.996-05:00Friday comment:
Still like longer-term Treasuries. The dramatic flattening of the yield curve really does look like 2000.
The point of Monday's issue is going to be the market sequence in 2000. Want to show when equities and metals prices broke lower and then when bond prices made an intermediate-term price peak.
For today... TBond futures have support at 112 2/32. The SPX appears to be in theKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101239274147462432004-11-23T14:45:00.000-05:002004-11-23T14:47:54.146-05:00Tuesday third comment:
Just didn't see the intermarket 'oomph' today to justify the early surge in crude oil prices through 49 and then 50. The airlines were mixed at worst. The SPX futures failed to break down through 1170 and the Alcan/Barrick ratio (even though it is under the support line) was firmer through the session.
Bonds saw some mid-session strength before fading badk towards flat. Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101225766069336222004-11-23T09:42:00.001-05:002004-11-23T11:02:46.070-05:00Tuesday second comment:
Ideally the rise in crude oil futures through 49 should hit the equity markets. The bond market has been rising with crude oil so it should get a lift.
The SPX futures are floating around 1174 at present. The rising support line cuts through around 1170. 1169.10 is the lowest I can make it. The idea here is that a 'real' break upwards by crude oil should go with a Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101221209736579522004-11-23T09:42:00.000-05:002004-11-23T09:46:49.736-05:00Tuesday comment:
Besides gold and copper the ratio of U.S. stocks to French stocks (CAC 40/NYSE Comp.) goes up with the euro and broke out yesterday. Bonds are also rising with this trend so as long as the dollar is making new lows there is an upward drift for the TBond futures. Resistance overhead is now at 114 30/32.
Ideally would like to go negative on bonds some time around the end of the Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1101139681186837412004-11-22T11:01:00.000-05:002004-11-22T11:08:01.186-05:00Monday comment:
I was rather fond of the comparison between the current period and 1990 that was in the IMRA today. Weak dollar, strong Asian growth, speculative real estate... all quite similar to 1990.
Taken literally the comparison argues that the SPX has made a first peak just under 1190 and that we should see a period of 'topping' that results in chopping down into the 1140's and then backKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100879677060249512004-11-19T10:44:00.000-05:002004-11-19T10:54:37.060-05:00Friday comment:
Finally.
The SPX vs. crude oil relationship seems to be swinging around. Support for the SPX futures is around 1172 (vs. intraday low of 1172.30 so far) then 1164 and then 1142. The longer 1172 holds this a.m. the greater the chance of a late-day bounce.
This locks in a bit better with crude over 47.20 (Dec. contract) vs. high so far of 47.12. Ideally crude continues up throughKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100798732566761412004-11-18T13:16:00.000-05:002004-11-18T12:25:32.566-05:00Thursday comment:
The relative action within the equity markets (stronger chips, weaker golds) has the look and feel of a reasonable spot to go negative short-term on bonds. Having called 17 of the last zero bond market tops we do this with some trepidation. However...
TBonds over 113 stop about a point higher. First target 110 8/32 with a best case view down to around 98.
Watching (will show Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100715237991291222004-11-17T10:33:00.001-05:002004-11-17T13:13:57.993-05:00Wednesday second comment:
Another strange day with markets heading in almost random directions.
The euro/yen cross rate is (once again) very strong. The rate has declined 1.23 to 135.17.
That is about 1 point away from a break. Given that it has taken almost a year and a half to build a top (euro vs. yen) this appears important.
The euro/yen has risen as the dollar has fallen. If the rate Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100705773614236092004-11-17T10:33:00.000-05:002004-11-17T10:36:13.613-05:00 Wednesday comment:
Still watching the relationship between crude oil and the SPX.
The expanding wedge or triangle action in the SPX futures can handle 1189 (today's intraday high) but not much more. If this is going to hold then crude oil should dig in and start to firm.
Copper- unleaded gasoline futures spread is 'high' which goes with tops in the SPX.
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100627218678351032004-11-16T13:41:00.000-05:002004-11-16T12:46:58.676-05:00Tuesday comment:
Several issues still on the go. The broad cyclical rally that includes everything from the Nikkei to the mines to GE to the techs needs weaker bond prices to continue higher. Our point has been that if the Nasdaq actually breaks higher it will mean sequentially higher short-term rates through much of 2005. If it fails here- and that could easily happen- then the Fed is close to Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100546724278494582004-11-15T13:30:00.001-05:002004-11-15T14:25:24.276-05:00Third comment:
Let's just take a deep breath and do a 'what if' with regards to crude oil.
Almost anyone with a ruler could have seen where the support line was and while it was broken today that was really never our big concern.
What we have been following for the past couple of weeks is the tight inverse relationship between crude and the SPX. The SPX runs higher until crude bottoms and thenKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100543542086047792004-11-15T13:30:00.000-05:002004-11-15T13:32:22.086-05:00Monday second comment:
Looks like a good break in energy prices. Monster rally in coffee futures today and now OJ is showing some strength along with wheat and corn. Coffee, by the way, usually spikes higher just as gold prices and gold mining stocks peak. That says a lot about the near-term trend for the U.S. dollar versus the euro.
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100533324818752492004-11-15T10:36:00.000-05:002004-11-15T10:42:04.816-05:00Monday comment:
Goodness... what an interesting day.
Crude oil has apparently broken down with such a sharp rise in coffee futures that it looks fairly 'real'. Better action in softs like OJ as well as the grains.
Broad relationships- U.S. dollar tends to be weaker when crude oil is strong. This helps the argument that the dollar could turn higher. A negative for metals prices.
The equity Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100274434471520482004-11-12T09:49:00.000-05:002004-11-12T10:47:14.473-05:00Friday comment:
Weakness in the U.S. dollar helps extend the rally in the metals which, in turn, goes with a rising equity market. Then... the basic relationship between metals and energy prices kicks in and crude oil prices start to rise. This puts downward pressure on the equity markets. Around and around we go.
The equity markets do nicely when copper and gold are stronger and crude oil is Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100194716692419022004-11-11T13:24:00.000-05:002004-11-11T12:38:36.693-05:00Thursday comment:
Getting a nice test of the outer edges of the crude oil vs. SPX trade idea today.
The original idea came from the recent tendency for crude oil and the SPX to move inversely with pivot points typically found almost exactly at mid-quarter. The set up a decline by crude below 48 with a peak in the SPX and then a few days to let things settle out. At present it looks like this isKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100110257251498542004-11-10T13:06:00.000-05:002004-11-10T13:10:57.250-05:00Wednesday second comment:
A little more than hour to go before the Fed announcement.
So far the lean within the markets for the balance of the day is positive for equities, bonds, the dollar, and crude oil.
Airlines and the Japanese yen tend to weaken when crude oil starts to rise in price. Both are down today. Yen weakness can help the dollar especially if the euro sticks at 1.29.
Base Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100105452108786612004-11-10T10:26:00.000-05:002004-11-10T11:50:52.106-05:00Wednesday comment:
Always hard to make any kind of comment in front of a Fed meeting because anything that happens leading up to the announcement can be erased in a blink immediately afterwards.
Crude oil is behaving nicely. The idea has been that crude would pull back into the 47's and then dig in. Now we need to let a few days pass by and if crude resolves upwards once again then the message Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1100013100376187092004-11-09T10:08:00.000-05:002004-11-09T10:11:40.376-05:00Tuesday comment:
Four times since February the SPX has run up to a peak as crude oil has moved to a low. It may be that the fifth time is NOT the charm but...
With crude down more than a dollar today our expectation that it would go sub-48 has been met. What we are now looking for is crude digging in here with a few of the equity markets relationships showing that it is going to rally once Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099671730605542892004-11-05T10:02:00.000-05:002004-11-05T11:22:10.606-05:00Friday second comment:
I was trying to find some way to explain what is bothering me today about the action in the various markets. Here is one way of looking at it:
An equity markets break out on rising yields works nicely from the context of the markets finally resolving towards 'growth'. This would argue that we are going to see a multi-month if not multi-quarter move upwards. Fair enough.
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099584566483415562004-11-04T10:48:00.000-05:002004-11-04T11:09:26.483-05:00Thursday comment:
The two thoughts this a.m. were as follows:
1) Copper plus gold have a 'hard top' at 570. Gold at 430 and copper at 140 (1.40), give or take, is formidable resistance. If that number is broken at a minimum we should start to see much greater volatility (i.e. rising VIX).
2) Whether we like it or not stock and bond prices are still moving inversely. 10-2 spread at 8 points Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099509099631495692004-11-03T14:02:00.000-05:002004-11-03T14:11:39.633-05:00Quickly...
Follow the bouncing ball.
Each short-term equity markets top over the past few months has gone 'with' a bottom in crude oil. We were looking for 47 crude so there is still some chance of SPX upside.
What we are seeing today is weakness in the airlines and a bit of strength in the rails.
Dollar starts losing touch with 85 and crude starts to firm. Crude through intraday high of Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099499049043252232004-11-03T10:55:00.000-05:002004-11-03T11:24:09.043-05:00I wrote a very long post earlier that seems to have disappeared.
The short version is...
Markets still look a bit too 'random' to justify this as a trend change.
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099414663762930482004-11-02T11:52:00.000-05:002004-11-02T11:59:57.693-05:00Tuesday comment:
This likely has little to do with 'today' but the sense is building that we could see much weaker energy prices than most expect through the next quarter or two. Asian 'growth' typically goes with natural gas prices. The U.S. dollar will also tend to bottom when short-term rates hit the cycle top. The way the markets would let us know that the dollar is at a bottom, the equity Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099328740338290492004-11-01T13:02:00.000-05:002004-11-01T12:05:40.340-05:00Monday comment:
Still seem to be in the 'sweet spot' where the markets can chop without seriously trending.
Dollar better today as crude oil works back towards support at 47. Gold and copper lower but platinum still above support at 830.
Airlines weaker earlier but starting to improve.
During the day I can usually be reached at a new phone number. 1-403-206-1467.
Kevin
Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099257857674368592004-10-31T16:08:00.000-05:002004-10-31T16:24:17.673-05:00Sunday comment:
I have just finished writing Monday's issue although it will take some time to get it into pdf and sent out. After thinking about what was in it I was struck by the fact that it is likely going to be quite confusing. Even I am having trouble following along with some of the logic.
The basic idea was to set up a currency-related combination that would help with the bond market's Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1099066152315312002004-10-29T13:00:00.000-04:002004-10-29T12:09:12.316-04:00Friday comment:
One thing that really popped out yesterday (but I failed to show in the IMRA) was the near breakout position of the airlines. The airlines have trended lower as energy prices have moved higher so upside break outs should mean that oil prices have come over the top and made some sort of intermediate to longer-term peak.
Since crude oil has trended higher with metals prices and Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1098803392110513492004-10-26T11:03:00.000-04:002004-10-26T11:09:52.110-04:00Tuesday comment:
In today's IMRA there is a chart showing gold plus 3 times copper. After it was pointed out to me that the numbers don't actually work I went back and checked the original chart and found that it was actually gold plus copper with gold in dollars and copper in cents. So... the chart shows gold plus one times copper. I don't think that this alters the point that I was trying to Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1098462749111523262004-10-22T13:29:00.000-04:002004-10-22T12:32:29.110-04:00Friday comment:
Markets still defending 4% yields and 1100 SPX.
Crude oil could extend now to 56.50- .55. Above that and the SPX looks like 1086.
Today's fixation is with the iShares DJ U.S. Financial Sector Index Fund (IYF). Support at Wednesday's low of 86.83. Last seen was 88.28 + .12.
Real weakness in the IYF should go with a rising TBond/SPX ratio. In other words, if the financials breakKevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1098419110297683192004-10-21T23:52:00.000-04:002004-10-22T00:25:10.296-04:00Thursday late comment:
It looks like 10-year yields at 4% and SPX 1100 are important levels that the markets are working hard to defend. Gold at 432 resistance, crude oil at 55, and unleaded gasoline sub-1.46 are also keys with natural gas at current levels a potential wild card.
Much depends on the near term trend for the dollar. A sharp rally would eventually be negative but continued Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1098373481964668932004-10-21T11:44:00.000-04:002004-10-21T11:44:41.966-04:00A little replay of last Friday's dollar comments:
Surprisingly enough... still dollar bullish. Ideally, however, it will slog around for the next few days and then make a pivot upwards around the end of next week. Since pivots usually come from low points the next few days may be difficult. When I get really 'tight' on this the best window for the start of dollar strength would be around Oct. Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1098285087114370712004-10-20T11:04:00.000-04:002004-10-20T11:11:27.113-04:00Wednesday comment:
The circle continues.
The U.S. dollar is weak because U.S. short-term interest rates are 'too low'. The weaker dollar helps push commodity prices higher with short yields especially sensitive to unleaded gasoline futures prices. In other words, each time the bond market starts to ease off the pressure on short yields we get dollar weakness and commodity price strength which Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.comtag:blogger.com,1999:blog-5969144.post-1097859870709240482004-10-15T13:58:00.000-04:002004-10-15T13:04:30.710-04:00Friday comment:
Nice pivot on the TBonds today. If the decline gathers momentum the two support numbers are 111 18/32 and then 111 5/32.
Surprisingly enough... still dollar bullish. Ideally, however, it will slog around for the next few days and then make a pivot upwards around the end of next week. Since pivots usually come from low points the next few days may be difficult. When I get really Kevinhttp://www.blogger.com/profile/00541493565961690273noreply@blogger.com