Hello everyone. This is Duru checking in, and I wanted to take this opportunity to thank Mike for being insane enough to let me scribble away on his blog site while he is away. I am highly honored and deeply humbled that he will let my mice play while the cat is away!
For any of you who have dared to check out my own 20th-century web site (I have promised Mike that I will go to true blog status sometime this Winter), you know that I have a very irreverent style. I also have a persistent inability to keep political discourse out of my money talk. I promise to do my best to stay true to Mike's mission and flow, so I will keep it simple as I fill in for him. You can expect me to do some quick hit commentary and to draw your attention to market moves I think are important. I cannot promise the kinds of colorful and informative charts that Mike provides, but I will list some charts that you may want to check out on your own. I will also touch on some market areas that Mike tends to leave alone.
So with that, let the games begin...!
...Mike noted how the various major market indices failed to maintain early morning momentum, smacking up against various forms of resistance. But as usual, the market is not going to make the interpretation of these pre-earnings, pre-election games easy on us.
For example, I point you to the Dow Jones Transports which printed new 52-week highs again on Monday. This is happening even as oil creeps ever higher. Interest rates are supposed to be headed upward, yet the Dow Jones Utility Average keeps creeping upward and onward (because of their high debt loads, utilities are supposed to go down with higher rates...traditionally, a strong utility average presages LOWER rates). I was also impressed with the charts printed by some stocks that punched new highs on Monday or came close: ADBE, MIK, ADSK, GOOG, and COO to name just a few. Even big, fat GE is trying to have high aspirations (makes sense given where the S&P 500 sits). Heck, even JBX has been looking like some good eatin' lately! If you look far and wide, you can actually find some very bullish pieces to the puzzle.
Now, on the flip side, we get Pulte Homes (PHM) warning us that earnings will not be quite as rosy as thought due to discounting in the previously red hot Las Vegas market. This could renew fears that the consumer is finally getting tapped out. But even as the housing sector received the obligatory smack down, we have the 10-year Treasury Yield Index potentially failing resistance at the 50 DMA. If rates head down again from here, the housing bears may have to postpone their roast one more time. (Lower long-term rates provide the cheap $$$ that props up the housing sector).
As Mike says, earnings usually trump the technicals. Thus, for the next few weeks you will do well to avoid the "quick and dirty" read and to keep the big picture in full view.
Be careful out there!
And so it begins! Great job man. I'll add that not only did the Transports make a new 52-week high, they're at about a 5-year high and only 8% off of its all-time high. Very interesting indeed, and reminds me of that super-strong FDX chart.
Nice to meet you, Duru. Looking forward to reading your "scribbles."
Thanks for the warm welcome! :D
Wazzup Duru!! :)
This is like Arsenio fillin in for Johnny!!
Good one! :D