Post by Savant on Jul 12, 2004 2:24:07 GMT -5
The Best Economy Ever…? Published 03:24 EDT July 12 2004
In our pre-opening report for Friday July 09 our theme of the day was:
Can Friday foment a Stock Market reversal?
Well, thanks to GE’s impressive results exceeding expectations, the market did manage put in a positive reversal day with the Dow closing up a decent enough gain of 41.66 points and that potentially may at least support the case for a rally sometime this week.
Last Friday morning, GE: The World’s largest company in addition to announcing double digit gains in almost all of its divisions, an extraordinary accomplishment by any measure glowingly declared that this was the best economy in 20 years. That’s an understatement:
What they should have said: If one believes in calling a spade a spade or in seeing things exactly as they are, then GE should have loudly proclaimed this is the best economy ever:
No matter how good the economy was 20 years plus ago, when GE was about 1/100th of its current size and the volume on the NYSE was about 100 million shares a day the puny economy of yesteryear had absolutely nothing on today’s economy. Never had and never will. The high speed economy of today is so much more: Globally based and rapidly interconnected, efficient, profitable, productive, amazingly diverse and ultra-high-tech oriented. No economy in the past can possibly hold a candle to what we have today. The economy of 20 years ago was like sleepwalking compared to today’s rapid pace of living and the enormous Global reach and influence of that Internet and low cost communications.
We are in a Golden Era of growth that is truly without equal and the synchronized Global economic expansion that is now helping to power it, has to be totally unprecedented. For example: The speed with which new economies of China, India and Russia, representing the 2nd, 4th and 11th largest economies, are part of a new World order that most investors may not have yet fully woken up to, but to put things in perspective, when Moscow has actually at 32, (more Billionaires than the Financial Capital of the World, New York City), China has cell-phone companies with hundreds of millions of subscribers signing up at the rate of millions per month and India has a larger middle class than the entire US population, it certainly boggles the mind as to the incredibly positive developments impacting our whole new increasingly free and democratic World of the 21st Century.
If this ain’t the mother of all Golden Eras then: What is?
We’ve never had it so good and even though we have been through some awful life changing trauma, we’re stronger than ever because of it. And just as we’ve come through every other test we’ve had to meet and overcome, we’ve made phenomenal progress in many ways despite some unfortunate setbacks.
So, the market did rally in response to this impressive good news and very encouraging outlook from GE, but because most all indices closed down on the week, the market may have its work cut out for itself this week to mount a decent enough reversal and foment a new uptrend in the process. Much may depend on additional improved results from major corporations and no shockers that might rock the boat. Since most of any warnings are already out there, perhaps the likelihood of major disappointment surprises is diminished.
Keep in mind, we did report that stock market indices were deteriorating technically and that was not a good sign, with monthly lows of June have already been threatened and taken out and we were still only in the first week of July and that was a developing technically very bad sign with some ominous looking gaps at higher levels still intact. So, now Monday or Tuesday could become pivotal in determining either continuation of the downtrend that began late June or the beginning of a mid-July turnaround and strong new rally that will nip the developing bear correction of several weeks in the bud and signal clearly that this was just a mild post rate hike pullback that may finally have run its course...
Trading Ideas and Updates
Theme of the week could be test of Dollar strength, if any?
The Dollar broke sharply over the past two weeks causing strong rallies in almost all currencies and especially in the precious metals which displayed considerable strength playing catch-up. The US Dollar index potentially has some support that may kick in anywhere from here at 87.45 to 87.00 with some resistance that might come into play in the Euro between 1.24 and 1.25. If these levels are exceeded within their current respective trends then, the potential for new lows in the US Dollar and new all time highs in the Euro cannot be ruled out. Already, the British Pound is close to near 12 year highs and the Swiss Franc is a whisk away from making new 8 year highs.
Our orders to sell short Crude Oil CLQ4, Gasoline HUQ4, Heating Oil HOQ4 AND Natural gas NGQ4 at the market have so far served us well. In order to protect the profits in these positions, we are placing very tight buy stops as follows: CLQ4 39.77, HUQ4 1.3155, HOQ4 1.0875 and NGQ4 6.015.
The speed at which these contracts can rebound, especially in an environment prone to sudden and unexpected sabotage that can create dramatic and often wild gyrations necessitates such tight stops.
As mentioned last week, Sugar is in a very strong uptrend that portends still higher prices ahead.
We also suggested Thursday night that Copper appeared poised for a strong breakout and that has so far begun to unfold. Some resistance exists between 1.29 and 1.30, but if 130 is exceeded substantially, it could pave the way for a significant continuing upmove possibly to new highs.
Dairy Milk has been in a strong bull market all year and recently underwent a sharp correction. Buy DAU4 at 14.40 stop.
Coffee remains an interesting re-buy or new buy at 71.80 stop.
Look to buy December Cotton, CTZ4 on mid-morning weakness for at least a decent bounce
Have a great week
Trade Well...
Savant
In our pre-opening report for Friday July 09 our theme of the day was:
Can Friday foment a Stock Market reversal?
Well, thanks to GE’s impressive results exceeding expectations, the market did manage put in a positive reversal day with the Dow closing up a decent enough gain of 41.66 points and that potentially may at least support the case for a rally sometime this week.
Last Friday morning, GE: The World’s largest company in addition to announcing double digit gains in almost all of its divisions, an extraordinary accomplishment by any measure glowingly declared that this was the best economy in 20 years. That’s an understatement:
What they should have said: If one believes in calling a spade a spade or in seeing things exactly as they are, then GE should have loudly proclaimed this is the best economy ever:
No matter how good the economy was 20 years plus ago, when GE was about 1/100th of its current size and the volume on the NYSE was about 100 million shares a day the puny economy of yesteryear had absolutely nothing on today’s economy. Never had and never will. The high speed economy of today is so much more: Globally based and rapidly interconnected, efficient, profitable, productive, amazingly diverse and ultra-high-tech oriented. No economy in the past can possibly hold a candle to what we have today. The economy of 20 years ago was like sleepwalking compared to today’s rapid pace of living and the enormous Global reach and influence of that Internet and low cost communications.
We are in a Golden Era of growth that is truly without equal and the synchronized Global economic expansion that is now helping to power it, has to be totally unprecedented. For example: The speed with which new economies of China, India and Russia, representing the 2nd, 4th and 11th largest economies, are part of a new World order that most investors may not have yet fully woken up to, but to put things in perspective, when Moscow has actually at 32, (more Billionaires than the Financial Capital of the World, New York City), China has cell-phone companies with hundreds of millions of subscribers signing up at the rate of millions per month and India has a larger middle class than the entire US population, it certainly boggles the mind as to the incredibly positive developments impacting our whole new increasingly free and democratic World of the 21st Century.
If this ain’t the mother of all Golden Eras then: What is?
We’ve never had it so good and even though we have been through some awful life changing trauma, we’re stronger than ever because of it. And just as we’ve come through every other test we’ve had to meet and overcome, we’ve made phenomenal progress in many ways despite some unfortunate setbacks.
So, the market did rally in response to this impressive good news and very encouraging outlook from GE, but because most all indices closed down on the week, the market may have its work cut out for itself this week to mount a decent enough reversal and foment a new uptrend in the process. Much may depend on additional improved results from major corporations and no shockers that might rock the boat. Since most of any warnings are already out there, perhaps the likelihood of major disappointment surprises is diminished.
Keep in mind, we did report that stock market indices were deteriorating technically and that was not a good sign, with monthly lows of June have already been threatened and taken out and we were still only in the first week of July and that was a developing technically very bad sign with some ominous looking gaps at higher levels still intact. So, now Monday or Tuesday could become pivotal in determining either continuation of the downtrend that began late June or the beginning of a mid-July turnaround and strong new rally that will nip the developing bear correction of several weeks in the bud and signal clearly that this was just a mild post rate hike pullback that may finally have run its course...
Trading Ideas and Updates
Theme of the week could be test of Dollar strength, if any?
The Dollar broke sharply over the past two weeks causing strong rallies in almost all currencies and especially in the precious metals which displayed considerable strength playing catch-up. The US Dollar index potentially has some support that may kick in anywhere from here at 87.45 to 87.00 with some resistance that might come into play in the Euro between 1.24 and 1.25. If these levels are exceeded within their current respective trends then, the potential for new lows in the US Dollar and new all time highs in the Euro cannot be ruled out. Already, the British Pound is close to near 12 year highs and the Swiss Franc is a whisk away from making new 8 year highs.
Our orders to sell short Crude Oil CLQ4, Gasoline HUQ4, Heating Oil HOQ4 AND Natural gas NGQ4 at the market have so far served us well. In order to protect the profits in these positions, we are placing very tight buy stops as follows: CLQ4 39.77, HUQ4 1.3155, HOQ4 1.0875 and NGQ4 6.015.
The speed at which these contracts can rebound, especially in an environment prone to sudden and unexpected sabotage that can create dramatic and often wild gyrations necessitates such tight stops.
As mentioned last week, Sugar is in a very strong uptrend that portends still higher prices ahead.
We also suggested Thursday night that Copper appeared poised for a strong breakout and that has so far begun to unfold. Some resistance exists between 1.29 and 1.30, but if 130 is exceeded substantially, it could pave the way for a significant continuing upmove possibly to new highs.
Dairy Milk has been in a strong bull market all year and recently underwent a sharp correction. Buy DAU4 at 14.40 stop.
Coffee remains an interesting re-buy or new buy at 71.80 stop.
Look to buy December Cotton, CTZ4 on mid-morning weakness for at least a decent bounce
Have a great week
Trade Well...
Savant
