STOCK MARKET WATCH, Tuesday 30 March

[ozymandius]

Tuesday March 30, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 299
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 109 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 162 DAYS
WHERE ARE SADDAM'S WMD? - DAY 375
DAYS SINCE ENRON COLLAPSE = 858
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL ON March 29, 2004

Dow... 10,329.63 +116.66 (+1.14%)
Nasdaq... 1,992.57 +32.55 (+1.66%)
S&P 500... 1,122.47 +14.41 (+1.30%)
10-Yr Bond... 3.89% +0.05 (+1.22%)
Gold future... 417.10 -5.10 (-1.21%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[UpInArms]

1. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 88.37 Change -0.26 (-0.29%)

related articles:

http://www.fxstreet.com/nou/content/2025/content.asp?menu=market&dia=3032004

U.S. FOREX SUMMARY

The US dollar rose to a new 4-month high against the euro at 1.2050 in London as forecasts of an ECB rate cut loom over the market. With significant US economic data releases to occur later in the week, most notably the U.S. non- farm payrolls report for March on Friday, America’s currency traded largely range-bound over the weekend.

The Euro briefly hit its lowest level this year against the dollar and a four-month low against the yen as markets worried the ECB would cut interest rates on Thursday to support the bloc's fragile economic recovery. The euro traded steady on the day against the dollar at $1.2105, after retracing earlier losses to $1.2050 -- its lowest level so far this year. Interest rate futures had priced in a roughly 50 percent chance of an ECB rate cut by June before profit-taking in bond markets took them lower this morning.
Some in the market think the bank will not wait until June after President Jean- Claude Trichet said last week the central bank would reassess its outlook if consumer demand does not improve. Other ECB officials reprised this dovish tune later in the week, with Executive Board member Gertrude Tumpel-Gugerell saying on Friday Europe's recovery was uncertain and data mixed, with no sign that consumer demand was firming.
Europe’s single currency is expected to remain on its back foot against both the dollar and Japanese yen before Thursday as interest rate cut speculation solidifies.

The British Pound nosed higher against the euro and the dollar on Monday as robust consumer credit and record mortgage lending data bolstered expectations for higher UK interest rates. Data on Monday showed British mortgage lending rose a record 14.5 percent year-on-year in February, suggesting Britons' appetite for debt had not been diminished by the last two Bank of England interest rate hikes. Policymakers at Britain's central bank have become increasingly worried that house prices and consumer debt levels are rising too fast, raising the risk of a crash landing in the economy. Sterling is expected to depreciate against the dollar in the near term as the effect of ECB rate cut speculation overflows into Sterling.

The Japanese Yen rose overnight after a newspaper report said Japan had ended its policy of intervening to curb its gains. Japanese officials denied the Times of London report, which was based on a Bank of Japan (BOJ) source, that they would no longer seek to weaken the yen and said their currency policy was unchanged. The report initially sent the yen to six-week highs against the dollar before the Ministry of Finance (MOF) reminded markets that it, and not the BOJ, controlled foreign exchange policy and that it would continue intervening as needed. The yen is expected to continue its appreciating trend against both the dollar and euro, as Japan’s fiscal year end on March 31 comes to fruition.

...more...

http://sg.biz.yahoo.com/040329/15/3j473.html

Hedge Funds Resume Selling The Dollar At CME

LONDON (Dow Jones)--Short-term investors have resumed selling the dollar at the world's biggest currency derivatives exchange after a two-week break.

Weekend data for the week to March 23 show U.S. speculators trading on the Chicago Mercantile Exchange - typically model-driven hedge funds - held an aggregate net short dollar position worth $1 billion versus currencies from developed economies, according to Citigroup. Short positions are bets that an asset will decline in value.

This is the first short dollar position in two weeks.

In the past few weeks currency investors had been forced to buy the dollar to cover short positions amid a temporary reversal of the dollar's longer-term downtrend. As a result, CME accounts ended up with a long dollar position of $2.2 billion by March 16 and one worth $900 million the previous week.

The latest return to a bearish dollar position comes as many speculators have abandoned bets that the Japanese authorities will manage to weaken the yen through dollar purchases in the market. There is also an emerging feeling that the euro is ready to resume appreciating.

...more...

Good Morning Ozy and all the Marketeers! :hi:

Sorry I wasn't around yesterday - running around 'til after it was all over. Did enjoy reading the thread for the day though - thanks for all that keep this topic so informative and interesting :thumbsup:

This will be my last dollar watch day for a couple of weeks, so I will leave it up to you all to watch for the news and events (so I can read them later :D )

Have a Great Day!

[54anickel]

5. Morning UIA

Looks like the US$ is getting ready to resume its track downward.

You have a great couple of weeks away! The last time you took a bit of time away the dollar was headed down rapidly, so don't stay away too long. The US$ needs your support. B-)

[ozymandius]

2. WrapUp by Jim Puplava

Love My Cisco

Last year was a year that everyone made money. It was a year for the history books, a year when all asset classes made money. As an investor it didn’t matter where you were invested, stocks, bonds, emerging market debt, junk bonds, real estate, commodities, art, collectibles all went up in value. The only losing investment was the U. S. dollar. This year making money has become a lot harder. As of today’s market close all three major indexes were in negative territory. This year gold and silver are up along with commodity prices. The dollar has rallied and bond yields have fallen. The 30-year bond yield has fallen from around 5.2 % at the beginning of the year to 4.8%. Nothing is working as it should be and asset classes are starting to diverge. To a rational investor it is clear that rising bond prices and falling interest rates can’t go hand in hand with rising gold, silver, and commodity prices. One of these trends is wrong and I feel this year we’ll know the real answer to which trend is the real primary trend of the markets.

<cut>
This year the markets have become more troublesome. The economy has lost a bit of its steam, energy prices are soaring again, and terrorist attacks are becoming more frequent. The investment environment is once again becoming more dangerous. Investment professionals are feeling uneasy but are forced by competition to stay fully invested. On the other hand the investment public believes that the good ol’ days are back again. Investors can’t get rid of their cash fast enough. With negative real interest rates and historically low yields cash has become trash. Hoping to make up for the absence of savings and rising debt levels, Herbie Homeowner, Larry Lawnmower, and Danny Day Trader are fleeing safe and liquid assets in pursuit of higher returns. Speculation and risk taking are back in vogue. The psychological impulse to invest in anything that is going up dominates the investment public. Nobody wants to miss out on a good thing. Right now real estate and speculative stocks seem like a win- win proposition.

<cut>

Investors are now hooked on asset bubbles and have grown accustomed to them. Take the urge to speculate. Combine it with greed and blind faith in the Fed to create and support asset bubbles. You now have a market that is grossly unprepared for the unexpected. Yes, the economy may continue to grow and corporate profits, the main driver of the financial markets these last five years, may also rise much further. However, the financial markets have become more vulnerable to financial shocks or unexpected political events. If this happens or if these types of events occur more frequently this year speculative investments could implode the same way they did between 2000-2002. This is not the time to be speculating with your investments. Investors today have very little appreciation for risk and the markets aren’t compensating investors for taking them. Therefore, be forewarned and forearmed. Know what it is you are buying and what risks are involved. The mighty bear still lurks out there and is apt to catch you by surprise.

<cut>

In my book the best way to evaluate management is to look at return on equity. This financial ratio tells an investor how well management has done in handling shareholder money. If a company doesn’t pay a dividend and invests all of its capital then investors should expect a high return on the capital. If you aren’t getting your returns in cash you should be getting them from internal returns on invested capital. If present management wants to keep all of the profits inside the company investors should expect a high return on that capital. Once again Cisco disappoints. Their returns on capital are the worst out of the whole group. Caterpillar Tractor a cyclical company generated better and more consistent returns on capital employed.

http://www.financialsense.com/Market/wrapup.htm

[54anickel]

3. Futures point to a bit of profit taking, blather states geopolitical

concerns. I don't know, this one seems like a bit of a stretch to me. :eyes:

8:00AM: S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -7.5. The futures market is trading lower on the heels of yesterday's winning session that took the major averages higher by 1.1-1.7%. The apprehensive pre-open bias comes in spite of upward giudance by the likes of ADSK, SSTI, and PEP, but in concert with European bourses, which are mildly lower after an undisclosed number of people suspected of being terrorists were arrested in raids in and around London, bringing geopolitical concerns back in focus.

[54anickel]

6. U.S. Stock-Index Futures Drop; CarMax Falls and Accenture Gains

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a3WiQML.oIGQ&refer=home

March 30 (Bloomberg) -- U.S. stock-index futures fell ahead of a Conference Board report that may show consumer confidence in the world's largest economy fell to its lowest since October amid concerns about the job market.

Snip>

Standard & Poor's 500 Index futures expiring in June lost 3.50 to 1118.20 at 8:54 a.m. in New York. Dow Jones Industrial Average futures fell 34 to 10,277. Nasdaq-100 Index futures slipped 7.50 to 1436. Futures extended a decline after U.K. police arrested suspected terrorists in and around London in raids at dawn.

``If the consumer sentiment number is much worse than expected, I think the market will take it hard,'' said Dennis Fitzpatrick, who helps manage $2.9 billion at First Investors Management Co. in New York.

The S&P 500 Index has shed 3 percent since reaching a 23- month high on Feb. 11 amid concern that slow employment gains and renewed terrorist threats may make consumers reluctant to spend, denting corporate profits.

snip>

Jobs Outlook

Some investors are looking to Friday's report from the Labor Department, which may show that U.S. employers added more jobs in March than in any month since December 2000.

Payrolls are forecast to have grown by 120,000 this month, according to the median estimate in a Bloomberg News survey of economists, compared with a gain of 21,000 in February.

``It's fair to say it may have been somewhat of a jobless recovery, but it sure wasn't a profitless recovery,'' said Richard Hoey, chief investment strategist at Dreyfus Corp. ``There has been little employment added.''

[54anickel]

4. Gold Drops From Close to 10-Week High in London as Funds Sell

edit for link:
http://quote.bloomberg.com/apps/news?pid=10000086&sid=aN3Gvjmna.jU

March 30 (Bloomberg) -- Gold fell for a second day in London amid speculation that hedge funds may sell contracts after driving prices to a 10-week high on Friday during a rally fueled by concerns about terrorism.

Investors boosted their holdings in gold futures, or long positions, on the Comex division of the New York Mercantile Exchange to a two-month high last Tuesday, according to data released Friday by the U.S. Commodity Futures Trading Commission.

``The increasing speculative long position on Comex makes gold vulnerable,'' said Alexander Zumpfe, an analyst at Dresdner Kleinwort Wasserstein in Frankfurt, in an e-mailed note.

snip>
Euro Tracked

The difference in wagers that gold's price will go up instead of down - so-called net longs - increased 64 percent in the week to last Tuesday to 102,511 contracts, or 10.3 million ounces. That was the highest since Jan. 13 and the third weekly rise.

Gold futures slid 1.2 percent in New York yesterday amid speculation hedge funds may start selling.

For most of the past year, gold has tracked the euro, as it has risen against the dollar, making the dollar-denominated precious metal cheaper for holders of the European Union currency.

It has deviated from the trend since the March 11 train bombing in Madrid that killed 190 people. Gold, spurred by safe- haven buying, has risen 4.8 percent this month, while the euro had dropped 2 percent.

[emad]

7. Just waiting for that imminent announcement that Ken Lay has

been arrested and charged....

[54anickel]

8. London bankers overtake Wall Street on pay-survey

http://www.forbes.com/home_europe/newswire/2004/03/30/rtr1316546.html

LONDON, March 30 (Reuters) - Top bankers in London are earning more than their Wall Street colleagues for the first time since the 1980s, an industry survey revealed on Tuesday.

"For the first time in 20 years UK employees are being paid more highly than their U.S. counterparts, this is a significant swing," said Shaun Springer, chief executive of recruitment firm Napier Scott, which conducted the survey.

A London-based managing director in structured credit products at a top tier investment bank, for example, can earn between 125,000 pounds ($227,200) and 1.1 million pounds, while a U.S. counterpart would get 105,000 to 950,000 pounds.

Springer said the main reason for the higher UK pay scales was greater demand from European investors for highly sophisticated products than in the United States.

snip>

Banks in Europe have become increasingly "Americanised" in terms of bonuses, with the survey showing that European pay awards now include stock options as well as cash.

Pay levels have been pushed up by increasing demands on the so-called "talent pool" from hedge funds. "They will undoubtedly exert further pressure on remuneration levels as the number of these institutions continues to grow," the survey said.

more...

[54anickel]

9. NYSE Firms Settle Improper Trade Charges

http://biz.yahoo.com/rb/040330/financial_sec_specialists_1.html

WASHINGTON (Reuters) - Five New York Stock Exchange floor trading firms agreed to pay a total of $241.8 million to settle charges of improper trading activities, U.S. securities regulators said on Tuesday.

The U.S. Securities and Exchange Commission (News - Websites) and the NYSE named Bear Wagner Specialists LLC (NYSE:BSC - News); Fleet Specialist Inc. (NYSE:FBF - News); LaBranche & Co. LLC (NYSE:LAB - News); Spear, Leeds & Kellogg Specialists LLC (NYSE:GS - News); and Van der Moolen Specialists USA LLC (Amsterdam:VDMN.AS - News) as the five specialist firms.

The specialist firms -- market makers who buy and sell stocks on the NYSE trading floor in order to dampen volatility -- improperly profited while giving customers either inferior prices or failing to execute them altogether, the SEC and NYSE said.

The firms had been charged with executing trades for dealer accounts before public customer or agency orders.

[KoKo]

28. Am I reading this correctly, in that if I had an "E-Trade Account" my

purchase or sale would be the last to be honored so these five "big guys" could get first preference? :shrug:

[54anickel]

30. Yep, pretty much. An unfair advantage over the general population

of traders.

Improper trading by the NYSE specialist firms led to ordinary customers getting inferior prices for their trades, or failing to get their trades executed at all, regulators said.

Between 1999 and 2003, individuals at the firms frequently executed orders for their own dealer accounts, instead of matching customers' orders with each other where possible.

"When an exchange specialist unlawfully takes advantage of its privileged position by seizing trading opportunities that it should leave for public customers, it fundamentally undermines the fair and orderly operation of the exchange auction system," SEC enforcement chief Stephen Cutler said.

[54anickel]

10. And we're off. Be sure to have your safety glasses on today. Lots of

sharp pointy thingamabobs on the charts today.

edit for html
Dow 10,337.41 +7.78 (+0.08%)
Nasdaq 1,989.11 -3.46 (-0.17%)
S&P 500 1,122.13 -0.34 (-0.03%)
30-yr Bond 4.797% -0.016

NYSE Volume 191,199,000
Nasdaq Volume 286,424,000

10:00AM: Market shows early resilience...volume remains light...early actives list on both the NYSE and Nasdaq are regulars, with the exception of NPS Pharmaceutical (NPSP 30.13 +3.19), which announced positive results on an osteoporosis drug...

9:45AM: Indices open lower, but better than futures indicated...downside is a reaction to yesterday's big gains, and weakness on overseas markets...PepsiCo (PEP 53.74 +1.53) got a big boost after raising earnings estimates for this quarter and raising its dividend 44%...Accenture (ACN 24.55 +0.50) had a good earnings report...Sears (S 41.73 -1.38) was downgraded by Goldman Sachs, but Federated (FD 53.14 +1.52) was upgraded...Conference Board Consumer Confidence Index at 10:00 ET...

[54anickel]

11. Be braced for a bust as bubbles look set to burst

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1079419983726&p=1012571727304

Credit has to be given to Alan Greenspan, the Federal Reserve chairman.


He is the first head of a monetary authority who has not only managed to create a series of bubbles in the domestic economy but has also managed to create bubbles elsewhere - in the New Zealand and Australian dollars, emerging market debts, government bonds, commodities, emerging market equities and capital spending in China.

In fact, over the last 18 months, US monetary policies have boosted all asset classes. This is most unusual since it ought to be obvious that in the long run commodities and real estate inflation is incompatible with a bond bull market.

Mr Greenspan's monetary tribulations mark an achievement no one else in the history of capitalism has accomplished. It is also one investors will never forget once this credit-driven, universal bubble bursts and it will fill entire chapters of financial history books with economic and financial horror stories.

We simply don't know how the end game of the current speculative wave will be played out and when the bust will occur but a painful resolution of the current asset inflation and global imbalances is as certain as night follows day.

more...

[54anickel]

16. A bit more concern on the Greenspin effect from Australia

AM - Fears of financial bubble

http://www.abc.net.au/cgi-bin/common/printfriendly.pl?http://www.abc.net.au/am/content/2004/s1074351.htm

AM - Friday, 26 March , 2004 08:26:02
Reporter: Stephen Long
TONY EASTLEY: Is there a risk the world economy could be destabilised by a dangerous new bubble forming in global financial markets?

Australia's Reserve Bank seems to think so.

It fears that low interest rates in all the key financial centres are luring investors into high-risk, high-yield investments.

And it's not alone, members of the US central bank are expressing similar concerns.

Finance Correspondent Stephen Long reports.

STEPHEN LONG: The last time irrational exuberance gripped the markets of the world, during the tech boom, it created a stockmarket bubble of historic proportions. And when it collapsed it inflicted extraordinary losses, destroying more than US$7 trillion of wealth, more than twice the financial cost to the US of World War Two.

And critics hold US Federal Reserve Chairman Alan Greenspan largely responsible.

Journalist Peter Hartcher, author of a forthcoming critical book on Alan Greenspan.

more...

[54anickel]

12. A Bull Market in Gold – Technically Speaking

http://www.lewrockwell.com/thornton/thornton18.html

There is always a bull market somewhere in the economy. It could be junk bonds, real estate, a particular currency, tech stocks, foreign markets, land, blue chips, or small caps. Today we are in a bull market in gold and commodities. Oil and gas are at all-time highs while metals such as silver are up more than 25% in 2004.

Gold had been in a secular bear market and is now in a secular bull market. Market technicians use the term secular not in the religious sense, but to indicate a long time period. Not an entire century, but perhaps to represent events that occur "once in a lifetime" because they are so long. The chart below shows the bubble in gold forming in the late 1970s, the bust in 1980, and a subsequent 20-plus-year downtrend in gold prices.

I’ve drawn three trend lines from the bubble to the present. Trend lines are figments for illustration purposes. What they show in this case is that the price of gold has trended downward for the last 23 years. The trend lines start from the very top of the bubble and the next two "tops" in the early 1980s. Starting from the top of the bubble, the trend line intersects the gold price (in red) in early 2001 at around $265/oz. Gold lost 70% of its value over this 20-year period, more if you account for the depreciation in the dollar. The second trend line starting at the next top intersects the gold price in early 2002 at around $300/oz. and the third trend line, starting from the second peak and touching all subsequent peaks, intersects the gold price in early 2003 at around $350/oz.

Trend lines are not magical, nor do they predict the future. They only help you visualize the past. Within the secular bear trend there were are four complete cycles of cyclical bull and bear markets with peaks in early 1980, 1983, 1988, and 1996. The trend lines suggest that the bear market is over, that a cyclical bull market is in progress and that it might be the beginning of a secular bull market. Trend lines don’t come with a money-back guarantee. If the price of gold were to go to $200/oz. these trend lines would disappear and new ones would emerge in their place.

more...

[54anickel]

13. March (Budget) Madness

http://www.house.gov/paul/tst/tst2004/tst032904.htm

Despite all the rhetoric flying around Washington last week during the annual budget debate, one fact about the new budget is clear: it makes government bigger. Like many of my Republican colleagues who curiously voted for the enormous budget resolution, I campaign on a simple promise that I will work to make government smaller. This means I cannot vote for any budget that increases spending over previous years. In fact, I would have a hard time voting for any budget that did not slash federal spending by at least 25%, especially when we remember that the federal budget in 1990 was less than half what it is today. Did anyone really think the federal government was uncomfortably small just 14 years ago? Hardly. It once took more than 100 years for the federal budget to double, now it takes less than a decade. We need to end the phony talk about “priorities” and recognize federal spending as the runaway freight train that it is. A federal government that spends 2.4 trillion dollars in one year and consumes roughly one-third of the nation’s GDP is far too large.

Neither political party wants to address the fundamental yet unspoken issue lurking beneath any budget debate: What is the proper role for government in our society? Are these ever-growing social services and military expenditures really proper in a free country? We need to understand that the more government spends, the more freedom is lost. Instead of simply debating spending levels, we ought to be debating whether the departments, agencies, and programs funded by the budget should exist at all. My Republican colleagues especially ought to know this. Unfortunately, however, the GOP has decided to abandon principle and pander to the entitlements crowd. But this approach will backfire, because Democrats always offer to spend even more than Republicans. When congressional Republicans offer to spend $500 billion on Medicare, Democrats will offer $600 billion, and why not? It’s all funny money anyway, and it helps them get reelected.

The term “baseline budget” is used every year in Washington. It means the previous year’s spending levels represent only a baseline starting point. Both parties accept that each new budget will spend more than the last, the only issue being how much more. If Republicans offer a budget that increases federal spending by 3%, while Democrats propose 6% growth, Republicans trumpet that they are the party of smaller government! But expanding the government slower than some would like is not the same as reducing it.

more...

[WhereIsMyFreedom]

39. Inflation?

Wouldn't increasing the government budget by 1% over last year actually be shrinking the size of government because of inflation? Or is inflation another one of those statistics that have been cooked till it is inedible by this administration.

It is nice to hear that at least some Republicans still hold to Republican values (though cutting government spending by 25% sounds kind of extreme to me).

[54anickel]

14. How Healthy Are the Banks?

http://www.mises.org/fullstory.asp?control=1480

In his speech before the Independent Community of Bankers of America on March 17, 2004, the Chairman of the Federal Reserve Board, Alan Greenspan, concluded that the US banking system is in healthy shape. According to the Fed Chairman, the weakness in credit quality that accompanied the recent recession has clearly been mild for the banking system as a whole, and the system remains strong and well positioned to meet customer needs for credit and other financial services.

The latest data, however, indicate that there is some deterioration in the quality of bank credit. In the fourth quarter, the charge-off rate of real estate loans rose to 0.26% from 0.13%, while the consumer loans charge-off rate jumped to 3.04% in the fourth quarter from 2.76% in the previous quarter

Furthermore, not once during his entire speech did Greenspan mention the Fed's policy that has driven down interest rates to their current lows, much less how this policy is a major factor behind the appearance of a supposedly strong banking system.

The Fed's policy can generate the illusion of success, to be sure. But when it is reversed—as it inevitably must be—the illusion is shattered to reveal the painful facts of reality. Contrary to Greenspan, the expansion of the banking system and its apparent strength is built on shaky foundations.

Good credit versus false credit

more...

[54anickel]

15. The Coming Great American Home-Equity Bust

http://www.financialsense.com/editorials/bronson/2004/0328.html

Here are comprehensive house price indexes (mean and median) where we've combined both new and existing home sales prices weighed by their relative sales volumes. Because of the coming consumer-led recession, and probably two more recessions later during this K-cycle winter, or what we quantify as a deflationary economic BAAC Supercycle Bear Market Period, it's likely the July 2003 all-time price high (see chart below) for the average-priced home will stand for many years. A report explaining these terms and concepts is available upon request.

snip>
The importance of our forecast is that we fully expect more than 50% of American homeowners will become under water, or upside down, on their home mortgages because of the deadly deflationary economic consequence of having borrowed too much on their homes and then their home price declining, on a comparable neighborhood-sales basis.

Because home equity constitutes the lion's share of family net worth, this complete loss of home equity by more than 50% of American homeowners will have a tremendous negative "wealth effect" on their consumption spending -- which is the primary force driving the American economy. This is especially a problem since Americans have run their income-based savings rate down to the its lowest level in history.

Since every family has to live somewhere, of course there won't be a selling panic and mass exodus from homes, although we fully expect an over-housing problem will be so exposed. Since homes are illiquid assets, we fully expect the negative-home-equity wealth effect will cause homeowner investors to massively liquidate their stock market investments, which will have already declined again -- see our recent calls for a major stock market top and subsequent second-leg, devastating bear market -- from having been so overvalued as they are today relative to a second coming recession. However this time the recession will be led by over- extended consumers, although businesses will have to cut back in concert, of course. We also expect it to be a global recession, but I'll cover that in another article.

[KoKo]

32. Folks pulling out of stocksand maybe having to liquidate their 401-K's if

they are heavily over re-fi'ed with negative value in their homes. That's an interesting comment. What can Greenspan be thinking, allowing this to go on, though? I suppose he has a "cap" in mind and we haven't reached it yet for the refi mania. But, given what all the charts show, we must be close.

This is an interesting article. Thanks "54" :hi:

[masmdu]

17. Tracking My Forecast....from Mid-February...So far so good.

My forecast is #8 on this thread from Feb 16th

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=367227

"High was 2/13.....down to Low on 2/26... up to high on 3/8....then BIG DOWN into first week of April.

(Save this forecast...track it....and I'll be back during 4/1-7 to see where we are...I expect a great buying opp then)"

S&P was spot on...
http://finance.yahoo.com/q/bc?s=%5EGSPC&t=3m

Dow nearly so...
http://stockcharts.com/def/servlet/SC.web?c=$INDU,uu%5Bm,a%5Ddaclyyay%5Bdb%5D%5Bpb50!b200!f%5D%5Bvc60%5D%5BiUb14!La12,26,9%5D&pref=G

Lows may have already come in a week early...if S&P closes the month over 1124.75 then this is likely...if not then a retest of the late March lows is likely in the first week of April....f

From those lows I expect higher into May (to exceed 2004s highs)

(editied to fix link)

[KoKo]

26. It may be a buying opportunity, but when will the next "shoe" drop?

Unless one is a day trader I would be very worried about holding anything long term if one bought on these lows...:shrug:

[54anickel]

31. Hi Masmdu. So far, so good.

Now we'll have to see about that big down for the 1st week of April, unless (as you state) the lows are already in a week early. In which case, should the S&P close above 1124.75 we go up, if not we go down to 2004 lows (as late March was the lowest for 2004)?
Regardless you see May exceeding 2004 highs?
If the low came in a week early, isn't the great buying opp lost?

[54anickel]

18. U.S. stocks fight to build on rally (Long "Blather")

http://biz.yahoo.com/cbsm-top/040330/e2583e2d8fdbeec4c4c4b4e60ca500a0_1.html

snip>
David Sowerby, chief market analyst and portfolio manager at Loomis Sayles, said the market appears to pausing for a "pit stop" here after bouncing off the weakness of the past few weeks that erased 2004's gains.

He remains bullish on the year, saying strength in corporate earnings, low interest rate levels, and an accommodative Fed all point to appreciation for equities.

"We have a strong opportunity for 2004 to be a slight above average year for the stock market," he said, putting the gauge of that performance at growth of 10 to 15 percent.

Sowerby said last year's rally was legitimate, and he estimates that stocks have completed two-thirds of the rally from bear market levels, leaving another one-third left to run.

snip>
U.S. consumer confidence fell slightly in March, the Conference Board said Tuesday. The consumer confidence index fell to 88.3 in March from a revised 88.5 in February. This is the lowest level of the index since last October. Economists expected the index to slip to 86.9. The February confidence index was revised up from the initial estimate of 87.3.

snip>
Economic data
Ian Shepherdson, the chief U.S. economist with High Frequency Economics, said the number is "trending gradually higher but it remains well below the level implied by the historic relationship with the unemployment rate." He explained that this gap opened after the Sept. 11 terrorist attacks and said "there is no sign of it closing yet."

He said the dip most likely reflects the impact of higher gas prices and the stuttering equity market in recent weeks.

"Overall, though, the numbers remain consistent with decent growth in spending," he said.

In addition, there was a 1.9 percent drop in U.S. chain stores on a sequential basis for the week ending March 27, according to the International Council of Shopping Centers. Weekly sales rose 0.2 percent the previous week. Sales slowed to a 6.6 percent increase year-over-year compared with 7.1 percent the previous week.

"The earlier spring merchandising rush this year versus last year is hurting some of the year-over-year comparison," said Michael Niemira, ICSC's chief economist and director of research. He cited high gasoline prices as cutting into the number of shopping trips.

snip>
Fed's Bernanke says don't blame outsourcing
"Distressingly slow" job creation in the United States shouldn't be blamed on foreign trade or outsourcing, Federal Reserve Gov. Ben Bernanke said during a speech in North Carolina.

The official strongly defended trade, saying a free flow of goods and services across borders is an undeniable benefit to the U.S. economy because consumers benefit from lower prices, and workers benefit from higher paying jobs that replace the lost jobs.

Bernanke made no comments on monetary policy, other than to repeat that he's confident job growth will resume at some point.

[54anickel]

19. 11:57 update

Dow 10,331.70 +2.07 (+0.02%)
Nasdaq 1,990.91 -1.66 (-0.08%)
S&P 500 1,123.00 +0.53 (+0.05%)
30-yr Bond 4.792% -0.021

NYSE Volume 522,080,000
Nasdaq Volume 660,447,000

11:30AM: Indices firm...after holding off early losses this morning, some confidence returns...but gains are still modest and volume light...the most significant factor today is still that selling pressure has not emerged after yesterday's gains...Friday was the lowest volume day this year, and Monday was very light as well, but today is running behind Monday...it just isn't very active today...NYSE Adv/Dec 1756/1282, Nasdaq Adv/Dec 1526/1332
11:05AM: Indices remain in narrow trading range, but show little sign of pressure despite big gains yesterday...there is only one minor earnings release after the close today, and tomorrow brings just Factory Orders and the Chicago PMI report on the economic side...light trading conditions might persist...NYSE Adv/Dec 1606/1376, Nasdaq Adv/Dec 1494/1305

[54anickel]

20. Where Is The Dollar’s “Safe Haven” Status When You Need It?

http://www.prudentbear.com/internationalperspective.asp

Terrorist bombing attacks influence election results in Spain, violence erupts again in “stabilised” Kosovo, more US troops get blown up by suicide bombers in Iraq, Sheik Yassin, founder of Hamas, is killed by Israeli forces (presaging yet more violence in the Middle East), and the Taiwanese President and his Vice President get wounded in an assassination attempt days before that country’s close run Presidential elections.

All this, in the mere space of a week. One might accordingly expect the dollar’s recent recovery to be perpetuated through a “flight to safety”, especially with so much of the current instability now emanating from Europe’s own backyard. But the greenback’s sluggish performance has been one of the less remarked features of this fear-filled week. Instead, it has been gold which has played the role of safe haven, a paradigm shift which may significant future implications for the capital markets.

snip>
So what has become the safe haven of choice? One week does not a bull market make, but it is noteworthy that during a time when the paper currencies essentially treaded water, spot future Comex Gold has had its best weekly rise for five months, rising from $US 395.60 to $412.70. Although we expect further central bank action to discourage its rise, gold still looks set to challenge its recent peak of $433.

Until recently, the yellow metal was seen as nothing more than a variant of the “anti-dollar” – i.e., its strength was seen as nothing more than a corollary of dollar weakness.

More recently, this has changed. In fact, the persistent strength of commodities, including gold, in the face of recent dollar strength has been one of the unremarked features of the markets in recent weeks. If one looks particularly at the “barbarous relic”, it has been strong as the bond market has crashed. It has done well when the bond market has recovered. Recently, it has even been strong whilst the dollar has recovered marginally.

What message is this conveying? The U.S. has a massive net external debt and an unsustainable current account deficit. Why has the dollar not crashed? The usual answer is that the world’s other major currencies – the euro and yen- have their own very serious drawbacks, to which recent events, such as those in Spain, Kosovo or Taiwan, have drawn greater attention. Many have remarked that, if all of the world’s currencies are unattractive, gold might regain some luster as a reserve currency and a store of value. It helps that nominal interest rates everywhere are negligible. It also helps that, in a world of ubiquitous excessive debt, gold is the one asset that is no one’s liability. Could gold’s recent strength finally be signaling its re-emergence as a viable safe haven of choice? The next few weeks in the markets could be very telling indeed.

[On the Road]

21. Touching the 50-Day Moving Average on Light Volume

Classic retracement in a downtrend. Look for a lower low about a week into April.




On Edit: The chart is the NASDAQ Comp from Clearstation.

[54anickel]

23. Thanks ribofunk. Do you have any insight on the Dow as well?

[On the Road]

24. All The Major Indexes are Similar

I noticed the Russell breaking the moving average by quite a bit, but it will tag along behind the larger indexes. All the indices will move together, although not by the same amount -- the NASDAQ, eg, is much more volatile.

The S&P 500 is where 3/4 of the money is, but the NASDAQ Comp or 100 tends to take the lead in trends.

For a good short course on identifying trends, see www.clearstation.com and click on the Education section.

We're clearly in a downward trend until the 50-dfay average is convincingly broken on volume. It's amazing how short-term trends change at the major moving averages. This is exactly the point that one would expect the market to resume its downward momentum.

[54anickel]

27. Thanks again ribofunk. Great link.

[54anickel]

22. 1:09 update & blather

Dow 10,325.19 -4.44 (-0.04%)
Nasdaq 1,985.25 -7.32 (-0.37%)
S&P 500 1,121.49 -0.98 (-0.09%)
30-yr Bond 4.792% -0.021

1:00PM: SOX semiconductor index (SOX 478.85 -8.72) is down 1.8% and helps pull the overall Nasdaq lower, as some broad weakness sets in...it obviously isn't severe, however, and volume remains light...gold is up over $420 an ounce, and the gold stock index (XAU 104.41 +1.00) is up about 1%...oil prices are now up almost $1 ahead of the OPEC meeting tomorrow as the outcome of the planned output cuts remain in doubt...Saudi Arabia is apparently in favor of production cuts, while Kuwait and the United Arab Emirates may be opposed...NYSE Adv/Dec 1776/1366, Nasdaq Adv/Dec 1437/1556

[54anickel]

25. R Russell DTL for 3/31/04

http://www.gold-eagle.com/gold_digest_04/russell033104.html

snip>
This is the one thesis that I find almost impossible to get across to people. Once a bull market dies and a bear market takes over - then one way or another, then by hook or by crook, then despite the efforts of the Fed, the Congress, the President, Merrill, Goldman or Morgan Stanley - the bear market will go to its conclusion. The conclusion will find investors enveloped in black pessimism while stocks are selling at great values. At the bottom of the bear market "experts" will tell us that capitalism as we know it is finished, that stocks will never rise again, and that there is no future in investing.

How does this pertain to the present situation? Let's recount a bit of history. We rode through a great bull market that began in 1974 and ended in 1999-2000. The first bear wave of this new bear market carried from 2000 to 2002. Following the end of the first bear wave, the market turned up and a corrective advance took the market to highs in January-February of 2004.

Now the upward correction is breaking up - and the top is in. The bear market has now lasted a little over four years, but the Dow is still above 10000 and the S&P is trading just below a 50% retracement of its 2000 to 2002 bear market losses. The Nasdaq recovered about 25% of its bear market losses and is now turning down again.

Values in a primary bear market deteriorate through time, and as I said - the bear market is now a bit over four years old. Underlying values have deteriorated, but prices have not declined that much.

For this reason, the bear may want to make up for lost time. If this occurs and the top is in, then the year 2004 could turn out to be a rather nasty affair. That's the way I see it from a Dow Theory standpoint. Based on my studies, we're now early in a long journey that will ultimately take stocks down to extreme undervaluation. This is the change (or cycle if you prefer) that 98% of the population is not ready for - this is the change that 98% of the population can't even conceive of.

snip>
Meanwhile, the Dollar is holding its own. Do you remember that I said that the massive US edifice of debt constitutes a "synthetic short" against the dollar? I believe that's what could be beginning to take place today.

Question - Russell, what do you mean, a "synthetic short" against the dollar?

Answer - To carry debt, to pay off debt in the US you need dollars. The US public, the cities, the counties, the states, the corporations, the government - they're all loaded up to their eyeballs with debt. To carry or pay off this debt you must have income or savings in the form of dollars. If you can't carry your debt, you're facing bankruptcy. This is the reason I call debt a short against the dollar. As this bear market moves on, as an increasing number of people and corporations run into trouble, the dollar is going to be a wanted item. Maybe it won't be wanted outside the US (the dollar actually could weaken internationally) but it's going to be wanted in the US. In fact, as the bear's grip tightens in the weeks and months ahead, we could even see a panic for dollars.

I've said all along that this bear market will be international in scope. The US has been the world's engine of growth. Sure the growth has been phoney in that it's been generated by Fed-manipulated 45-year lows in interest rates plus a veritable ocean of liquidity. But it's the US that the world has depended on as the place to sell its goods and services. If the US is sick, the rest of the world will also head for the hospital.

more...

[54anickel]

29. Watch the Nasdaq for a Bullish Clue

Uh, yeah, OK. :eyes:
I did a search on bull market looking for some cheerleading. Got a lot of hits on this same story as it hit the local TV stations. And then the 2nd story. But not much cheerleading available out there today.

http://www.businessweek.com/bwdaily/dnflash/mar2004/nf20040330_6479_db006.htm

The tech-heavy index will signal the Street's next upward move, says Loring Hedge Fund's Pat O'Neil, who likes Symantec and Microsoft

A short-term pause in a bull market -- that's how Pat O'Neil, manager of the Loring Hedge Fund and president of Loring Investment, sees the state of stocks today. He expects the market to resume its push upward. O'Neil suggests watching volume on the Nasdaq for a clue to the next move and says he would like to see that volume at 2 billion shares in a day, with a 2% climb in the index. At the moment, he's 35% in cash but is watching his current favorite sectors -- wireless telecom and Internet security -- and looking for the best stocks there to ride up. He likes to buy when it looks as if the market will be going up in the next two or three months.

snip>
Q: Pat, after today, would you venture to say that the market correction is over?
A: I would like to have seen more volume today, but the fact that the Dow is holding above 10,000 is great. We'll wait for another good day like today.

Q: What do you think the trend will be for the next few months?
A: We expect that the market will continue to push upward. This looks like a short-term pause in a new bull market.

Q: What impact, percentage-wise, do you think a major terrorist event would have on the market?
A: I think the next event would have about half the correction that we had last time. The market is beginning to adjust for terrorist events worldwide. I don't see that anything positive could happen to the market, however, even as far as defense and the like go. We're living in a new financial world, with terror as the wild card.

Q: Getting back to your feeling that we're in a new bull market -- what's keeping you so positive?
A: After three years of aggressive selling, including 9/11, the market just had enough and began to turn. Bull markets usually last two to three years, with pauses during the runup. We're one year into this one, and we have taken a lot of bad news regarding jobs and earnings. I think the market has proven to be very tough -- and is showing that right now.


And there was this:
Stock market can forecast economy

http://kobtv.com/index.cfm?viewer=storyviewer&id=9691&cat=CONSUMER
Want to make a killing on Wall Street? Then you may one day find yourself at a convention like this. It’s called the money show, and it’s held around the country several times a year.

Of course, millions of people don’t have extra money to invest, so they feel investment markets are meaningless. But the stock market is anything but meaningless...even if you don’t have a dime at risk.

Why? Because the stock market can often predict where the economy is going, and the American economy affects everyone all over the world.

The stock marker was certainly good last year. I asked the chief investment strategist for Standard and Poor’s, Sam Stovall, if we’re in for a repeat this year:

“Our feeling is that we could probably see the Standard and Poor’s 500 rise about 11% in 2004, which would be consistent with the average growth during the second year of a bull market,” he said.

[revcarol]

33. When did/will consumer confidence numbers come out?

<sigh> I just can't follow this every day.

[54anickel]

35. Sorry Revcarol, I probably should have posted them here earlier.

They were posted in LBN by MaineDem.

March 30 (Bloomberg) -- U.S. consumer confidence was little changed in March as Americans waited to see if reports of improving labor market conditions translate into actual hiring, a report by a private research group showed.

The New York-based Conference Board's sentiment index for March was 88.3, compared with 88.5 in February, which was revised higher from last month's report as attitudes about job availability improved.

more at article....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x452918

[revcarol]

37. Thanks.

Kinda noticeable they didn't go UP, what with all that prosperity and new job creation, ain't it.

[54anickel]

38. Heh, yeah. According to the updated Forbes story, if it wasn't for the

price of gas everyone would have been a lot more confident. :eyes:

http://www.forbes.com/markets/newswire/2004/03/30/rtr1317186.html

[54anickel]

34. U.S. stocks make late bid for advance

http://biz.yahoo.com/cbsm-top/040330/b2aeaa92e0ede4a98c29030667d56b20_1.html

NEW YORK (CBS.MW) - U.S. stocks were moving higher Tuesday as the major indexes made a late bid to add to the impressive gain that started the week.

snip>
Todd Clark, head of listed trading at Wells Fargo Securities attributed the late gains to end-of-quarter window dressing by portfolio managers, and a squeeze on short sellers.

"There's also some optimism that Friday's job number will be one of the strongest ones we've seen in some time."

Clark said the number being mooted on trading room floors was for 200,000 jobs to have been created in March.

According to economists polled by CBS MarketWatch, non-farm payrolls for March are expected to rise by 122,000.

snip>
Fed officials out with comments
The Federal Reserve is watching inflation closely, despite the fact that prices have been kept in check for over two decades, said William Poole, the president of the Federal Reserve Bank of St. Louis.

"You can rest assured that the Fed remains vigilant on that (inflation) front," Poole said in a speech prepared for delivery to the Rotary Club of Evansville, Ind.

Also, "distressingly slow" job creation in the United States shouldn't be blamed on foreign trade or outsourcing, Federal Reserve Gov. Ben Bernanke said during a speech in North Carolina.

The official strongly defended trade, saying a free flow of goods and services across borders is an undeniable benefit to the U.S. economy because consumers benefit from lower prices, and workers benefit from higher paying jobs that replace the lost jobs.

Bernanke made no comments on monetary policy, other than to repeat that he's confident job growth will resume at some point.

[54anickel]

36. Closing numbers & blather

Dow 10,381.70 +52.07 (+0.50%)
Nasdaq 2,000.63 +8.06 (+0.40%)
S&P 500 1,127.00 +4.53 (+0.40%)
30-yr Bond 4.818% +0.005

NYSE Volume 1,306,468,000
Nasdaq Volume 1,590,972,000

Close: It was a good day for the stock market...not overly impressive, but traders were looking to see if there was much selling pressure after the big gains yesterday...once it appeared that the "selling on upticks" of a couple of weeks ago wasn't going to happen today, the indices drifted higher...volume was extremely light, however, as it was yesterday...so the move lacks conviction to the technical analysts...but the Nasdaq ended just above the psychologically supportive 2,000 level...
corporate news was light, but PepsiCo (PEP 53.28 +1.07) gained on upward guidance to its profit forecast for this quarter and a 44% increase in the dividend...Federated (FD 53.92 +2.30) was up on an upgrade from Goldman Sachs...American Express (AXP 51.91 +1.05) announced a partnership with a Chinese bank to issue credit cards in China...gold rose to over $420 an ounce, and oil prices firmed ahead of the OPEC meeting tomorrow...the next big event for the market is the March employment report due Friday morning...NYSE Adv/Dec 2154/1126, Nasdaq Adv/Dec 1837/1296

3:30PM: Indices continue the modest rally since early afternoon as tone improves...the leveling of the indices last week and the bounce early this week has chart analysts more convinced that the recent downdraft was a classic correction...the main negative aspect remains the lack of volume on the upturn the past few days...the Nasdaq is pushing towards 2000 and is now just 3 points below that psychologically important level...NYSE Adv/Dec 2049/1200, Nasdaq Adv/Dec 1722/1371