7/3/2008

Early Take

I’m not too sure how meaningful today’s action will be, being a shortened pre-holiday session - markets close at 1PM Eastern.

But the Dow has already seen a range of over 130 points from top to bottom this morning, bouncing all over the place. The indices are currently mixed, with A/D lines in the red. The groups show more red than green, with drug stocks, retail and internets leading the winners, while HMOs, natural gas stocks, metals, steel and gold and silver stocks lead the losers.

Treasuries are mixed. Energy prices are slightly higher. The dollar index took a morning jump, gold and silver are lower.

Posted: 9:27 am

10 Comments »

  1. PPT doing their patriotic duty. Barring news over the weekend, I think this rally could get legs next week. The financials and real estate are leading, and mostly what seem to be languishing are the most recent momo favorites.

    Comment by Re-REMIC — 7/3/2008 @ 11:05 am

  2. I’m not sure you can call it a ‘rally’ at this point. Even when the Dow was up more than 100 points, A/D lines were still red and the Russell was flat to negative. And things have now started to pull back from there.

    7 new highs, 700+ new lows…

    Comment by BMB — 7/3/2008 @ 11:09 am

  3. I’m calling it a rally. We’ll see next week. I’ve seen signs of capitulation. That said, I have not taken on any aggressively long positions yet. Too much unknown and known unknowns to risk it over the weekend. I have been using the opportunity to cover some of my E&P hedges that worked out well. The microcap E&Ps have been taken out back and shot the past 2 days.

    Comment by Re-REMIC — 7/3/2008 @ 11:49 am

  4. Rally? Nah. Not with the nas closing down. And on a short day like this, you don’t have enough players to be a rally or a capitulation. Most people I know have the whole day off, the whole week in some cases or at least the afternoon off. Anyone that even only has the afternoon off isn’t thinking about stock trades–they’re making phone calls to set up all the things they are picking up for the weekend or phoning their husband to tell him to get extra charcoal and other package of burger on his way home because aunt bessy is coming after all…the wife is stopping to get the big fat cake from the bakery–after she stops to get her nails done…

    Comment by Maria — 7/3/2008 @ 12:17 pm

  5. PPT doing their patriotic duty. Barring news over the weekend, I think this rally could get legs next week. The financials and real estate are leading, and mostly what seem to be languishing are the most recent momo favorites.

    The amazing thing is the ECB raised interest rates .25% and the dollar didn’t drop. Instead, it is up .70% at the moment. Go ahead and tell me the PPT isn’t working over time.

    The currency markets are huge. There is no way they can put a stick under the dollar to prop it up long term. Middle of next week will be a better time to look and see what the reaction really is to the ECB interest rate move.

    Comment by Anonymous — 7/3/2008 @ 12:29 pm

  6. You may be right Maria, but I think we’re near a tradeable rally point. Looking for some selling at the open on Monday followed by more upside in the financials/RE sectors. Like I said, I’ll wait until Monday to get more aggressive about it. I think that anon is right that the ECB interest rate raise has not yet been priced in, but heck if I know how it will be. I did pick up some TBT today as a trade.

    Comment by Re-REMIC — 7/3/2008 @ 12:54 pm

  7. The ECB move was pretty much a given, having been telegraphed well ahead of time. The only unknown was what the ECB would say about the future, and they didn’t talk as though more rate hikes were imminent. I think that’s the main reason for the move in the dollar, which was strongest against the Euro - which is almost two-thirds of the dollar index.

    Comment by BMB — 7/3/2008 @ 12:54 pm

  8. Yeah, if you read Chuck’s newsletter over at http://www.everbank.com on currencies, he’s been saying they’d raise and also to pay attention to their statement/outlook. BUT no one expected them to be too hawkish. He said earlier this week that the Euro would have a hard time getting above 158 and change and that’s pretty much what happened. From what I gathered there’s been no surprises–everyone knew the hike was coming, how much it would be, etc.

    Comment by Maria — 7/3/2008 @ 6:26 pm

  9. From what I gathered there’s been no surprises–everyone knew the hike was coming, how much it would be, etc.

    I agree. But if so, why did the dollar jump up so much? Everything was already priced in, right???

    I’m pretty sure we saw some ‘intervention’.

    Comment by EDN — 7/4/2008 @ 10:19 am

  10. The dollar jumped on the “outlook” also. Basically, they were waiting to see if Trichet hinted at further hikes or not–he was “neutral” which was expected, but still it lifted the dollar in “relief” that he didn’t talk about inflation for 1/2 hour and threaten more hikes.

    That’s not to say that there isn’t propping and talking to prop going on. The worse the dollar gets, the worse pricing for commodities get.

    Comment by Maria — 7/4/2008 @ 11:37 am

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