STOCK MARKET WATCH, Monday 24 May

[ozymandius]

Monday May 24, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 245
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 164 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 217 DAYS
WHERE ARE SADDAM'S WMD? - DAY 431
DAYS SINCE ENRON COLLAPSE = 914
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff 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 May 21, 2004

Dow... 9,966.74 +29.10 (+0.29%)
Nasdaq... 1,912.09 +15.50 (+0.82%)
S&P 500... 1,093.56 +4.37 (+0.40%)
10-Yr Bond... 4.76% +0.05 (+0.97%)
Gold future... 284.90 -93.60 (-24.73%)

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

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

[ozymandius]

1. Geezzits - look at how gold plummeted!

When has gold ever moved so much in one day?

[ozymandius]

2. Aaaaa! I've lost my star!

Looks like I'll have to dig for some cash.

[54anickel]

15. Gold on back foot in Europe, seen drifting

http://www.forbes.com/home_europe/newswire/2004/05/24/rtr1381943.html

LONDON, May 24 (Reuters) - Gold weakened in Europe on Monday
morning, failing to follow through from a stronger performance at the end of last week when fund buying took the metal to a two-week high on a weaker dollar.

Traders expected the market to drift in familiar ranges around $380-385 an ounce ahead of an options expiry in New York futures on Tuesday and in OTC markets the following day.

Currencies were still seen setting direction, so traders were awaiting this week's data releases from the United States, with May consumer confidence on Tuesday, durable goods on Wednesday and
revised first-quarter domestic product the following day.

The dollar bounced off recent two-week lows versus the euro and yen on Monday after oil prices fell on news that Saudi Arabia was to raise output to ease supply concerns.

snip>
He noted, however, that the market appeared to attract good buying into price dips.

Simon Weeks, director of precious metals at ScotiaMocatta, expected gold to have a quiet week, possibly drifting back towards $370.

Other analysts said gold could come under pressure ahead of options expiries this week, with large open interest at the $380 strike.

more...

[ozymandius]

3. WrapUp by Tim W. Wood

THE DOW REPORT
Market Volume

Below is a daily chart of the Dow Jones Industrial Average going back to December 2001. The green line at the top of the chart is a 34 day moving average of NYSE advancing volume. The red line is a 34 day moving average of the NYSE declining volume. First, I want to focus on the advancing volume line. Notice that as the market rallied out of the March 2003 low advancing volume expanded. This expansion of advancing volume continued into the June 2003 high. From the June 2003 top the market sold off into a minor low and then continued its advance, but notice how advancing volume began to lag and never reached the level seen back at the June peak.

Let’s now look at the declining volume. As the market rose into the June 2003 top, you can see that declining volume did move up ever so slightly. This rise in declining volume was perfectly normal as the market moved into the June short term top. But, notice how advancing volume continued to decline and declining volume continued to advance as the market basically went sideways into the early August low. This was a clear sign of distribution as the market moved into the early August low, which marked an intermediate term cycle low. I have marked this low on the chart with a “w.”

-cut-

The bottom line here appears to be that we are seeing a mass distribution of stock. It also appears that this distribution process is not yet complete as the professional continues to feed his stock to the public. The public continues to listen to the mainstream media telling them that this pull back is simply a buying opportunity and therefore they continue taking the bait. The technical picture is currently negative from many angles. However, one does not have to understand Dow theory, Cycle theory, Elliott Wave or any other technical discipline to understand that it takes volume to push the market higher. Specifically, it takes rising advancing volume in order for an up-trend to remain healthy. Anyone should be able to see from these charts that advancing volume has continuously shrunk since June 2003. It is also obvious that declining volume has been expanding and has now surpassed the advancing volume. If you look back at the declines in 2002 and 2003 you can clearly see that this is not a positive situation for the market and unless this changes soon we are very likely to have trouble just ahead.

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

[UpInArms]

4. daily dollar watch

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

Last trade 90.72 Change +0.23 (+0.25%)

http://www.fxstreet.com/nou/content/103770/content.asp?menu=technicalanalysis&dia=2452004

DAILY MARKET COMMENTARY

The dollar continued its yo-yo pattern of one day up and one day down

The dollar continued once again its yo-yo pattern of one day up and one day down versus the European currencies and saw the expected weakness on Friday. It should edge higher on Monday, but the general selling pressure should persist. However, there is upside risk after Saudi Arabia decided to increase its oil output despite opposition by some OPEC partners.

...more...

Forex - US dollar firmer vs yen in Tokyo afternoon on techincal factors

TOKYO (AFX-ASIA) - The US dollar was firmer against the yen in early afternoon Tokyo trade, with market participants in Asia triggering dollar buy- stops - preset orders to buy dollars - near the 112.70-80 yen level, dealers said. "I'd say (the dollar's gains) were largely technical, with the US unit surging through triggering (dollar) buy-stops near 112.70-80 yen," said Rikiya Takebe, senior market strategist at Traders Securities, adding: "There was no particular news or event to pull the US unit higher." Some anticipate speculators to target dollar stop-loss levels near 113 yen, but others said the dollar will likely rmain top-heavy due to a lack of follow-through buying. "The US dollar has no clear direction against the yen (over the short-term), with speculators' dollar positions seen mixed," said Kenji Kobayashi, a senior dealer at Bank of Tokyo-Mitsubishi. Early morning trade saw short-term speculators testing the US unit's downside against the yen after OPEC's failure to raise its production over the weekend, traders said

Soaring oil prices could harm stock prices in New York, adversely affecting the dollar

However, the OPEC news failed to prompt long yen players to trigger dollar sell-stops - preset orders to sell dollars - parked near 111.50 yen. The US unit bounced off its lows to clamber back above 112 yen eventually in Asian trade, they added. "Whether OPEC raises oil production going forward depends on its general meeting in early June, so we don't know the outcome yet," said Harry Ida, senior analyst at Thomson Financial's IFR Forex Watch.

...more...

Daily Market Briefing 24/05/04

http://www.fxstreet.com/nou/content/102055/content.asp?menu=market&dia=2452004

Key factors today:

The reaction of oil prices and equity prices will remain important over the next 24 hours as the markets continue to assess the level of risk aversion.

Euro/dollar:

A further period of range trading is the most likely outcome, especially with no major US economic data due for release this week. Overall, the dollar is likely to hit resistance in the 1.1920 region and failure to strengthen through this level would undermine dollar sentiment slightly. There is the potential for a fresh Euro challenge on 1.2050 and the odds just favour an eventual move to 1.2120 even though initial attempts will probably fail.


The G7 ministers failed to make any significant comments on exchange rates, satisfied by developments over the past few weeks. The Opec meeting was potentially more significant with Saudi Arabia pledging to increase output despite opposition from other Opec members. The net implications of any sustained decline in oil prices would probably be marginally dollar supportive in the short term due to reduced fears that the US economy will slow, although uncertainties over the economic trends will persist in the absence of fresh data.

The latest IMM data recorded a small increase in long Euro positions of close to 1,000 in the latest week, pushing the total to 13,500. This suggests that there has been further interest in buying Euros on recent dips and this could offer long- term Euro support. The net long position of around 13,500 will, however, act as a barrier to substantial Euro gains.

What's with the euro and yen charts? That flat line? The dollar index doesn't reflect a no-action period, but ....

Have a Great Day Marketeers! :hi:

[54anickel]

8. A bit more from Forex News and Analysis

http://www.forexnews.com/na/default.asp?f=N20040524B.mgn

Dollar Little Changed, Oil Falls Back Below $40

The dollar remains in a tight consolidation pattern, falling back below key resistance at 1.2050 on Friday after a brief rise above its 3-month long downtrend line. Since we first wrote 5 weeks ago that the euro would find a “trio of support” at 1.1750, the euro has chopped sideways giving no hint of its intended direction. But this week converging trendlines will likely force a breakout, which will force the market’s hand. So far, initial indications are that a multi-week rally may be in store if the euro can rise back above 1.2050. Only a move below 1.1890 would put the 1.1750 lows in focus, indicating that a further decline was underway.

Stock futures bounced back to last Friday’s highs, holding important trendline support from lows made two weeks ago at 9850 and 1076 in the Dow and S&P 500. 10-year yields were also up 10 basis points after reaching a 2-week low on Friday at 4.68%.


Oil Shows First Technical Signs of Topping

snip>
Oil prices also fell back below the psychological $40 per barrel level on Friday, but not before recording a new record high of $41.85 before this weekend’s meeting and an output pledge from Saudi Arabia. While we believe that commodities are in the beginning stages of a long term bull market, we had warned three weeks ago that oil prices could top out in the $42 to $45 area this year as interest rates rise. While the fundamentals certainly exist to support further gains in oil prices this summer, the large amount of long speculative contracts in oil has a reminiscence of the record long positioning of speculators in the bond market back in March.

In fact, speculative long positions reached 167,232 in the week ending May 11, the highest since the bull market began. But speculative short positions have nearly doubled in the past two months, rising to 100798 in the week ending May 11, thereby actually seeing a deterioration in net long positioning by speculators even as prices rose above the psychological $40 level. The latest CoT report shows a continued deterioration in net speculative positioning, having topped out at 80k in March when oil was trading at $37.50. The past three weeks have seen net longs level off at 65k.

Waning enthusiasm by traders despite strong fundamental bullish backdrop was confirmed last week by the first technical signs of a potential top, as new record highs were not confirmed by new highs in momentum measures such as RSI or the MACD on the daily or weekly charts. This is usually the first indication that a top may be in. Moreover, RSI reached an overbought level above 70 then crossed back below it and has broken its uptrend line, which adds to the bearish outlook. Given that oil prices also recorded a weekly reversal by reaching a new high but lower close on the week, a break below trendline support from the April lows crossing at $39.50 today could see further selling pressure targeting previous resistance band at $38. But only a sustained move below $38 would likely see a larger correction of the entire 9-month rally from $26.75.

Dollar Speculative Positioning Little Changed

Dollar shorts rose marginally in the week ending May 18, as the greenback continues to trade along its 2-year downtrend, giving little hint of its overall direction. EUR longs rose 1k to 13,422. GBP longs fell 2k to 3219. CHF shorts fell 4k to 2598. JPY shorts rose 2k to 12682. CAD shorts rose 3k to 28734. AUD shorts fell 1k to 1775.

[54anickel]

16. The US Dollar Index:The Bear Market Rally could soon be over

http://www.gold-eagle.com/editorials_04/zihlmann052104.html

snip>
The bear market rally of last summer lifted the US Dollar Index by 8%. This time, it has already reached 9%. Could this be a trend reversal or is this bear market rally simply becoming stronger because the preceding fall was notably above the previous ones?

The long-term trend is definitely down. This is a simple fact.

snip>

The US Federal budget deficit could reach $ 2.4 trillion over the next 10 years, $ 1 trillion more than previously estimated, according to official assessments.

President Bush says he will cut the deficit in half by 2009. Will he be there to live up to his promise? The cost of the occupation of Iraq is stated as $ 5.46 billion monthly, of which $ 1.56 billion is interest.

snip>
The prudent way for anyone wanting to go short at this stage is to watch the resistance level between 93 and 94 and to put stops above in case the US dollar should keep pushing higher against our expectations.

Short-term, it is evident that the trend is up and has not been broken. A close below 89 points would cause us to be more confident that the bear-market rally has indeed run its course.

more...

[ozymandius]

5. Gotta run folks.

I need to earn some scratch so I can get my star back. Have a great day at the Casino!

Ozy :hi:

[UpInArms]

7. Bye Ozy!

Hope you find lots of "scratch"!

[54anickel]

6. Good Morning Marketeers. My but don't those futures look shiny today!

9:00AM: S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +13.5. Futures indications lift to their best levels of the morning and continue to point to a higher open for the cash market. Supporting the advance is Saudia Arabia's commitment to increasing output of crude oil, although it remains to be seen if the biggest oil producer in the world is going to be backed by the rest of OPEC. Trade in overseas markets is positive, contributing to the early enthusiasm.

8:30AM: S&P futures vs fair value: +6.0. Nasdaq futures vs fair value: +10.5. Expectations remain set for a higher open on the heels of four consecutive down weeks for the major averages. Lower crude oil prices are supporting the early favorable bias, although it remains to be seen if the enthusiasm can be sustained given the anemic volume levels exhibited of late. There are no economic reports this morning.

8:00AM: S&P futures vs fair value: +5.8. Nasdaq futures vs fair value: +11.0. The futures market is higher in concert with favorable trade in overseas markets, where the European DAX is up 1.7% and the Asian Nikkei and Hang Seng are up 0.3% and 0.8%, respectively. Contributing to the favorable bias is Saudi Arabia's decision to boost crude oil production to prevent record-high prices that would hurt economic growth as demand increases.

[ze_dscherman]

9. Japan grows 'much slower' than Tokyo suggests

Hiya all! Looks like the Japanese have begun to cook Enron style as well - but who doesn't, nowadays?



Japan is growing at less than half the speed suggested by official data because of problems in calculating deflation and providing adequate seasonal adjustment, according to new research.


Instead of growing at a real 1.4 per cent in the first quarter, an annualised rate of 5.6 per cent, the Japanese economy expanded by a more modest 0.6 per cent in real terms, or 2.5 per cent on an annual basis, according to research by HSBC.

The sober assessment is a counterweight to economists who see Japan's latest bout of growth as fundamentally different from two other post-1990 recoveries, both of which ran out of steam.

SNIP

Nevertheless, Mr Sheard acknowledged that the durability of the recovery offered hope. The longer growth lasted, he said, the more chance the economy had of shifting into a self-reinforcing positive cycle.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1084907776738&p=1012571727102

[54anickel]

10. The Sleaziest Journalism on Earth

In defense of hedge funds.

http://www.gold-eagle.com/editorials_04/mauldin052204.html

This week we explore the problems with generalizations and assumptions. We will use as the launching point a rather poor piece of sensationalistic journalism from an otherwise excellent magazine. We look at the problems, costs of and the drive for the regulation of hedge funds. And I offer what may be a controversial opinion or two. This is not my usual gentile style, as I take the gloves off.

Let me note upfront that this issue is going to deal with hedge funds. Long time readers know that this is my economic backyard where I make the main part of my living. Normally, I do not discuss this specialized part of the economic scene in this letter, except in oblique references. I try to use this weekly space for general education and thoughts on the markets and investing.

snip>

While the writers at Forbes offer us their flank, hopefully my "attack" will not yield so dire a result. But it will provide an opportunity for education, and maybe a little amusement.

Three quick points before we start. First, I like Forbes. It is one of a very few financial magazines to which I subscribe. Steve Forbes, the publisher, has been a stalwart in the movement for free trade and open markets for many years, and I have a very high opinion of his work and analysis. I do not believe this article is in keeping with his philosophy, or that of his publication in general.

Secondly, this will not be an apologetic tome for hedge funds. They are not investment nirvana. The Forbes article pretty much rehashes all the tried and true old anti-hedge fund bromides that we see from time to time in mainstream journalistic endeavors. In the interest of moving on, I offer a few more realistic critiques and problems with hedge funds that future writers might explore rather than visiting old sensationalist stories and half-truths. Investors might well decide that hedge funds are not appropriate for their portfolios, but not for the reasons that Neil Weinberg and Bernard Condon suggest.

Third, while it should go without saying, this letter is entirely my personal opinion. When I make judgmental statements and acid comments, you should insert "in my opinion" before the sentence. Rather than doing it 40 times and annoying you, gentle reader, I do it for the letter at this one instance.

more...

[54anickel]

11. FLASH BUBBLES

The Daily Reckoning PRESENTS: In theory, the Federal Reserve can print as much money as it likes. Reflation should be assured. Unfortunately, the wise men overlooked one small detail...wage stagnation. If consumers cannot afford to pay higher prices, you don't get higher prices...

http://www.gold-eagle.com/editorials_04/denning052104.html

If you're like 99% of the world, you expect the Fed to raise rates.

But somewhere along the way, in its perfect plan to "reflate" the American economy and prevent a Japan-style soft depression, the Fed made a fatal miscalculation: It caused a simultaneous asset bubble in stocks, bonds, commodities, housing, and real estate. We stand on the edge of the great collapse of the "reflation rally." Some assets will come through relatively unscathed. Others will deflate. What the Fed is about to reap is a lot different than what it thought it was sowing.

The Fed thought it could make money cheap and keep the stock market high (and households feeling wealthy). It was right. It thought it could keep money cheap and force savers to abandon money market funds and CDs. It was right. It thought it could keep home prices rising by keeping interest rates low (and mortgage rates low in sympathy). It was right.

It also thought it could create so much money that raw material prices would rise. It was right. The Fed's cheap money caused a series of "flash bubbles" in the commodities sector, especially in base materials, and even in gold. It also thought it could keep money cheap and force up producer prices. Producers have to buy raw materials, after all. It was right.

And it thought that the whole chain of inflation - or the ladder, if you prefer - would be completed in the form of rising consumer prices. It thought it could prevent deflation by first forcing up raw materials prices, then producer prices, and finally consumer prices. If the Fed couldn't make consumers borrow, it thought it could make them spend by inflating. It was wrong.

This essay is not going to be a long explanation of the failures of monetary and fiscal policy, though it would be fitting if it were. Never before has an American government been as irresponsible with its citizens' money as the current administration. And never before has the Federal Reserve done more to undermine your standard of living than this Federal Reserve has.

more...

[54anickel]

12. 10:21 numbers and blather (Charts look like bottle rocket trails again)

Dow 9,995.91 +29.17 (+0.29%)
Nasdaq 1,926.35 +14.26 (+0.75%)
S&P 500 1,096.50 +2.94 (+0.27%)
10-yr Bond 4.760% -0.004
30-yr Bond 5.456% -0.004

NYSE Volume 231,316,000
Nasdaq Volume 1,379,384,000

10:00AM: The favorable bias is extended, with the major averages lifting to new session highs... The bulk of the sectors are supporting the advance, with leaders to the upside including the hardware, internet, networking, semiconductor, software, biotech, REIT, industrials, broker/dealer, homebuilding, steel, aluminum, and chemicals groups... Laggards of note are difficult to come by, although the drug and tobacco sectors are among the few groups showing losses...
The oil services sector is showing gains despite the decrease in the price of oil, which has boosted sentiment in the broader market in today's session...NYSE Adv/Dec 2183/466, Nasdaq Adv/Dec 1989/552

9:45AM: As indicated by the futures market, the cash market is off to a higher open... The favorable bias comes on the heels of four consecutive down weeks and is being supported by Saudi Arabia's commitment to increasing crude oil production to 9mln barrels a day, or 8%, at the June 3 OPEC meeting, although it remains to be seen whether the rest of the committee concurs with the world's largest crude oil producer... Also supporting the favorable bias are upgrades of Caterpillar (CAT 75.34 +2.31) at Merrill Lynch to Buy from Neutral and Boeing (BA 44.04 +0.64) at CSFB to Outperform from Neutral...


Advances & Declines
NYSE Nasdaq
Advances 2336 (78%) 2024 (72%)
Declines 505 (16%) 647 (23%)
Unchanged 148 (4%) 135 (4%)

----------------------------------------------------------------------

Up Vol* 136 (86%) 219 (87%)
Down Vol* 21 (13%) 29 (11%)
Unch. Vol* 1 (0%) 1 (0%)

----------------------------------------------------------------------

New Hi's 16 40
New Lo's 6 19

[54anickel]

13. Termination of Lehman, Morgan bond trusts could cost investors millions

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20040524/IBTRUST24/TPBusiness/International

NEW YORK (AP) - A sudden and unusual liquidation of a handful of bond trusts sold by Lehman Brothers Inc. and Morgan Stanley may cost some investors millions.
Trusts worth $430 million, backed by the debt from subsidiaries of General Electric Co. and Verizon Corp., were terminated this month after the subsidiaries stopped filing their own financial reports with the Securities and Exchange Commission.

Brokerage firms are telling some investors in a Lehman Brothers trust to expect up to a 16 percent loss, only months after their initial investment. By contrast, investors in one Citigroup Inc. trust will lose nothing, because the bank is making up their loss.

"It's a little bit of a fiasco," said Andrew Montalbano, a trader with Advest Inc. who sold shares of the trusts to investors.

The meltdown provides a window into the little-known but vast world of the trusts. About $10 billion in bond trusts currently trade, Montalbano estimated.

Here is a hypothetical example of how the trusts, also called repackagings work:

more...

[UpInArms]

14. Japan FSA: 11 big banks bad loans Y13.6 trln at end-Mar

http://www.forbes.com/business/services/newswire/2004/05/24/rtr1382005.html

TOKYO, May 24 (Reuters) - Bad loans at Japan's main 11 banks amounted to 13.6 trillion yen ($121 billion) at the end of March, the Financial Services Agency said on Monday.

The 11 banks belong to the big seven banking groups, which are Mizuho Financial Group <8411.T>, Sumitomo Mitsui Financial Group (SMFG) <8316.T>, Mitsubishi Tokyo Financial Group (MTFG) <8306.T>, UFJ Holdings <8307.T>, Resona Holdings <8308.T>, Sumitomo Trust <8403.T> and Mitsui Trust <8309.T>.

The FSA's calculations for Resona Holdings are for only the group's main unit, Resona Bank.

The average bad loan ratio at the 11 big banks fell to 5.2 percent at the end of March from 7.2 percent a year earlier.

...more...

[54anickel]

17. US Corp Bonds-Spreads tighter as stocks advance

http://www.forbes.com/markets/newswire/2004/05/24/rtr1382195.html

NEW YORK, May 24 (Reuters) - U.S. corporate bonds tightened a touch early on Monday after oil prices fell, sparking a rally in global stock markets and easing worries that U.S. consumer spending would be derailed.

"Stocks are rallying, so people are coming in short-covering," said Simon Ballard, global credit strategist for Bear Stearns. "The news from Saudi Arabia on production is obviously positive, which is boosting stocks and spreads."

Crude oil prices ended below $40 for the first time in 10 trading days on Friday after Saudi Arabia proposed that OPEC increase production. Over the weekend, Saudi Arabia confirmed it was already boosting output, although some oil traders were skeptical whether oil supplies could be increased enough to keep up with stronger demand.

snip>
"Our biggest concern regarding higher energy prices is the impact they may have on an already over-levered consumer," FTN Financial credit strategist William Cunningham said in a report on Friday.

Because consumer spending is important to economic growth, "we have to worry about the sustainability of the current growth cycle in the face of higher interest rates and much higher energy costs," Cunningham said.

more...

[54anickel]

18. 11:13 numbers & blather

Dow 9,985.47 +18.73 (+0.19%)
Nasdaq 1,925.57 +13.48 (+0.70%)
S&P 500 1,095.57 +2.01 (+0.18%)
10-yr Bond 4.766% +0.002
30-yr Bond 5.458% -0.002

11:00AM: The major averages are vacillating around the lower part of their morning trading ranges, but remain off their earlier respective session highs... Although trading below $40/bbl in the pre-open session, the price of crude oil is currently up $0.87 at $40.80/bbl, despite reports that Saudi Arabia is looking to increase output at the June 3 OPEC meeting... The market remains pre-occupied with the ebbs and flows in the price of crude oil, although the real impact of the higher price of commodity needs to be kept in perspective, as discussed in The Big Picture brief...
Also, earlier in the session, the Nasdaq failed to lift above its two-week range top at 1937, which played a part in cooling the market's enthusiasm... The Nasdaq's ability to lift above the technically-significant level on sizeable volume later in the session, would likely incite buying efforts in the broader market...NYSE Adv/Dec 2315/665, Nasdaq Adv/Dec 1986/832

10:30AM: Although maintaining their stance in positive territory, the major averages have slipped off their earlier highs, with the blue-chip indices showing only mild gains at this juncture... The consumer and S&L/savings banks sectors have joined the drug group in the red... The weakness in the savings banks group is particularly notable considering the fact that the banking sector plays an influential role in determining market direction... The BKX index is currently trading in the green, although it's currently up only 0.3%...

Sizeable gains in blue-chip averages are going to be difficult to achieve if the banking sector continues to post only mild gains...NYSE Adv/Dec 2305/568, Nasdaq Adv/Dec 1949/761

[UpInArms]

19. Market Numbers at 11:39 EST

Dow 9,960.99 -5.75 (-0.06%)
Nasdaq 1,917.08 +4.99 (+0.26%)
S&P 500 1,093.18 -0.38 (-0.03%)
10-Yr Bond 4.762% -0.002

11:30AM: Like in many sessions of late, the early spike in the major averages has proven to be unsustainable... Currently, although still in positive territory, the major averages have slipped well off their morning highs and are trading with only mild gains for the blue-chip averages and moderate gains for the Nasdaq... Groups in the red are easier to come by and include the drug, S&L/savings banks, and restaurant sectors... The S&P 500 banking sector, which is indicated by the BIX index, has slipped into the red and is weighing on the market...

The tobacco sector is among the biggest laggards after a federal judge refused to limit the $280 bln worth of fines the government is seeking at a trial due to start in September...NYSE Adv/Dec 2306/773, Nasdaq Adv/Dec 1854/1015

[54anickel]

21. Whoops, should have checked before I posted. Wonder what the

lunch-hour lull will bring today?

[54anickel]

20. 11:50 heading into the lunch-hour and headed down, again.

Dow 9,960.81 -5.93 (-0.06%)
Nasdaq 1,918.49 +6.40 (+0.33%)
S&P 500 1,093.77 +0.21 (+0.02%)
10-yr Bond 4.752% -0.012
30-yr Bond 5.445% -0.015

NYSE Volume 503,756,000
Nasdaq Volume 1,379,384,000

11:30AM: Like in many sessions of late, the early spike in the major averages has proven to be unsustainable... Currently, although still in positive territory, the major averages have slipped well off their morning highs and are trading with only mild gains for the blue-chip averages and moderate gains for the Nasdaq... Groups in the red are easier to come by and include the drug, S&L/savings banks, and restaurant sectors... The S&P 500 banking sector, which is indicated by the BIX index, has slipped into the red and is weighing on the market...
The tobacco sector is among the biggest laggards after a federal judge refused to limit the $280 bln worth of fines the government is seeking at a trial due to start in September...NYSE Adv/Dec 2306/773, Nasdaq Adv/Dec 1854/1015

[UpInArms]

25. Market Numbers at 1:27 EST

Dow 9,942.82 -23.92 (-0.24%)
Nasdaq 1,919.97 +7.88 (+0.41%)
S&P 500 1,093.52 -0.04 (0.00%)
10-Yr Bond 4.742% -0.022

1:00PM: The Nasdaq is able to maintain its stance in positive territory, while the blue-chip averages are on a track of new session lows... The market's eye is on the price of crude oil, which has continued to advance... After setting a new multi-year high of $41.80/bbl earlier in the session, crude oil futures are currently trading at $41.70/bbl, up $1.77 for the session... The oil services index is among the leaders to the upside, with the OSX index trading up 2.9% and staying at its best levels of the morning, while the broader market is struggling...

The market has been focused on crude oil of late, but the real impact of the increasing price of the commodity needs to be kept in perspective... Please read The Big Picture column for more details...NYSE Adv/Dec 2075/1091, Nasdaq Adv/Dec 1707/1274

[UpInArms]

26. Market Numbers at 2:38 EST (and blather)

Dow 9,945.94 -20.80 (-0.21%)
Nasdaq 1,920.02 +7.93 (+0.41%)
S&P 500 1,093.79 +0.23 (+0.02%)
10-Yr Bond 4.742% -0.022

2:30PM: Having dipped over the past half an hour, the market carries on with its spiritless trade... Although the current standing for the major averages is far from disappointing seeing that the indices are little changed, it is rather uninspiring considering the market's early gains, which took the Nasdaq higher by as much as 1.2%... As has been the practice of late, the market's advances are being used as opportunities to lighten positions, with buyers, for the most part, sticking to the sidelines...

Participants' lack of conviction is reflected in moderate-at-best volume totals, which are running at a lighter pace than the levels exhibited last week...NYSE Adv/Dec 2240/989, Nasdaq Adv/Dec 1815/1254

2:00PM: With the major averages having erased the bulk of their earlier gains, buyers have re-emerged on Wall Street, driving the market off its earlier session lows... It remains to be seen whether the market's upward momentum, exhibited over the past hour, is sustainable... Yet, the breadth figures are favorable... To that effect, advancers are leading decliners by a roughly 2-to-1 degree on the NYSE and 3-to-2 degree on the Nasdaq, while up volume is outpacing down volume by a 2-to-1 margin on the NYSE and a 3-to-1 margin on the Nasdaq...

The ratio of new 52-week highs to new lows remains uninspiring, with 25 and 52 new lows on the NYSE and Nasdaq, respectively, juxtaposed with 20 and 54 new lows...NYSE Adv/Dec 2246/967, Nasdaq Adv/Dec 1823/1203

[54anickel]

22. URGENT: US-British draft resolution allows Iraqis to control oil funds

http://news.xinhuanet.com/english/2004-05/24/content_1488052.htm

UNITED NATIONS, May 24 (Xinhuanet) -- A draft UN resolution presented on Monday by the United States and Britain will give thecontrol of Iraqi oil revenues back to a provisional Iraqi government, which is due to take over power on June 30.

The draft says the Iraqi Development Fund, where its oil revenues are deposited, "shall be disbursed at the direction of the interim government of Iraq and its successors.

But the draft also stipulates that the spending of the money shall be monitored continuously by the International Advisory and Monitoring Board.

[Frodo]

24. Is this a bad thing?

What are the alternatives?

[54anickel]

29. I don't think it's a bad thing, but it's a 180 by Shrubco and that makes

it big news I guess.

[54anickel]

23. US dollar weakness expected to continue

http://www.newratings.com/new2/beta/article_425655.html

LONDON, May 24 (New Ratings) – Analysts at JP Morgan Securities expect the US dollar to remain weak in the medium term.

In a research note dated May 21 and published this morning, the analysts mention that the recent uptrend in the US dollar is not sustainable in view of the currency's long positions versus the euro. Expectations of increased production by the OPEC have resulted in the strong support for the Japanese yen and commodity currencies, the analysts add. Moreover, the ability of the US to attract long-term flows continues to be limited, according to JP Morgan Securities. The latest US treasury portfolio flow report reveals record selling of US equities by foreign investors, against a record trade deficit, the analysts add.


Buck is sliding a bit this morning:

Last trade 90.59 Change +0.10 (+0.11%)

Open 90.77 Previous Close 90.49

High 90.95 Low 90.49

[54anickel]

28. Dollar flat but edges off two-week lows

I was going to post this before I was suddenly called away. A bit late, but what the heck.

http://cbs.marketwatch.com/news/story.asp?guid=%7B71C5E571-44E9-4236-98CE-EAFA9984996A%7D&siteid=google&dist=google

The greenback had managed to claw its way off last week's two-week lows against the euro and the yen when stocks rose initially, but uncertainty about oil production soured early stock gains and kept the greenback narrowly confined.

"Developments in the oil market will be of some interest, with equities so far perking up globally on prospects of increased supply from the Saudis," said foreign-exchange analysts at Web-based research firm, Action Economics. "We look for recent dollar trading ranges to hold up."

U.S. stocks rose after Saudi Arabia said it would increase oil production, but its commitment to opening the crude spigots wasn't yet carried over to other OPEC producers. OPEC will make a formal ruling at its June 3 meeting.

snip>
If eye-popping energy bills sap consumer spending, the Federal Reserve could be less inclined to raise U.S. interest rates, an expected move that had helped the dollar gain for much of the past month-plus. At the same time, higher energy prices might raise global inflation levels, which could prove dollar supportive.

snip>
No U.S. economic reports were scheduled for release Monday and Federal Reserve speeches would come later in the week. The dollar continues to be underpinned, against the euro in particular, on prospects for rising U.S. interest rates this year. But the market needs new confirmation from data or Fed comments that U.S. rate hikes will come sooner rather than later.

Higher rates would narrow the interest-rate differential between the Federal Reserve's 1 percent target and the European Central Bank's 2 percent target, boosting the allure of dollar-denominated assets in the eyes of foreign investors.

more...

[54anickel]

27. Closing numbers and da yada

Dow 9,958.43 -8.31 (-0.08%)
Nasdaq 1,922.98 +10.89 (+0.57%)
S&P 500 1,095.41 +1.85 (+0.17%)
10-yr Bond 4.740% -0.024
30-yr Bond 5.436% -0.024

NYSE Volume 1,226,719,000
Nasdaq Volume 1,379,384,000

Close Dow -8.31 at 9,958.43, S&P +1.78 at 1,095.34, Nasdaq +10.89 at 1,922.98: Today's session offered yet another instance of the "one step forward, two steps back"-kind of trade that the market has been dealt over the past two months... After gapping higher at the open on optimism that Saudi Arabia is committed to raising its crude oil output by 8% at the June 3 OPEC meeting, the market lost its traction as participants speculated that the potentially increased supply of the commodity would be insufficient to meet the rising demand... As a result, the price of crude oil spiked to a new multi-year high of $41.82/bbl, while the market backed off its opening highs...
Also dampening participants' enthusiasm was the Nasdaq's failure to lift above its two-week range top at 1937... These factors, combined with traders' lack of conviction to the market, as demonstrated by the anemic volume totals, led to the market's meltdown through the morning, although the major averages managed to close off their respective session lows... The bulk of the sectors ended the day in the green, with leaders to the upside including the hardware, networking, telecom, gold, REIT, industrials, oil services, transportation, coal, and utility groups...

The tobacco sector was among the few notable laggards after a federal judge refused to limit the $280 bln worth of fines the government is seeking at a trial due to start in September... Elsewhere, the bond market was little changed, with the 10-year note up 5/32, bringing its yield down to 4.73%...NYSE Adv/Dec 2404/904, Nasdaq Adv/Dec 1939/1167

3:30PM : With half an hour of trade remaining, the major averages remain stuck in the same trading ranges in which they have spent the bulk of the afternoon... Crude oil remained on the front burner in today's session, as the price of the commodity set a new multi-year high of $41.82/bbl in the midst of concerns that even the promised Saudi Arabian production rise and a possible OPEC quota increase won't be sufficient to meet rising demand... Interestingly, for all the talk of inflation generated by the climbing price of energy, the price of gold has been declining over the past month...

After trading as high as $433/oz on April 1, the price of gold is at $385.70/oz in today's session... The recognition of a strengthening economy has boosted the dollar against the euro, putting a damper on demand for the dollar-priced gold...NYSE Adv/Dec 2301/971, Nasdaq Adv/Dec 1842/1250



Advances & Declines
NYSE Nasdaq
Advances 2395 (69%) 1939 (59%)
Declines 920 (26%) 1167 (35%)
Unchanged 135 (3%) 166 (5%)

----------------------------------------------------------------------

Up Vol* 823 (67%) 943 (66%)
Down Vol* 376 (30%) 455 (31%)
Unch. Vol* 27 (2%) 24 (1%)

----------------------------------------------------------------------

New Hi's 31 60
New Lo's 27 64


Have a great night Marketeers! :hi: