STOCK MARKET WATCH, Thursday 18 March

[ozymandius]

Thursday March 18, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 311
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 97 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 150 DAYS
WHERE ARE SADDAM'S WMD? - DAY 361
DAYS SINCE ENRON COLLAPSE = 845
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 17, 2004

Dow... 10,300.30 +115.63 (+1.14%)
Nasdaq... 1,976.76 +33.67 (+1.73%)
S&P 500... 1,123.75 +13.05 (+1.17%)
10-Yr Bond... 3.68% -0.01 (-0.14%)
Gold future... 407.10 +4.50 (+1.12%)

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

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

[54anickel]

1. Great toon Ozy!! Futures are not looking to bright today, huh?

[ozymandius]

2. Looks like it may be profit-taking day.

Off to find some news...

[54anickel]

6. Bloomberg surveys don't point to much happy, happy, joy, joy news

http://quote.bloomberg.com/apps/news?pid=10000103&sid=ak5mdmCaNP6o&refer=news_index

snip>
The estimate for last week, based on the median of 40 forecasts in a Bloomberg News survey of economists, compares with 341,000 a week before and an average of 349,000 so far this year. Claims last year averaged 403,000. The report will be issued at 8:30 a.m. Washington time.

snip>
...The failure of the economy to generate new jobs is eroding optimism among the public as President George W. Bush campaigns for re-election in November.

``The combination of small gains in employment and compensation will make it hard for consumers to keep spending,'' Martin Mauro, a senior economist at Merrill Lynch & Co. in New York, said in a note to clients. Household spending accounts for 70 percent of the economy.

A report at 10 a.m. from the Conference Board may show that its index of leading economic indicators, a gauge of expected growth over the next three to six months, increased 0.1 percent in February. The index rose 0.5 percent in January and hasn't increased as little as 0.1 percent since September.

snip>
A gauge of manufacturing for eastern Pennsylvania, southern New Jersey and all of Delaware may show that the pace of expansion cooled this month. The Federal Reserve Bank of Philadelphia's regional manufacturing index is expected to decline to 29 for March from 31.4 in February, according to the median of forecasts.

The expected reading would be the lowest since 27.9 in November, although any number higher than zero still indicates growth. The report is set for release at noon Washington time.

Figures on producer prices for January, delayed for almost a month, are to be released at 8:30 a.m. at the Labor Department. The government had put off the report because of ``unexpected difficulties'' converting data to a new classification system, the department said. The report on February producer prices, originally due March 12, has yet to be rescheduled.

In January, the producer price index may have risen 0.4 percent after rising 0.3 percent a month earlier, according to the median of forecasts. The core, excluding food and energy, probably rose 0.1 percent in January after falling 0.1 percent in December, the survey showed.

snip>
The labor market has emerged as a central issue in this year's presidential election. Bush says that tax cuts are supporting consumer spending and business investment, which will help generate demand for more workers. His Democratic rival, Massachusetts Senator John Kerry, has hammered on the economy's loss of 2.3 million jobs since Bush took office.

U.S. consumer sentiment fell in March for a second month, reflecting a rise in pessimism about the job market, a survey by the University of Michigan found.

more...

[ozymandius]

3. WrapUp by Mike Hartman

Provocative, Ponderous…

<cut>
On most days I weary myself trying to figure out where things are headed with stocks, bonds, currencies and commodities. This business of predicting the future direction of prices is not an easy task. It’s a complex world we live in, and even more complex when analyzing the inter-market relationships of the various asset groups. Many of the old rules seem to have been tossed out the window. The first that comes to mind is the relationship between interest rates and commodity prices. Normally, rising commodity prices are associated with rising interest rates due to inflationary pressures. Today we see commodity prices going through the roof, while interest rates remain at their lowest level in nearly a half-century. Clearly we see the disconnect. Low interest rates have been attributed to the notion that we have very little inflation which is a complete farce! I will attempt to give my rational without becoming too cynical, but it will be a challenge!

So Much For Keeping a Low Profile (on my thoughts)

It is my opinion that the Feds knew exactly what they were doing back in 2000 when they caused the stock market to crumble by raising short-term interest rates ABOVE long-term interest rates. There is only one infallible economic indicator, an inverted yield curve. If recollection serves me, there have been eight times in the last century we have witnessed an inverted curve (short rates higher than long-term rates). Every single time the yield curve goes upside-down the stock market has headed south, just as the mighty bull of the nineties came to a screeching halt in 2000. I’m expecting some nasty emails by suggesting the Feds caused the crash in 2000, and likewise attributing today’s stock gains to their “propping up” the markets. Before you blast me, you should take some time to examine the evidence. It’s a “given” so just go with it!

A Few Easy Links to the Evidence

Without beating a dead horse, please start with the Executive Order written by President Reagan back in 1988. The Executive Order established the Working Group on Financial Markets, otherwise known of as the “Plunge Protection Team.” The most comprehensive site I know of is the “Plunge Protection Page” by FallStreet.com. The group consists of the President, the Chairman of the Federal Reserve, the Secretary of the Treasury, the Chairman of the Securities and Exchange Commission, and the Chairman of the Commodity Futures Trading Commission. Look at the horsepower behind these offices and you must believe they have the resources to “influence” the markets. As a brief side-note, I’m optimistic enough to believe the PPT was established to prevent a market event similar to the crash of 1987, but since that time they have become “proactive” in manipulating the markets to further their agendas.

<cut>
Enough of That Stuff

By now, most of you should be saying, “Okay fine, so what if they do intervene in the markets? What should we do with that information?” A quick answer comes by way of the cliché, “Don’t fight the Fed!” In other words, think about what the Fed can actually accomplish by way of intervention, and invest along with them, or go around them. I believe it is more advantageous to go around them by investing in items they cannot control forever. In terms of “paper assets” such as stocks and bonds, they probably have much more control than we would like to believe, so go around them with tangible assets. Remember that theoretically they have an unlimited supply of money since they can create it out of thin air. You need to invest in things they cannot create out of thin air.

too much good stuff

[ozymandius]

5. Recall this opening volley from Tuesday's WrapUp

Business as Usual

The Fed ruled the day’s trading as they held a policy-setting committee meeting today. Volumes in the indexes were very light as most traders sat on the sideline waiting to see what it was the Fed would say this time. The central bank statement, once released, reiterated the need for an “accommodative” monetary policy, and also preserved its wording about the inflation outlook, saying the risks of deflation and rising prices as almost equal.

After the statement was released, equity markets briefly surged and then quickly slid into negative territory, finally making a comeback in late trading, most likely a boost from some “unknown, large buyer.”

For anyone who poo-poos the notion of the PPT, I say that evidence is stacked heavily in the affirmative for its existence and active participation in the markets.

[54anickel]

11. Heh-heh! KoKo and I must be physic!! -

There are many out there that passionately scream of the market manipulations and the fleecing of the public. There are even those that describe the stock market as a “wealth transfer mechanism” designed to line the pockets of insiders. :evilgrin:

[54anickel]

15. We'll have to see what the reaction to the PPI ends up being -

From the article:

Another note on the inflation front comes today from the Labor Department. They have finally come up with a number to report for the January Producer Price Index that is more than a month overdue. I promised to guard my cynicism, so let’s just say they figured out a way to demonstrate no inflation while commodities prices head for the moon. The number will be announced tomorrow. All eyes should be watching to see the impact on interest rates. My best guess says the number will be in line with the CPI announced today, otherwise bond prices head decidedly south ushering in higher interest rates dictated by the markets. They just can’t allow that to happen now, or the proverbial economic recovery will be in jeopardy.

So far the economy has been kept alive with excess government spending, tax kickbacks to consumers, and abnormally low interest rates. Right now consumers are out there spending their income tax refunds which should last another month or so. After that well runs dry the consumer can always go for another round of cash-out refinancing on their homes since 30-year mortgage rates have dropped again to 5.37%. The Mortgage Bankers Association announced today that mortgage refinancing jumped almost 40% over the prior week. If rates can remain low, there could be enough extra cash to keep the consumer spending as we move closer and closer to the elections this fall.

[UpInArms]

17. that man's hiding his crystal ball

Mar 17 8:30 AM CPI Feb
reported 0.3%
projected 0.3%
anticipated 0.3%
January 0.5%
-

Mar 18 8:30 AM Core PPI Jan
reported 0.3%
projected 0.1%
anticipated 0.1%
December -0.1%

[54anickel]

21. Uh-oh, came in a bit higher - guess we need to watch for his "Otherwise"

scenerio. Could be a pretty bumpy ride today.

edit to add:
They are trying to blow it off in the early blather -

Have seen some improvement in the futures market in the wake of PPI and claims data... former seems to be getting passed over in recognition of its dated status and understanding that yesterday's CPI data is a fresher and more relevant (as far as the Fed is concerned) inflation reading.

[54anickel]

39. A more in-depth tech analysis pointing to the same outcome

http://www.gold-eagle.com/editorials_04/bloom031604.html

This article is highly technical in nature and may be difficult for some readers to follow. For this reason, a summary of the article and its conclusions are set out by way of introduction:

* Although a Dow Theory sell signal has recently been given by the markets, the Relative Strength charts are saying that the Dow is not yet ready to go into free fall

* The "fear factor" that has been plaguing the markets is therefore likely to recede in the short term, causing commodities, oil and gold to pull back from their currently (long term) overbought situations

* The primary reason that the Dow will not (yet) go into free fall seems to be that the Establishment still has some weapons in its arsenal. However, based on the low velocity of money, these weapons seem more likely to be related to political "jawboning" rather than being driven by Fed actions. Expect a steady stream of "feel good" news over the months ahead.

* This feel good news is also likely to underpin a continuing (short term) rise in the US Dollar

* Given that increased corporate profitability in the recent reporting periods has been significantly impacted by "apparently" improving streams of income from overseas (in reality more US Dollars for the same foreign currency earnings), a rising dollar is likely to have the opposite impact - ie it will place a cap on earnings growth. This is not likely to be well received by the markets

* Insider selling has been extraordinarily high in recent months, indicating that managements can already see the writing on the wall, and cannot see a continuation of the currently rising trend in profitability

* At some point in the next few weeks or months, when all the jawboning is behind us and deteriorating profits start to set in, the Dow Jones seems likely to go into free fall

*At that point, the "fear factor" will probably begin to re-emerge, and gold, oil and commodities will continue their Primary Rising Trends. The US Dollar is likely to reverse back down as foreigners begin to pull their capital out, and Bond Yields will start to rise.

*When the gold price finally breaks decisively above the $400/ounce level it seems likely to continue strongly upwards as it begins to become generally perceived as a safe haven. Because of the thinness of the gold market, the gold share market stock is likely to be difficult to acquire, and prices will start to rise strongly as a result.

more...

[UpInArms]

4. daily dollar watch

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

Last trade 88.32 Change -0.33 (-0.37%)

related articles:

http://quote.bloomberg.com/apps/news?pid=10000080&sid=augXXC9q_fyI&refer=asia

Yen Trades Near 4-Week High; Japan May Restrict Currency Sales

March 18 (Bloomberg) -- The yen was trading near its highest in almost four weeks against the dollar in Asia on speculation Japan will restrict sales of its currency to slow its ascent rather than weaken it.

The yen has gained as foreign buying of Japanese shares helped push up the Nikkei 225 Stock Average 44 percent in the past year. Overseas investors bought 129.6 billion yen ($1.2 billion) in Japanese stocks last week, after they bought more shares than any week in the past three years the previous week.

``Rather than drawing a line in the sand, they're smoothing the yen's move,'' said Peter Clay, currency strategist in Sydney at ABN Amro Holding NV. Given overseas investment in Japanese assets, ``the only true direction for the yen is up.''

<snip>

The government has sold record amounts of its currency to stem the yen's gains to protect its export-led recovery. Japan's yen sales are ``aimed at preventing speculative moves'' and ``not to weaken the yen,'' Finance Minister Sadakazu Tanigaki said yesterday.

Money Flow

Demand for the yen also increased as a Finance Ministry report said Japanese investors sold 1.11 trillion yen in overseas bonds and sold 200.7 billion yen in overseas stocks during the week ended March 12.

``Japanese investors may have sold assets to lock in profits ahead of the March 31 financial year end,'' said Xinyi Lu, chief strategist at UFJ Bank Ltd., a unit of Japan's fourth-biggest lender. ``Both foreign and Japanese investors' money flows are adding upward pressure to the yen.'' Japan's currency may rise to 105 per dollar and 130 per euro by the end of March, he said.

Bank of Japan Governor Toshihiko Fukui said Tuesday consumer spending is growing faster than expected, helping the central bank maintain its evaluation that the world's second-biggest economy is ``recovering gradually.''

...more...


http://www.forbes.com/home_asia/newswire/2004/03/17/rtr1303079.html

Yen steadies versus dollar after intervention test

excerpt:

INTERVENTION OVER?

Speculation was growing that Japan is rethinking its intervention policy because of concerns about exposure to domestic interest rate rises, which would drive up funding costs, and worries about losses on ballooning holdings of U.S. Treasury securities.

Earlier this week, Finance Minister Sadakazu Tanigaki said Japan would not intervene "simply out of habit", while top currency diplomat Zembei Mizoguchi reiterated on Thursday that Tokyo had not changed its stance on foreign exchange rates.

Traders said the authorities might be waiting for the unwinding of long positions in the dollar that had built up after it recently shot up to 112 yen.

"As soon as the (long) positions are lightened, I bet Japan will intervene again to prop up the dollar/yen for book closing," said Mitsuo Imaizumi, deputy general manager of the international bond and forex department at Daiwa Securities SMBC.

Japanese corporations close their books for the 2003/04 fiscal year on March 31, and Japan is seen keen to avoid any spike in the yen until then. Such a jump would bite into the overseas earnings of the country's export giants.

The yen also rose against other currencies, such as sterling, and analysts cited unwinding of high yielding foreign currency denominated bonds for repatriation ahead of book closing.

...more...

The unemployment claims and leading indicators report are due today - tomorrow we get to the the numerical manipulation of the January PPI - that should be interesting - the futures are not so shiny today - is that witchy hunting thingy over?

Have a great day Marketeers! :hi:

[54anickel]

8. Mornin' UIA. Interesting moves (lack thereof) by the BoJ these days

Do you suppose 105 was their fiscal year end target all along? I remember reading that a while back before the raised terror alert helped to drop the yen and their continued intervention gave them quite a good sized cushion. Either way, the rest of the month should be interesting for dollar watching.

That "witchy hunting thingy" is tomorrow, so there could be all kinds of strange stuff going on today as everyone continues to re-position. There better not be too many surprises in todays reports, especially the long awaited PPI. I'm sure that one will come in right at expectations at such a bewitching hour.

Noticed another 1:00 am big move in gold, silver & platinum again today. Wonder if they'll repeat at 1:00 pm again as well.

[ozymandius]

7. Good morning all. Not going to be around much today.

In fact, this may be my last post. I have a full day ahead as I tie up more loose ends with my woodshop. Then I must follow-up on the job interview from Tuesday.

Thanks to all for keeping the numbers fresh and the commentary rapier-sharp. I look forward to spending more time with you all tomorrow.

:donut: :donut: :donut: :donut: :donut: :donut: (and of course, donuts and coffee to start the day)

Have a great day at the managed casino!

Ozy :hi:

[54anickel]

9. Bye Ozy, have a great day! Hope you can watch the witches with us

tomorrow. :hi:

[UpInArms]

18. bye Ozy!

:hi:

like 54anickel says - we should bring our brooms tomorrow :evilgrin:

[Frodo]

10. DID THE PPI JUST GET REPORTED???

I thought we were going to get a day's warning?

Core PPI (Jan) .3% (expected .1%)
PPI (Jan) .6% (expected .4%)

http://biz.yahoo.com/c/e.html

[54anickel]

12. We did. They announced it yesterday.

[Frodo]

13. Ah. Ok. Did they give us a basis for comparison?

Or is it already normed to work "apples to apples"?

[54anickel]

28. Hey Frodo, where ya been lately anyway? Haven't seen you around

for a while. Nice to see you back. :hi:

[Frodo]

52. Been away from the internet for awhile.

Business travel etc.

Glad to be back, but it will be sporadic for awhile.

[54anickel]

56. Mountain of work piled on your desk? I always hated when that happened.

[Frodo]

59. "MountainS of work"

And I hate it too.

[UpInArms]

14. here's an article on the PPI

http://cbs.marketwatch.com/news/story.asp?guid=%7B497FA8AB%2D1ACF%2D4C30%2D8A83%2DCE22D2EB4D23%7D&siteid=mktw

PPI up 0.6% in January
Energy prices rise 4.7%; core rate up 0.3%

By Rex Nutting, CBS.MarketWatch.com
Last Update: 8:36 AM ET March 18, 2004

WASHINGTON (CBS.MW) - U.S. producer prices rose 0.6 percent in January as energy prices jumped 4.7 percent, the Labor Department said Thursday in a report that was delayed for more than a month.

The core rate for the producer price index - excluding food and energy costs - rose 0.3 percent in January.

Economists were expecting the PPI to rise about 0.4 percent in January after the 0.2 percent gain in December, according to a survey conducted by CBS MarketWatch. The core rate was expected to rise 0.1 percent after falling 0.1 percent in December.

The report was delayed because the government agency had difficulty switching to a new industrial classification system. The February release has not been scheduled yet.

Wholesale gasoline prices soared 14.1 percent in January. Heating oil costs rose 16.8 percent.

...more...

[UpInArms]

22. what's with the exclusion of food and energy?

here's a link to the breakdown on December's report

ftp://ftp.bls.gov/pub/news.release/History/ppi.01142004.news

and although it shows those as categories, it does not exclude them from the PPI amount

[UpInArms]

24. looks like the market readers are not accepting

that .3% number

http://www.thestreet.com/_tsclsii/markets/marketfeatures/10149495.html

Producer Prices Spike in January

By TSC Staff
3/18/2004 8:59 AM EST


The government's much-delayed report on January producer prices might have been worth the wait, as the
data was full of surprises, including a larger-than-expected jump in the core rate to 0.3%.

Economists had forecast a 0.1% increase in prices, minus food and energy costs. The overall rate rose 0.6%, also well above the consensus expectation, which was 0.3%. Energy prices rose 4.7%, driven by a double-digit jump in gasoline.


After much smaller gains in December, when the headline and core rates rose 0.2% and 0.1%, respectively, the January readings could ring inflation alarms, especially with crude oil prices hitting a 13-year high Wednesday.

But the very reason for the report's delayed release may also warrant a more studied interpretation and tempered reaction. The Labor Department changed its industry classification system, which may make comparisons initially difficult, especially because the release of February data, which was originally scheduled for this week, has been postponed indefinitely.

...more...

[54anickel]

26. So it's not apples to apples? You can't compare the data to previous

reports but trust us there's no inflation? :wtf:

[54anickel]

25. Hmmm, that's interesting. Must be that new fangled computation.

Probably a good thing they took that out for the future calculations. See what wheat did yesterday.

[KoKo]

47. Everyone's so polite about the "delayed PPI" reports...it's incredible,

when it's obvious they are holding them back because the numbers would contractict everything they are saying about "inflation" not existing and Greenspan would be looked on as a liar for the Administration.

It's unbelievable that no one except the folks at Financial Sense and a few other online sites will tell the truth about what "Our Own Eyes," "wallets" and "monthly bills" tell us!

It's incredible how they get away with everything! With only what they call the "finge conspiracy theorists" calling them out on their lies and obfuscations, cover-ups and frankly, I think, criminality! Holding Government numbers Hostage? Maybe Ted Koppel needs to do a "Day 80 something, PPI Held Hostage by Bush Government Operatives."
----
I just got online and this was where I headed to read all the fine articles linked from this a.m. and I'm telling you the steam is coming out of my ears! Mike Hartman's article, the article from "Gold Eagles" and others, are just so damining of this manipulation! And, the Repugs carry on about how they are for "Free Markets!" Sheesh! I need a banner which says "Free Our Markets from Bush Tyranny!" What's sad though, is that it isn't just Bush that's responsible for this. Hartman makes a good point about Reagan's 1988 Executive Decree for the PPT. It's been going on for awhile but the Bushies have got us spread so thin it's going down hard when it goes. Probably worse than the 2000-01 bottom fall out, because it's so spread out now. I don't even want to think of housing and consumer credit.

I will take a break and come back and read the rest just to cool my head down :D

[54anickel]

57. Whoa KoKo, didn't mean to get your blood boiling today. Here, sit

relax. Let's chill out over a frosty one together.

:beer: :toast:

[Robbien]

68. It is shameful that in the mainstream media articles the PPI

is being hidden as an "oh by the way" comment under the cheerleading headlines of the jobless drop. So the masses are generally unaware that PPI went up .6, that is 7.2% annualized if costs remain constant! And of course to make that number appear even smaller, they take out those non-essentials such as food and energy. Who uses food and energy on a daily basis? Anyone?

[54anickel]

69. This maladministration has no shame. They are ruthless, greedy

bastards transferring as much wealth to themselves and their cronies as possible before the entire house of cards crashes down.

[54anickel]

16. Blather on the futures and PPI effect (dropping)

8:58AM: S&P futures vs fair value: -3.7. Nasdaq futures vs fair value: -7.5. Futures indications sink back towards the earlier lows, and continue to point to a noticeably lower open for the cash market... Sharp losses across the Asian and European indices, news that MSFT failed to reach an agreement with the European Union, and the decent run in US stocks over the past two days have all diminished the appeal of buying.

8:38AM: S&P futures vs fair value: -2.7. Nasdaq futures vs fair value: -4.0. Have seen some improvement in the futures market in the wake of PPI and claims data... former seems to be getting passed over in recognition of its dated status and understanding that yesterday's CPI data is a fresher and more relevant (as far as the Fed is concerned) inflation reading... meanwhile, modest drop in claims and 4-wk avg. are helping mood with respect to outlook for labor market

8:04AM: S&P futures vs fair value: -3.2. Nasdaq futures vs fair value: -8.5. Cash market poised for a lower open as the futures, relative to fair value, remain entrenched in negative territory... A weak showing from foreign indices, skepticism over the sustainability of the recent rebound effort, and news that Microsoft (MSFT) failed to reach an agreement in settlement talks with the EU have contributed to the bearish bias

[54anickel]

19. Whoa, Look at gold - and the dollar is up from UIA's early report -

What gives? Another bombing somewhere?

UD$
Last trade 88.40 Change -0.25 (-0.28%)

Settle 88.65 Settle Time 23:34

Open 88.24 Previous Close 88.65

[54anickel]

20. From 7:00 Forex news report

http://www.forexnews.com/NA/default.asp

The dollar continued its decline against the yen on Thursday, breaking below key support at 108 and falling to a session low of 106.60. The yen registered the largest 4-day rally against the dollar in six months, which from the perspective of the Japanese must seem volatile. Yet there has been no intervention since Monday. The precipitous drop through key support at 108 yen today also has traders wondering why the Japanese alerted the markets to a possible end of their yen selling campaign after record intervention this year and last led only to an uncertain success earlier this month.

Sterling was also higher, rising to a one week high of 1.8280 while the dollar was range bound against both the euro and Swiss franc. Gold rose to a session high of $408 this morning, shrugging off the dollar’s strength against the euro and holding above its one year uptrend at $395. While it is too early to tell, it may be that gold is moving on its own bullish fundamentals and not simply following the dollar anymore.

snip>
Also of import will be the belated release of the January PPI figure. Recall that the BLS has held back this figure for two months because it said its old computers are not capable of handling the "reclassified" data. Our question has been whether they are having trouble reclassifying a surge in commodity prices with the official mantra that inflation is too low. Recall that the Philly Fed prices paid index soared to a 10-year high last month. The last time the index was this high the federal funds rate was nearly 6%.

Commodities Reach New 20-Year High

The CRB reached a 20-year high of 281 yesterday, just under its 1984 high of 283 and the exact 61.8% retracement of the decline from 335 to 185. The CRB has run 53% in 2 years, its strongest gain in 30 years. Above 285 would target the all time high of 335 last seen in 1980 and fuel inflationary expectations. But if commodities were to stall at this significant barrier a larger relief rally in the dollar may be in store.

[Layman]

34. Japanese Face

There's a piece on gold-eagle.com by a John Lee that basicly says the Nipponese are fed up with the Fed. The BoJ warned them last month with a shot across the bow about buying gold and then the other day saying they were finished supporting the dollar by selling the yen. Lee posits that if the Fed didn't take the hint and raise interest rates at the their meeting then the BoJ has decided to fuck'em though of course they're much too polite to say that in public.

[54anickel]

35. Thanks Layman. I missed that one. Here's the link.

http://www.gold-eagle.com/editorials_04/lee031904.html

snip>
We visited Japan also. Japanese in our view are deliberate, they like to save face. They avoid confrontation, and instead they drop hints.

We don't think it's a coincidence that JCB came out one day before the Fed's rate announcement to make news. They were politely asking the Fed to raise interest rate to support the dollar. Failure to respond they hinted, the Fed would risk a plunge in the dollar index. JCB even specified a deadline for the Fed to act - the end of March.

In fact, we believe this was the second warning to the US government to put its house in order. The first warning came on January 28th when the following made headlines.

"Japan says to cautiously consider gold in reserves"

Again, you have to be quite mentally-challenged to declare the intention to buy gold, especially when you have USD $500billion in your pocket.

The Fed has essentially stuck its high nose at the JCB. We doubt that the Japanese will take this arrogance lightly. In the short term however, we don't expect JCB to stop buying the dollar anytime soon.

[UpInArms]

27. the dollar continues to slide

Last trade 88.19 Change -0.46 (-0.52%)

[54anickel]

29. Ewww, big drop starting at 9:00 am by the chart. Yen up to 106.5

as well.

[54anickel]

31. COMEX gold hits 1-month high on Iraq blasts

NEW YORK, March 18 (Reuters) - COMEX gold rose above $410 an ounce for the first time in almost a month Thursday, after two deadly bombings in two days in Iraq brought the precious metal back in fashion as a safe-haven.

April gold <0#GC:> at 9:11 a.m. EST was up $3.80 at $410.90 an ounce, its highest price since February 20.

[UpInArms]

32. look out below!

Where's that BoJ when you need them :shrug:

Last trade 87.85 Change -0.80 (-0.90%)

[54anickel]

33. Yen at 106.61 Making the traders and Snow sweat a bit?

[UpInArms]

23. numbers at 9:45 EST

Dow 10,274.74 -25.56 (-0.25%)
Nasdaq 1,969.71 -7.05 (-0.36%)
S&P 500 1,120.46 -3.29 (-0.29%)
10-Yr Bond 3.737% +0.054

[54anickel]

30. 10:34 update

Dow 10,248.82 -51.48 (-0.50%)
Nasdaq 1,959.57 -17.19 (-0.87%)
S&P 500 1,117.69 -6.06 (-0.54%)
30-yr Bond 4.674% +0.029

NYSE Volume 278,402,000
Nasdaq Volume 397,502,000

Blather hasn't been updated since 10:00 - perhaps at a loss for words.

10:00AM: Indices hold in fairly stable range...the stronger-than-expected 0.6% in January PPI has had surprisingly little influence, although the 10-year note is down 8/32 to yield 3.74%...the drop in new claims for the week ended March 13 to 336,000 also had little impact although it is data for the week in which the March employment survey was conducted and reflects a continuing decline in layoffs...SOX semiconductor index has turned slightly negative...

[UpInArms]

36. numbers and blather at 11:02 EST

Dow 10,240.24 -60.06 (-0.58%)
Nasdaq 1,958.90 -17.86 (-0.90%)
S&P 500 1,117.32 -6.43 (-0.57%)
10-Yr Bond 3.727% +0.044

10:25AM: Indices head south, not long after the Leading Indicators Index comes out as unchanged...that was near expectations and almost all of the components have been previously released, and the market doesn't typically react to the release...Microsoft (MSFT 24.75 -0.38) and the SOX semiconductor index (SOX 483.87 -3.22) have both turned lower...gold is the only stock sector of significant strength as losses are widespread, but generally shallow...NYSE Adv/Dec 1051/1747, Nasdaq Adv/Dec 892/ 1741

[54anickel]

38. Guess reports don't matter during the witching season. Yeah that's it

it's that MS/EU deal messing things up today. :eyes:

[54anickel]

37. 750 is an Important Number for the S&P500

http://www.gold-eagle.com/editorials_04/shepherd031504.html

snip>
I went to the S&P 500 website to have a look at the PE ratio. What I found using AS REPORTED figures (i.e. the GAAP figures for the last 4 quarters) were earnings of $49.08. Now on December 31 2003, the S&P 500 closed with a reading of 1111.92. So we had a PE ratio of 22.65. It is now slightly higher. For a perspective of the importance of PE ratios throughout history, please read Joe Miller's excellent article at Gold-Eagle.

We know from the historical perspective that a PE ratio of 20 is overvalue, a PE ratio of 15 represents fair value, and a PE ratio of 10 is undervalue. We also know that Bear markets normally end at PE ratios slightly below undervalue around about 7.

We know that earnings for the S&P 500 are currently $49.08

PE20 = 981.6 OVERVALUE
PE15 = 736.2 FAIR VALUE
PE10 = 490.8 UNDERVALUE

The important figure is that at fair value we have an S&P500 reading of 736.2 which is very close to the long-term trend line at approximately 750 drawn above. It is as if the bubble never actually happened!!!! EVERYTHING POINTS TO 750 AS A VERY IMPORTANT FIGURE AS IT NOT ONLY IS THE NATURAL CONTINUING TRENDLINE, BUT IT ALSO REPRESENTS A PE AT FAIR VALUE.

This tells me that this new mini Bull market is not the real thing as not only was it launched from a historically high PE ratio and is largely a creation of sacrificing the USD to buy earnings. For example if McDonalds sell a meal in Paris and makes 1 Euro of Profit or EARNINGS when the exchange rate was 1 to 1, they have 1 dollar of earnings. They now make the same 1 euro profit, but at an exchange rate of 1 to 1.25 they have 25% more dollars an extra 25% of dollar denominated profit over the previous year.

It seems to me that most of the so-called earnings recovery has largely been made by cost cutting and more importantly currency gains. Now if interest rates rise that will not only stop the relative decline of the dollar and therefore the prime source of recent easy earnings growth, but also increase financing costs on Americas massive corporate, Personal, and Government debt, it will also stop the Bond carry trade therefore leading to a bond sell off and a further increase in real rates as yields rise. NONE OF THIS IS GOOD FOR STOCK MARKET EARNINGS. Also can you imagine George and Alan raising rates in an election year knowing full well that it was a weak economy that did his father in!!!! I DON'T THINK SO. However If they don't raise interest rates, the dollar keeps sliding American consumers then ask 'why is everything getting more expensive, but you tell us inflation is so low already the official inflation figures look very massaged! (Talking of which has anybody seen the PPI figures recently?) Finally just maybe the long suffering FOREIGN purchasers of American bonds say enough is enough.

more...

[54anickel]

40. An important anniversary week - and with the witching thinging falling on

the same week.

http://www.gold-eagle.com/gold_digest_04/hamilton031504.html

This week was a fascinating multi-pronged anniversary in the equity markets. Exactly one year ago the war rally in US equities launched when Washington, DC began its operation to annex Iraq by bombing Baghdad on live television.

The war rally turned out to be one of the most extraordinary equity rallies witnessed in decades. Its magnitude and duration were unprecedented in many ways, especially when considering the blisteringly high valuations from which it erupted out of the blue a year ago this week.

The war rally proved especially vexing to contrarians, as many including I lost big bets on the short side last year when the rally powered relentlessly higher in brazen defiance of many proud and usually rock-solid sentiment indicators. Extreme greed not witnessed since the terminal months of the Great Bubble of the late 1990s fueled the powerful rally while sentiment indicators screamed to stay short the entire way up.

While we on the contrarian and bear side were gutted and filleted like fish by the war rally, the bulls rejoiced, and rightfully so. They are always happy to point out that the war rally was really technically a cyclical bull. And they boldly made the claim that the Great Bear of the early 2000s was rendered extinct by the war rally, even though general stocks never traded below 20x earnings or above 2% in dividend yields last March, traditional long-term topping, not bottoming levels.

Battered and bruised, we contrarians had no choice but to grudgingly accept the surreal and unnatural war rally, carefully biding our time and waiting for the popular euphoria to fade, as it always does. Even today a year later we still see rampantly overvalued markets trading near historical bubble extremes in P/E and dividend-yield terms, drenched in naked greed.

For some, particularly perma-bulls, twelve months of war rallying or cyclical bullying is enough to convince them that we are sojourning through a brave New Era where valuations are irrelevant, where buying any stock at any price at any time for any reason is always a bargain. We contrarians sure don’t buy this happy rationalization though!

This week marked a second, and far more important, anniversary as well. Four years ago, the US stock markets blasted to nosebleed bubble extremes in valuations never before witnessed in US history, even in 1929. Four years ago this week the bulls, just like today, happily argued that valuations were meaningless since a brave New Era was upon us. Who needs those dusty old laws of market history anyway when the markets are soaring, right?

more...

[54anickel]

41. Yen Surges Against Dollar, Euro as Japan Signals Less Sales

http://quote.bloomberg.com/apps/news?pid=10000080&sid=aVVYcpJbuqrM&refer=asia

snip>
``It is clear the Ministry of Finance is tolerant of higher levels,'' said Marvin Barth, a currency strategist in London at Citigroup Inc. who previously worked at the Federal Reserve. ``The question is how much further will they let it go? I'd say not a heck of a lot further. The last time we approached 105 they halted its ascent.''

Japan's currency jumped to 106.73 per dollar at 10:27 a.m. in New York from 108.29 late yesterday, according to EBS prices. It earlier touched 106.50, the strongest since Feb. 19, and has rebounded 5 percent from a five-month low of 112.33 on March 8.

The yen also rose to as strong as 130.77 per euro, the highest since Jan. 30, from 132.50.

Versus the euro, the dollar fell more than a cent to $1.2354 from $1.2236 yesterday as traders including Enrico Caruso, chief trader at currency hedge fund Tempest Asset Management in Irvine, California, said there had been speculation of a bomb scare in the rail tunnel between the U.K. and France. Police subsequently said they arrested a man on a rail line between London and Dover, under the Terrorism Act.

snip>
The yen gained against all 16 major currencies today.

The dollar is falling against the yen because ``the BOJ's not supporting it any more,'' said Daniel Katzive, a currency strategist at UBS Securities LLC in Stamford, Connecticut. ``It seems like they're going to allow it to relapse back to 105 but there's no guarantee.'' UBS's three-month forecast is 105 yen.

The gain accelerated after the yen rose beyond 107.90 per dollar, a so-called technical level watched by traders who use charts to predict price movements, said Minoru Shioiri, a senior foreign exchange manager at Mitsubishi Securities Co. in Tokyo.

Finance Minister Sadakazu Tanigaki said he isn't targeting a specific level. He spoke in the upper house of parliament, echoing comments he made yesterday. On Tuesday, he said the government can't sell yen ``forever.''

snip>
`Testing BOJ's Resolve'

``The market is testing the resolve of the BOJ'' to thwart yen gains, said Brian Taylor, chief currency trader at Manufacturers & Traders Trust, in Buffalo, New York, with $50 billion in assets. ``It's hard to see it breaking the 106 mark.''

more...

[UpInArms]

42. guess they mean bidness this time?

Last trade 87.54 Change -1.11 (-1.25%)

[54anickel]

44. Wonder how close we'll get to 86 today?

[54anickel]

54. Looks more like bidless bidness. :-)

[54anickel]

43. Dollar still on a dive - UIA, help me out with the Euro/Yen Am I reading

it correctly?

USD
Last trade 87.55 Change -1.10 (-1.24%)


Yen fairly steady against USD
FOREX:USDJPY
Last trade 106.8 Change -0.09 (-0.08%)


If I am reading this correctly, the Yen is dropping against the Euro?
FOREX:EURJPY
Last trade 132.23 Change +1.0 (+0.76%)

[54anickel]

45. 11:55 numbers

Dow 10,240.00 -60.30 (-0.59%)
Nasdaq 1,955.34 -21.42 (-1.08%)
S&P 500 1,116.63 -7.12 (-0.63%)
30-yr Bond 4.683% +0.038

NYSE Volume 518,580,000
Nasdaq Volume 697,458,000

11:25AM: The S&P 500 Index continues to drift lower, leaving it about 5 points down for the week...the Nasdaq is down about 30 points to this point...the weakest sector so far is mobile homes and RVs, as Winnebago Industries (WGO 29.85 -3.07) is getting hammered after coming in a penny light on earnings relative to expectations...gold is the only sector up more than 1%...the indices as of yet show little resilience...NYSE Adv/Dec 1030/1989, Nasdaq Adv/Dec 786/2097

11:00AM: The downward drift continues...higher oil prices, a great-than-expected increase in PPI, and the Microsoft-European Union spat...United Technologies (UTX 87.79 -1.01) is lower after re-affirming its 2004 guidance...the company said earnings would be $5.00 to $5.30 per share...Wall Street estimates are near $5.21...given recent strong guidance form firms such as GE and MMM, perhaps traders were looking for some good news...NYSE Adv/Dec 1029/1916, Nasdaq Adv/Dec 926/1893

[UpInArms]

46. numbers and blather at 1:01 EST

Dow 10,256.45 -43.85 (-0.43%)
Nasdaq 1,954.53 -22.23 (-1.12%)
S&P 500 1,117.84 -5.91 (-0.53%)
10-Yr Bond 3.713% +0.030

12:25PM: Indices near their lows of the day, as the negative tone generally persists...volume is low, with the NYSE under 600 million shares...after the close today, there are several significant earnings reports...Adobe Systems, 3Com, Nike, and Lattice Semiconductor are among those due to report...NYSE Adv/Dec 1007/2110, Nasdaq Adv/Dec 809/2151

dollar still sliding

Last trade 87.49 Change -1.16 (-1.31%)

Yen/Dollar 106.84

(and yes, the yen is sliding vs the euro)

(edited for html)

[54anickel]

48. Thanks for the clarification on the euro/yen UIA. Wanted to make sure

I was getting that up is down business correctly.

[KoKo]

50. Winnebago is a "Buy!" This stock will rocket like Gold when Bankruptcy

and Mortgage Defaults throw thousands out of their homes. To say nothing that we will have to be very mobile because of the constant job layoffs. With what one can scrape up if anythings left after financial disaster either buying the Winnebago and hitting the road to take advantage of "employment pockets" in the US, or moving into the "mobile home" will be the only alternative. I think I'll check out some of those "doublewide" companies in SC and GA that make those mobiles I'm always trying to avoid on I-95.

BTW, I'm not pushing Winnebago stock, and frankly they are too expensive for anyone in dire straights. Maybe a used camper with a "Pop Up" will be the only way to go. Commodities, water, food and portable housing. The new stocks for the future...:-(

[54anickel]

51. Nah, probably won't be able to afford the gas! 6 mule team?

[54anickel]

49. Post lunch rally based on news in Pakistan

Dow 10,272.08 -28.22 (-0.27%)
Nasdaq 1,958.82 -17.94 (-0.91%)
S&P 500 1,119.80 -3.95 (-0.35%)
30-yr Bond 4.689% +0.044

NYSE Volume 732,950,000
Nasdaq Volume 978,908,000

1:05PM: Reports that Al Qaeda are surrounded in Pakistan-Afghanistan border area give the markets a bounce...talk of institutional buying of S&P futures...

[54anickel]

53. Woo-hoo! The DOW breaks to the surface - must be that

talk of institutional buying (although they said in the S&P)

Dow 10,303.04 +2.74 (+0.03%)
Nasdaq 1,963.61 -13.15 (-0.67%)
S&P 500 1,121.78 -1.97 (-0.18%)
30-yr Bond 4.695% +0.050

[54anickel]

55. Man, the S&P got 1 penny above the waterline then took another dive.

That's what I get for watching too closely for 5 minutes. :evilgrin:

1:23
Dow 10,275.56 -24.74 (-0.24%)
Nasdaq 1,960.28 -16.48 (-0.83%)
S&P 500 1,118.95 -4.80 (-0.43%)
30-yr Bond 4.690% +0.045

[54anickel]

58. 1:44 update

Dow 10,289.62 -10.68 (-0.10%)
Nasdaq 1,962.54 -14.22 (-0.72%)
S&P 500 1,121.35 -2.40 (-0.21%)
30-yr Bond 4.693% +0.048

1:30PM: The market continues to improve...the focus is on developments on the potential Al Qaeda situation in the Pakistan/Afghanistan border...this is impossible to anticipate as traders watch the wires for developments...however, the gains have been focused on big cap, S&P stocks as opposed to Nasdaq or smaller cap stocks...NYSE Adv/Dec 1163/2002, Nasdaq Adv/Dec 997/2012

[54anickel]

60. 2:32 update and blather

Dow 10,270.82 -29.48 (-0.29%)
Nasdaq 1,957.67 -19.09 (-0.97%)
S&P 500 1,119.26 -4.49 (-0.40%)
30-yr Bond 4.695% +0.050

NYSE Volume 972,549,000
Nasdaq Volume 1,248,655,000

2:05PM: Focus remains on developments out of Al Qaeda...there is also a lot of talk related to potentially higher oil prices and the impact on sectors such as airlines...related to that is some scattered talk about potential inflationary impacts not only of energy prices, but also in the PPI and CPI data as well...tone remains nervous and uncertain over geopolitical issues...NYSE Adv/Dec 1270/1920, Nasdaq Adv/Dec 1067/1949

[54anickel]

61. 3:08 numbers & yada

Dow 10,296.48 -3.82 (-0.04%)
Nasdaq 1,963.00 -13.76 (-0.70%)
S&P 500 1,122.19 -1.56 (-0.14%)
30-yr Bond 4.692% +0.047

NYSE Volume 1,076,440,000
Nasdaq Volume 1,352,785,000

3:00PM: Oil prices are off about 40 cents from their high today, due in part to warmer weather expectations, but there is increased concern about the outlook for energy prices...airlines are down today as a result even with the slight drop in oil prices...yet, despite some increased talk of inflationary pressures, the 10-year note has only backed up 8/32 today and the yield remains at a historically low 3.74%...volume remains light and breadth poor, as the bounce off the lows for the indices has been mostly due to large cap companies...NYSE Adv/Dec 1260/1958, Nasdaq Adv/Dec 1026/2045

2:30PM:Minutes for the January FOMC meeting just released state that vigorous economic growth is now established, and that job growth is likely but not certain...this news has not had much impact as reports that the second in command for Al Qaeda may be surrounded in Pakistan, amidst intense fighting...the situation is not entirely clear as traders switch back and forth between NCAA hoops and CNN... :eyes:

[54anickel]

62. Why the dollar will not fall

I don't get it, but thought I'd post it anyway. Is he saying the US/IMF has the world by the short hairs?

edit to add: I looked for the quoted paper, it was written last September but I ain't gonna pay bucks to read it.

http://www.business-standard.com/today/story.asp?Menu=26&story=36712

snip>
In a recent paper*, Michael P Dooley, David Folkerts-Landau and Peter Garber also ask why central banks are accumulating so many dollars and whether they have any choice in the matter. At last count, Japan had $ 750 billion, China, Hong Kong and Taiwan 700, the Euro Area 230, South Korea 180 and India 110.

They write, “accumulations of financial assets and liabilities, in particular, international reserve assets and domestic currency liabilities that appear to be suboptimal when viewed in isolation, make sense when viewed as a part of a development strategy.”

There are two forces driving this strategy. One is the labour surplus. The other is the assessment that this surplus can only be absorbed in export industries, whose competitiveness can be maintained only through a stable and low exchange rate vis-à-vis the dollar.

Being Westerners, and, therefore, not at the receiving end, they omit to add the third driving force. This is simply the determination not to be held to ransom by the US via the International Monetary Fund.

You have to be naïve not to be able to understand just how powerful the US is and how ruthlessly it can treat a country, even to the point of manufacturing a payments crisis for it.

snip>
The authors conclude that “diversification is inconsistent” with the policy imperatives of the developing countries. “An attempt to diversify and maintain dollar cross-rates would generate an increase in gross reserve assets and the gross domestic assets required to sterilise the reserve increase.”

In other words, switching from dollars to euros will necessitate an increase in the holdings of euros as well, to sterilise which will impose a further cost. It would be far cheaper to stick to the good old dollar, which seems to be turning out to be as good as gold.

This is an important conclusion because economists and journalists are now no longer asking whether the dollar will fall, but when it will do so.

snip>
What does this mean for the financial markets? Real interest rates will remain low and perhaps by as much as one percentage point, say the authors. “If Asia does not blink first and inflation stays low because of the supply of cheap foreign savings, we expect to see lower short and long interest rates, with short treasuries well below other short rates.”

What if inflation returns to the US anyway? “Then the rise in US rates would be mitigated by Asian intervention.”

[54anickel]

63. The End of the Dollar System Is On the Agenda

Related article I stumbled across. Argentina DID sort of stand up to the IMF recently :shrug: I claim ignorance on LaRouche, I've only heard of the name.

http://www.larouchepub.com/lar/2004/3107roanoke_radio.html

The complete lack of impact on international currency markets, of the G7 finance ministers' and central bankers' Feb. 7 public call for "stabilization" of the dollar, showed the global crisis of the dollar/International Monetary Fund system to be out of control. It was followed immediately on Feb. 9-10 by a further fall of the dollar, and sudden compensatory increases in the global price of oil as OPEC nations cut output due to slackening economic demand. The floating-exchange-rate monetary system has now reached the point where any severe shock—a major loss of derivatives contracts in a Parmalat or other big corporate blowout; a sudden acceleration of the dollar's decline; a U.S. interest rate increase puncturing values in the American real estate bubble; a big Third World debtor's default; or a political/military crisis—can bring the financial system to a meltdown.

Warnings, apart from the clear statements of Presidential candidate Lyndon LaRouche, are being heard from European financial experts and from former U.S. Treasury Secretary Robert Rubin (see EIR, Jan. 23). Said one severely worried City of London manager, "We're coming to a point, where pensions will start to go, health services will be denied.... What LaRouche has been talking about for years, is coming closer." The response by international bankers and central banks has been to demand that they, not governments, will control an attempt to reorganize and salvage the dying dollar system, and will reject and fight any move for its bankruptcy reorganization into a "New Bretton Woods" proposed by LaRouche. Nowhere is this clearer than in the new and vicious demands for blood, by the banking community, from Brazil and from Argentina, acknowledged just two years ago to be an economy ruined by IMF debt and incapable of paying it. Now the American and European governments have been muscled into a desperate confrontation with these large Third World debtors.

Should Argentina stand up to that confrontation with the IMF and the vulture bankers, it will immediately force the question of a new monetary system.

Our survey of the crisis focusses on key harbingers of what is to come: the initiative by a leading Russian Presidential candidate, Sergei Glazyev, for Russia to launch a new Bretton Woods; the signs of a shift in policy by major Asian powers whose dollar-support operations are at a desperate breaking point; the debt explosion which has forced Britain to start raising interest rates; the potential involved in the Argentina-IMF showdown; and an analysis of the crisis in Brazil, the biggest debtor, by a leading Congressman who backs LaRouche's New Bretton Woods initiative.

'A Very Severe Monetary Crisis'

more.....

[54anickel]

64. OK, I've read the whole thing now. He really looses me when he gets

into that protectionism mode and turning back 40 years, but some of what he says does make some sense.

[KoKo]

66. Well 54, my read which admittedly is limited in understanding all the

technical between "real rates," etc., etc, cheap foreign savings, costs of converting to Euro's and all of what I call "Economist speak" still seems to say, (which I think was also your conclusion),the US will recover because it wants to believe it will recover and...quote from the article: "You have to be naïve not to be able to understand just how powerful the US is and how ruthlessly it can treat a country, even to the point of manufacturing a payments crisis for it."

The whole world will act as a "currency/debt PPT" so "don't worry...be happy...don't worry...be happy! :D

[54anickel]

67. We may play dirty, but we play to win?

[KoKo]

70. Yep, that's what Bush/Cheney/Rumsfeld/Perle and even Powell tell us...

they never lied to us about that. I have to say...that's the one thing they haven't lied about in all the lies they've told.

[54anickel]

65. Closing numbers and the yada

Dow 10,295.78 -4.52 (-0.04%)
Nasdaq 1,962.44 -14.32 (-0.72%)
S&P 500 1,122.31 -1.44 (-0.13%)
30-yr Bond 4.695% +0.050

NYSE Volume 1,363,695,000
Nasdaq Volume 1,673,488,000

Close Dow -4.52 at 10,295.78, S&P -1.44 at 1,122.31, Nasdaq -14.32 at 1,962.44: It was an international day...there was a fair amount of news, but it was all overshadowed by developments in Pakistan...there, Pakistani officials say their troops have surrounded the number two leader in al Qaeda...when word of this hit the markets, the indices recovered significantly off their lows, and the Dow and S&P ended with only small losses...the markets opened down as international markets were mostly lower, and word out of Europe was that Microsoft (MSFT 24.91 -0.22) and the European Union were unable to reach on deal on anti-trust issues, and that Microsoft now faces fines...
the price of oil eased on international markets, but remains at high levels, and coupled with the report that the delayed January PPI rose a strong 0.6%, brought back some talk of inflationary pressures...the other economic news was mixed...new claims fell to their lowest level in over three years, but the Philadelphia Fed manufacturing survey was a bit weaker than expected...Morgan Stanley (MWD 59.91 -0.55) dropped despite a stellar earnings report, and United Technologies (UTX 87.83 -0.97) reaffirmed guidance for 2004...

decliners led advancers by a fair amount overall, and the Nasdaq and Russell 2000 (RUT 574.51 -4.06) small cap index were lower on the day...volume was very light...developments in Pakistan are likely to set the tone tomorrow, which is a quadruple options expiration day...NYSE Adv/Dec 1487/1788, Nasdaq Adv/Dec 1231/1881

3:25PM : CNN is now reporting that Pakistani forces say they have in fact surrounded the number two leader of Al Qaeda...this news is overwhelming other issues, and the Dow has now gone positive...it very well may be that traders will not want to be short overnight given the potential for positive news...overall, having the Pakistani troops getting aggressive in hunting down Al Qaeda is a positive recent development...NYSE Adv/Dec 1359/1887, Nasdaq Adv/Dec 1149/1927

[salin]

71. Looks like we may have found the new 'stabilizing' point

for several weeks (a month?) the point was around 10,600 - things wouldn't fall (much) below 10,500, nor rise much beyond 10,700 and on average would move almost vertically around 10,600 (up here, down there, etc.)

Looks like 10,300 might be the new psychological moderating point. At least for a little while...