Rally last hour WTF ?
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reminds me of the previous financials rally and homebuilders it will be a few months from now and skf will be much higher from its current level.....i look at it like this, all of these current writeoffs are from peak/near peak employment, now factor in rising unemployment/inflation/alt a/cc delinquencies/declining rights offerings(HBOS offering only 8% taken leaving banks holding rest)
I believe Oil has started to drop. It will hit $100 sometime soon in the future and this trend will make the the tech sector and maybe other sectors to rally. Financials might rebound but will not rally. I see some good buying opportunities in foreigh ETF funds. Real estate index like IYR is also one of my picks in oil down play.
NFP is down ~450k so far. The 2001/2002 recession (which was mild in historic context) lost 2.7m jobs. Shouldn't we be closer to 1m already? Where are the -250k months? New claims are coming in at 400k a week, way below 1990 recession levels which were a population adjusted of 500k+ per week. LEI are still way too high considering we're supposed to be in the middle of the worst recession since WW2. Industrial Production jumped the most in 12 months this past June.
I just wonder ... what happens.. if employment never implodes to the horrific levels predicted for the last 2 years by the doomsday crowd?
No, wasn't a squeeze. Lots of institutional paper came in on volume. JPM was a big buyer in the last half hour on good volume. This was mainly initiating positions by the big boys. There was some short covering as there always is on rallies, but not the cause of this one.
Coulda been crude drop or could be better than expected earnings. Doesn't really matter does it?
This is a head fake. I shorted a few financials into the close. My time frame is within 2-3 days before this thing rolls over, so I'm scaling into some other puts.
You will see a MONSTER rally in the Dollar.
Right now, the dollar strength since the FXE high of July 15th has lead to a decline in Crude Oil, with lots of momo-funds liquidating.
Given that the FXE had a high of 160.50 back in mid-April, and ran out of gas at 160.44 on July 15th, equities could see some support coming from a rally in the USD - - - with the potential of a multi-month top in the Euro.
The dollar obviously still has a lot of "work" to do before that happens . . . but the decline in the FXE looks poised to "test" the 40 day MA after testing the 21-day MA today, intra-day at roughly 158.00
Even for those that have no understanding of "technicals", the ROTATION today and the markets ability to head higher on "bad" news from Apple, TXN, SNDK, and AXP is impressive!
You never want to "fight" a market that is able to rally on "bad" news.
I see the dollar rallying also, but it has been building for awhile. Over sold, and interest rates at super low levels are the main reason it was beaten down in the first place (more so than deficits and trade imbalances).
Also, it is now looking like Europe and Britain are going to have a nastier recession than the US, so its all relative US FX vs everyone else. Even with job losses, the buck is going to rally in the medium term. Its also going to jump around a lot though I bet.