Sample Reports
Major Report!!
SPECIAL MARKET HIGHLIGHT
Monday, March 21, 2005
1970's Redux: Son of Stagflation
This major report delves into significant historic background to explain the reasons behind Mr. Greenspan's low long yield "conundrum", the weaker US dollar after the Federal Reserve began tightening in 2004, and why both would eventually head back up.
Still relevant perspective... "...we could send you back to the future."1
Click the link for a more extensive description at the bottom of this page.
Capital Markets Observer II-25 Thursday, June 8, 2006
Very Interesting Financial Times Analysis: Our somewhat premature suggestion that the 1970's style 'stagflation' was coming back had finally become enough of a reality for the mainstream business press to echo that sentiment in "Is it back to the 1970s?"
 Click to Read
Click to Read the excellent FT Comment & Analysis attachment
RECENT and EXTENDED REPORT SAMPLES
These were chosen for their insights at key technical turning points for price trends, and/or the significant sustained influence of major fundamental factors.
Capital Markets Observer III-24 Tuesday, June 12, 2007
Fixed Income analysis is a pointed reminder that after the huge break, and in the context of the extreme bearish sentiment, the long dated debt contracts are reaching significant congestion into major long term oscillator support. 'Same Old Stuff?' discusses why the fixed income break ending will likely see the equities rally back sharply from their own break.
'Miscellany' reviews why former Fed head Greenspan may be turning into an irrelevant Cassandra.
Click to Read
Capital Markets Observer III-22 Wednesday, May 30, 2007
'Analytic Balance (revisited)' adds a fine line view of 'Trend Deduction' that revisits the Sherlock Holmes analogy (III-18), along with 'Seismic Psychology' metaphor for the impact of various fundamental influences.
'Hypotheses or Just Plain Facts' is a dissection which slams Efficient Market Hypothesis and Random Walk Theory as just plain, rather banal facts of life for trend analysts.
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Capital Markets Observer III-21 Wednesday, May 23, 2007
Fixed Income analysis reviews why the Bund finally failing below 113.35-.20 (see CMO III-15) projects several full points lower.
On broader background, 'Analytic Balance' is a brief tour de force of how technical and fundamental analysis complement each other (as opposed to the conflict mistakenly claimed by some on each side.)
Due to its extent, a highlighted version is provided.
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Capital Markets Observer III-18 Tuesday, May 1, 2007
'Multiple Cycle Divergences' thoroughly reviews how the more extensive than usual divergence between the US and Europen economies from 2004 onward fomented the significant distortions of the comparative equity market and fixed income trends.
'Falstaff Equities' observes why the equity markets have acted like all news is good news, with a Sherlock Holmes analytic analogy.
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Capital Markets Observer III-15 Wednesday, April 11, 2007
Fixed Income analysis highlights Bund failure below important continuation and June contract mid 114.00 support, yet cautions the bigger decision level is 113.35-.20.
This is consistent with the 'Choppy Cycle Phase' brief warning that the Bund will lead the way down against the far more resilient US T-note, even though 113.35-.20 did hold for a month prior to the more dramatic spring break.
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Capital Markets Observer III-14 Wednesday, April 4, 2007
'Misguided' discusses volatile geopolitical concerns exacerbating elevated inflation concerns as a discordant Fed leaves many observers poorly focused.
'The Fed's Real Challenge' is to reassert its role as World's Central Banker, and risk lower US growth to tame inflation, or risk 1970's style consequences.
Of note, that view was a key part of Dr. Plosser's speech one week later.
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Capital Markets Observer III-13 Wednesday, March 28, 2007
'Differential Psychology' reviews how gross shifts in equity market sentiment distorted perceptions and near term pricing in long dated fixed income.
'Inflation Expectations' discusses the potentially very negative consequences if the Fed has indeed shifted its Core PCE inflation 'comfort zone' to the more sanguine approach suggested in Mr. Mishkin's speech.
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Capital Markets Observer III-11 Wednesday, March 14, 2007
'Fractal Chaos Blues' (Overview) reviews how the confluence of subprime mortgage concerns, weak US Retail Sales and OECD economic outlook are providing more negative impact than warranted by economic fundamentals.
'Tricky Tech' discusses equities and fixed income residual tech levels beyond recent respective lows and highs, while 'Confounded Cassandra's' cites market activity which refutes unfounded carry trade 'crisis' concerns.
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Capital Markets Observer III-10 Wednesday, March 7, 2007
'Of Bankers and Busts' reviews the reasons why equity markets crash, and how the Fed could have created a more stable environment this time around.
That is preceded by an Overview on both technical aspects determining whether the early March selloff becomes disorderly, as well as important intermarket indications for the fixed income and yen (carry trade) cross rates.
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TrendView GENERAL UPDATE Monday, March 5, 2007
Brief update on the shift to a highly psychological market in the wake of the previous week's sharp equity market selloff, and fixed income and Japanese yen recovery.
This is followed by a full technical trend review, including crucial intermediate term equities trend support levels, and yen cross rate supports for the Euro & British pound (more critical than US dollar levels.)
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Capital Markets Observer III-8 Wednesday, February 21, 2007
'Carry Tirade Cassandras' Quixotic Qualms' debunks the broadly discussed potential for a 'carry trade' crisis based upon sharp Japanese yen escalation, except due to turmoil triggered elsewhere.
'The Cycle' discusses why it is the wrong time for equities and fixed income to rally together for very long.
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Capital Markets Observer III-7 Wednesday, February 14, 2007
'French Toast?' reviews the extreme social engineering platform of Socialist presidential candidate Segolene Royal possibly pointing the way backward.
'Market Mayhem?' questions whether Chinese investment redirection will disrupt US treasuries any more than previous concerns regarding Japan.
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TrendView MARKET ALERT Wednesday, January 31, 200
FOMC major statement change repudiates previous dovish view of economy. Somewhat sanguine inflation view allows wiggle room if economy strengthens;
a contradiction which causes the equities to soar, with a more problematic setting for debt markets, and that weighs a bit on the US dollar.
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Capital Markets Observer III-4 Tuesday, January 24, 2007
'US Housing Still Issue For Equities' revisits some of our thoughts on second phase US housing crunch affecting the markets and economy at some point, along with more excellent background on the same from John Mauldin.
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More of John Mauldin's excellent 'Thoughts...' on the US housing market
Capital Markets Observer III-3 Wednesday, January 17, 2007
'Basic Scenario' reviews the way buoyant equities holding early year support and receiving significant reinforcement from the somewhat surprising BoE rate hike means any economic or equities weakness is indefinitely deferred.
This will bring continued pressure on fixed income, and US dollar support.
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Capital Markets Observer III-2 Tuesday, January 9, 2007
Even though the revisit to 'FOMC Minutes' reviews the major shift to a more dovish view, the approach to ECB and BoE meetings brings a cautionary reminder that all of the potential risk factors for equities are 'contingent.'
Miscellany on Democrats' 1st 100 Hours program delayed implementation.
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Capital Markets Observer III-1 Tuesday, January 2, 2007
'Equities and the Economy' reviews the overwhelming bullish sentiment on the equities as the markets stall into resistance. Further background on this from the Russell Investment Group Investment Manager Outlook is attached.
Miscellany on the newly 'Bolshie' UK Conservative Party of the People.
Click to Read
Read the Russell Investment Group Investment Manager Outlook
Read except from CNBC interview of RIG's Randy Lert
Capital Markets Observer II-49 Tuesday, December 12, 2006
An extension of the previous views on risk factors into 2007, with additional considerations for the FOMC, the US-China Dialogue, US Housing (again), Geopolitics, and a bit of Miscellany that revisits the latest madcap antics of what passes for government in the USA.
Click to Read
Read John Mauldin's excellent 'Thoughts...' on the US housing market
Capital Markets Observer II-48 Wednesday, December 6, 2006
“Smooth Rebalancing? …or… The Crash of ’07?” explores how risk factors are mounting due to inconsistencies in market trends, and changes which may hit in early 2007.
Additional topics attendant to this view: Risk Contingencies, The Fed, US Housing, Forex, Germany, Equities, Debt.
Click to Read
TrendView BRIEF UPDATE Thursday, November 16, 2006
Another sharp warning: a potential critical failure in fixed income if it dropped from key resistance after below-estimate US CPI capped a week of soft news; which is exactly what occurred.
By quickly forgetting the 'lesson' of equities excessive exuberance, the Fed may be falling behind the curve.
Click to Read
 Click to Read 'Fed learns lesson on interest rate' (December 2005)
Capital Markets Observer II-45 Tuesday, November 14, 2006
'The Good, The Bad and The Ugly' explores how the latter is indicative of the much tougher investment climate into 2007, when funds managers might take the Man With No Name's view, "If you cut down my percentage, it's liable to interfere with my aim."
As such, investors are at risk. 'The Bad' accurately anticipates Dem's instant internal acrimony as a risk for Washington gridlock.
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Capital Markets Observer II-44 Monday, November 6, 2006
'Reporting Cycle Oscillation' expectations of strong news this week is correct, yet fixed pushes back up to resistances.
'US Bi-Election': it's better if Dems take both houses; Miscellany: 'Why Politics Has Degenerated Into Farce.'
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TrendView BRIEF UPDATE Friday, November 3, 2006
A sharp warning of the possible radical fixed income response to the US Employment report, with a downside bias due to Thursday's much higher than expected Unit Labor Costs depressing Productivity.
Yet, the inflationary implications of the strong jobs numbers were very well-received by equities.
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Capital Markets Observer II-42 Monday, October 23, 2006
'FOMC/Equities Showdown' explores the continuing dissonance between the Fed's doves and very strong corporate earnings, which could reinvigorate the economy. And if hikes are indeed needed, what happens to 'transparency'?
Are retail investors being lured back to the equities due to the new highs?
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TrendView BRIEF UPDATE Thursday, October 19, 2006
Troublingly weak fixed income response to constructively subdued news, especially weak sister UK. Just building a base, or anticipating the impact of Friday's UK Q3 GDP, and expected upward revision to German 2006 GDP? Equities remain strong, in part due to continued energy market weakness.
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TrendView GENERAL UPDATE Tuesday, October 17, 2006
Brief fundamental update on Monday's Observer, then refocused on tension between T-note slippage below critical mid 107-00 support, yet still needing a Bund faiure below 116.80 for a decisive capitulation of fixed income markets. Equities still look good, and the energy markets remain weak, yet critical.
Click to Read
TrendView MARKET ALERT Wednesday, October 11, 2006
FOMC September 20th minutes are a SHOCKER!! Growth likely to strengthen in 2007 (kudos to Dr. Plosser), lower non-inflationary growth ceiling, housing weakness NOT spilling over, and slower growth NOT necessarily lowering inflation. All quite hawkish, with further fixed income weakness becoming a technical problem in front of important European events Thursday morning.
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TrendView BRIEF UPDATE Wednesday, October 11, 2006
Mr. Greenspan's mea culpa: “...we tried that (bursting the bubble) in 1994/1995 and failed.” Also his views on housing is okay, and energy prices not likely to stay weak in the attached article. Also RBA Governor Stevens' hawkish views, and a review of the critical technical levels for the T-note and Bund.
Click to Read
Click to Read the FT article on Mr. Greenspan's views (October 9, 2006)
Capital Markets Observer II-40 Monday, October 9, 2006
“There are three kinds of lies: lies, damned lies and statistics.” -Mark Twain (apochryphal quote of Benjamin Disraeli.) Reviewing the impact of the major BLS CES rebasing, short money forwards' lack of predictive value is revisited (with reference to "1970's Redux: Son of Stagflation.")
Also, the Fed hawks are more in tune than the chairman with major central banks' global view.
Click to Read
Click to Read the BLS CES Rebasing Press Release (October 6, 2006)
Capital Markets Observer II-39 Monday, October 2, 2006
"Your gonna need a bigger boat." The movie "JAWS" metaphor was a clear warning that within the critical trend decision cycle, this week "... things popping up ad hoc can turn the hunter into the hunted." The major BLS CES revision confirmed our instincts on Friday.
Also a really different view of inflation from the Dallas Fed, and hedge fund regulation comment.
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Capital Markets Observer II-38 Tuesday, September 27, 2006
'Extended Fixed Income Technical Decision Outlook' reviews critical technical trend levels, and discusses the degree to which the overall fixed income decision likely awaits the important early October reports the following week.
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TrendView GENERAL UPDATE Wednesday, September 20, 2006
Our fundamental background and extensive technical trend indication analysis includes consideration of the possible equity market influence on the fixed income in the wake of the FOMC decision, especially any further equities strength with the DJIA near the 11,750 all-time high. The critical energy market support and stagnant foreign exchange situation are also reviewed.
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Capital Markets Observer II-36 Wednesday, September 13, 2006
'Central Banks' and 'Inflation' focus on "Gentle Ben and the Vigilantes" dissension between FED and more hawkish stance of other central banks, along with why 'core' inflation is not a reliable guide.
'Debt Tech' explores the critical nature of the discounted December Bund support for all fixed income.
Click to Read
Click to Read the FT Core Inflation Comment from Dr. Stephen Cecchetti
TrendView GENERAL UPDATE Friday, August 11, 2006
Our brief analysis of fundamental background and extensive review of the technical trend indications. In this instance that includes due consideration of the weakness of the fixed income leaving those markets at critical interim support (and major support in the Gilt.) The other markets are still churnining along in late summer trading ranges.
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Capital Markets Observer II-34 Monday, August 7, 2006
FOMC will hold rates steady on Tuesday. This may be a mistake, as noted in 'Transitional Fixed Income Markets' and 'Technical Factors' comments on the contrary hawkish stance of other central banks, which are reinforced by an already inverted US yield curve and lack of technical confirmation.
Click to Read
Capital Markets Observer II-31 Wednesday, July 19, 2006
Equity Market Psychology will improve if Mr. Bernanke's testimony focuses on economic drags. Yet, US Inflation indications should be more focused on headline rates as energy and other prices remain stubbornly high. This ultimately holds very significant implications for the FOMC and equity markets.
Click to Read
Capital Markets Observer II-30 Tuesday, July 11, 2006
Fixed Income Psychology: We had noted previous that major mid-May lows were likely the end of the aggressive down trend. In spite of T-note slippage to the 104-00 area support, the lapse into range bound basing attempts was only confirmed after the early July weak US June Non-Farm Payrolls, with ample technical and historic evidence for sustained summer stability.
Click to Read
Capital Markets Observer II-24 Thursday, June 8, 2006
Bernanke the Bold emerges to dispel any residual 'girlie-man' central banker image from his late April faux 'pause'. Yet, de facto inflation targeting is a significant burden for the equity markets. It will likely trigger the major DJIA intermediate term correction to the 9,000 area.
Click to Read
TrendView BRIEF UPDATE Thursday, June 8, 2006
Timely review of critical contingencies prior to ECB rate hike, with bullish bias to long dated fixed income, especially if DJIA drops below key 10,900 support. Also EUR/USD 1.2780 support violation is critical for the US dollar upturn.
Click to Read
TrendView BRIEF UPDATE Monday, May 22, 2006
While the T-note was choppy above 105-16,... "...the weakness of the equities is now the driving force,... ...and that looks to continue for a while." US dollar bulls were disappointed by EUR/USD holding 1.2750 on the weekly Close.
Click to Read
TrendView MARKET ALERT Friday, May 5, 2006
Our most concise analysis, focusing on critical information or price levels if a major report release or announcement impacts the trend. Timely and effective.
This one focused on the importance of the 105-11 area resistance in the June T-note future after the release of the weak US April Employment report.
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TrendView BRIEF UPDATE Wednesday, May 3, 2006
A follow up to previous consideration of Mr. Bernanke's "pause" vacillation, with a gaming analogy for the May 10th meeting, and historic reference.
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TrendView GENERAL UPDATE Tuesday, May 2, 2006
Our brief analysis of fundamental background and extensive review of the technical trend indications. In this instance that includes due consideration of Mr. Bernanke's poorly handled introduction of the possible FOMC "pause."
This is followed by extensive yet pointed technical insights which are a key to successful trend analysis, especially the critical trend decision levels/ranges.
Click to Read
Capital Markets Observer II-19 Monday, May 1, 2006
Bernanke blinks by proactively suggesting an FOMC "pause" may occur sooner than not (later retracted.) Wild FOMC Thought (50 point hike May 10th.)
US dollar sharp selloff is more likely stale carry trades than rates.
Click to Read
Capital Markets Observer II-13 Wednesday, March 29, 2006
Coverage of continued misplaced notions on FOMC, very pernicious late month fixed income activity, and restatement of negative US dollar view.
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Capital Markets Observer II-10 Friday, March 3, 2006
Both ECB and OECD focus on stronger inflation and growth, reinforcing our bearish view of fixed income. Independently weak US dollar also reviewed.
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Capital Markets Observer II-4 (Excerpt) Tuesday, January 24, 2006
Excerpt on strong indications for a major Bund failure below 121.50 area leading to aggressive bear, and the reasons behind its previous mispricing.
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Capital Markets Observer I-17 Thursday, December 15, 2005
Yield curve sensibility. Labor wage demands in Germany. Critical review of two major US dollar factors: 'Dark Matter' theory of why the deficit had not already crippled the buck, and why the Gold and US dollar were about to part company after their 2005 rally, with only the Gold likely to continue higher.
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Capital Markets Observer I-12 Tuesday, November 22, 2005
More central bank review: major focus on the relationship between equity markets, the Fed and the US short money forwards. Also ECB and BoE.
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Capital Markets Observer I-10 Wednesday, November 2, 2005
The clear indication the three pillars of the Bund bull were crumbling, albeit allowing for a rally if mid-low 119.00s held. Major central bankers review, with first articulation of the five step logic for 4.75% Fed Funds at Mr. Bernanke's frist meeting as Chairman on March 28th.
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TrendView BRIEF UPDATE Wednesday, September 28, 2005
Clear analysis of Mr. Greenspan's "history lesson" that masked strong indications the FOMC was to push Fed Funds farther than most thought.
Click to Read
Click to Read Mr. Greenspan's speech (with Rohr highlights on page 4)
Capital Markets Observer I-08 Monday, September 12, 2005
"The Agony and the Irony." Quarterly contract expiration view that the Bund was critical into upper 123.00 area (the start of the bear.) Extensive Katrina damage would not stop the FOMC from hiking September 20th, due to the lack of a national economic drag and higher energy prices. ECB begins to focus on wages and energy expense as inflationary.
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1970's Redux: Son of Stagflation
This major report delves into significant historic background to explain the reasons behind Mr. Greenspan's yield curve "conundrum." The multiple reasons for lower than expected long term interest rates and a weaker US dollar after the Fed began tightening in 2004, and why they would both eventually head back up, are analyzed in detail.
"...we could send you back to the future."1
1
Professor Emmett Brown to Marty McFly in Back to the Future
(1985, Universal Studios; directed by Robert Zemeckis)
The overall theme of this report is anomalies in intermediate term fixed income and foreign exchange cycles. These are ultimately due to the recent and current extended trend phase encompassing necessary long term adjustments after the year 2000 end of the twenty-five year major economic and equity market cycle. It naturally calls for rather more extensive review of historic (and then current) politico-economic and price trend tendencies than our normal Special Market Highlight.
Yet, all of these long term factors remain very relevant to addressing the various "conundrums" (as Mr. Greenspan so aptly expressed it) which continue to vex even successful long term market analysts and portfolio managers during what are still the early years of the cycle in the new millennium. It also discusses how some extensive dislocations occurred in the short term interest rate instruments as well.
This was published by our affiliate, Institutional Trend Insight, Inc.
For ease of review, charts are embedded in the report instead of listed as additional files. This makes it a very extensive report (37 pages that include 26 charts in a 5 Mb file), and depending on your connection speed it may take awhile to download.
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