Select Archives: 2007
'Select' rather than 'Comprehensive' due to the degree of repetitive reinforcement for overall intermediate-term and long-term fundamental perspectives and critical technical projections.
While consulting clients find revisitng major themes and certain technical indications useful,
a full archive would be over loaded, and less relevant regarding the true nature of our analysis.
Other Archived Reports selected for meaningful insights:
2009 2008 2006 2005
EXTENDED REPORT SAMPLES
These were chosen for their insights at key technical turning points for price trends, significant sustained fundamental factors and/or some general educational benefit.
Capital Markets Observer III-41 Wednesday, December 19, 2007
Our swan song for 2007 reinforces the theme of equities’ technicals leaving a critical burden of proof on the bulls (especially with stale MACD’s.)
The even larger point is the Fed is back to ‘clumsy’ at a bad time, as it is obvious to many that liquidity rescue plans are less than effective in a solvency crisis.
We offer the solution ‘RTC 2008’ for at-risk mortgages instead of commercial property; something which Messrs. Paulson & Bernanke singularly fail to grasp through the entire ensuing crisis. And it continues to grind on into 2009. Maybe soon?!
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Capital Markets Observer III-40 Tuesday, December 11, 2007
The ‘Overview’ discusses how the subprime borrower rescue plan may be in trouble just as the DJIA is retesting 13,700. After recent recovery, any failure below 13,250 would also be a significant technical failure. As that waited until after Christmas, our exploration of ‘Santa Who?’ (actually portfolio managers) was relevant, while the balance notes the Fed is seemingly on its game.
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TrendView GENERAL UPDATE Wednesday, November 28, 2007
An unexpectedly emotional DJIA weekly opening into the 12,800 area interim support held, and began the recovery up to a retest of (no surprises) 13,700. The subsequent failure from that previous UP Break set the stage for a more major failure into new lows for the down trend into 12,000-11,750 in January.
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Capital Markets Observer III-37 Wednesday, November 7, 2007
While a predictable further drop in equities and fixed income bid proceeded, the real action was in US Dollar Index slipping below .7650, setting up a move to the .7400 area. In ‘Uncertainty’, ‘Anchoring’ and ‘Balance’ we further explore general analysis themes, with an implication for the US dollar at the end.
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Capital Markets Observer III-35 Tuesday, October 23, 2007
Following up on the DJIA failure back below 13,700, which sets the stage for a return to the critical 12,000-11,750 area overall. Fixed income is firm yet not dynamic yet, pending further equities weakness. We offered a reminder from the late 1980’s real estate crunch that a ‘Neutron Bomb’ market seemed to be on the way: the buildings were left standing, but the investors all got killed.
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Capital Markets Observer III-34 Wednesday, October 17, 2007
Revisiting the critical nature of DJIA 14,200 and 13,700, yet with a focus on the extensive government speeches and announcement of the M-LEC Program (Master Liquidity Enhanced Conduit) being questioned in ‘Sleight of Hand.’ The FT’s astute Gillian Tett is cited as saying the catch “…is that some banks want to avoid asset sales because they fear… it would hurt balance sheets.”
What a prescient observation on a theme would become the crisis mantra.
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Capital Markets Observer III-31 Wednesday, October 10, 2007
Pointed view that even the new DJIA all-time high was running into resistance in the 14,200-14,400 area, and a drop back below 13,700 area would be a failure once again. Resilience of fixed income in the face of previous equity strength is a precursor to its return to a bull, if and when equities fail. This is further reinforced in ‘Rates vs. Reality’ revisiting the idea that Fed easing will not turn the overall tide. There is also a major review of general analytic perception and methodology in the extensive ‘Frame of Reference’ topical discussion.
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Capital Markets Observer III-31 Wednesday, September 26, 2007
Much of the analysis regards how well the fixed income markets are holding in the face of the continued nominal bullish equity trend. However, our strongest assessment was there was likely to be a ‘Dollar Debacle’, even if its relatively low price meant this was likely to be in slow motion. And while many already felt it undervalued, our US Dollar Index objectives in the .73-.70 area were hit.
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Capital Markets Observer III-30 Tuesday, September 18, 2007
Our assessment was it would be self-defeating for the Fed to ease by a full 50 basis points that day.
Yet it did, implementing a Bernanke Put. In the event the rally fizzled up around previous highs, and in ‘FOMC Alternatives’ we explore why aggressive Fed action was not likely to stem a weakening economic tide.
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Capital Markets Observer III-28 Friday, September 7, 2007
The weakness of US Dollar Index is highlighted, as its rally was only up to resistance during the equity market turmoil,
seeming just a subset of heavy Yen Carry Trade repatriation elsewhere. The lack of expected rate hikes seemed to be ‘De Facto Easing’, while ‘Interbank Indications’ of stress seemed further confirmation that the looming problem was solvency, and not liquidity.
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Capital Markets Observer III-27 Thursday, August 23, 2007
Strength in ‘govvies’ in spite of the Fed's liquidity injections was an early sign of the sustained strong tone to follow during subsequent equities weakness. ‘Neither ’87 Nor ‘98’ explores how the downtrend in equities is likely to be far more pernicious, expanded upon in ‘Subprime, Housing and Consumers.’
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Capital Markets Observer III-26 Friday, August 17, 2007
In addition to a major review of why Fed needed to intervene in equity markets the previous day to prevent a DJIA meltdown to the 12,000 area, there is the definitive observation on the fact there will not likely be any Carry Trade Crisis after equities led the way down, as discussed in ‘Cassandra’s Conundrum.’ Strength in ‘govvies’ in spite of the Fed's liquidity injections was an early sign of the sustained strong tone to follow during subsequent equities weakness.
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TrendView BRIEF UPDATE Wednesday, August 15, 2007
Pointed analysis of the degree to which any DJIA failure below the 13,000 area would not be likely to hold interim 12,800 support.
As such, it would likely sink to the more significant 12,500-400 area, which was the major level prior to the far more critical 12,000-11,750 area.
In the event, the market slide to 12,500 the following day fomented the first Fed intervention of the overall credit crisis.
See the CNBC video interview clip from Monday of that week for the assertion by Alan Rohrbach that the Fed would need to move if market dropped quickly.
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TrendView BRIEF UPDATE Friday, July 27, 2007
As discussed extensively over the previous couple of weeks, the DJIA inability push above 14,000 area fomented a significant failure back below the 13,665 Symmetrical Triangle UP Break.
As noted in the opening of this report, there was compelling technical damage inflicted on equity markets.
This was also when the countervailing bottom in fixed income was fully confirmed.
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TrendView BRIEF UPDATE Friday, July 13, 2007
Major warning that near-term strength of economic data had pushed DJIA out on a 13,665 Symmetrical Triangle UP Break with questionable aspects.
It is not just that the Objective was 15,417, yet equally as much there was the strong oscillator resistance into the 14,000 area.
Fundamentals were deteriorating, and it seemed more of a Last Hurrah than credible UP signal.
See CNBC video interview clip from one month later to see how this worked out in practice.
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Capital Markets Observer III-25 Tuesday, June 25, 2007
The flip-flop by Mr. Bernanke on the impact of housing is assisting incipient bottoms in fixed income while equities continued to hold key support levels, ‘Forward Failure’ discusses again the lack of predictive value in short money futures forwards, while a major proponent of Random Walk Theory allows that he indulges in attempting to beat the market at times in ‘Mind-Blowing.’
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TrendView BRIEF UPDATE Wednesday, June 13, 2007
Following up on the previous day’s major debt market analysis, there was specific advice that oversold oscillator indications on all of the long dated ‘govvies’ meant that this could be the end of the bear trend it indeed was.
See Article from Financial Times; Bond math yields to animal spirits.
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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.
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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, 2007
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.
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Read the Russell Investment Group Investment Manager Outlook
Read except from CNBC interview of RIG's Randy Lert
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