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Wednesday, August 30, 2006

Bulls Free to Run

Good morning.

There is - unfortunately! - a fair bit of "open space" for the bulls to roam upward. There's really not much in the way of overhead resistance on the major indexes and, by and large, there's a decent amount of space between current prices and the next Fib level up (which is where they peaked last May). Not a great setup going into what is usually a "bear's month", September.

Take the $SPX (please!) I've marked in yellow the wide open space that bulls could trample upward, if they've got it in them (and, in the past month, they certainly have).


Much the same can be said of the Dow Industrals.



The NASDAQ is a bit more of an exception. It's approaching a fairly substantial trendline from down below.


Being exasperated gets old. I'm just going to keep sitting and puzzling. Weird, weird market....

at 8/30/2006 55 insightful comments   Links to this post

Tuesday, August 29, 2006

Fingers of Instability

A reader of this blog (Old Soldier) was kind enough to forward me a fascinating article by John Maudlin called Fingers of Instability. It'll take you a little while to read it, but I highly, highly recommend it. It's fascinating.

Extracted from the Comments section - - some other interesting tidbits about the housing bubble and the credit which made it possible:

• 32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000;
  
• 43% of first-time home buyers in 2005 put no money down;
  
• 15.2% of 2005 buyers owe at least 10% more than their home is worth (negative equity);
  
• 10% of all home owners with mortgages have no equity in their homes (zero equity);
  
• $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007.

at 8/29/2006 53 insightful comments   Links to this post

Monday, August 28, 2006

Just For Fun

The Dow was up over 100 points today but then started to ease back to close up 67 points. One reader was puzzled by my mention of the market being in the 'doldrums.' I guess the Dow up that much isn't exactly doldrums, but my portfolios were basically unchanged. So it was pretty boring.

Just for kicks, let's take a look at some of the mentality back in 1999. All these books were published within months of each other in late 1999. Great lesson in contrarian thinking........


Not to be outdone.....


And then, in a desperate bid for attention......


Where was the Dow 1,000,000 book? I guess the market crashed too soon.

In last Sunday's NY Times there was an amazing article on the real estate bubble. I know this is a really tired subject, but this one graph is breathtaking. The latest surge in real estate completely dwarfs anything seen in the U.S. (...said the man with two overpriced houses in Palo Alto, California). Scary, scary stuff:

at 8/28/2006 46 insightful comments   Links to this post

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