Monday, July 02, 2007


Strong rally in the markets with the Dow, S&P and Nasdaq all up around 1% or more. The bulk of the gains came in the first hour. Volume was on the light side which is understandable considering a lot of traders are on vacation ahead of the July 4th weekend. Utilities, basic materials and oil and gas were the biggest winners today. LOCM IOC ZN DELT VMED were some of the days biggest gainers. TRMP ADLS CRYO PTT were the biggest losers. My biggest gainers included HANS NTRI VCLK OMRI PRAI and UXG. GLD and SLV along with FXE also did very well.

Oil prices rebounded Monday from early declines to settle above $71 for the first time in 10 months as traders focused on a refinery outage in Kansas and new accusations about Iran's role in Lebanon and Iraq.

Early in the day, investors sold to lock in profits from last week's rally, which drove prices above $70 a barrel for the first time since August. But as the day wore on, light, sweet crude for August delivery rose, settling up 41 cents at $71.09 a barrel on the New York Mercantile Exchange and up from a session low of $69.57. On Friday, oil prices rose to close above $70 a barrel for the first time in 10 months. Continue reading

The dollar fell to a 26-year low against the British pound Monday ahead of an expected rate hike by the Bank of England later this week.
The pound rose to $2.0173 -- its highest level versus the dollar since June 1981 -- in New York trading before retreating to $2.0165. The dollar also dropped to within a cent of its all-time low versus the euro, as rising global interest rates made the currency less attractive to investors.

The 13-nation euro rose to $1.3637, just shy of its April 27 all-time high of $1.3682, before dipping back to $1.3623. Continue reading

The nation's factories, plants and utilities expanded at a faster pace in June, suggesting hardy consumer spending is boosting confidence among manufacturers even as prices for raw materials rise.

The Institute for Supply Management said Monday that its manufacturing index rose to 56 in June. The reading marked the fifth consecutive month of growth for the manufacturing sector and the 68th consecutive month of growth for the overall economy. Continue reading

They say they don't ring a bell at the top of a market. However, sometimes you need to listen to history with dog ears.

At the end of the first week of June I wrote a piece called A Pivotal Set Up Worth Watching.
Now, at the beginning of the first week of July, it is a good time to further flesh out the bones of that set up.

To review, the average time for a blowoff is ninety calendar days (sometimes extending to four months). Since the closing low for the year occurred on March 5th and the intra day low occurred on March 14th, that translates to an approximate window between June 5th and July 5th on the one hand and June 15th to July 15th on the other for a peak. Continue reading

June's trading in the stock market provided a little bit of something for those who think the glass is half full, as well as those who see it as half empty.
The good news is that the stock market didn't collapse in the wake of the sharpest correction since the Beijing Surprise in late February. Indeed, given the daunting number of hurdles that the stock market had to jump over in June -- everything from much higher bond yields to the potential collapse of several hedge funds -- it is impressive that the market showed as much resilience as it did. Continue reading


For one long-standing indicator of shifting moods in the stock market, a now-or-never moment is at hand.

The gauge in question, which focuses on cash reserves held by managers of stock-mutual funds, has been emitting increasingly bearish signals about the market outlook.

But nobody has been paying much attention. The indicator's once-stellar record of accuracy has been less than compelling lately. What's more, the whole premise behind it may be out of date.

That hasn't stopped some commentators from arguing that closer heed is due. ``The risk of a cyclical price top and subsequent sell-off is very high,'' says Norman Fosback in his newsletter Fosback's Fund Forecaster, from Boca Raton, Florida. Continue reading

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