Beebles and 007 . . . Actually, you both are right. And possibly LT, too. (In fact, logically speaking, LT should be right. Just, nobody's listening). Saw this in Fleckenstein last night . . .
November 5, 1998
Market Rap with Bill Fleckenstein
Stocks rally, bonds decline on another loony day
Very interest-ing... Let's get right
to the news. The Japanese markets
pulled back a percent and a half last
night after having been down more
than twice that much. But more
importantly, the yield on the most
recently issued six-month Japanese
T-Bill traded at a -. 005. Negative
interest, basically! I am sure that
somebody was covering a short in
those bills. That also happened here
during the Depression, the only
other time it has occurred in history.
No sign of strength ... Here's a tip for everyone who thinks that Japan is getting much better economically: Its fixed income doesn't support that view. The country's bond market barely has lost any ground, with its 10-year bond trading at about .86 percent. I think its all-time low is about .82, so there is no sign of economic strength being priced into the credit market.
European markets lower... Europe was down a couple of percent this
morning. In a very surprising development, The Bank of England cut rates 50 basis points, when folks were looking for only 25 basis points. It announced some bad economic news as well and its markets were unable to rally. Maybe it needs to cut rates into some sort of OTC option expiration and take a page from Easy Al's book
Oskar rebuffed on rates...The Bundesbank did as we suggested, with
Bubba telling Oskar, "Up your nose with a rubber hose." No rate cut out of the Germans. If these left wingers don't shut up, the Bundesbank never is going to cut rates unless the Bundesbank, as we know it, no longer exists. (This is a possibility we have highlighted but I am not rooting for it - someone has to stay sober.)
Market opens low, closes high... The futures traded down all morning,
which indicated a lower open on Wall Street, and that decline lasted for about one hour. Then the buying began and the S&P futures rallied, from down 1 percent on the day to up over 1 3/4 percent on the day, without ever really backing off. It was interesting that the rally occurred in the face of a bond auction that appeared not to be going that well.
Convenient coincidence?... While we are talking about bonds, the
government mistakenly released the employment statistics today rather
than tomorrow. Naturally they were bond-friendly and naturally they were released just before the auction. coincidence? I'm sure it is!
Bond move baffling... Interesting to note that Greenspan was out
flapping his jaws in front of the SIA (Securities Industry Association). Just as he began to speak, the S&Ps started to rally and bonds sold off. From the time he started, we got a 2.5 percent rally in stocks and a percent decline in bonds. Go figure! I mean, we didn't get a decline in bonds on the economic news. For the stock market to go up and the bond market to retreat on bond-friendly news is particularly loony, but what isn't these days?
Gold gains... There was quite a big move in gold today as it was up about $3 for no apparent reason. The gold stock index was up another 6 percent (following yesterday's 8-percent gain). Gold stocks have had quite an enormous move in the last couple of days with no particular catalyst. Perhaps there is trouble in China or maybe they are just behaving like stocks. The bank stock index came to life today, up about 3 percent. It was the index squeeze du jour, and the second-best-performing index behind the XAU.
And there's more-
stocksite.com
For someone who seems as nimble as Thean (that doesn't include me, BTW) this market has been great. But it sure is scary. I'm mad at myself for being too slow to pull the trigger and now, I'm too scared to. I've learned my tolerance for pain (very low). I don't have what it takes to be a good trader (old, slow pc notwithstanding). Tums only works for a while<g>.
challo |
