On NAPM data price paid increases is the only thing of concern otherwise backlogs, inventory and the number itself is quiet satisfactory. On ECI I was trying to research the details on 'first union' site to study it in details. They think the numbers masks wages inflation, as fourth quarter banking bonuses were hit big. Overall, market has tested NAZ 2500 several times rather three since Thursday, 625 was also tested twice the second time a higher low,NDX supports have also been tested, the market barometer made that test of 1318 and roared back up on Friday, the level of skepticism is high, the economic numbers are good, naturally from a situation of anticipating deflation to a situation where some normalcy is returning and CRB is now inching up with oil prices moving higher, fears of inflation will now be talk of the markets, this will result in higher volatility.
This is possibly going to be a market like 900 and 990 band. I will think we will see some back and forth movement between 1372 and 1230.. I would in short term like to see 1355 to be taken out and we close above it on DOT 675 should be softened, 2576 with 1355 can be a good signal for a run to 1368 area, on down side a break of 1339 on SPm will trigger my defensive response, I will like to short 760' on DOT and purchase 1320's if we stay below that 1339 for 30-45 minutes, I will not hesitate to cover also at 1323 area or 625 on DOT..
I will keep a close eye on BKX a break of 907 will indicate some selling in key finacials if we break thru 902 we may not see that recovery from 1322 support. Bond Yields TYX are now very important and increase beyond 5.69 will impact the market hard, so if we see it rising above that 5.69 reduce your trading positions, this level of yield is pretty steep for market at 1345, we need lowering of yiedls. The possibility of big rally is always round the corner if we see some results from Chernomyrdin meeting with Clinton and Gore, Balkans take some time they live in history,so I am not sure about a quick settlement but Europe and Global markets will certainly have few days relief rallies as cease fire comes into existance.I see that diplomatic solution is in sight, I also see that damage to Serbia and a diplomatic settlement will weaken hold of Milosovic on Serbs, he is unable to expand the conflict crakcs are appearing in the edifice of his power structure.
Russians ego's have been properly massaged and they will like to look the deal makers here, probably Europeans are too worried with the war in their backyard and that also for 'few ethnic ALBANIANS', NO vital interests are involved and as such they would like to get over with it asap
I will like to be nimble and trade on break of supports and cover at lower supports like 1339 to 1323, like wise I will long the break of resistance for example from 675 to 725 is a run on DOT, a break of 902 can take us to 878 on BKX, a break of 935 on closing basis takes us higher to 952. I will cautiously watch the market and look at composite 2500 support also, I also think that as highlighted last week the OSX index is very near to highs like 78 a rally to 90 is possible but Oil prices within three weeks will come under pressure. Overall commodity inflationary fears and wage inflatiopnary fears will be the decide the move from 1378 onwards to 1440 area.. I would think that 11200-400 si the top I am seeing from where we can see a reversal to 8900 support, I am part of the run however for me it is market where dips are to be bought and resistances to be sold.. |
