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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (7729)	4/13/2005 8:07:09 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

<<"The market is giving a sigh of relief," said Michael Metz, chief investment strategist for Oppenheimer & Co. There was concern that the policy discussions reviewed in the minutes "would have a much more hawkish tone" on inflation than they did, he said. >> I don't buy that at all. I think that is typical post-hoc talking head BS. If there truly was concern, that should have been reflected in the Fed Funds Futures, and it was not. The Fed Funds Futures have priced in with virtual certainty successive 25 bp increases at each FOMC meeting through December, and no 50 bp increases. These futures, which directly reflect market expectations, indicate that the market expects and has priced in that in December the Federal Funds Rate will be 4.0%. T

To: Vendit™ who wrote (7729)	4/13/2005 8:16:11 AM
From: Walkingshadow	Respond to of 8752

At the moment (90 minutes before the open), oil continues to fall, and is close to $51. The "sigh of relief" evidently was an ultra-rapid sigh, since index futures are currently trading down, and indicate a modest gap down at the open. However, in 30 minutes there are several important economic reports released. If these deviate from expectations, that will have to be discounted by the market. At 8:30 ET, March Retail Sales (consensus +0.8%) and Retail Sales ex-auto (consensus +0.5%) will be released, and will be closely watched. The market's interpretation will be rapidly reflected in the futures markets. T

To: Vendit™ who wrote (7729)	4/13/2005 8:49:29 AM
From: Walkingshadow	Respond to of 8752

One last thing about the "sigh of relief": If the market was indeed concerned, one would expect that QQQQ would have traded down between the FOMC meeting and yesterday's release of the minutes from that meeting. That did not happen. On March 21, the day before the FOMC meeting, QQQQ closed at $36.58. On Monday, the day before the release of the FOMC minutes from that March meeting, QQQQ closed at $36.66. That represents a slight increase of 0.2%. T

To: Vendit™ who wrote (7729)	4/13/2005 9:05:57 AM
From: Walkingshadow	Respond to of 8752

March Retail Sales were 0.3%, well below expectations (consensus 0.8%). Retail Sales-Ex Autos came in at 0.1%, also below expectations (consensus was evidently revised up to 0.6% from 0.4%)... In response to the data, Treasurys have rallied, as the 10-yr note is now up 6 ticks yielding 4.32%. Not surprisingly, stock index futures dropped on the news, and the markets will gap down at the open. Earnings news last night and this morning were mixed, with several warnings and downward revisions interspersed with higher than expected EPS. Overall, earnings were probably a wash. If the markets close down today, that will represent yet another recent example of lack of follow-through in market rallies. Specifically, since the beginning of March, there were only two instances out of 8 possible where we saw two consecutive hollow body candles (25%). Today's close if down will make that 2 out of 9 (22%). In contrast, during this same time, black candles were followed by one or more consecutive black candles 7 out of 8 times (87.5%). As you know, uptrends are characterized by evidence of follow-through. Yet we see precious little evidence of this, which is consistent with my interpretation that we have not seen the bottom of this medium-term correction yet. I agree with you that it is quite possible (considerably less so following today's news) that QQQQ might try to rally halfheartedly up to the heavy resistance beginning at about $37, but after that, all indications show that we are looking at significantly more downside, ultimately down to $35 or perhaps even lower. T