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D Frys Market Outlook 29 11 2006

The "talking" began today and should continue throughout the week. Prepare yourself for more volatility, be patient, and watch your step.

Sometimes there's not a lot to write about, but I'm always comforted when the NAR [National Assn of Realtors] makes comments. David Lereah, their chief economist, must burn the candle late coming up with tidbits like:

  • As expected, existing home sales appear to be stabilizing, fingers and toes crossed...
  • Falling prices are a good thing.
  • Inventories have stabilized.
  • "That's a segment of the marketplace that's experiencing some pain." [Referring to unsold condos]

Chairman Bernanke chimed-in stating that things are going according to plan. The economy is slowing and excluding the ailing housing and auto sectors [gag], "economic activity has, on balance, been expanding at a solid pace."

On the other hand, Charles Plosser of the Philly Fed stated that current levels of inflation are unacceptable and that interest rates may need to be increased. These sentiments are tentatively dollar supportive and are part of a strategy to keep the dollar from falling out of bed.

"Turnaround Tuesday" was revived today as economic releases pressured stocks early but some well-timed program trades hit the markets after 10 AM to stem the selling and lift stocks. And as the day chugged toward the finish line more buy programs lifted stocks. It's not a big surprise since we're approaching end of month and a little window dressing is common. It's not like we undid Monday's big decline in any fashion, but using "realtor speak," prices have "stabilized" for today anyway.

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

Let's focus on issues that dominate investor's attention again -- the dollar, precious metals and commodities.

First, more money has been lost over the past year trading currencies than any other market and that includes investors like Buffett and Soros and typical hedge fund managers. So there's no "lock" on the notion that "this is it" and much money will be made in currency trading going forward. There are plenty of forces ready to take markets in a completely different direction.

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

Let's look at even more volatile markets.

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

D Frys Market Outlook 29 11 2006

This week will require investor patience as the market is probably at a more dangerous and volatile point since last summer. So "watch your step" but be patient at the same time. More potentially market moving "talk" from officialdom will take place. Further, Thursday is the last day of November so window dressing will continue barring other news.

Have a pleasant evening.

Disclaimer: The ETF Digest maintains positions in: NASDAQ 100 Trust Shares ETF (QQQQ), S&P 500 Index (NYSEARCA:SPY), PowerShares Zacks Small Cap (PZJ), Euro Currency Trust ETF (NYSEARCA:FXE), CurrencyShares Swiss Franc ETF (NYSEARCA:FXF), streetTRACKS Gold Trust ETF (NYSEARCA:GLD), iShares Silver Trust (NYSEARCA:SLV), Central Fund of Canada (NYSEMKT:CEF), Market Vectors Gold Miners ETF (NYSEARCA:GDX), iShares S&P Latin America 40 Index (NYSEARCA:ILF), iShares FTSE/Xinhua China 25 Index (NYSEARCA:FXI), India Fund Inc. (NYSE:IFN), Templeton Russia & Eastern Europe Fund CEF (NYSE:TRF) and iShares Lehman 7-10 Yr Treasury Bond ETF (NYSEARCA:IEF).

Source: David Fry's Daily Market Outlook