Monday Pre-Market Notes

The US Dollar index is climbing back toward 80 this morning, with renewed eurozone jitters weighing on the markets. Look for a rocky start to the trading session, and watch for support at the 50 day MA on the SPX, Russell2K and NASDAQ. Expect the Dow to break the 200 day to the downside. The bias looks negative for the commodities, especially oil.


To Readers: a New Direction

First, I’d like to thank my readers for their interest and occasional encouragement. It has been very rewarding as well as demanding to maintain this blog. After nearly a year of regular activity, it is time to re-visit the reasons for writing and making this material public. In most respects it has met my initial aims, but in one respect it has not: the exchange of ideas I hoped would be found in the comment section.

For some time copies of most of my posts, in particular the weekly market outlook, have been reproduced pretty much identically at Seeking Alpha. Given the wider reading audience found there, it has been in important ways more successful than my own blog here at WordPress. For this reason I am making a change in direction. From this point I will be publishing all specifically market related material there. This blog will contain supplementary market commentary, as well as some non market specific economic material.

It is my hope that readers will find this material valuable, as well as visiting me at Seeking Alpha. As always, your comments are welcomed. Thank you again for your interest.


Midweek Update

The US Dollar is rising again pre-market. SPX looks like it may be due for a pullback, but the NDX and the Dow industrials and transports still show strength. Breadth indicators still look solid pretty much across the board.

Lately some analysts, myself included, have been considering whether the inverse Dollar/equities correlation may reverse. So far the early evidence is leaning  in that direction. Portfolio implications: continued bullishness for stocks, weakness for commodities.

This week’s much discussed negative yield TIPs auction appears to have confirmed the reversal in the bond market. Corporates have  joined Treasuries in the selloff as the market appears to be repositioning for inflationary expectations. The deflation thesis which has held sway for so long seems to be receding.

Europe – Brief Comment

This won’t take but a moment. Regular readers know my position on European assets. It seems German banks don’t want full disclosure of their “stress test” results, and the authorities are backing them.

As we’ve noted before, Europe’s sovereign debt crisis is really a banking crisis in drag. No further comment needed. Reach your own conclusions.

Quiet…Really Quiet

Not much to comment on recently. There has been plenty going on, but the markets seem unimpressed with any of it, for good or bad. Most of the major averages are drifting along, with little volume to move the needles.

With Q1 earnings season now underway, let’s see if things start to move a little.

Health Care Reform Bill Passes

The markets have been even more sensitive to news, since the meltdown. Any predictions? Dollar and Treasuries down, maybe stocks down as well? We’ll see in the morning.

Apparently this bill isn’t going to be so bad for the health care industry. The S&P Health Care ETF (XLV) has participated in the recent rally. One would think, with it becoming fairly apparent in recent weeks that this bill would pass, that if it was going to hammer the industry, it would have shown up in the stock prices. No such indication was seen.