Although it was a pretty good rally yesterday, investors remained cautious ahead of the FOMC decision. VIX (16.03) rose even as stock prices were higher, and settled above 16 for the first time since mid October. Technically, it was just an oversold bounce yesterday, as the major indexes are still in the downtrend started on November 29. With that said, it all depends on what the Fed says on Wednesday. Should there be no tapering, we are most likely to get a final push higher toward the year end.
with NO GROWTH in 2014 and uncertainty about its future business and future growth at 25 dollars Intel is fully priced. This market is fully priced for perfection at this point. But with the Feds tapering just 10Bln which is peanuts and no further commitments whether they will cut 10Bln every month or the next time they meet in March, this market can head any direction. Sawwy investors will stay away, fools will join in.
Bernanke killed the shorts. But with stocks up 25 percent for the year 2013 already I don't see much upward move unless the earnings are a blowout by any corporations. The multiples are so high that the corporations have stopped buying their own stocks, what does that tell you folks.
With the tapering issue out of the way, the stock market is allowed to run with the economy and earnings, both of which look to be on the path of moderate growth. This suggests that the longer term uptrend will probably stay in place for quite a while. In the near term, although the DJIA and the S&P 500 closed at record highs and the rest of the major indexes broke above of their short term downtrend started in late November, it is still unclear whether the major indexes can decisively break out above their November highs. The small and mid cap stocks again lagged yesterday, while the market internals weren't as strong as what the price moves by the DJIA and the S&P 500 would have suggested. Keep an eye on the internals and the technical indicators of the major indexes, which continue to show negative divergences, in the coming days. For a solid Santa Clause rally, the internals and the technicals would have to catch up.
as per the technical indicators it seems unlikely we will see it again for a long long time. That was the high and it will be the high for a while. If I am right and its a big IF (since the market has thrown the technicals and fundamentals out the window) we will see a pullback from here as the internals are not very strong.
yesterday was that Bernanke made a comment about keeping long term rate to zero hence protecting the folks who have borrowed on margin. So Uncle Ben has Wall streets back covered. Besides the inflation numbers of 2.5% and the unemployment target of 6.5 was thrown out and now the market expects the earliest if any rate increase will be end of 2015. But the biggest relief was to the margin borrowers. With tapering out of the way and the next fed meeting in March where Yellen will do more tapering the market is now moving forward on its own fundamentals of growth and earnings.
Stocks needed a rest after wednesday's big run. So it wasn't surprising to see them taking a rest yesterday. However, the underperformance of the small and mid cap stocks continued to be a concern. In addition, there was little leadership in the market. The stock market needs another pullback like what we had in the first half of December to bring buyers in. Suggest take your profits or hedge and go to the sidelines. There does not seem to be one stock out there reasonably priced for an entry point. Way over valued and we will see a pullback most like after the new years.
He had a date with a b!tch half his age, he got help of the purple pill "Viagra", that darn pill got stuck in his throat and he had a stiff neck for the last 3 days, that's why he is in there. LOL
Nope bro, they handed a letter to the S.Koreans they made a Xerox copy for their files...lol This dude Kim Thong Unnn (sorry his nuts got stuck in the thong)...lol - this dude with a bad haircut- looks like Dennis Rodman gave him his haircut...LOL is #$%$ NUTS...He looks Gay to me so maybe Rodman and Un ..same sex marriage?????? you may think something is going on since bro Rodman seems to be going to North Korea soooo many times???? Maybe he like flying long distances...LOL
If the economy is on such a strong footing with GDP revised to 4.1 percent for the 3rd QTR and unemployment down to 7 percent why is the fed continuing with the QE with only 10Bln tapering??
is at 7 percent but these are either seasonal jobs or people working 2 and 3 part time jobs. The Feds have 4 trillion dollars worth of Bonds on their books and adding, and they will never be able to unload the bonds without ROILING the markets. Keeping the rates at ZERO almost forever is not a good thing. Its a disaster for the dollar and bullish for gold and people will give up 15 and 30 year mortgages for the 5 year variable mortgage due to asset bubble in the housing markets high home prices. It will drive people into renting and rents are going up as well. The Fed has not achieved much with 3 QE's cause if they had achieved their goals they would not have thrown their goals of 6.5 percent unemployment and 2.5 percent inflation out the window. The fed tried to raise inflation with its QE's but was unsuccessful because how can anyone working 2 and 3 part time jobs have the power to spend. There is presently 11 million folks on disability, millions who have given up looking for jobs, 26 million unemployed, 48 million on food stamps and millions working 2 and 3 part time jobs and all of the jobs created are mostly 7 dollars and hour jobs. No wonders analysts are beginning to speak about Recession although never say never but the markets are forward looking and with the markets having gained 20 percent for 2013 I seriously doubt a recession but then hey I am one of yall just a human with no crystal ball.
It was a strong finish friday as the small caps caught up to the larger names. There are six trading days left in the year and the seasonality favors bulls. With the Fed out of the way, expect stocks to continue melting up on good economic numbers. Technically, stocks are in a short term overbought territory but as downside is limited, any pullback is likely to be shallow and met with dip buyers.
Ashraf, good morning, in the SA ya'll keep talking about Intel buying Micron for production of the SSD's etc;
Intel already has a massive stake in Micron roughly 50% owned by intel and they are always ready to pump more if need be. They were also going to open a JV Fab in Singapore, that went on hold in 2009 when the market crashed and am not sure if they eventually got it going. So I seriously doubt if Intel will buy Micron and especially at 21.50 a share when they could have bought it at 1 dollar a share in 2009. Thanks and have a nice day.
hi, yr gut feeling is right on. the market is way too overbought, there is not one stock that is reasonably priced that I would even day trade or swing trade. you cant touch a darn thing. I am on the sidelines. goodluck.
El-Erian: Here are 4 reasons to be skeptical of the QE exit
December 26, 2013, 1:13 PM
The Federal Reserve’s announcement that it would begin curtailing its bond-buying stimulus program has been hailed as remarkably smooth, but maybe we should hold off on the celebrations.
The central bank said last week that it would reduce its $85 billion in monthly purchases by $10 billion, beginning next month, while at the same time keeping its target policy rate at near zero for an extended period of time. That decision was met with a surge higher in stock prices (which has continued), while bond yields have mostly risen at a modest pace (the 10-year Treasury broke through 3% Thursday).
That contrasts with the Fed’s earlier declaration of possible action in May and June, when the debt market sold of sharply and stocks had a short-lived pullback.
But we’re not yet out of the woods — or, rather, out of the stimulus — says Mohamed El-Erian, chief executive officer at asset-manager Pimco. “Central bankers have good reason to be more cautious about declaring victory at this stage. And the rest of us would be well advised to ask why,” he writes in a Financial Times commentary Thursday.
Here’s why, as explained in his commentary:
The Fed is still artificially inflating asset prices, which means El-Erian considers them over-priced compared to fundamental economic indicators like extension of credit and use of cash for economic investments. Until the economy improves enough to line up with asset prices, concerns will linger.
The central bank is due to lose some of its control when its switches from its direct monetary policy of buying bonds to its indirect mechanism of issuing forward guidance about the path of interest rates. That raises the question of how well the Fed can keep a lid on rates. One sign of that is the sharp move higher in the 5-year Treasury note 5_YEAR +0.40% yield, which is heavily influenced by the path of monetary policy.
The 5-year yield is up roughly 25 basis points since before the policy announcement.
Equities have been red-hot recently, which could be “disruptive” if they reverse with the same force.
Other central banks besides the Fed have also been partaking in highly accommodative monetary policies (ahem, European Central Bank and Bank of Japan). They will also have to contend with the tricky exit process.
Your browser does not support iframes. The rising 5-year yield could be one sign of difficulties ahead.
Pimco has projected that the Fed will hold its interest rates near zero until 2016, but some market indicators of rate hikes are pulling forward those expectations into the first half of 2015. The CME’s FedWatch shows the market pricing in a 54% chance of a rate hike in April 2015, based on fed funds futures contracts that are tied to policy rate expectations.
Perhaps that’s one sign that the exit could be tricky as the Fed tries to hold the market together. But it’s a long process, El-Erian says, and there are many battles left to be fought.
says he may invest in intel from his fathers tipping pot. WOW! Elian says his step dad El Erian thinks markets will correct but his aunt Janet Reno says the markets will head higher and higher and higher until his other aunt Yellen takes a #$%$ in your soup pot again while adding some spice, caper and another 10bln taper.