Two of the most impressive phenomena of the past couple of months have been the ruddy health of American consumers and the strength of the US dollar. Despite recent news reporting the cooling of the US housing market, domestic consumption and economic growth have not slowed appreciably, and the markets are pricing in at least 50bp more of Fed tightening in the months ahead. Asian economies have Doubting Timothy - Geithner Warns on the Current Account Deficit at 2006-07-09 19:42:58
Who cares about global imbalances anymore? Investors don’t seem to pay them much mind, as Morgan Stanley is reporting that the common perception voiced at its annual MacroVision seminar last week was that imbalances would unwind gradually into a soft landing as steady consumer demand in the US is augmented by growing demand abroad. Some economists are also suggesting that imbalances either don’t The End of the Carry Trade at 2006-07-09 19:42:57
Is the carry trade about to unravel? While the recent speculation that the Fed is nearing the end of its tightening cycle may have been premature, the attention that the speculation focuses on economic cycles is timely. The economic expansion in the United States has been running ahead of its peers in Europe and Japan. Whether the Fed pauses at its next meeting or not, interest rate differentials Watch list for week of 6-5-06 at 2006-07-09 19:42:55 Everybody probably thought I was nuts last Monday morning when I said we were in a short-term rally and the naz closed down like 40 points. I didn't sell a thing that day. Like I've said before: most days your best move is to do nothing. It was for me, the naz ended the week up 9 points; its second consecutive up week. In fact, on Wednesday morning I bought some TZOO shares just above its 50-day SMA. TZOO hasn't broken out yet, and sure enough it made an appearance on my market homework software this weekend as a buy candidate. I'll be adding to that TZOO position if it does in fact break out.
I'll be watching the nasdaq very closely over the next month because it has made a significant lower low, taking out the low put in at the beginning of the year. I don't sell profitable long term trend trades when the naz is having a correction off of a fresh higher high, even if the pullback is extreme like this one in May, but I will be closing out those positions if the naz
Watch list for week of 6-12-06 at 2006-07-09 19:42:55 This correction has become more severe than I anticipated. It seems that a lot of bulls capitulated on Thursday, along with some margin call liquidation. If Friday had been an up day then I would have a little more confidence in long positions. I think this bull might be close to its last legs, but I cannot be certain yet so I am still net long. My watch list this week looks far better than it has for months. It has been a while since such high relative strength stocks have consolidated long enough to meet the criteria my market homework software looks for.
I'll probably be re-allocating some of my portfolio from the worse looking positions into better looking consolidations on the list below. I've had GIGM since I posted about it in March and added to it again this past Thursday morning. I'll add even more shares if it breaks out from its current consolidation.
