ابن الديرة
16-10-2006, Mon 3:16 PM
Moving forward, this upcoming week will be filled with important economicdata. Furthermore, with stocks likely bid up to recent highs on the expectations that the economy is running at just the right temperature, we
suspect that any out-of-line reports this week could have the ability to movethe markets south (keep in mind, we were just at Dow 11,500 a few short weeks
ago).
Specifically, the CPI and PPI data will be closely watched, as will housing data. Investors will no doubt be looking for any signs of inflation heating up and/or the economy cooling off too rapidly. Additionally, oil prices and corporate earnings will likely continue to take center stage. We would also keep a very close eye on the 10 year Bond, as any move in the yield up towards
the 5.0% levels could serve to take some of the steam out of the markets near term.
Again, while the recent move in the market has been very nice, we continue to believe that when too much of the street is bullish, it tends to set the stage for an overall market decline at some point. Additionally, if we continue to see money rotate out of technology and into larger cap Dow stocks, that can often times signal that a down turn is coming (i.e. money moving into less risky
and more secure "old money" type positions). For now, we continue to urge investors to take a tempered view of the recent market move.
If history is any guide, then just when you least expect it, a sell-off will start to unfold.
suspect that any out-of-line reports this week could have the ability to movethe markets south (keep in mind, we were just at Dow 11,500 a few short weeks
ago).
Specifically, the CPI and PPI data will be closely watched, as will housing data. Investors will no doubt be looking for any signs of inflation heating up and/or the economy cooling off too rapidly. Additionally, oil prices and corporate earnings will likely continue to take center stage. We would also keep a very close eye on the 10 year Bond, as any move in the yield up towards
the 5.0% levels could serve to take some of the steam out of the markets near term.
Again, while the recent move in the market has been very nice, we continue to believe that when too much of the street is bullish, it tends to set the stage for an overall market decline at some point. Additionally, if we continue to see money rotate out of technology and into larger cap Dow stocks, that can often times signal that a down turn is coming (i.e. money moving into less risky
and more secure "old money" type positions). For now, we continue to urge investors to take a tempered view of the recent market move.
If history is any guide, then just when you least expect it, a sell-off will start to unfold.