Prague Twin

Tuesday, September 05, 2006

Markets

It has been a while since I reported on markets. I know this bores most of you so I will try to be brief.

The Dow has recently cleared important technical resistance levels which clears the way for new record highs above the 11,700 mark set in May. On Friday before the Labor Day holiday it stood at over 11,400 which is the highest level in three months. Now that Labor Day is behind us, the senior traders are back on Wall Street. It will be interesting to see if they continue the bullish trend that the junior traders established over the last couple of weeks, or if they take a pessimistic view and a sell-off insues. So far today, the Dow is down just slightly.

Non-Farm Payrolls came in just above market expectations Friday at 128,000. The ISM Manufacturing Index also came in at market expectations. These two numbers emphasised the view that the economy is still robust but not overly hot. Traders took it as a sign that further gains are in the cards but an interest rate hike probably is not.

Currency traders have been shorting the dollar everywhere you look. This oversold bias has actually helped the dollar retain it's value. The major currencies have been not been able to break out of the same ranges that we have seen all summer against the dollar. A couple of months ago I reported that the EUR/USD was in a range between 1.26 and 1.2950. Recently the range has been confined to the upper half with 1.2750 providing solid support and 1.2940 providing solid resistance.

All and all pretty boring over the last couple of weeks. There is very little data to be released this week, so the boredom should continue. Next week the inflation numbers start coming out and I expect that that data will provide the markets with some direction.

2 Comments:

  • While I have never posted a comment on one of your "Markets" posts, I thoroughly read each one. As we come from dissimilar political arenas, I like to see your take on what it is that drives and slows the markets.

    And while it may indeed be boring, it is important information and information that is presented in a way that no other blog from the Left (if a may be so daring) has the courage to present in such a "numbers don’t lie" fashion.

    Thanks.

    By Anonymous Arch Stanton, at 3:00 PM  

  • You are more than welcome Arch. Thanks for reading.

    By Blogger Praguetwin, at 3:38 PM  

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