Thursday, November 09, 2006

CSCO Can't Hold Market Up

Thursday’s big items were the CSCO news from Wednesday evening, the trade deficit reduction, the final democrat senator wins to push the democrats into the majority in both houses, the jump in the precious metals, and the market’s response to all of the news. CSCO screamed out of the blocks in early trading and opened on the High of the day at 27.44, a new 52 week high, in fact the highest price for that stock since early 2004. From there the stock drifted lower most of the day and closed near its lows of the session, still up at a new high for the year.

The reduction in the trade deficit didn’t do too much to the stock market or the bond market. The news is just so bad on that front that people have been ignoring if for a long time. Later in the day the precious metals jumped maybe in response to the trade deficit news but maybe not. Gold was up 3% and silver was up 4% with the HUI up about 4%. The precious metals market was joined by crude oil which spiked a couple of percent. Do you think the markets are starting to try to figure out what the election means?

We think the stock market was fairly loud and clear today as the early morning jump spurred by CSCO could not hold. The market, at least the tech heavy NASDAQ, started out about 0.75% higher, spent the rest of the day leaking, this on the highest NYSE volume since October 4th. We know that the market has been known to thrown us bears a bone or two now and then and immediately come take it away but we have a lot of hope built into the market at this time and a nice drop from these crazy highs would be good. We think the bulls would benefit from a healthy correction, too, or so we would tell them. They would say that a 73 point down day in the Dow is all the correction necessary. What would you say?

Here it is again, Thursday evening and we have watched another week of action go past us. We can only wait for an opportunity that we like. Have a good weekend.

Dow Industrials: 12,103.30 -73.24
VIX: 11.01
QQQQ: 42.80
RYVNX: 17.99
RYAIX: 22.08
RYCWX: 37.29
TLT: 89.47
BEGBX: 13.86

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