About Me

Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Sunday, January 08, 2012

Stock Market -- Weekly

Technical
The market remains in a moderate but volatile uptrend. Failure of the SPX to take out even mild
Oct. 2011 overhead resistance at 1285 over the past week should remain a source of concern for
traders and serves as a cautionary warning for the next couple of weeks. $SPX

Fundamental
The Fed is maintaining Its nearly $100 bil. liquidity swap, but as expected, it has started draining
permanent reserves following a moderate build up for the holiday season. That build up did
increase trader optimism that a new round of quantitative easing could be in the works. It will
be important to see how traders react to further, but normal seasonal shrinkage in longer term
Fed bank credit.

If sizable, additional increases in the central bank liquidity swap program are needed in the
months ahead, it would underscore rising financial stress in the EU and would not be a good
sign.

My weekly cyclical fundamental directional indicator continues to advance modestly primarily
on the strength of falling initial unemployment insurance claims. A rising directional indicator
is a positive for the market and could provide significant additional support if the breadth of
the various measures that comprise it would increase.

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