Tuesday, August 18, 2009

Evening Briefing for August 18th

* MARKET THEMES FROM TUESDAY - After Monday's pullback in risk assets, we saw a bounce overnight on favorable economic news from Japan. That led to buying in commodities, a pullback in the U.S. dollar, and a rise in 10-year Treasury rates. All are themes supportive of higher stock prices, and, indeed, buying pressure was solid through the day on Tuesday. We moved above the August 12th lows, a level I've been watching closely, but we also saw some evidence of toppiness late in the day. That will have me looking at markets carefully overnight and early Wednesday to see if the former support now serves as resistance. If so, we can expect a test of Monday's lows in the near term. If we can stay above those August 12th lows, a bounce back into the thick of the prior multi-day range would be expectable.

* OVERSEAS/OVERNIGHT NUMBERS: 11:30 PM CT - Japan, All-Industry Index; 1:00 AM CT - Germany, PPI; 6:00 AM CT - Canada, CPI.



-- Prospects for U.S. dollar decline;

-- Excellent overview of challenges facing residential real estate;

-- What lifestyle do traders desire?

-- Worthwhile reading from NewsFlashr, including prospects for more foreclosures;

-- Defaults to rise on commercial mortgage backed securities;

-- Stock market disconnected from economic realities.


Bob said...

Hey Brett,

I've noticed the substantial emphasis you place on inter-market relationships i.e."themes". This is an area I am trying to educate myself on, do you know of any comprehensive resource (a good book perhaps?)
For example, I often hear people describe risk seeking verse risk adverse market participant behavior. What would you look at to assess this and how does it relate to your primary market? Do inter-market relationships apply to all time frames, or is there a lower limit to their application (1 day vs. 1 hour vs. 1 min)?

Love the Blog, first post.

Adam said...

Brett ~

Interestingly, your link to "What lifestyle do traders desire," takes us to a list of hopes and dreams the likes of which are guaranteed to promote frustration or failure in one's trading career:

"Successful, Lavish, Luxurious…Ideally on a yacht in the mediterranean."

"big house, lots of cars, lots of holidays and a distinctly disgraceful amount of surplas money"

"Leisurely lifestyle - little to no stress regarding income"

On the other hand, a few of the survey responses were intriguing, even insightful:

"Autonomous, financial independence."

(Okay, that sounds typical, but it's realiatic.)

"I want to be an independent scholar."

(Now we're talkin', 'cause that's what every successful trader in fact is.)

"No bullshit"


Happy trading!