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B4 The Bell, PreCrash Moonday, May 10


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:D Welcome to another week of trading, humor, insights, and what not at B4 the Bell! Crash warnings are up for the second week in a row. Will the market follow Japan down that dark canyon? Stay tuned for B4s and Docs analysis.

 

House of Bush

 

Saudi Oil Min: Hike In OPEC Output Ceiling "Essential"

 

DOW JONES NEWSWIRES

May 10, 2004 6:14 a.m.

 

DUBAI -- Saudi Arabia's Oil Minister Ali Naimi Monday called on OPEC to raise its production ceiling by 1.5 million barrels a day when it meets June 3 in Beirut.

 

"It is certain that the Kingdom believes that increasing the OPEC production ceiling is essential to keep supply and demand balanced," he said in a statement, adding that the required increase on the 23.5 million b/d ceiling should "not be less that 1.5 million b/d."

 

Naimi said he would discuss the market situation with other Organization of Petroleum Exporting Countries at the International Energy Forum's upcoming meeting in Amsterdam May 22-24.

 

"(We) shall opt to reach an understanding to increase the production ceiling...in Beirut," he said.

 

The Saudi minister said recent price increases, which have seen U.S. prices hover around $40/bbl, were a "major concern" for the oil-rich kingdom.

 

"We do not want to see prices rise to the level that they negatively affect the growth of the international economy or the demand for oil," he said.

 

Naimi said strong demand from Asia would continue to grow in the second half of this year.

 

The minister said the most important reason behind the recent hike in oil prices is "the market's unwarranted fear of disruptions in supplies from some oil producing countries and regions at a time when only the kingdom and probably two or three other countries have spare production capacity."

 

Market speculation is another factor, he added, saying that traders are holding and maintaining long-term contracts for commodities such as oil, due to the economy's robust growth and low interest rates.

 

http://online.wsj.com/article_print/0,,BT_..._000984,00.html

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Hitting Long Term Support

 

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Futures setting up for an opening gap below "death lines" on the Dow and S&P. This is getting good. Could it be? Could the crash telegraph itself like this? The NDX has a very little room, but if the other two go, it won't be long until it follows.

 

With that said, I can't help but think back to 911 + 1 week. With futures locked limit down in the morning, Mark Haines and the crew on Crapvision were speachless, shaking their heads in despair. When the markets opened, they shot straight up all day and never looked back for months. Different circumstances now I know, but the memory makes me cautious. I have trouble believing "they" would be so obvious about a crash.

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The effectiveness of the jam jobs, those alredy tried since 6:30 am eastern time and those to more than likely come again before 9:30 and into the first hour of trading, will mark the course of today's market. MOsc was at -296 and very Dover Sole. Ike Iossif's buy-sell eliquibrium and thrust oscillators have turned up amidst continued developing weakness in his other quantifiers. suggesting a possible short, sharp rally may be near but that the overall condition of the market is so weak that rallies should be used for shorting rather than dips be used for buying. I for one would love a nice washout today to bag some decent profits in the IWM and QQQs, the latter I think could really play catch-up today as I felt the semiconductor rally of late last week was for further distribution. Given how European and Asian tech stocks got smacked today, I suspect I may get my wish. Still, you got to believe a big selloff today could get the MOsc to well over -300, leading to an Dover Sole bounce similar to ones like we had in July, 2002. Since when wasn't even a feeble rally possible from those levels?

A rally into Wednesday would be nice. . .just in time for the inflation and consumer sentiment news coming on Thursday and Friday, which I think will be worse than expected, leading to further weakness in the bond market and perhaps a more concerted decline in equities. Selling today, IMO, is what is needed to confirm the possibility that the bull case is in deep doo-doo, if not finished altogether. After all, we are talking about a mindset for selling developing amidst shrinking liquidity.

It's the second wave of selling after a failed frantic rally that leads to despondency and then capitulation.

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Guest yobob1

Did a little gold mining this weekend, using a $1300 dry washer. Well let's call it dirt sorting. Frankly after my experience, $100,000 an ounce wouldn't be enough to cover expenses. :lol:

 

It occurred to me that gold may be in a similar position as oil. All of the easy large finds have been made and going forward more and more dirt will have to be moved to locate it in diminishing quantities. I opined quite a while back that most of the miners, in order to survive the low prices of the late 90's/early00s, ran their best ore keeping their cost per ounce low. Now that prices have risen they are running lower grades both because they can and because they have to.

 

Much angst amongst the gold & silver bugs. Personally I'm not overly concerned - yet and unlike Brian, I don't think they are responding to the inevitable onset of deflation. Yes I think deflation will happen and damned soon, but I suspect that with the global population where it is and the known quantities of metals where they are that in time their role as money will reassert itself as fiat becomes known for what it is. Note, I'm still not convinced they can let the dollar go at this stage and as the reserve currency it will retain utility for a while as we go through the arduous process of competitive devaluations.

 

The general economy is on borrowed time. Al will never - repeat never raise rates. He can't. If Al quits in June, I would still find it difficult to see a rate increase in the foreseeable future on a fundamental basis from the fed's standpoint. That is not to say the markets won't force the fed to follow, but the pressure is on keeping fed funds where they are. I still think we end up with not a rate curve but a rate flagpole and incfreasing spreads across a wide swath of bonds away from treasuries. Emerging market, corporates, muni and RE bonds should start displaying their true risk rates. A flight to safety (US treasury debt) is still possible during volatile periods, but even that will fade as any rate increases across the yield curve is adding to the deficit by rasing borrowing costs and increasing the percentage of the budget that must be used to cover their already issued (mostly short term) debt. Big deep dark doo-doo developing there.

 

Last Summer I said Bush was peaking way too early. The matrix has cut him free to flounder on his own. Pray for a Republican House and Senate with a Democratic Pres. Hopefully we will get grid lock. We're a whole hell of a lot safer if they do nothing.

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I hear ya. The matrix is in full swing .

1. saudis announcing desire to see lower prices ( Hmmm - I guess the royal family is quite satisfied with their wealth and don't want to seem greedy)

2. Would'nt be surprised to see margin requirements on Crude futures raised.

3. then fed govs will be out saying oil price spike was temporary and inflation is not a problem.

4. maybe the germans and French will again voice their aversion to gold and say they want to dump all their useless yellow stuff as soon as possible.

5. Then Maria and gang will sing lullabies for the sheeple.

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Futures setting up for an opening gap below "death lines" on the Dow and S&P. This is getting good. Could it be? Could the crash telegraph itself like this? The NDX has a very little room, but if the other two go, it won't be long until it follows.

 

With that said, I can't help but think back to 911 + 1 week. With futures locked limit down in the morning, Mark Haines and the crew on Crapvision were speachless, shaking their heads in despair. When the markets opened, they shot straight up all day and never looked back for months. Different circumstances now I know, but the memory makes me cautious. I have trouble believing "they" would be so obvious about a crash.

Let us look at the all powerful Nasdaq the has no were to go down.

 

ABC down,

A 2060, B 1920

A-B = 140

C 1970

D= 1970-140 = 1830

I think we could have a nice move down with all three.

Since I am short it would be nice to see the matrix actually lose control of all three.

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Last Summer I said Bush was peaking way too early.  The matrix has cut him free to flounder on his own.  Pray for a Republican House and Senate with a Democratic Pres.  Hopefully we will get grid lock.  We're a whole hell of a lot safer if they do nothing.

I think that bushman is being taken down by that small country in Asia, which has more people than any other country.

 

They just do not want, what they view is a madman.

 

First they give us inflation by buying everything. That stage is done with.

Now they are not renewing the note and bonds they bought, If they are not renewing, YIELD have to go up.

 

The bushman is toast.

 

If what you are saying it true. That country, that really makes things, has been able to also take down the MATRIX, that only pushes vapormoney.

 

One thing that I do not understand is why and how is the USD is able to move up.

 

But if everybody wants the USD, YIELD should be going down.

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Nothing too good for the GSE's.

 

"NEW YORK, May 10 (Reuters) - Fannie Mae (FNM.N: Quote, Profile, Research) and the U.S. Securities and Exchange Commission have reached an agreement allowing the mortgage finance giant to avoid a restatement of its results, the Wall Street Journal said on Monday."

 

"Under the deal, Fannie Mae will be required to use a different method of accounting for certain securities backed by manufactured housing loans and aircraft leases, the Journal said."

 

Fannie Mae, SEC in deal to avoid restatements -WSJ

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