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 David Fry's Market Outlook for Wednesday

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gastaoss



Number of posts : 440
Registration date : 2007-07-01

PostSubject: David Fry's Market Outlook for Wednesday   Wed Aug 29, 2007 9:36 am

http://seekingalpha.com/article/45894-david-fry-s-market-outlook-for-wednesday

David Fry's Market Outlook for Wednesday

posted on: August 29, 2007 | about stocks: SPY / IEF / GLD / RSX / INP / FXI / EPP





There are many moving parts now that are influencing growing investor angst, and many of them are pretty scary.




    <LI _extended="true">Credit card repayment default rates are up 30% YoY.
    <LI _extended="true">Consumer Confidence is weak.
  1. Home prices fell nationally per the S&P Case-Schiller U.S. National Home Price Index.







  1. According to this summary from www.markit.com, the credit crunch continues in the mortgage space as noted by their charts featured below. Note that AAA and AA tranches for example are going for $78, while A rated are around $57 and BBB at just $37.


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gastaoss



Number of posts : 440
Registration date : 2007-07-01

PostSubject: Re: David Fry's Market Outlook for Wednesday   Wed Aug 29, 2007 9:37 am


    <LI _extended="true">CNBC reported that there are big bets being made that the market will decline before September options expiry.
  1. On the Middle East, geopolitical scene is the Iraq/Iran/French/U.S. war of words that could escalate to something more serious quickly. The first story regarding Iran’s threat to take over Iraq upon the U.S. exit. French President Sarkozy implies an attack is inevitable if the Iranians don’t stop uranium enrichment. And, President Bush in another speech outlined Iranian interference in Iraq and Afghanistan. In the meantime U.S. carrier attack groups number three.


Are you scared yet? You should be. I am.

Meanwhile, U.S. stock markets were crushed.

It looks like Yahoo may finally have gotten some volume data at least partially right as noted below.







Now we may have had a 90/10 day in the opposite direction from Friday’s spike -- a large negative. Yes, volume is still light but it was on Friday’s rally also.

It goes without saying that volatility is increasing dramatically once again as put buyers seek protection.

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gastaoss



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PostSubject: Re: David Fry's Market Outlook for Wednesday   Wed Aug 29, 2007 9:39 am




























We could post a lot of charts, but we won’t since everything is about the same notwithstanding extremes. Let’s just glance at the popular BRIC sector and a couple of other markets of interest internationally.
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gastaoss



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PostSubject: Re: David Fry's Market Outlook for Wednesday   Wed Aug 29, 2007 9:39 am



















If you’re a day-trader these are the kinds of markets you love, since you can make money fast IF you know what you’re doing. For us, we’re slower and because of that “cash” is king.

The more important question: Can Bernanke & Co. save the day? I’m not sure an interest rate cut would be helpful, but Helicopter Ben will be speaking on Friday. His focus groups are working overtime rehearsing various scenarios, tools and “words” they can use to calm or support markets.

Maybe given the points we listed at the start a perfect storm is developing as financial and geopolitical risks become highly elevated.

Disclaimer: Among other issues, the ETF Digest maintains long or short positions in: iShares Lehman 7-10 Yr Treasury Bond ETF (IEF), iShares Lehman 20+ Year Treasury Bond ETF (TLT), streetTRACKS Gold Trust ETF (GLD) and PowerShares DB US Dollar Index Bearish (UDN).
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