Morning Call: Tuesday, June 16, 2009
Good morning.
Blame it on the charts Cramer says. The technicals got too far above their moving averages and we were therefore vulnerable to a pullback. His timing for a resumption of the up trend is a week away which coincidently is the beginning of the FED meetings of June 23rd and 24th. It seems too pat but the charts have been uncanny for quite sometime now. We are not in danger of breaking any uptrend lines, so the opportunity to book profits in the quarter is quite attractive.
John Maudlin wrote about the possibility of a "lost decade" and borrowed from Krugman as well as using an extensive quote from David Rosenberg of Gluskin Sheff. It’s nice to see local lads land on the Global Stage. (Everyone remembers the brilliant full page ad?)
Capital Economics talked of the 25 year build in US consumer debt and postulated that it will take 5 years to work it back down to levels where the American spender starts to go again. Certainly on our home front we are de-junking and as a result vowing never to buy anything ever again.
All of that to say that the bears came out in force. The wall of worry is still intact and we came off with little volume, which is also healthy.
Capital Economics talked of the 25 year build in US consumer debt and postulated that it will take 5 years to work it back down to levels where the American spender starts to go again. Certainly on our home front we are de-junking and as a result vowing never to buy anything ever again.
All of that to say that the bears came out in force. The wall of worry is still intact and we came off with little volume, which is also healthy.
We concur with those that assert that no one knows what will happen. The recent rally was led in part by base metals which is a historical first. There all kinds of arguments to the contrary. So this rally happened but it’s been anything but typical. It will probably stay that way.
The housing starts came in at 525k versus expected 485K. PPI is reported at 0.2% with consensus at 0.6%. Stay tuned. Best Buy beat really well and the stock was down. Is good news no longer good news?
The housing starts came in at 525k versus expected 485K. PPI is reported at 0.2% with consensus at 0.6%. Stay tuned. Best Buy beat really well and the stock was down. Is good news no longer good news?
It may be best to………………… Stay on the sidelines.
Nuclear Tuesday
The UX price is up $3 to $53. There were 5 trades for 1.6mm lbs and with U3 O8 equivalent included there were 2.3mm lbs in 11 deals. Why we like Uranium? It’s
1.) Fungible
2.) Non-Substitutable
3.) used to make Electricity which is Non-Storable (except maybe in Aluminum)
4.) has to run 24/7 because of the capital costs.
1.) Fungible
2.) Non-Substitutable
3.) used to make Electricity which is Non-Storable (except maybe in Aluminum)
4.) has to run 24/7 because of the capital costs.
SSO US (Bloomberg): Ultra Standard and Poor’s 500 ProShares is an exchange-traded fund incorporated in the USA. The Fund seeks daily investment results that correspond to twice (200%) the daily performance of the Standard and Poor’s Index.
Quote of the Day:
“In business, the competition will bite you if you keep running; if you stand still, they will swallow you.” -- William Knudsen Jr.
Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca
Graham Farrell, Institutional Equity Trading
416-369-4208, gfarrell@dominick.ca
The above note is prepared by an Institutional Salesperson based on morning meeting comments and general Institutional desk discussion and should not be construed as a research report or a solicitation. For information purposes only. D&D Securities, its clients, and principals may have positions in these securities.
