MysteryTraderBlog.com: directionless market behavior

mys·ter·y¹ Pronunciation Key (mst-r)

One whose identity is unknown and who arouses curiosity.

Search Blog

Syndicate MysteryTraderBlog

Advertisers

« Relief rally? | Main | downside risks loom large »

directionless market behavior

Crude oil prices fell more than 1% to $69 on news that supplies of crude oil, gasoline, and distillate all rose in the latest week, contrary to expectations for a decline.

Also, a slightly smaller than expected upward revision to second-quarter U.S. economic growth as measured by GDP (gross domestic product) reinforced hopes that the Federal Reserve may have ended its interest rate raising cycle.

Stock prices turned higher on this news, but I doubt that the gains can be sustained.

Unless a surprising employment report gives the market some direction on Friday morning, choppy, directionless market behavior may continue. Many traders are on vacation this week, and so a truer reading of the market intentions may be postponed until next week.

I still see potential downside risks outweighing potential upside rewards.

Posted by MysteryTrader on August 30, 2006 05:05 PM | Permalink

TrackBack

TrackBack URL for this entry:
http://www.mysterytraderblog.com/cgi-bin/mt-tb.cgi/50

Comments

With a nice rally on Fridays lite volume we will find out on Tuesday if the rally has legs or not.

Posted by: fajim | September 5, 2006 06:02 AM

Inverted yield curve is an effect of a rising liquidity- people borrow short to own whatever is going up (lend long term). So a yield curve in effect is not a warning for an impending recession but just the thing before bust, a boom. Problem happens when the yield curve switches from its present state of being inverted to upward sloping-indicating that appetite to borrow short and lend long is shrinking rapidly and the party could come to an end. Based on this analogy we can conclude that current shape of yield curve should not make us worried but we should be in lookout for the yield curve to revert to it upward sloping form, when the actual recession would begin.

Posted by: Anindya Banerjee | September 6, 2006 07:09 AM

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Name:

Email Address:

URL:

Remember personal info?

Comments: (you may use HTML tags for style)

About Me:

Almost nothing is known about the Mystery Trader. If there were anything much known, he or she would not be such a mystery, would he or she?

We can say only this: the Mystery Trader has been trading for a long time, has learned a few things, mostly the hard way, has traded all kinds of crazy financial instruments, has made AND LOST an awful lot of money, and has not died broke well, not YET anyhow, but there is still time for that.

The Mystery Trader writes these impressions and thoughts as a kind of an uncensored stream of consciousness journal or diary, largely for his or her own amusement, but also hoping these thoughts might help readers somehow, perhaps occasionally, prevent them from doing something stupid.

The Mystery Trader hopes that his or her thoughts might help YOU keep from losing YOUR shirt in the world's biggest casino. The financial markets are notoriously tricky and have ALWAYS been loaded with disinformation, deception, raw deals, chicanery, and outright criminal theft. Unfortunately, little of this bad behavior is caught and punished because the financial markets are too big and chaotic.

The Mystery Trader certainly and explicitly does NOT recommend that you blindly accept any ideas presented here or take anything expressed here at face value as actual fact. On the contrary, if anything, the Mystery Trader hopes that this blog might encourage you to think entirely for yourself and develop your own UNcommon sense. Be careful, have fun, and good luck!

Post Calendar

Site Sponsor