Thoughts from the Floor

By webmaster • February 5th, 2008

Today’s drop in ISM non-manufacturing to 41.9 (vs 53 expected) was a clear shock to equity markets. The weakness reported was across almost all sectors: only three reported an improvement in conditions: utilities, scientific services & education. The last time we’ve seen such a big drop in non-manufacturing ISM was directly following the 9/11 attacks, [...]

Ok, so what was that saying again? Oh yes, NEVER FIGHT THE FED.

Well we can’t really say that the market is following that old piece of advice (this time will be different!) as equities have basically gone nowhere despite a massive 125bp rate cut by the FED within two weeks. Everybody betting against assets though [...]

European & Asian equity markets took a real beating today, closing at the lowest points of the day, generally down anywhere between 5-7%. The financial sector was the bleeder once again, this because of genuine fear that the Ambac’s and MBIA’s of this world will go belly up and with that create another round of [...]

Sentiment in worldwide equity markets continues to be pretty pessimistic and not many other asset classes seem to be able to offer relief. Except for government bonds ofcourse, which continue to be well bid in these circumstances.

On the subject of govvies, we think that you are absolutely out of your mind if you are buying [...]

What started off as a promising day in Europe ended in a disaster after HSBC stated that it was going to use $45b of its capital to bail-out its two Structured Investment Vehicles. Another round of “de-risking” took hold of the financial sector, dragging along the general market. Crude oil kept hovering around the $100 [...]

Dealingfloor.com has been up & running for well over a year now the time has come to re-think the content of the site. We’ll be taking a two-week holiday & hope to return afterwards with fresh ideas for the future. In the mean time please feel free to send us your suggestions as to what [...]

- The most important story of the week has been the continued weakness in commodities in our view, with oil breaking out to a new low, followed by the precious metals. We believe commodities are trading at deeply oversold levels, from which a significant bounce is likely to occur. There is quite some speculation on [...]

The Technical picture of the S&P 500 Index looks a bit troublesome: on the short-term time frame that is. The index has basically recovered to its May-high but now seems to hesitate to break through that level. Since the Fed didn’t prove to be the catalyst to push the S&P through 1330 [...]

The recent dip in crude oil has brought the commodity back to the lower end of its mult-year upward trending channel. This together with an oversold reading in the RSI-indicator leads us to believe that crude has seen most of its downside and is likely to turn (sharply) higher in the short run. We are [...]

Gold is currently flirting with its 200-day moving average. Further the metal seems to be testing the lower end of its long term upward sloping trend line. Should gold be able to find a bottom anywhere between $580-$590, we think it will prove to be an excellent buying opportunity. From a longer term perspective [...]