From: Greg Simmons
Sent: October 30, 2005
INTEREST RATES - bonds put in a lower low this week (yields a higher high) and we have the Fed meeting on Tuesday so rates should be the driver of the markets this week…
Last week the President announced that Greenspan's successor would be a man who claims that if there is a rough patch in the economy that (I am not making this up!) throwing money out of helicopters would be a good idea! The market loved the news for about one day.
I mentioned last week that the M3 looks out of control on a chart and the next day I read that they are growing M3 by a TRILLION (with a "T") dollars a year to keep things afloat - - couple that with the helicopters that are coming and there is nothing to worry about regards the economy ever again I guess? (chart attached).
GOLD - as overbought as it appears refuses to go down…
I would have thought it would drop into the mid $450s after it's explosive run and take a break, but it's scratched back to nearly the highs already and maybe the world is waking up to the fact that if our new Fed chairman is looser than the last (to me it's like comparing one of the sleazy pop "divas" to a porn star) that holding some REAL money (Gold has been REAL money for about 5000 years - - granted it had a 25 year bear market and has been out favor till the last 3 years, but still no one seems to notice the move from $260s to the $470s) at a time where the dollar is in freefall may be prudent?
STOCKS/RELATED INDEXES - another way above average week for intra-day moves on the markets that didn’t really amount to anything again…
The month of October (still a day to go of course) looks like it will have about a 2-3% loss for the month, but the interesting part is that the "Hedge fund's" losses for the same month are, in many cases from what I have read, nearly triple those losses. Why? I think I know … these "new" (what looks to be tame to me from when I was running my fund back in the late 90s into the early 2000s when the market moved around for REAL and just didn’t teeter around the same minus or plus 2% off ground zero for the year all year) hints of volatility i.e. daily spikes up and drops keep getting the 8500+ funds (like lemmings) to keep 2nd guessing if a trend is starting causing a series of whipsaws which could be the start of some real blowups in some of those funds is my guess - - 10% monthly drawdown (with no yearly performance + no performance last year either) cause desperation and use of more leverage and then BOOM!!!
OIL - some big daily moves, I think a 3.5% day mixed in, but nothing for the week…
The support under $60 seems to have held or at least so far and its trading around $61