Month: December 2005

Officially Inverted and Front-Page News

As per the front-page of most/all of today’s financial publications, and as was alluded to in my 12/24/05 posting, the 2-year and 10-year Treasury Notes finally inverted (i.e., the yield on the 2-year notes is higher than the yield on the 10-year notes).  This is important because a material inversion (extent and duration) normally means a recession is on the horizon.  So will this be a material inversion?  Will we still be inverted when liquidity comes back to the bond market in January??  When Alan "Bubbles" Greenspan retires at the end of January???  If still inverted, how inverted????  And what the heck will the dollar be doing?!  As you know, I think now is a great time to diversify out of the dollar (before 2006 begins).  We’ll leave it at that for now.  Cheers!

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Christmas Inversions

Yesterday, at 4.37%, the yield on 2-year treasury notes rose above the yield on the 5-year notes (4.36%).  Today the inversion increased to 4 bps.  The 2’s and the 10-year notes are 3 bps from inverting.  If and when that happens the media will roar about a recession in ’06.  Cheers!

Western Digital Update

Wdc122105Today WDC broke out of its base, gapping up 18.6% on 26.3 million shares — 9.8x normal volume.  The catalyst was news of Seagate Technology’s (STX) buyout of Maxtor Corp. (MXO) at about a 60% premium.  Disk drives are now officially in play.  See my post of four days ago (12/17/05), when I introduced WDC.  Cheers!

Neoware Systems Inc.

Nwre122005Here we see an 6-month chart of Neoware Systems (NWRE).  The chart was pulled at lunch time today, so we won’t know how the day closes for a few hours yet.  What we do see is the stock pulling back after yesterday’s 14% gap up on big time volume.  The gap and the volume were both the largest since the first day or so of September you see on the chart.  To soon to tell if yesterday’s gap will lead to another leg up or prove to be a headfake.  Stay tuned.  Cheers!

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Notable Action for the Cubes

Qqqq121905Here we see the Cubes’ (QQQQ) first break below the 20-day EMA since the start of the post-Katrina rally.  They also broke below their month-long trading range.  It’s too soon to tell if this is a shakeout or the beginning of a correction, but today’s action should be noted nonetheless.  Cheers!

On Admitting Mistakes

To [some] others being wrong is a source of shame; to me, recognizing my mistakes is a source of pride.  Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes.

-George Soros