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Bin Laden and the Trickle Down Theory

May 2, 2011


Good morning. It was another solid steady move to the upside last week, with the SPY rising 2.65 (2%) to close at 136.43. This move, again, comes under the general umbrella of lower dollar and higher commodity prices in line with the expansionary monetary policy being maintained by the Federal Reserve. Today we have the added bullish sentiment accompanying the raid on Osama Bin Laden’s compound in Pakistan, during which he and several companions were killed by U.S. Special Forces.

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Floating Them Trillions

April 11, 2011


Good morning. The market was slow and virtually unchanged last week, with the SPY closing down a scant .28 at 132.86. The VIX was up slightly (.48) to close at a still relatively low 17.39. There was a little more movement in interest rates, with the 30-year bond rate up.15% to close at 4.63%.

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Laughter, Disbelief, Anger

March 21, 2011


Good morning. Volatile and down week for the market last week, despite a solid bounce off the Wednesday lows. The SPY was down 3.08 on the week to close at 127.76 (2.3%), which was still a solid 2.48 (2%) off the low made on Wednesday afternoon. The news regarding the Japanese earthquake damage and subsequent tsunami, soon overwhelmed by events at the nearby nuclear reactor facility, dominated the trading for the week. A big upward reaction to the market was directly associated with a coordinated G7 (first coordinated intervention in over ten years) move to stop appreciation of the Japanese yen in the aftermath of the disaster.

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Revolution in Wisconsin

February 28, 2011


Good morning. Rising tensions in the Middle East caused the market to have its first down week in a while last week, with the SPY closing (despite a strong rally on Friday) at 132.33, down 2.24 (1.7%). The VIX spiked higher to finish at 19.21, up 3.32 (17%) from a very low close before the three-day weekend of 16.43.

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Efficient Market

February 14, 2011


Good morning. We had another quiet but positive week for the broad market last week, with the SPY quietly advancing 2.04 to finish at 133.11 (1.5%). The VIX, mainly due to the very quiet week, was down to 15.68, a drop of another 1.8%, and a level that we reached last April before the market underwent a roughly 15% correction. For whatever reason market advances have been associated with the significant decrease in market fear, so that virtually all market corrections or sell-offs have been associated with low implied volatilities at the start.

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