Friday, July 17, 2009

Stock Market -- Position Overview

Our previous newsletter, dated June 19th, stated that our technical perspective may allow the stock market to remain within a period of consolidation -- removing the oversold environment that exist, prior to resuming the long-term bear market decline. We anticipated that the DOW would have a trading range for the month between 8,450 and 9,400, as this period of consolidation continues even further. The actual result did see the DOW continue in a period of consolidation, but in a narrower range than projected, between 8,259 and 8,878 -- a somewhat accurate forecast.

The US treasuries were projected to remain under price-pressure for the entire yield curve during the course of the month, inversely causing yields to rise, and, therefore, we anticipated a base-yield for the US 10-year Note at 3.60%. The actual result did see US treasuries decline in price, inversely allowing yields to rise, producing a yield range for the month between 3.46% and 4.01% -- a very accurate forecast.

The US dollar was projected to remain under pressure and we anticipated a euro fx equivalent trading range, during the course of the month, between $1.37 and $1.44. The actual result did see the US dollar steadily decline, producing a euro fx equivalent trading range for the month between $1.3750 and $1.4310 -- a very accurate forecast.