Tuesday, August 18, 2009

Stock Market -- Position Overview

Our recent newsletter, dated July 17th, stated that improved liquidity, along with other reasons outlined within the report, could keep the DOW within a broad trading range during the course of the month, between 8,100 and 9,500, before resuming the primary bear market decline. The actual result did see the DOW trade within a broad range, continuing within a period of consolidation, between 8,087 and 9,246.

The US dollar was projected to decline in value, at least for the near-term, and we anticipated a euro fx equivalent trading range for the month between $1.38 and $1.48. We did indeed see US dollar weakness during the course of the month, with an actual euro fx equivalent trading range between $1.3831 and $1.4281.

The US treasuries were anticipated to be under price-pressure for the month, inversely causing yields to rise, with a base-yield on the US 10-year Note of 3.25%. The forecast proved to be very accurate, as the US treasuries declined in price, producing an actual yield range for the month between 3.26% and 3.77%.