Friday, September 18, 2009

Stock Market -- Position Overview

Our previous newsletter, dated August 18th, stated that the DOW remained within a period of consolidation, and we were anticipating a trading range for the month between 9,100 and 10,050, before resuming the primary bear market decline in the near future. The actual result saw the DOW continue its period of consolidation during the course of the month, with a trading range between 9,116 and 9,630 -- a fairly accurate forecast.

The US treasuries were projected to have a base-yield for the month of 3.45% for the US 10-year Note, due to the expectations of the suspension in the Federal Reserve purchasing program and the continued increasing supply size of the various US Treasury Refunding Auctions. The actual result did see yields rise, as prices of US treasuries declined in price, with a US 10-year Note yield range for the month between 3.39% and 3.88% -- a very accurate forecast.

The US dollar was anticipated to remain under pressure, at least for the near-term, and we projected a euro fx equivalent trading range for the month between $1.40 and $1.46. The actual result saw the US dollar decline in value during the course of the month, with a euro fx equivalent trading range for the month between $1.4060 and $1.4445 -- a very accurate forecast.