Friday, November 20, 2009

Stock Market -- Position Overview

Our previous newsletter, dated October 19th, stated that the DOW could remain, once again, within an "elevated period of consolidation" during the course of the month, with an anticipated trading range between 9,400 and 10,800. The actual result was the DOW did remain elevated, but within a narrower trading range than projected, between 9,430 and 10,117.

We stated that the sliding US dollar is encouraging producers of various commodities that trade in US dollars to raise prices as a hedge against the lower currency. Furthermore, we felt that the US dollar weakness could persist, at least for the near-term, and projected a euro fx equivalent trading range for the month between $1.45 and $1.52. The actual result saw the US dollar remain, as expected, under pressure, with a euro fx equivalent trading range for the month between $1.450 and $1.508.

The various US treasuries were anticipated to decline further in price, inversely causing yields to rise, due to the US dollar weakness, and projected a US 10-year Note base-yield of 3.10% or higher, during the course of the month. The actual result saw the US treasuries decline in price, with yields inversely rising, producing a US 10-year Note yield-range for the month between 3.10% and 3.58%.