Wednesday, May 26, 2010

Stock Market -- Position Overview

Our previous newsletter, dated March 31st, stated that the DOW continues within its period of elevated consolidation, at least for the near-term, and projected a trading range for the month between 10,400 and 11,100. We further stated that this type of gradual ascent is commonplace within bear markets or counter trend rallies, as various markets adjust to a point of neutrality or equilibrium, prior to resuming the primary bear market trend lower. The actual result produced a slightly narrower trading range than anticipated, between 10,326 and 10,955.

The US dollar was projected to remain within a broad trading range, between euro fx equivalent of $1.34 and $1.38. The actual result was a wider trading range than projected, between euro fx equivalent of $1.3237 and $1.3753.

The US treasuries were anticipated to remain under price-pressure, at least for the near-term, with the US 10-year Note having a base-yield for the month of 3.60% or higher. The actual result saw the US treasuries decline further in price, causing yields to inversely rise, producing a US 10-year Note yield range for the month between 3.59% and 3.93%.