http://finance.yahoo.com/intlindices

http://money.cnn.com/markets/morning_call/










http://www.kitco.com

Energy futures

Currencies/Au/Ag

A cheery little market today. All Ords +0.5% with Financials picking themselves up off the floor to do a bounce, +1.5%. Telecomms are next in line at +1%. The only two red sectors are Utilities -1.4% and Property Trusts -0.4%.

The big miners are seeing some nibbles: BHP +0.6% and RIO +0.2%. Golds looking reasonable: Newcrest +1.7%, Newmont -1.1% and Lihir +2.2%.

Oils not happy apart from Woodside, +1.2%, Santos -0.8% and Caltex -3.9%.

The bullish mood continued. All Ords closed off the intraday highs but with a respectable 1% gain. Financials continued in the lead, +1.6% followed by Consumer Staples +1.3%. The only two reds were IT, -0.4% and Property Trusts -0.3%.

The two big miners came in at a mediocre +0.4% but golds, with the exception of Newmont -1.1%, perked up: Newcrest +4.6% and Lihir +3.7%. Juniors finished flat to up.

Oils mixed: Woodside +2.4%, Santos -0.6% and Caltex -2.6%.

Asia green: Honkers +1.6%, Sth Korea and Taiwan +1.5% and Nikkers +1.3%.


Over to UK/Europe:








http://finance.yahoo.com/intlindices?e=europe

Since most CDOs are synthetic I wonder what will happen if a big bond insurer just disappears...

Top read at Gloomberg:
MBIA Tumbles on $8.1 Billion of CDOs, Fitch Warning

http://www.bloomberg.com/apps/news?pid=206...D_VE&refer=news



Will the economy remain suspended in the limbo as the derivatives black hole bends time and space or immediately collapse on itself and cease to exist?

Wall Street bankers and the government will keep the big insurers in business--they have to, or the whole system melts down.

Gold back up to 810.....this wedgie could be about to resolve upside and run....

are the markets closed monday?

I guess no one has learned...This is a sign to say GMTFO

The Board of Trustees of MFS Intermediate Income Trust (NYSE: MIN) has
approved changes to the investment objective and policies of the fund.
Effective December 21, 2007, MIN's current investment objective of seeking to
"preserve capital and provide current income" will be revised to provide that
MIN will seek "high current income but may also consider capital
appreciation." MIN's principal investment strategies are described below.

Significant items to note in connection with the changes include:

-- Percentage limitations on certain types of investments have
been eliminated to allow the portfolio manager more
flexibility to invest in appropriate securities.

-- The fund substantially invests in investment grade debt
instruments.

-- Certain limitations on the fund's ability to invest in
derivatives have been removed.

-- The fund's policy of an average portfolio maturity of between
3 and 7 years is changed to an average portfolio life of
between 3 and 10 years.

-- Beginning January 2008, the fund will seek to make a monthly
distribution at a fixed rate of up to 8.50% per year.

Hey how come nobody is talking about the ECB's 6 day €142 billion Fixed Term Deposit (drain) today.

Oh, that's right, we only notice the adds, not the drains. They don't count.

The market is open Monday until 1PM. I will not be here however. The WSE Pro will not be published Monday or Tuesday. The Precious Metals and Fed reports will also not be published on Wednesday. The market update will return on Wednesday night.

How do you factor these sovereign wealth funds into the equation? These look like permanent adds to the system. Or are these funds simply perpetuating the game that much longer until the inevitable?

Shares of Merrill Lynch & Co. (MER) rose to $55.99
before the opening bell Friday, after The Wall Street Journal reported the
financial firm is expected to get a capital infusion from an Asian government
investment fund.

Temasek Holdings Pte. Ltd., a Singapore state-owned investment company, is
in advanced talks to inject as much as $5 billion into Merrill, a person
familiar with the situation said.

The news comes amid analyst predictions that mortgage write-downs at Merrill
may double with another $8 billion or more in the fourth quarter. Temasek's
board has given preliminary approval to the investment in Merrill, although
pricing, timing and regulatory issues remain to be negotiated, the person
familiar with the situation said.

As such, a deal may still not materialize. It is also possible that Merrill
may be in discussions with other government investment funds in addition to
Temasek.

If an investment by Temasek is finalized, it would follow a string of deals
by government funds into the ailing Western financial sector.

KW,
if it does that would confirm that gold was in a continuation triangle...the gold bull is still alive.

TURK

Well... I guess the Fed doesn't matter, especially when the FCBs are pumping cash into the US markets like mad as they did this week and last.

I've learned my lesson. No more posting of kneejerk reactions on the board. I will stick to my usual careful reporting in the WSE Pro. If there are times when it is appropriate to post snippets of what I wrote after careful analysis I will do so, like this one from last night's market update:

"An aging 13 week cycle up phase got a second wind on Thursday with a little help from all those Michelangelos plying their trade on Wall Street, and in spite of some incredibly Scrooge like behavior from Uncle Ben’s Loan and Pawn. It’s that time of year when the painters do their best work, but where was the Fed? Apparently, the stuffed shirts up there are in no mood to party."

The real meat and potatoes will continue to be reserved for subscribers only. Subscribers, I appreciate your support, and I will continue to ensure that what you are paying for is proprietary!

Sovereign wealth funds are not central banks. They do not create liquidity. They move it around. To the extent that they are moving food around on the plate, they will affect the parts of the plates that they are moving from and to.

Big drained here yesterday...
Big drained over in Europe today...

Looks like no one cares. The holiday spirit has totally taken over. Looks like a buy buy buy day.

qqqq just about hit 5 day cycle projection of 51.80.

Yep, am long a truckload here..

spx 3 day cycle projection 1474-75 is hit.

However, base breakout has measuring implication of 1486.

Yep, the charts are all that matter, and they gave a clear signal yesterday....

I'll wait for the backkiss of the 50/200....

I forget who said it, BD can help there, but "Never bet against historical irony." Sure now, the rabid chicken hawks, who yell about all our 'enemies' are the very ones to sell out family heirlooms to those same 'enemies'. Hey, a hundred billion here, and a half a trillion there, pretty soon we're talking about real money.

Dow 3 day cycle projection 13425. Measuring objective of base 13475

Looking for YM 13,500+

Doc,
I was just about to ask you that. I remember you mentioning your cycle work is just turning up last week. The impression of your post yesterday about the big drain is that the market is ripe for a smack down. This could be quite confusing to your everyday lurkers.

spx 3 day cycle projection now looks 1485.

5 hr projection looks 1480.

dow 5 hr projection 13,440

hui 3 day cycle projection 405.

5 hr projection 394-95

Bucky should at least correct downward a bit here, if this isn't The top for the move. That would fit with a metal pop.

Santa came down his broker chimney and left him a message.

There's a dynamic tension at work on a number of levels. First of all, sometimes the cycle analysis and liquidity analysis are not in agreement over certain time frames. Liquidity analysis is important in the broader perspective because the market goes in the direction of base liquidity growth. I've proven that correlation, and it's pretty much an absolute. But in the short run, the market can do anything, even on a day like yesterday when the Fed does a record drain. So it's a matter of perspective. When I react emotionally to historic events I tend to be wrong. Yesterday was an historic liquidity event, and my reaction to it was dead wrong.

In the meantime, the cycle work was saying something else. I had several indications over the last two days that the market was probably at a short term low. They were offset by other signs, and that left room for doubt, but as K Wave said, by last night, the signs were pretty much unequivocal.

The other part of the tension is that this board is a platform for people to get to know me. So I like to reveal bits and pieces of myself here, both on a personal level, and with snippets of my analysis. That's why I often post the intraday projections and signals. They are a microcosm of the larger work I do in the newsletters, and they are an area I do not address in the newsletters. My hope is that by revealing as much as I can without divulging the content of the Professional Edition, I can entice those of you who are interested into giving the service a try.

For the most part it doesn't work. Most new subscriptions tend to come in from people who have heard about the work elsewhere, such as in the free blogs on the WSE.

So I guess the real reason I post here is because I love this board, and the great people who share their thoughts here.

And on that note, I want to wish everyone here a wonderful holiday.

And I hope that you all have given a listen to the free preview of the latest Radio Free Wall Street podcast where our old friend Steve Northwood dropped in and paid us a visit.

http://radiofreewallstreet.fm

DJ Fed: Intend To Conduct TAF Auctions Long As Needed


WASHINGTON (Dow Jones)--The Federal Reserve says it intends to conduct
biweekly Term Auction Facility sales "for as long as necessary" to address
elevated pressures in short-term funding markets.

The Fed said in a news release Friday it will announce the sizes of the Jan.
14 and Jan. 28 TAF auctions at 12 p.m. EST Jan. 4.

DJ Fed Accepts $6.75 Bln In 3-Day RPs

Type of transaction: 3-Day RPs
Total accepted: $6.75 Bln
Total submitted: $54.7 Bln

Agency Collateral Operation
Total accepted: None
Total submitted: $16.55 Bln
Stop-Out Rate: N/A
Weighted Average: N/A
High-rate submitted: 4.31%
Low-rate submitted: 4.15%

Treasury Collateral Operation
Total accepted: $6.75 Bln
Total submitted: $17.9 Bln
Stop-Out Rate: 3.7%
Weighted Average: 3.7%
High-rate submitted: 3.7%
Low-rate submitted: 3.45%

Mortgage-Backed Collateral Operations
Total accepted: None
Total submitted: $20.25 Bln
Stop-Out Rate: N/A
Weighted Average: N/A
High-rate submitted: 4.3%
Low-rate submitted: 4.2%

(Data was provided by the New York Federal Reserve Bank).

Sheet Happens

By the way, I have had a VIP visitor here for the past two days.

[attachmentid=93976]


He likes to help his grandpa bang on the computer keys!

Yeah, well, bfd. The January auctions will be rollovers of the initial $40 billion. Let's see if they increase the size.

Out for a 200+ point KaChinger!

Now we see how it sets up from here....

Well, we should have all the Rydexers scrambling to get long for the 10:30 cutoff...

Might be a good short in about 20 minutes....

Here are the results of yesterday's Taffy. Demand was weaker than at the first auction.

On December 20, 2007, the Federal Reserve conducted an auction of $20 billion in 35-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 4.67 percent

Total propositions submitted: $57.664 billion
Total propositions accepted: $20.000 billion
Bid/cover ratio: 2.88

Number of bidders: 73

Bids at the stop-out rate were prorated at 73.40% and resulting awards were rounded to the nearest $10,000 (except that all awards below $10,000 are rounded up to $10,000).

The awarded loans will settle on December 27, 2007, and will mature on January 31, 2008. The stop-out rate shown above will apply to all awarded loans.

what would be the biggest surprise here?

Hope so. I'm having a hard time getting all this egg off my face.

Hey I was short yesterday too....Market told me to change my story so I did...no biggie

I guess we did get the golden-cross blistering rally.
Looking for 1486-1490...

EURGBP near new highs. Once it breaks 0.7260 (old high), next stop could be 0.8950.

GBPUSD looks like it wants a short covering bounce here but after that 1.7080 is a longer term target.

Just possibilities.

doc, i want to give you a holiday thanks for all your work on the wse pro, the podcasts, and here on the board. thanks also to all the posters here. i have learned so much since i started lurking back in the summer, as the credit chickens began coming home to roost (they sure are taking their time).


i feel like i am back in school again, studying econ and finance instead of bio and chem. and my professors are denninger over at market ticker, roubini at rgemonitor, tanta and calculated risk, mish, and over here winter, arroyo-calderon, ducalion and the perfessor, dr. stool. (damn, that is a lot of reading every night). ids and m2m are like a graduate seminar, where i just sit in the back, keep my mouth shut and try to learn from the senior stoolies.


i have done very little trading over the past few months. i just wanted to preserve my little bit of retirement capital (treasuries and a safe money market fund at aim). but you hang around a barber shop, sooner or later you get a haircut. so with a little bit of mad money i can easily afford to gamble with, i have gone in and out on the double inverse funds a couple of times (skf, twm, qid), and i have tried to follow k-wave's lead on the srs.


damn, the swings on that have been wild. i can't quite get the timing right, but thanks to doc's advice to trade these and not hold them overnight/over weekend, i've done ok (up about 2% on four or five trades). but i am here to learn, so if a crash comes, or if we have a slow, grueling bear market, i can take some advantage.

thanks doc, i love the subscription to wse pro, and happy holidays all.

The important thing is to always have a positive attitude.

Ahh please. I have a feeling you'll be vindicated in January. Isn't this just year end window dressing at its finest?