January 19, 2006
Hello,
A belated Christmas message form Osama bin Laden and the issue of the day returns to the forefront. Ok ok so Iran is making Nuclear weapons, next you’re going to tell me smoking gives you cancer, coal mining is dangerous or social security is going broke. Apparently everyone except for the Iranians who are currently very busy transferring all their money out of European central banks didn’t really believe Iran didn’t have the west’s best interest at heart. In his annual Christmas message, be it a bit late, well mail delivery from the cave is a bit slow this time of the year. Osama Bin Laden threatened attacks on US ,snore what else is new .However he also asked for a truce ,while many politicians and media pundits lined up to surrender ,the Bush administration say “NO”.
Iran not to be out done responded in kind by disregarding western efforts to limit nuclear development. Taking the European efforts to talk Iran out of developing a nuclear program, the Persian government has come to the same conclusion that many Americans have that the Europeans are simply wimps. Among the rhetoric, both sides have taken steps to prepare for war, including French President Jack Chirac mentioning his nations ability to use its nuclear umbrella for something more than a make work project. The market seemed very unsettled by the idea of a Frenchmen sipping wine playing with nuclear weapons and caused a sell off on Friday.
Welcome back volatility, yes the down side is harsh but the resurrection of volatility is a signal the market is going to break out of its morbid trading range that has consumed so much of the last 3 years. The total lack of volatility has been one of the hall marks of this Bear market that has ensued since the melt down of the bubble market in 2000. Dare I say, time to go back to buying on the dips, ok I know to some that strategy that worked so well in the late 1990’s, but has been an abject failure of late puts fear in the heart of men and women. A strong broad based rally the next week or so would give me cause to celebrate and confirm my theory that renewed volatility is a sign of stronger market possibilities.
It the end of the world was coming and the demise of mankind ,gold would have went to the moon on Friday ,but alas I hate to disappoint Gold stocks and the GLD (gold index) were down slightly. Signaling at lest to me that Friday was a one off event and more a reaction to a combination of short term events, like issues in Japan, Nigeria, Iran and France.
TSE halts trading in Japan? Well separate the hype form the reality rumor has that the TSE’s trading system is very antiquated and cant handle the volume form all the new day traders that have sprung up in Japan since the market started to rally last year .Remember the Japanese stock market has been on the downside dog house since 1989,. This is an exchange that closes so traders can take an 1 ½ hour lunch and it is an exchange that closes at 3pm. don’t commit Hare Kari just yet, with the Japanese market you should have done that a long time ago looks more like a Buying opportunity.
James Foytlin
www.jamesfoytlin.com
1 comment:
Hi James
Belatedly I was happy and thankful both to see some gains in my last two statements - hopefully this will continue and increase.
It's also sad but interesting (especially after my longtime spent with the Japanese culture) that the latest suicide shows that some things will never change.
Susan
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