Stocks crossed back and forth across the break even line en route to a marginally higher finish, which is good news for those bullish on stocks. The fear was that after Tuesday's outsize gains, profit taking and a resumption of negative attitudes would sink the markets and send investors back into their six-month-long funk.
But, despite a strong sell-off at the close, all indices remained in positive territory, with the NASDAQ, loaded with tech stocks, faring the best of all. A couple of key levels were tested and both were beaten back by vigorous selling: 7000 on the Dow, and 730 on the S&P. The former is more psychological than anything else, the latter considered a key support/resistance area. In both instances, the earlier attempt, right around 10:00 am, was stronger than the final surge in the last hour of trading. It will take more than just positive vibes to exceed these levels. Maybe Ken Lewis can offer encouragement in Bank of America to get the lift needed.
Dow 6,930.40, +3.91 (0.06%)
NASDAQ 1,371.64, +13.36 (0.98%)
S&P 500 721.36, +1.76 (0.24%)
NYSE Composite 4,505.38, +6.00 (0.13%)
Market internals were a bit more positive than the smallish headline numbers would indicate. Advancers were solidly ahead of declining issues, 3876-2886. New lows maintained their advantage over new highs, but the number is shrinking fast. There were 245 new lows to just 9 new highs, but it is conceivable that these numbers could converge and even reverse within the next 5-7 sessions as options expiration approaches on March 20, a triple witching day.
With a two day winning streak under its belt, markets may be a bit bolder as investors snap up bargains and traders view profitable short-term opportunities. In the options markets, there are quite a load of heavy bets on selected stocks and index options far ahead of where stocks now sit. A gambling man - which anyone with any skin in this market no doubt is - would be leaning for more upside at this juncture, with the caveat that all bets are off if the Dow hits 7500-7800 or past March 20, whichever comes first.
Volume was strong once again, keeping with the current tone. There are plenty of trades being made, and unless there's a serious falloff in the next few sessions, another vigorous rally could ensue as shorts would be forced to cover quickly, forcing shares even higher. The market is clearly in the hands of day-traders and short-timers, who will trade relentlessly in search of minor gains. This market is for singles hitters instead of home run bashers, but the cumulative effect could produce a fairly solid bounce. Even some downward motion would be good for traders who have triggers set at lower levels. The area around 6830-6850 on the Dow has emerged as a fairly strong support level which, as yet, remains untouched.
NYSE Volume 1,745,479,000
NASDAQ Volume 2,228,163,000
Commodities were mixed again. Crude oil for April delivery fell $3.38, to $42.33. Gold rebounded off recent selling, picking up $14.80, to finish at $910.70. Silver remained in our target buying range, up 26 cents, to $12.80. The majority of the consumables, including foodstuffs and energy, were lower, reflecting the continuum of demand destruction, which continues on a strong scale. Deflation has become locked into the global economy, and, separate from the banking and housing crises, is contributing to severe price pressure in just about every business activity in the good-producing sectors. This pressure will help keep unemployment high, as companies are loathe to hire when business is slow and prices are down.
A couple of anecdotes which may or may not be of much importance. First, the tent city growing on the outskirts of Sacramento, California is a national disgrace, considering how much money has been thrown at banks as well as at social welfare programs such as food stamps and unemployment insurance. Just about everybody is being propped up except for these people - primarily lower-middle class workers - who have fallen through the cracks. Some of the Billion$ in the TARP program should be made available to help these people.
Second, listening to Treasury Secretary Timothy Geithner speak - without saying anything - is becoming an exercise in frustration. Geithner was the only guest on PBS's Charlie Rose last night. The hour-long interview was pure tedium. Geithner, not as adept as "the Maestro," Alan Greenspan, at complete obfuscation and dithering, clearly has taken some lessons. Listen yourself, the next time he speaks and see whether or not his words actually have substance. The chances are about 99-1 that they will not, and therein lies one of the largest problems facing the world economy today. We are being led by a fellow is too smart for his own good. Eventually, he'll actually be pinned down on an issue and that's when the mask comes off. He doesn't really have any fresh ideas or plans for fixing the banks or the economy. He is reading from a script in his mind which was memorized weeks ago and he's yet to help the condition which with we are faced.
Investors are more sophisticated than the average man or woman on the street and they are not amused by either Geithner, the President or the congress. They will trade this bounce for a while longer, but until there are actual facts to support a real rally, this is nothing but a short term bump in the road. The government is pushing on a string with the economy and the American public (outside the obvious government sector) is not going to take it much longer.
Wednesday, March 11, 2009
Tuesday, March 10, 2009
Stocks Gallop Ahead to Best Gains of 2009
At long last the market responded to extreme oversold conditions and ramped up for the biggest gains of the year.
Dow 6,926.49, +379.44 (5.80%)
Nasdaq 1,358.28, +89.64 (7.07%)
S&P 500 719.60, +43.07 (6.37%)
NYSE Composite 4,499.38, +273.07 (6.46%)
The impetus was provided by Citigroup CEO Vikram Pandit's comment that his beleaguered bank had performed well enough to be profitable (minus some odious one-time charges and government money) over the first two months of the year.
It was more than likely nothing more than than a well-timed fabrication, but investors were so starved for any kind of good news, they bought it and ran with it. The resultant gains will probably last for some time, as the market is simply worn out from selling. In fact, there's nothing resembling even the slightest resistance in the charts all the way up to 8000 on the Dow, so this could turn into a lengthy, extended bear market rally.
This move is off fresh multi-year lows, so there's no telling where stocks will go from here, though it was pleasant to see such enthusiasm over such a broad base of stocks.
Advancers absolutely trounced declining issues, 5815-863, about a 7-1 ratio. Still, new lows maintained their long-standing edge over new highs, 354-14, so, obviously, there's more work to be done before anyone starts calling a bottom, though another day or two on the upside will bring on the perma-bulls. Volume was also very strong, another factor that will bring out the bellows for a bottom being in place, which is probably more wishful thinking than actual analysis.
NYSE Volume 2,186,757,000
Nasdaq Volume 2,424,305,000
Commodities, for the most part, were the one area that did not participate in Wall Street's celebration. Oil fell $1.31, to $45.71. Gold dropped $22.10, to $895.90, back under the $900 barrier, and silver sold off in sympathy, losing 40 cents, to close at $12.54. a multi-week low.
To illustrate the absurdity of today's gigantic move forward, Citigroup was up a whopping 38%, gaining 40 cents to $1.42. Noting that, Pandit's baby will have to double and then almost double again in order for many fund investors to actually be able to trade in the stock under their charters. Citi has been under $5/share for nearly two months, and now that the United States owns roughly 36% of the company - about 6 shares for every person in America - the entire population should be beaming that they own such a hot investment.
Of course, I'm being cynical, because Citi is not a very sound bank. They, along with Bank of America, AIG and JP Morgan Chase have all been the recipients of government largesse, and are largely unsound and quite possibly insolvent. That's why there was an urgent need to "talk up" the market. Just about everybody with a high school education is angry at the banks and the government, so a rally was ordered up and they got it, in spades.
Not like this rally wasn't predictable, markets don't go straight down (as they have been) for long without some kind of snap back. The tricky part will be determining when it all falls apart again and the bears take over. It could be 3 months or 3 days.
The best trades in the world are the short term variety, and this is a perfect spot for experienced hands with steel in their veins.
Dow 6,926.49, +379.44 (5.80%)
Nasdaq 1,358.28, +89.64 (7.07%)
S&P 500 719.60, +43.07 (6.37%)
NYSE Composite 4,499.38, +273.07 (6.46%)
The impetus was provided by Citigroup CEO Vikram Pandit's comment that his beleaguered bank had performed well enough to be profitable (minus some odious one-time charges and government money) over the first two months of the year.
It was more than likely nothing more than than a well-timed fabrication, but investors were so starved for any kind of good news, they bought it and ran with it. The resultant gains will probably last for some time, as the market is simply worn out from selling. In fact, there's nothing resembling even the slightest resistance in the charts all the way up to 8000 on the Dow, so this could turn into a lengthy, extended bear market rally.
This move is off fresh multi-year lows, so there's no telling where stocks will go from here, though it was pleasant to see such enthusiasm over such a broad base of stocks.
Advancers absolutely trounced declining issues, 5815-863, about a 7-1 ratio. Still, new lows maintained their long-standing edge over new highs, 354-14, so, obviously, there's more work to be done before anyone starts calling a bottom, though another day or two on the upside will bring on the perma-bulls. Volume was also very strong, another factor that will bring out the bellows for a bottom being in place, which is probably more wishful thinking than actual analysis.
NYSE Volume 2,186,757,000
Nasdaq Volume 2,424,305,000
Commodities, for the most part, were the one area that did not participate in Wall Street's celebration. Oil fell $1.31, to $45.71. Gold dropped $22.10, to $895.90, back under the $900 barrier, and silver sold off in sympathy, losing 40 cents, to close at $12.54. a multi-week low.
To illustrate the absurdity of today's gigantic move forward, Citigroup was up a whopping 38%, gaining 40 cents to $1.42. Noting that, Pandit's baby will have to double and then almost double again in order for many fund investors to actually be able to trade in the stock under their charters. Citi has been under $5/share for nearly two months, and now that the United States owns roughly 36% of the company - about 6 shares for every person in America - the entire population should be beaming that they own such a hot investment.
Of course, I'm being cynical, because Citi is not a very sound bank. They, along with Bank of America, AIG and JP Morgan Chase have all been the recipients of government largesse, and are largely unsound and quite possibly insolvent. That's why there was an urgent need to "talk up" the market. Just about everybody with a high school education is angry at the banks and the government, so a rally was ordered up and they got it, in spades.
Not like this rally wasn't predictable, markets don't go straight down (as they have been) for long without some kind of snap back. The tricky part will be determining when it all falls apart again and the bears take over. It could be 3 months or 3 days.
The best trades in the world are the short term variety, and this is a perfect spot for experienced hands with steel in their veins.
Monday, March 9, 2009
No News, Stocks Lose
In a very choppy trading session, the major indices fell further to the downside on Monday, as investors were largely left without guideposts. There were no meaningful economic reports nor corporate releases upon which to trade, so the overwhelming overhang of a continuing negative feedback loop sent investors bailing again.
Dow 6,547.05, -79.89 (1.21%)
NASDAQ 1,268.64, -25.21 (1.95%)
S&P 500 676.53, -6.85 (1.00%)
NYSE Composite 4,226.31, -58.18 (1.36%)
Stocks opened lower at the open, but quickly rebounded and traded in positive territory for a while, but by 11:00 am, the bears had taken control again. The only encouraging news was merger-related, though the combinations were deemed dilutive to two companies, one a Dow component: Merck (MRK) and Dow Chemical (DOW). In the pharma sector, Merck signed definitive agreements to purchase Schering-Plough for $41.1 billion in stock and cash. Dow Chemical, meanwhile, convened talks with buyout target Rohm & Haas to resolve thorny issues which have resulted in litigation. Merck lost 1.75, to close at 20.99, the largest percentage decliner on the Dow at a loss of 7.78%. Dow Chemical lost 0.79, to close at 6.32, an 11% loss.
Overall, the Dow finished with 14 stocks up and 16 down, but the severity of the losses was far greater than what amounted to skimpy gains.
In the general market, declining issues outnumbered advancers, 4613-1947, The number of stocks making new lows was again very high, at 1244. There were only 6 new highs. Volume was less than it was last week, reflecting some degree of disinterest or outright exhaustion.
NYSE Volume 1,556,423,000
NASDAQ Volume 2,053,304,000
Commodities were split once again, with oil rising $1.55, to $47.07 on word of more desperate OPEC supply cuts, despite heating oil and natural gas both finishing lower. Natural gas finished at a seasonal low of $3.87, a sign that milder weather through the latter part of February and into March has led to lower consumer demand.
Gold dropped $24.70, to $918.00; silver fell 39 cents, to $12.94.
There is continuing evidence of price destruction in the US and beyond, which will no doubt put pressure on many corporate profits this quarter. Looking out 6 weeks at the next earnings season, prospects continue to dim, and that was reflected in Monday's sluggish trade.
Stocks have now fallen in 14 of the last 18 sessions, resulting in a net loss of 1392 points on the Dow. The DJIA is now off 25% for the year.
Dow 6,547.05, -79.89 (1.21%)
NASDAQ 1,268.64, -25.21 (1.95%)
S&P 500 676.53, -6.85 (1.00%)
NYSE Composite 4,226.31, -58.18 (1.36%)
Stocks opened lower at the open, but quickly rebounded and traded in positive territory for a while, but by 11:00 am, the bears had taken control again. The only encouraging news was merger-related, though the combinations were deemed dilutive to two companies, one a Dow component: Merck (MRK) and Dow Chemical (DOW). In the pharma sector, Merck signed definitive agreements to purchase Schering-Plough for $41.1 billion in stock and cash. Dow Chemical, meanwhile, convened talks with buyout target Rohm & Haas to resolve thorny issues which have resulted in litigation. Merck lost 1.75, to close at 20.99, the largest percentage decliner on the Dow at a loss of 7.78%. Dow Chemical lost 0.79, to close at 6.32, an 11% loss.
Overall, the Dow finished with 14 stocks up and 16 down, but the severity of the losses was far greater than what amounted to skimpy gains.
In the general market, declining issues outnumbered advancers, 4613-1947, The number of stocks making new lows was again very high, at 1244. There were only 6 new highs. Volume was less than it was last week, reflecting some degree of disinterest or outright exhaustion.
NYSE Volume 1,556,423,000
NASDAQ Volume 2,053,304,000
Commodities were split once again, with oil rising $1.55, to $47.07 on word of more desperate OPEC supply cuts, despite heating oil and natural gas both finishing lower. Natural gas finished at a seasonal low of $3.87, a sign that milder weather through the latter part of February and into March has led to lower consumer demand.
Gold dropped $24.70, to $918.00; silver fell 39 cents, to $12.94.
There is continuing evidence of price destruction in the US and beyond, which will no doubt put pressure on many corporate profits this quarter. Looking out 6 weeks at the next earnings season, prospects continue to dim, and that was reflected in Monday's sluggish trade.
Stocks have now fallen in 14 of the last 18 sessions, resulting in a net loss of 1392 points on the Dow. The DJIA is now off 25% for the year.
Friday, March 6, 2009
Late Rally Saves Dow, S&P; NASDAQ Lower
Bed news for investors continued today, as the BLS released the Non-farms labor report for February, showing the nation lost another 651,000 jobs over the period. The Bureau also revised December and January figures even lower and boosted the official jobless rate to 8.1%, a further blow to confidence.
After gaining initially, the major indices soon feel into the red again, and stayed down most of the session, which was one of the more lackluster of recent vintage. At the end of the day, stocks rallied on a combination of short-covering, staking out of positions and a general oversold condition. It was not enough, however, to prevent the indices from falling for the 8th week out of nine so far in 2009.
Dow 6,626.94, +32.50 (0.49%)
NASDAQ 1,293.85, -5.74 (0.44%)
S&P 500 683.38, +0.83 (0.12%)
NYSE Composite 4,284.49, +16.89 (0.40%)
The Dow ended the session with 16 components up and 14 down, in line with the moderately higher closing figures.
Declining issues outweighed advancers, 3786-2782, so the buying which produced the gains was quite selective. New lows tallied 1684, to a mere 8 new highs. The disparity in the lows-highs this week has been the widest since the collapse back in the September-November wipeout of 2008. Volume was the among the highest of the week, indicating that there are still those who believe the worst is not over, and, alternately, a large share of bargain hunting.
NYSE Volume 1,771,049,000
NASDAQ Volume 2,489,014,000
Commodities were generally up, with oil gaining $1.91, to $45.52. Gold gained $14.90, recovering some of the ground lost over the past week's profit taking, to $942.70. Silver remained strong, adding 21 cents, to $13.33.
The late-day rally in stocks sets up an intriguing scenario for next week. In the absence of earnings reports from companies, the market will continue to focus on economic numbers and outside events.
Surely, employment will still be in focus. Any large-scale layoffs might spook already exhausted sellers, though if the news is more benign (and just about everyone believes the bad news has to take a break at some point), it could spark a fairly sharp rally. The global economy hasn't completely fallen off the cliff, so there are pockets of hope and some very attractive prices in stocks.
If anything, the market is more than overdue for a multi-week bounce to the upside. Of course, by April, the banks may be reporting the results of their government-sponsored "stress tests" and that should put the kibosh on any gains.
Sentiment remains stoic and bearish, but traders being the aggressive beasts they are, 1000 points to the upside in short order is not out of the question at this juncture.
After gaining initially, the major indices soon feel into the red again, and stayed down most of the session, which was one of the more lackluster of recent vintage. At the end of the day, stocks rallied on a combination of short-covering, staking out of positions and a general oversold condition. It was not enough, however, to prevent the indices from falling for the 8th week out of nine so far in 2009.
Dow 6,626.94, +32.50 (0.49%)
NASDAQ 1,293.85, -5.74 (0.44%)
S&P 500 683.38, +0.83 (0.12%)
NYSE Composite 4,284.49, +16.89 (0.40%)
The Dow ended the session with 16 components up and 14 down, in line with the moderately higher closing figures.
Declining issues outweighed advancers, 3786-2782, so the buying which produced the gains was quite selective. New lows tallied 1684, to a mere 8 new highs. The disparity in the lows-highs this week has been the widest since the collapse back in the September-November wipeout of 2008. Volume was the among the highest of the week, indicating that there are still those who believe the worst is not over, and, alternately, a large share of bargain hunting.
NYSE Volume 1,771,049,000
NASDAQ Volume 2,489,014,000
Commodities were generally up, with oil gaining $1.91, to $45.52. Gold gained $14.90, recovering some of the ground lost over the past week's profit taking, to $942.70. Silver remained strong, adding 21 cents, to $13.33.
The late-day rally in stocks sets up an intriguing scenario for next week. In the absence of earnings reports from companies, the market will continue to focus on economic numbers and outside events.
Surely, employment will still be in focus. Any large-scale layoffs might spook already exhausted sellers, though if the news is more benign (and just about everyone believes the bad news has to take a break at some point), it could spark a fairly sharp rally. The global economy hasn't completely fallen off the cliff, so there are pockets of hope and some very attractive prices in stocks.
If anything, the market is more than overdue for a multi-week bounce to the upside. Of course, by April, the banks may be reporting the results of their government-sponsored "stress tests" and that should put the kibosh on any gains.
Sentiment remains stoic and bearish, but traders being the aggressive beasts they are, 1000 points to the upside in short order is not out of the question at this juncture.
Thursday, March 5, 2009
Stocks Routed Worldwide; NASDAQ Capitulates
Stock indices from Tokyo to Toronto suffered major losses again on Thursday as the global depression deepened and General Motors (GM) contemplated bankruptcy unless it receives additional financial support from the US government.
As the steady pounding continued, following the first gains in a week (yesterday), investors wiped out nearly double the amount of Wednesday's gains.
Dow 6,594.44, -281.40 (4.09%)
NASDAQ 1,299.59, -54.15 (4.00%)
S&P 500 682.55, -30.32 (4.25%)
NYSE Compos 4,267.60, -197.29 (4.42%)
There was no standout sector or industry spared from the widespread carnage, as the NASDAQ finally became the 4th major index to fall below the previous, November 20 lows. On that date, the NASDAQ closed at 1313. Today's close was 1% lower and comparable to October 2002 levels, when the NASDAQ bottomed out following the dotcom bust on October 9, at 1114.11.
As has been the case for months, US banks were at the center of the storm. Citigroup (C) traded below $1.00 for a brief time during the morning, closing down another 0.11, at 1.02. Bank of America (BAC) closed down 0.42, to 3.17, while JP Morgan Chase (JPM) tumbled 2.70, to 16.60. All of those were among the major losers of Dow components, though General Motors took the prize as the day's biggest, losing 0.34, to 1.86, a decline of 15.45%.
On the Dow, only 2 of 30 components gained ground. Pfizer (PFE) added 0.17, to 12.67. Wal-Mart (WMT) was up 1.26, to 49.75, as the nation's largest retailer saw improved same-store sales for February and increased its dividend to shareholders.
Market internals were a shambles, with decliners overwhelming advancing issues, 5823-842, a 7-1 ratio. New lows shot up to levels seen only in the September-November meltdown, with 1527 stocks reaching new 52-week lows versus only 7 new highs. Volume remained elevated, as it has over the past 7 sessions.
NYSE Volume 1,878,339,000
NASDAQ Volume 2,314,223,000
Oil futures were off $1.77, to $43.61. Gold emerged as a safe haven, up $21.10, to $927.80. Silver added 21 cents, to $13.12.
Prior to the opening bell on Friday, the Bureau of labor Statistics releases February Non-farm Payroll numbers. Expectations are for another 630,000 job losses.
As the steady pounding continued, following the first gains in a week (yesterday), investors wiped out nearly double the amount of Wednesday's gains.
Dow 6,594.44, -281.40 (4.09%)
NASDAQ 1,299.59, -54.15 (4.00%)
S&P 500 682.55, -30.32 (4.25%)
NYSE Compos 4,267.60, -197.29 (4.42%)
There was no standout sector or industry spared from the widespread carnage, as the NASDAQ finally became the 4th major index to fall below the previous, November 20 lows. On that date, the NASDAQ closed at 1313. Today's close was 1% lower and comparable to October 2002 levels, when the NASDAQ bottomed out following the dotcom bust on October 9, at 1114.11.
As has been the case for months, US banks were at the center of the storm. Citigroup (C) traded below $1.00 for a brief time during the morning, closing down another 0.11, at 1.02. Bank of America (BAC) closed down 0.42, to 3.17, while JP Morgan Chase (JPM) tumbled 2.70, to 16.60. All of those were among the major losers of Dow components, though General Motors took the prize as the day's biggest, losing 0.34, to 1.86, a decline of 15.45%.
On the Dow, only 2 of 30 components gained ground. Pfizer (PFE) added 0.17, to 12.67. Wal-Mart (WMT) was up 1.26, to 49.75, as the nation's largest retailer saw improved same-store sales for February and increased its dividend to shareholders.
Market internals were a shambles, with decliners overwhelming advancing issues, 5823-842, a 7-1 ratio. New lows shot up to levels seen only in the September-November meltdown, with 1527 stocks reaching new 52-week lows versus only 7 new highs. Volume remained elevated, as it has over the past 7 sessions.
NYSE Volume 1,878,339,000
NASDAQ Volume 2,314,223,000
Oil futures were off $1.77, to $43.61. Gold emerged as a safe haven, up $21.10, to $927.80. Silver added 21 cents, to $13.12.
Prior to the opening bell on Friday, the Bureau of labor Statistics releases February Non-farm Payroll numbers. Expectations are for another 630,000 job losses.
Subscribe to:
Posts (Atom)
Posts
