Up and down.
If you believe in V bottoms jump in. Otherwise, you may want to wait and see some recognizable bottom formation before jumping in.
I suspect what has happened was massive quantitative easing last week. The fed panicked and fed billions out to its banking buddies. The money has to go somewhere. There was no reason in the news, the fundamentals or otherwise for a 3% rise in the market. So look for QE 4.0 and another ridiculous market melt-up to postpone the inevitable until after the Nov. elections.
I hate the people running this country. And they hate us.
dead cat bounce.
Tomorrow it will be down 500.
Irrational exuberance, to borrow a phrase from Mr. Andrea Mitchell.
WTF happened?
Charbucks must have opened three more stores...
No thanks to you, I almost had a heart attack! God forbid!
by: Wall Street Strategies
July 07, 2010
Maybe it was the visit by the queen, maybe it was just time, or maybe value players sniffed out opportunities but the market staged an impressive bounce into the close. Granted, stocks were much higher and could have put in a truly memorable session, but for me it's the kind of session when towels are thrown and yet equities still stage a bounce that grabs attention. Beggars can't be choosers, right?
Well, there's the problem right there. It's not beggars that are looking for relief but producers and job creators.
Investors understand risks; they aren't asking for anything other than the right to invest without becoming pariahs.
There is no way deep-pocketed money managers watched the close and didn't salivate just a little. Man, if the coast was clear and there were guarantees that rules wouldn't change that much we'd see much more action at current levels.
Would-be investors are looking for a hands-off approach, and that's not begging. Other nations break into terms with no-confidence votes but we don't have that here, we have the stock market. Last year, stocks rallied on the notion that things would get better and also on the knowledge this nation has overcome worse circumstances. This year, stocks are on the ropes even as companies post amazing profits.
Yes, we are dealing with the oxymoron known as a jobless recovery and the ominous double-dip (also oxymoronic since most of the time the economy never bounced enough to author a new dip, anyway) recession. The market starts each session with knowing that even 171 points on the Dow could be erased in the blink of an eye.
This kind of action is an S.O.S. Not much changed yesterday mid-session but the market collapsed. It got back on its feet as bargain hunters finally pulled the trigger.
Make no mistake, this market is more about a message to Washington than anything to do with value investors, shorts, weak sisters and the unknown. I don't think we have to go into a double-dip but we could if the war against prosperity isn't halted immediately.
It is true that financial institutions and corporations want to put money to work. It didn't get any press or credit but I think the update on consumer credit helped the market move higher into the close.
Credit card debt (revolving) continues to sink like a rock but non-revolving credit was up enough to push the total into the plus column for the second time this year.
But it's not the total number the market has responded to during this turmoil, it is non-revolving credit increases that have helped the market along throughout its rebound efforts.
I've connected the dots and it's very interesting. Sure, some would say there is no cause and effect and often consumer credit is released on the same day jobs data is updated.
I see a few interesting things and know one immutable fact, this economy isn't turning until credit is available to individuals and small businesses. Total consumer credit has only been positive three times since October 2008.
Revolving credit continues to slide tremendously, partly because consumers switched to debit cards and have avoided using credit as well. The irony is revolving credit historically has been easy to access.
Let's face it, revolving credit was too easy to access for a while and helped to create a false sense of security in consumers that chose to ignore their own financial limits and laws of common sense. On the other hand, non-revolving credit, which can't be used once it's repaid, continues to flow. What's the deal with that, how can that be with financial institutions so worried?
One of the big reasons is the federal government. 
Government to the Rescue
The war on Wall Street has had a direct impact on the flow of capital. The result is the U.S. government is responsible for 90%+ mortgages through guarantees via FNM, FRE, and FHA. With the government kicking private money out of student loans, government has stepped up to fill the void from fewer and fewer securitized loans. In 2006, securitization of loans (loans no longer carried on the balance sheets of originators) reached $246.7 billion. That same year the government and Sallie Mae were responsible for $91.7 billion.
Not only is the government crowding out the private sector but this action is also adding risks to be passed onto taxpayers. It would be great to get securitization back into the game as I'm sure a jolt of an extra $150.0 billion through the private market would add a little spark to the economy.
So here's the market connection. The positive January 2009 non-revolving credit news was released on March 6, the Dow closed the previous day at 6,594 and finished the session at 6,626...and never looked back.
The positive number achieved in February 2009 was posted April 7 when the Dow was at 7,789. The market peaked at 10,725 and began to drift when the December news of positive non-revolving credit was released on February 5 of this year. The Dow came off 10,012 and got an extra boost on strong gains in the component reported on March 5.
We'll see what happens this time around, but I do not believe those previous moves were coincidences.
Heh, from the title I thought maybe Chicago managed to sign Lebron. :-)
Told everyone to buy the Euro a few weeks back. Zoom, zoom.
A few other companies as well are poised to announce good results (remember these numbers will, of course, be way higher than last year...not sure what the sentiment going forward will be).
The market was hugely oversold, that’s all. Sooner or later, there was going to be some computer-generated buying. When as many stocks are below their 50 and 200 days SMA’s as we have here, the trading models kick in and buy - and they might be long for all of 3 to 20 days, then they’ll sell.
Bull markets don’t go straight up, bear markets don’t go straight down.
The thing that I’ve seen in the last month that is significant for investors, tho, is that this is NOT a “stock picker’s market.” The correlation across stocks is unusually high - ie, when the SP500 goes up or down, most (and sometimes nearly all) of the stocks in the SP500 index move in the direction of the index. In past years, the level of correlation was not as high as we’re now seeing, which is part of what is leading to these “up 270, down 270” type of days. In the past, it was rarer to see a “90%” day, when 90% of the stocks would go in the same direction as the index. Recently, we’ve seen selloffs where 499 out of 500 stocks were down in one day. Very unusual breadth. Today we see (I think) 490 up out of 500. Again, unusual.
For a trader, these can be good days - if you keep your head on straight, are nimble and are ready to give up any and all convictions and pre-conceived notions about what should work. When I have a few days to set up and am trading (as I was today), I just ignore everything other than price and volume and things like the TICK, TRIN and VIX. Do I care which way the market went? No. Do I care why? No. Do I think this is a productive use of my time? In that I made money, yes.
Do I think the type of action we’re seeing in the markets is good for confidence in our markets or our country? Nope. Not by a long damn shot.
I figure I'm up about 20% from the start.
maybe a couple of IPO’s on companies that make VAT calculation and collection software?