Monday, September 15th:
Holy Bankruptcy Batman - I am sure we all saw something bad headed
down the tracks, even after the Bear Stearns collapse, but could anyone have
predicted this. As I am typing this, Lehman Brothers is not official gone yet
but probably will be shortly. Merrill Lynch was basically forced to sell itself
to Bank of America and not to be left out AIG has to come up with some cash and
quickly or it will be downgraded. The futures are off over 2%, but we are a long
way from opening and that could change dramatically based on what additional
information comes out this morning and what happens over seas. Today will
certainly be one crazy ride, so buckle those seat belts.
Friday, September 12th:
Adios Lehman - Well it certainly looks like Lehman Brothers is about
to be flushed down the toilet. It is just another player getting kicked to the
curb for indulging in high risk loans for a little cash. The people you feel
sorry for are the employees who probably had no idea the problems were this bad
in their firm, until recently of course. It just goes to show you that you
should never have all of your eggs in one basket when investing. You have to
diversify yourself a little to avoid a problem like this. Since yesterday
finished off on such a high note that probably means today is going to be
horrible. I will wish for the best (a large up day), but certainly be prepared
for the worst.
Thursday, September 11th:
What a Snooze - Now yesterday was kind of a boring trading day
considering the first couple days of this week. I don't now how much longer I
can stand this lack of movement in the markets. Lehman Brothers tried to get the
market going in the right direction this morning by talking about what they are
going to do to get more cash. I am not sure they really cleared anything up but
they appear to be trying to put a plan together to keep them afloat. Oil is
continuing its downward spiral despite news coming out almost daily that you
think would drive it higher. I am not going to complain about that, but scary if
you have investments in anything related to oil. Perhaps today the traders will
need to gas up on their Redbulls.
Wednesday, September 10th:
The Lord Giveth and the Lord Taketh Away - Monday came and went with
much excitement over the market’s large gains, then came Tuesday and the market
gave it right back. The market mover Tuesday was Lehman Brothers rumors and
speculation. The roller coaster ride will continue until Lehman Brothers clears
up the question marks out there, on how they are going to get more cash. This
looks to be unfolding in a similar fashion to the Bear Stearns collapse with a
little different plot, but could have a similar outcome. It sounds like Lehman
is going to be making an announcement within the next few hours, so we will see
how the market reacts today when it opens. This is kind of like watching a train
wreck in slow motion right before our eyes.
Tuesday, September 9th:
Freddie and Fannie Fuels Gain - Yesterday was a great day to be a
stockholder for the most part. The financial stocks were off and running, except
Freddie and Fannie of course. They took a nice bath and laid down for a long
nap, a really long nap. The day started off with a bang, everything was up huge
but as what seems to happen lately the profits were quickly taken. It was still
a great day, but until the market can stop selling off in this range bound
pattern we seem to be in we probably will not see much progress. Perhaps these
mortgages getting cleaned up will open up some liquidity for banks. Could this
event be the oil to lube the US economy’s engine?
Monday, September 8th:
Something Wicked This Way Comes - The book is about a strange carnival
that rolls into town and in stock market terms we can call the financial credit
collapse this carnival. You might think you know when this wacky carnival is
going to hit the road but in the end, it is just a guessing game. Fannie Mae and
Freddie Mac are the latest victims to fall from the high wire act. Eventually
this circus will leave town, but I know I don’t want to pay the price of
admission until I am certain I know what is under the tent.
Friday, September 5th:
Terrible Thursday - Yesterday was a disaster to say the least. The
major indexes dropped 3% and nothing was working. If this is what is going to
happen with the traders back, I wish they would return to their summer breaks.
The fact of the matter is the next 6 months (at least) are going to be tough, so
I would stay lighter than usual in stocks and would be much more anxious to take
profits when you get them. The same could be said for losses. I would cut ties
with down stocks quicker than I normally would with the uncertainly these days.
Thursday, September 4th:
Republicans Turn - I have to admit that I was actually interested in
watching Gov. Palin’s speech last night and that is saying something with as
boring as politics have become. I thought she did a great job for someone who
has probably never even sniffed a stage and audience like this before. The jury
is still out on how her selection will affect this ticket, but along with Obama
on the other side, it has seemed to re-energize politics in America. This is
something that was badly needed, regardless of who is selected, we will
hopefully see some positive changes in Washington. Speaking of positive changes,
how about a positive day for all the major averages today.
Wednesday, September 3rd:
Highs and Lows - The wackiness continued on the first day back from a
long holiday weekend. The stocks were off to the races yesterday and the rabbit
(lets call him a bull) was looking to finish the day off on a spectacular high,
but just like in the book the rabbit fell asleep and the turtle (bear in this
case) stormed back and in the end won the race. Oil continued its march lower
and commodities did not want oil to feel lonely so it followed as well. The
dollar looks like it is going to continue to strengthen for the time being and
there are pluses and minus to this as well. You just need to watch your
portfolio closer these days and it could continue for at least 6 more months.
Tuesday, September 2nd:
Traders Are Back - Well it is that time of the year when the traders
return to New York or at least that is what they tell us so we can find out the
true state of the stock market. The summer has been up and down and that could
fall in the understatement of the year category. We will see if the July lows
are the bottom or if we have a ways to go now that the volume should be picking
up here shortly. We have a great week in front of us, if nothing more because
the NFL will get kick started on Thursday and college football as just begun. So
buckle those chin straps, it is time to find out who is for real in the stock
market and on the field.
Friday, August 29th:
What a Push - Stocks were on the rise yesterday and what a day they
had. The trend has been to hang around the 50-day moving average for the SP500
and DOW for the last couple weeks, but yesterday they really broke above that.
The volume of course is way down but any positive gains we can cash in on is
nothing to complain about. Today should be a really light day as well. The
question I have is will stocks hold on to these gains with the traders getting
back to work on Tuesday. Who knows what today will bring us but another positive
day would be fine with me.
Thursday, August 28th:
Obama’s Turn - Tonight Barack Obama will address the Democrats from
Denver in what I would imagine is the biggest speech of his life. Regardless of
which candidate gets in they will face some tough times but there is definitely
light at the end of the tunnel. Yesterday we had a good finish to the day and
the DOW and SP500 actually closed above the 50-day moving average.
Unfortunately, that means that today we will probably push below it to continue
the zigzag pattern we are in. The best way to play it is buy the dips and sell
the rips.
Wednesday, August 27th:
The Search for Direction - The SP500 has been very close to 50-day
moving average for almost 3 weeks. It is like a frighten child clinging to its
mother never wanting to stray to far from home. Unfortunately, the 50-day line
keeps moving slowing down like walking down 20 stories one stair at a time. Let
us jump on the elevator and get to the bottom so we can start the recovery
already. Once this week is over and the traders start to get back to work, we
could see the volume increase and perhaps find a direction one way or another.
Tuesday, August 26th:
Tuesday Has to be Better, Right? - Yesterday was not exactly a banner
day for stocks. The major indexes lost about 2% for the day and nothing really
seemed to be moving in a positive direction. Freddie and Fannie did move to the
upside, but does anyone really want to play with those time bombs? It will
probably be a slow week as far as volume goes since we have the long holiday
weekend coming up and everyone is enjoying their so called last weekend of
summer. It sure would be nice if we could get some positive finishes before
Friday.
Monday, August 25th:
Olympic Wrap Up - The Olympics have come to an end and were pretty
entertaining. I came away from these games knowing two things for sure. One is
Michael Phelps is the new Aqua Man and two Usain Bolt is ridiculously fast.
Speaking of fast, we are quickly approaching the end of summer and someone
forgot to tell the stock market that it was suppose to be in recovery mode by
now. There is no doubt the second half recovery has not even left that starting
blocks yet, but we do still have time on our side. A new trading week begins and
let us improve upon last week’s performance.
Friday, August 22nd:
Oil Up - Dollar Down - We could be seeing a new trend over the coming
weeks. In 2008, a trend means it is valid for about a week before something
changes the picture. This week it looks like oil is making a charge back up and
the dollar is again losing ground. It has not been a great week for stocks so
lets hope we can find some strength to fight off the bears before the weekend is
here. Big Ben will be speaking later today in Jackson Hole, so perhaps he can be
the sparkplug.
Thursday, August 21st:
Financial Burden - Well the financials sure are putting the death
squeeze on the stock market and it does not look like it will let go anytime
soon. If you are the daring type and like to live on the edge a little, here is
something you may want to watch. The XLF, which
tracks a basket of financial stocks, has been hammered this year. This is not
news to anyone, but what is interesting is what number it is closing in on. You
can count on one hand the number of times the XLF has dipped below 20 since
1999. It did go below 20 last month and had a good bounce off that. It again is
looking to go below 20 (closed at $20.35 yesterday). It got to around the 18
level before it bounced off that last month, so that is a number I would be
watching. If it gets to 18 again, I might actually look to buy it or buy some
calls.
Wednesday, August 20th:
Two for Two - Monday and Tuesday certainly were not fun for investors
unless you are on the short side. The big problem was the producer price index
skyrocketed to its highest annual rate in 27 years and that means inflation is
not ready to go away just yet. A new day has started so lets get the positive
energy flowing. Here are a couple stocks that have hit 52-week highs and that is
good considering what has happened over the last couple of days. The first is
Laclede Group (WAB) and they are in the gas utilities industry. The
second is Westinghouse Air Brake Technologies (LG) and they
play in the railroad industry. I do not know much about either company, but
perhaps worth taking a look.
Tuesday, August 19th:
Slip Sliding - Monday’s are bad enough, so we don’t need a one and a
half percent drop on the major indexes to pile on but that is exactly what
happened yesterday. The financials got the finger pointed their way for the drop
in Monday’s action, but that is not news to anyone. Now is a time to look at
stocks and find out who is fighting off the down days with some success and
still enjoying the up days. If you can find stocks like this, you might be
looking at tomorrow’s leaders. You should always be looking for edges even in
markets like this. Warren always says to buy when everyone is panicking and sell
when everyone is buying.
Monday, August 18th:
Which Way is Up? - Could someone please give us directions out of this
quagmire? The map that has been put in front of us is not easy to read. We have
commodities sinking like a stone, so inflation pressures are easing.
Unfortunately, the only stocks that have done well in 2008 are closely related
to commodities. We have a dollar that is finally starting to shake the funk it
has been in for years. This is probably due to the fact that Europe is starting
to slow down, and the rest of the world for that matter. Our goods were cheap
because of other counties inflated currencies. Our economy could be losing that
benefactor as the dollar continues its climb. I do not mean to paint a gloom and
doom picture for you but the point is to remain cautious in these times of
uncertainty. I just think we will remain in a tight trading range for at least 6
months while everyone tries to figure out the next move. So I guess the, “buy
the dips and sell the rips” is the way to play it.
Friday, August 15th:
The Good, The OK and The Shaky - It does not have the same punch as
The Good, The Bad and The Ugly, but it is a better description of how the
NASDAQ, SP500 and DOW’s daily charts look. By the way, The Good, The Bad and The
Ugly quite possibly could be the greatest movie ever made. Anyway, the NASDAQ
chart looks great as it has broken through the 200-day Moving Average and most
of the oscillators are looking good. The SP500 is still hanging around the
50-day moving average and oscillators look pretty good. The DOW however really
looks like it is starting to struggle. The Stochastic chart is showing some
divergence, while the index has been moving up over the last month. The volume
has been light as well, so just keep your eyes peeled on this one.
If you want to see some charts about what I am seeing, you can sign up for
free and check them out. After signing up, they are located under the Research
tab and you click on ‘Charts of Indexes’.