Stock Market update -Jun 29th

Fasten your seat belts! We will close out June and the 2nd quarter with another big slide in prices. The Dow has lost 1600 points since the turn in mid-May at the 13000 level; the S&P 500 lost 160 points from the 1440 level, while the Nasdaq lost 550 points -the Dow has been the worst performer of the three.


Here is a longer term look at the three major indexes. This clearly shows the importance of using simple charts to track performance -the Nasdaq has been a clear loser here if you held it for the 'long term'.

After the Fed meeting on Wednesday, the market sold off hard on Thursday, with some more selling on Friday; the US Dollar also sold off. I would be very cautious going forward as the economy continues to be dragged down by a number of factors (Oil continues to move higher, touching $142 this week). The market has already given back around 20% since last October. Cash is a great position in these uncertain times -why risk losing an additional 10% plus, when you can get around a 2-4% return in cash. Not to sound like a broken record, but the credit crisis is still looming large out there, with the potential for possible bank failures as things continue to get worse (bank index).

Next week we have a short week because of the 4th of July holiday on Friday. We could expect some action in the US Dollar based on the ECB actions next week. Also, the market is very oversold, and with the S&P 500 approaching the March and January lows, we could get a small bounce at that level (note that the DOW has already broken down 'past' those levels). On a side note, Gold and gold equities saw a nice jump this week.

News stories:
Oil hits $140 for the first time
U.S. Stocks Tumble, Sending Dow to Worst June Since Depression
Dow in 350-point tumble
Gloom Descends Over Wall Street Again
Barclays warns of a financial storm as Federal Reserve's credibility crumbles
This Recession, It's Just Beginning
Gold surges into $900 territory

BofA to cut 7,500 jobs after Countrywide deal
Banks' pipelines to fresh capital are narrowing
Citigroup sinks to 10-year low, Goldman urges short sale
GM drops to 53-year low, Goldman urges "sell"
GM's Market Value Is Only $7 Billion—Half That of Avon
Ford (F) Says It Will Never Make Money Again
New home sales and prices both drop in May
The Housing Abyss

Intel to skip Vista upgrade
Eleven Billion Videos Viewed In April, And No One Made A Dime
World now has 10 million millionaires

Stock Market Update -Jun 22nd

The downtrend continues with another bad week in the market (the DOW was down 465 points for the week). High oil prices, inflation, and the ongoing credit crisis and housing problems continue to hurt the market. We continued to see weakness in the Regional Banks too (see the chart in last week's post). Also take a look at some of these charts BBT BKUNA FITB KEY STI WB WM.



Shares of GM fell to levels we havent seen in over 15 years, Ford also continues to fall, along with the airlines, and major bond insurers (ABK and MBI). Also, GE's stock price is plunging like the financial companies. A key thing to keep in mind here is that whether it's a large 'blue chip' company or not, always protect your position or exit when there is a major trend change in the stock price. What to do? Unless you are a trader, stay out of this market until the downtrend reverses! Instead of losing money, at least your cash will earn a small return.

Meanwhile the FBI is trying to show that they are helping to fix things with an announcement of more than 400 arrests for mortgage related fraud, and by parading 2 former Bear Stearns fund managers before all the news cameras as they they were taken into custody (Bear Stearns kick started the sub-prime crisis last summer with the collapse of one of their hedge funds, then the entire Company itself collapsed and went on to being acquired by JP Morgan for a small pittance).

Next week we have a Fed meeting, and we also approach the end of the 2nd quarter.

News stories:
A Rough Week in a Rough Year for Stocks
Bank and economic fears drive Dow to 3-month low
RBS issues global stock and credit crash alert
Writedowns will hit US$1.3-trillion: fund company
Citi to suffer more 'substantial' writedowns

Banks Trimming Limits for Many on Credit Cards
Wall Street’s Fading Crush on G.E.
More than 400 Arrested in Mortgage Fraud Sting
Ex-Bear Stearns Fund Managers Taken Into Custody
There's nothing else the president can do to fix the economy.
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Other stories:
XP era ends: Will Vista step up?
Woman sues Victoria's Secret claiming thong injury

Stock Market Update -Jun 15th

We saw more downside action in the market this past week, except for a rally on Friday, in the face of a bad CPI number (inflationary), and persistently high Oil and Gas prices. I expect continued weakness in the market going forward.

The Financial stocks took a beating again this week, but recovered a bit near the end of the week. Apple shares fell this week as well after the much anticipated announcement of the new iPhone. Bond prices fell, helping to push mortgage rates up. The US Dollar continued to gain ground. Corn and Soybean prices are on the rise again -Corn surged to new record highs!

Next week we have expiration of the June Options and Futures contracts on Friday. We also get earnings reports from some of the big financial firms.

Keep your eye on the Regional Banks...


News stories:
May foreclosures rise 50%
U.S. home prices may dip 30%, junk bonds weaken by 2010, says J.P. Morgan analyst
Mortgage Rates Fly Higher
Heads roll as banks scurry for high ground
Wachovia, WaMu still in big trouble
Lehman raising $6B in capital, expects $2.8B loss
Lehman shares plummet amid write-down fears
Derivatives Market Grows to $596 Trillion on Hedging
A Banner Year for Farmers Buried By Floods
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Jun 8th

In my blog post last week I said 'We could see the market continue to reverse the recent rally from the March 17th lows if we get a bad jobs number on Friday.' Well, guess what? We got a bad Jobs number, and the market reversed -big time!! Also the Unemployment rate shot up to 5.5%, while Oil rocketed up to over $138 on Friday. Expect more downside action in stocks -looks like a classic ABC pattern unfolding (see chart).


On Thursday we had the biggest one-day move up in oil prices in history. Then on Friday oil prices doubled that move! Maybe this will be a blow off top in oil prices for now? If you are interested in trading these crazy moves in oil prices take a look at USO.

Next week we get the CPI report on Friday -probably more bad news on inflation; we'll see how the market reacts. Be sure to protect your ASSets; if this market continues with a new down-leg as projected above it could get ugly (remember the slide from October to March).

Also avoid the financial stocks -they have not bottomed, despite what the 'experts' are saying. I think we are actually beginning to see Part 2 of the Credit Crisis starting to unfold! (more charts)

News stories:
S&P slashes bank, broker ratings on loan loss fears
Stocks slide on more concerns about financials
Busy Week On Tap After Oil Surges, Stocks Crumble
Stocks fall sharply on surge in oil, jobs data
On a Disastrous Jobs Number, Recession is Obvious
GM closing 4 truck and SUV plants in North America

Lenders slash prices on foreclosed houses as numbers surge
Now lenders are facing HELOC hell
California Housing: Buy One Home, Get One Free! Really!
Subprime Debacle May Spark 2-Year Credit Crisis
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Jun 1st

Last week we recovered some of the losses from previous week, but with mixed signals from the market. The S&P 500 closed right at the 1400 level, the Nasdaq recovered most of it's loss, while the DOW is still below the broken up-trendline, so we have some divergence among these indexes, with the DOW being the weakest.

Oil prices retreated a bit, as the US Dollar strengthened. We also saw a drop in Bond prices.

Next week we get the much anticipated monthly Jobs report on Friday. We could see the market continue to reverse the recent rally from the March 17th lows if we get a bad jobs number on Friday.

S&P Sector Performance

News stories:
Oil Can't Rise Forever, So It Stops
Property Pain Past, Present And Future For U.S. Banks
Decline in home prices accelerates in March
Where the Financial Crisis Is Headed Next
The Next Shoe to Drop

Consumer confidence hits 16-year low in May
US and European debt markets flash new warning signals
Euro suffering from 'reserve currency curse' as investors pull out
Time for Goldman to Add Indonesia to the BRICs

Other news:
Touchdown! Phoenix Spacecraft Lands on Mars
Japan man discovers woman living in his closet
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.