Stock Market Update -Mar 29th

The rally continues, with the Financial sector leading the way (see 5 day chart below). The Treasury Secretary gave the market a big boost on Monday with his rescue plan for the financial system, paving the way to clear out $1 trillion in toxic assets. We saw a small pickup in home sales, and housing inventory is starting to come down as well.

Yet another bank was shut down this week, and new unemployment claims came in over 600,000 again. Since February, we have seen new unemployment claims over 600,000 every week!

Commodities: Oil prices remain above $50 per barrel, Gold prices lost some ground, while the US Dollar rebounded a bit.

Next week marks the end of the 1st quarter for this year. On Friday we get the monthly payroll report, which can sometimes move the market in a big way. Market analysis: With the market being up 20% in three weeks, it's likely we will get a pullback, then possibly a continuation of the rally. For short term traders, this pullback would be a good point to enter the market again. For aggressive traders, the 'leveraged' ETFs could provide nice returns, as long as you use 'stops' on every trade (e.g. SSO, UWM, UYG)

The Financial sector recovered nicely compared to the overall market.

News stories:
Worst quarter for the economy since the 1930s
Economy rescue: Adding up the dollars
This Time, Geithner’s Plan for Banks Makes Sense
Bankers: Take your TARP money back
Obama’s bank plan could rob the taxpayer
White House finalizing plan for more auto aid

California's Wipeout Economy
China questions the dollar's role as a reserve currency
Japan Exports Drop Record 49% as Global Slump Deepens
Existing Home Sales - March Report
Jobless Rate Exceeds 10% in Three More U.S. States

Stock Market Update -Mar 22nd

The market rally continued this week, but started to fade on Thursday and Friday. This rally is the biggest 2 week rally we've seen in decades!

The rally got a big boost on Wednesday after the Fed announcement that they will start buying Treasuries and mortgage-backed securities (i.e. they will be creating money from thin air for these purchases!) This caused the US Dollar to drop even further, and Bond yields to drop, bringing mortgage rates down as well. The drop in the US Dollar caused a continued rise in Oil prices, closing above $50 per barrel, and Gold to surge to $952 per ounce. Welcome to the world of dollar induced inflation (two weeks ago I suggested that the US Dollar had probably hit a top.) Overall we saw a rise in most commodity prices this week.

Also three more banks were shut down, and two credit unions were shut down this week. And lets not forget, new unemployment claims this week came in over 600,000 again!


Next week the market might signal what direction it wants to follow. If it can move above the 50 day moving-average line (chart above), and that line can start turning up, we could see a much bigger rally in the coming weeks.

We also await the much anticipated bank rescue plan from the Treasury (the last 'much anticipated plan' from the Treasury turned out to be a big nothing).

Pros Say: This Is the Bottom
Just A Sucker's Rally, Says John Mauldin
8 Firms Posting Surprising Profits
Banks, credit unions go bust
Nearly 15 percent of hedge funds closed last year
WaMu Sues FDIC for $13 Billion Over Bank Failure
Citigroup's Reverse Split: Will It Really Help?
The Real AIG Scandal

The Shadow of Depression
Treasury’s toxic asset plan could cost $1 trillion
Obama budget could bring $9.3 trillion in deficits
China ‘worried’ about U.S. Treasury holdings
Fed move is a market-changer as the dollar sinks
Dollar caps worst week in 24 years
The Dollar Is Dead

Stock Market Update -Mar 15th

This week we finally saw the markets rally (4 days in a row)! Citi and Bank of America had somewhat good news about profits, and the government started talking about maybe looking at 'mark to market' rules, which would affect the all the writedowns.

New unemployment claims this week came in over 600,000 again. Oil prices are still hovering around $45 per barrel, and the National Debt Clock has now crossed $11 trillion!



Next week we will see if the rally holds. Most people expect a pullback before rising further (if in fact it does rise further). We could also see Bond prices fall further based on comments from China regarding lending the US more money.

Rise in foreclosures 'a shock'
Obama Administration Tries to Reassure China on Treasury Debt
A Simple Guide to the Banking Crisis
Bankers Say Rules Are the Problem
Bonus Money at Troubled A.I.G. Draws Heavy Criticism
GM has more troubles than you think
Bernard Madoff: The Villain America Needed
Credit Cards Are the Next Credit Crunch

Stock Market Update -Mar 8th

The market sell-off continues, with the Financials leading the way again (some big losers in the DOW were Citibank, JP Morgan, GE, and General Motors). The major indexes have all lost at least 50% of their value from last year's high (DOW, NASDAQ, S&P500). The Financial sector has lost a little over 80%! More reasons to abandon that 'buy & hold' strategy that the 'experts' say we should use.

New unemployment claims came in over 600,000 again, with the jobless rate now standing at 8.1%. Oil prices started to move up, closing the week around $45 per barrel, and yet another bank was shut down this week.

Keep your eye on the debt clock (on the left) -now approaching $11 trillion!


Next week we could see more of the same unless some good news start to filter in. The S&P500 has now broken below the low-point we saw last November -not a good sign (see chart above). There is now talk of removing Citibank, Bank of America, and GM from the DOW as their valuations continue to dwindle -this could provide a boost for the DOW. Also, keep an eye on the US Dollar -we may be seeing a 'double top' in the recent US Dollar rally.


U.S. Stocks Post Biggest Loss in Three Months as Banks Tumble
Washington plans for big bank failure
Stock Markets: When Will the Bull Return?
Surging U.S. Unemployment Rate Puts Pressure on Obama
Unemployment in U.S. Surges to 8.1% as Payrolls Slide
Even Worse Than the Great Depression
A.I.G., Where Taxpayers’ Dollars Go to Die
The $700 trillion elephant
Microsoft's business model is over