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.

Stock Market Update -May 25th

Looks like the caution I expressed last week was well warranted -the market pulled back hard this past week, and broke the recent uptrend from the March 17th low, taking us back below the 1400 level on the S&P 500! (see green trend line on the chart). Oil prices surged to $135, causing investors to pull back; airline, automobile, and financial stocks took a big hit, along with the US Dollar. We also got more bad housing numbers this week.


Next week the markets are closed for Memorial Day on Monday. On the calendar, we get 1st quarter GDP numbers, along with more housing data.

It looks like we may be starting a new down-trend, maybe a continuation of the bigger downtrend that started last October, which could take us below 1250 on the S&P 500.

News stories:
Bear Market Rally Fizzles Without Further Fed Boosts
Buffett sees "long, deep" U.S. recession
Four reasons big buildup in home inventories is ominous
Not (yet) the worst housing downturn
Bank failures to surge in coming years
China's newest export: Inflation
Booming Brazil: The new China
Latin America Going Strong

Moody's computer glitch led to incorrect rating of CPDO derivatives
When A Computer Glitch Mucks Up Bond Ratings
After Credit Computer Glitch, Credit-Rating Company Has Its Credit Rating Cut By Bigger Credit Rating Company
Moody's Faces Scrutiny of Error, Possible `Cover-Up'
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -May 18th

The market moved higher last week, putting us back above the 1400 level on the S&P 500. If it continues the uptrend, we will finally be in positive territory for the year. I'm still cautious though with $127 Oil, inflation still looming out there, and the consumer pulling back on spending.


Next week we get earnings from HP, Target, Home Depot and Lowe's.

News stories:

U.S. Consumer Sentiment Decreases to 28-Year Low
U.S. industrial output plunged in April
The dollar's short-lived comeback
Dollar's decline finally may have ended
Housing starts surge on condo construction
US foreclosure filings surge 65 percent in April
Credit Problems Spreading Beyond Mortgages: FDIC
Saudi Arabia rebuffs Bush on oil production

Other stories:
China quake toll about 30,000; new aftershock is felt
Microsoft should nuke Vista instead of Windows XP
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -May 11th

The market gave up some ground last week with bigger than expected losses from AIG and Fannie Mae, and oil prices topping $126 per barrel. The US Dollar pulled back a bit, but I expect it will move back up to test the 75-76 area.


Next week we have more earnings -some of the big names reporting include Walmart and Hewlett-Packard.

News stories:
Can Citi Find $400 Billion in Assets to Sell?
Oil prices at more than $126 a barrel
Some See Oil At $150 a Barrel This Year
Venezuela, China set to ink new oil deal

The dollar danger is not over yet
American housing -Map of misery
U.S. April Business Bankruptcy Filings Increase 49%
Ethanol Fantasy Fuels a Food-Price Nightmare

Other stories:
California man losing nine homes in mortgage mess
Clashes in northern and eastern Lebanon, outside Beirut
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -May 4th

The market continued its recent upward trend after the Fed and GDP announcements and the Jobs report. The DOW is now back over 13000, and the S&P has finally moved past the 1400 level. Maybe we'll see the Nasdaq 100 (QQQQ) take out the 50 level next week (that's where we started the year!)


MasterCard surged from the $240 level to almost $300 and Google traded past the $600 level for the first time since January. The China market (FXI) also continues to recover. Exxon fell after reporting over $10b in earnings! Sun (JAVA) was a big loser this week.

We did see a steady drop in Oil prices as I predicted last week (until it rallied again on Friday!) In general, Commodity prices dropped as the US Dollar continued its recent rally. Gold pulled back to the mid $800 level that I predicted earlier -many of the mining stocks have now pulled back to attractive levels. Brazil (EWZ) continued on its winning streak after an upgrade from Standard & Poor's.

Meanwhile Citi had to raise another $4.5 billion in capital this week, Bank of America said it may not guarantee $38 billion in Countrywide Financial debt, while S&P finally cut Countrywide's credit rating to Junk -the saga continues.

Next week we don't have much in the way of economic reports. Some of the big names reporting earnings include AIG, CSCO, DIS, and FNM.

News stories:
Countrywide Rating Cut to 'Junk' By Standard & Poor's
Homebuilders: No recovery until 2009
Housing prices post record declines
Home Vacancies Rise to Record 18.6 Million
Foreclosures spike 112% - no end in sight (Video)

Buffett Says Worst of Crisis Over for Wall Street, Individuals May Suffer
JPMorgan says no near end to financial crisis
Home Depot to close 15 underperforming US stores
Brazil's Bovespa Extends Record, Led by Retailers, After S&P Upgrade
Why we're stuck with insane prices
Forget gas: Get ready for $4 a gallon milk
Wall Street: Sell what in May and go away?

Other stories:
Crackdown on unfair credit card practices
US deep in debt and still digging
China to build 97 airports in 12 years
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.