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

Stock Market Update -Mar 1st

This was another bad week for stocks. We heard from the Fed chairman, The President on the budget, General Motors, Citibank, more bad housing numbers, unemployment, and a knockout negative GDP number (-6.2%) -all contributing to the continued weakness. Oddly enough, the financial sector was the only gainer in the S&P 500 (see chart below).

Oil rose above $40 while Gold dropped from $1000 to around $940. The US Dollar also rose this week, while the 30 year Bond headed lower. Once again, first-time unemployment benefits crossed the 600,000 level and the nation's jobless rate is now at 7.6 percent. Two more banks were shut down this week.


Next week we get the monthly Payroll report on Friday. The major stock indexes are now testing the November lows -we'll have to wait and see if they rebound from those levels, or continue going down. (see sample trade here)

The European Central Bank and Bank of England will make interest rate announcements this week which could affect the currency market.

Some interesting stats from CNBC:
*The Dow & S&P turn in their worst February performances since 1933 when the Dow lost 15.62% and the S&P lost 18.44%
**The Dow turns in its biggest February point drop since its inception in 1896, losing 937.93 points for the month

Stocks finish down 50% from 2007 highs
S&P 500 Finishes At Worst Level Since December 1996
Will the banks survive?
Citigroup's Clever Plan to Shaft Taxpayers Again
U.S. government to own up to 36% of Citi
Citigroup Beats WorldCom, Sets Stock Trading Record
Is Citi the next AIG?
AIG: The bailout that won't quit
GM loses $9.6 billion in fourth quarter
California unemployment rate over 10%
JPMorgan warns of more housing woes
Trump Entertainment files for bankruptcy
Buffett's worst year

Obama unveils $3.6 trillion budget for 'new era'
Obama Plans to Reduce Budget Deficit to $533 Billion by 2013
Why Obama's Economic Plan Will Fail
U.S. Economy: GDP Shrinks 6.2%, More Than Estimated
Economy moving in reverse faster than predicted
Housing Prices in 20 U.S. Cities Fall a Record 18.5%
Europe's Crisis: Much Bigger Than Subprime, Worse Than U.S
Volcker: Crisis May be Even Worse than Depression

Stock Market Update -Feb 22nd

The market lost ground again this week, with the financial companies leading the way down (see chart on the right below). Once again this week, we saw the number of americans who applied for first-time unemployment benefits cross the 600,000 level. Another bank was shut down this week as well.


Next week we may get more clarity on the banking situation, good or bad! Meanwhile, the DOW is now just below the low point established back in November, and the S&P is almost there (see chart above). We could be near a reversal point, or it could just keep on going down -remember we are still in a vicious bear market!

About the only thing that seems to be going up right now is gold, and gold and silver stocks (ABX, AEM, AUY, EGO, GG, GRS, HMY, IAG, KGC, RGLD, SLW, VGZ). They are probably ready for a pullback at this point though, many of them having been up more than 100% since the October bottom.

Major indexes fall more than 6 percent for week
S&P heads to first quarter ever of negative earnings
Charts Predict: S&P Down to 600
Continuing jobless claims set record
Saab in Bankruptcy Filing; G.M. Seeks More Aid
Gold tops $1,000 an ounce
U.S. Tries a Trillion-Dollar Key for Locked Lending
Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies
Nationalization concern dogs Citi, Bank of America
Get ready for a wave of bank failures
Russia goes from splash to crash as commodities tumble

How to lose money in 10 years
How to lose money in 20 years

Stock Market Update -Feb 15th

The market dropped again this week. The big expectation from the Treasury Secretary regarding the banks was a big letdown. New unemployment claims came in above 600,000 again for the week, and four more banks were shut down by regulators. Gold prices continue to move up.


Next week we have options expiration for February. The market could very well fall back to the November lows from here.

Microsoft announced that they will now open retail stores -another gaff from Microsoft in my opinion. This company has lost its way.

S&P heads to first quarter ever of negative earnings
Stock slaughter
The rise, and potential fall, of America’s banks
U.S. Foreclosures Top Quarter-Million for 10th Straight Month
JPMorgan, Banks to Halt Foreclosures for Three Weeks
U.S. House Passes Obama’s $787 Billion Stimulus Plan
Summers Says Obama Mortgage Plan to Focus on Lowering Payments
Gold hits seven-month high on safe-haven buying
Japan’s Economy Plunges at Fastest Pace Since ’74
Microsoft to open own stores, take on Apple
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Feb 8th

The market was up nicely this week, especially the financials, in spite of the bad jobs data we got on Thursday and Friday (unemployment rate now at 7.6%). This time new unemployment claims for the week soared past 600,000 to 626,000! Oil prices are still range-bound in the $40 area, while Gold prices continue to rise. Three more banks were shut down by regulators this week.


Next week earnings reports will continue, and we await further action on the stimulus plan, and an announcement from the treasury secretary Timothy Geither on Monday, regarding the banking system. The market seems to be gaining some strength here

Big rally on Wall Street
Obama Urges Quick Action to Avoid Economic Tailspin
Economy sheds half million more jobs
Macy's cutting 7,000 jobs — 600 in Miami office
U.S. auto sales hit 27-year low
U.S. Mortgage Time Bomb Needs Defusing Yesterday
Is America Going The Way Of Japan?
Too late to avoid a depression?
Move over, subprime
A recession of biblical proportions

What uncontrolled printing of money can lead to:
Nothing to lose: how Mugabe’s banker turned Z$1,000,000,000,000 into Z$1