The morning rally looked good, but then the sellers overcame the buyers, sending the indexes into negative territory. A late afternoon bounce closed the indexes positive. This is not the kind of action one wants to see if we are ready to rally off the bottom here. You want to see rallies hold and consolidate. We did manage to close positive but the financials continue to weigh heavily while traders are eager to take profits whenever they can.Reminder FED meets tomorrow with policy announcement on Wednesday.
The weather here in DR continued to be rainy as the camp came to a close. Last night’s dinner was a joyful feast. It was a wondeful week in spite of some stormy days. As I write, there is a bit of sunshine coming thru the clouds and campers are beginning to make plans to fly back home.The markets closed slightly down in what turned out to be a very choppy week.
Sorry for the late posting of this chart. On Thursday Kerry left the Camp to fly home. The local airport was closed due to warm rain and fog and Kerry returned to the Camp. I had offered to post NH-NL, but in the confusion got Kerry’s message to please do so only this morning 🙂
The major indices had a solid rally today after yesterday’s big sell-off. IBM’s fourth quarter earnings and forecast where much better than expected. That has been unusual news in this environment.$30 billion of Treasury bills were offered today with a yield of .03% that had three times more bids than needed. The demand for these remains very strong, despite the low rate of return.
UPDATE – Charts are posted now….Hello from the Dominican, where we just returned from a festive dinner. The Traders camp is going well and great to see such a serious group eager to learn yet have endure the pain and suffering in the evenings.Banks stocks were hit hard again today dragging the markets lower. The news continues to be bad and many times worse.This morning State Street warned today and was considered by some to be one of the better positioned banks. It fell 53%. NL expanded again today to 297, this is the highest level since early December. The 850 level failed and we are now testing the 800 mark.
Hello from the Dominican where we are sitting on a balcony overlooking the Caribbean and enjoying a nice evening of warmth. A bit of rain set in, but soon we will make our way to endure in a nice Caribbean dinner.Reminder that the markets are closed Monday so picks are not due until Monday at 2pm NY time.
NL continued to expand a bit but about mid day we saw a very strong intraday rally ensue. NL have expanded over 200 now and we need to see this contained.The important event for the day was the release of the Democrats $825 billion stimulus package. The sell off we have been watching for the past several days is the……
When the market rallied last week, we got three days of New Highs exceeding New Lows – by single digits. Those skinny swallows did not make a Spring. Now that the market is sliding, the message is quite different
Obama wants the second $350 billion of the TARP released as quickly as possible. That will total $700 billion which is less than the $865 billion that State’s pension funds have lost over the past year. According to the state fund managers they won’t be able to make enough through investing to pull themselves out of the hole so it will be up to the taxpayer to bail them out.
The behavior of the NH-NL Index is just as important as its absolute level. We want to see New Highs expand during a rally to confirm its strength. The increase of New Lows during a decline points to bearish strength.