Thursday, November 20, 2008
Looking Ominous
Stocks hit multi-year lows Thursday on continued worries about the economy and the state of the car sector. The Dow fell 427.47 points Wednesday (5.07%), to close the session at 7,997.28. The SPX lost 52.54 points (6.12%) to end on 806.58.
Yesterday was a bad day for the markets.
The Dow didn’t penetrate its October 10th low on an intraday basis, but it did close at more than a five year closing low. However, the SPX did move through support. Auto stocks fell once again on the view a bailout package might not be forthcoming for the beleaguered sector, but it was the financial sector that continued to be the hardest hit. Economic news was disappointing and the Big Three’s attempt to talk the government into a bridge loan on the Hill didn’t provide any help. Citibank fell hard and its shares drop over 26% in one day, its biggest one day decline since the crash of 1987.
In economic news, housing starts fell 4.5 percent in October to a level of 0.791 million annualized units. However, this was slightly better than expectations, though the year on year declines sits at a drop of 38.0 percent. Building permits fell 12.0 percent and are down 40.1 percent this past year. This points to even further weakness for starts in the months to come. In related news, mortgage applications fell 12 percent for the week ending Nov. 14.
Thursday’s session will be crucial for both the bears and the bulls. The fact that buying didn’t come in when the lows were tested is a bearish sign and the bulls need to find strength tomorrow or new support will need to be found. And to be honest when you look at the 10 year chart of the SPX (see below) there is not much support anywhere if the 8000 level is not held!
Until next time.
Yesterday was a bad day for the markets.
The Dow didn’t penetrate its October 10th low on an intraday basis, but it did close at more than a five year closing low. However, the SPX did move through support. Auto stocks fell once again on the view a bailout package might not be forthcoming for the beleaguered sector, but it was the financial sector that continued to be the hardest hit. Economic news was disappointing and the Big Three’s attempt to talk the government into a bridge loan on the Hill didn’t provide any help. Citibank fell hard and its shares drop over 26% in one day, its biggest one day decline since the crash of 1987.
In economic news, housing starts fell 4.5 percent in October to a level of 0.791 million annualized units. However, this was slightly better than expectations, though the year on year declines sits at a drop of 38.0 percent. Building permits fell 12.0 percent and are down 40.1 percent this past year. This points to even further weakness for starts in the months to come. In related news, mortgage applications fell 12 percent for the week ending Nov. 14.
Thursday’s session will be crucial for both the bears and the bulls. The fact that buying didn’t come in when the lows were tested is a bearish sign and the bulls need to find strength tomorrow or new support will need to be found. And to be honest when you look at the 10 year chart of the SPX (see below) there is not much support anywhere if the 8000 level is not held!
Until next time.
# posted by Paul @ 4:26 AM 
