Friday, November 21, 2008
Where is the Support?
These are dark days indeed with the major market indices hitting new 6 ½ year lows. The Dow fell 444.99 points Thursday (5.56%), to close the session at 7,552.29. The SPX lost 54.14 points (6.71%) to end on 752.44. An important point to note is that volume was extremely heavy for the session which means that all the big instutional players were selling. We still have no play on which in hindsight was a shame for us this month. The presidential election in the middle of the month really made it difficult for us to make a good play.
Anyway after a horrible day of trading on Wednesday on concerns about TARP and the auto sector, stocks continued to plummet Thursday following the jobless claims data. Claims for the week ending Nov. 15 rose by nearly 30,000 to a level of 542,000. This was well above expectations for a reading closer to 505,000 and pushed the four-week moving average to 506,500. This is the highest level for this moving average since 1983. This data shows that the unemployment rate is likely to continue to rise, which obvioulsy is not good!
Earlier in the session, there were some gains when reports surfaced that a deal had been reached with the auto sector. However, news surfaced that Democrats had rejected the deal, especially when Treasury Secretary Paulson stated that the government "can’t be too hasty". This news led to selling, which culminated in a spike in the fear indices and a sharp decline in stock prices.
The fear index, the VIX jumped to above 80 which is not a good sign but did keep clear of it Oct 24 high of just under 90!
Today is expiration Friday so expect more volatility!!
I will be sending out in my email this weeked how I propose to move forward.
Until next time.
Anyway after a horrible day of trading on Wednesday on concerns about TARP and the auto sector, stocks continued to plummet Thursday following the jobless claims data. Claims for the week ending Nov. 15 rose by nearly 30,000 to a level of 542,000. This was well above expectations for a reading closer to 505,000 and pushed the four-week moving average to 506,500. This is the highest level for this moving average since 1983. This data shows that the unemployment rate is likely to continue to rise, which obvioulsy is not good!
Earlier in the session, there were some gains when reports surfaced that a deal had been reached with the auto sector. However, news surfaced that Democrats had rejected the deal, especially when Treasury Secretary Paulson stated that the government "can’t be too hasty". This news led to selling, which culminated in a spike in the fear indices and a sharp decline in stock prices.
The fear index, the VIX jumped to above 80 which is not a good sign but did keep clear of it Oct 24 high of just under 90!
Today is expiration Friday so expect more volatility!!
I will be sending out in my email this weeked how I propose to move forward.
Until next time.
# posted by Paul @ 5:10 AM 
