Monday, February 23, 2009
The New Leg Down
Apologies again for lack of posts. This time I can at least half blame it on Blogger as they have closed us down again for 10 days or so on the basis that we were spam!!
Anyway, since the last post Obama has outlined and signed off on his stimulus plan and the markets did not like it. We have moved a leg down and have come out of the channel the SPX has been in for the past two months.
We declined a play this month on the basis that we knew the Obama plan would be a market mover one way or the other and we wanted to stay clear of that storm as we are not gamblers.
The indexes have had a torrid time again over the last two weeks. On Friday we saw a second straight week of large declines. The Dow closed the session with a loss of 100.28 points to a level of 7,365.67. The SPX declined 8.89 points, finishing the session at 770.05. Both these markets are well below the techincal support levels we saw the previous months.
Again it is the financial stocks which have continued to push the markets lower on concerns many banks will need to be nationalized at least for a period of time. Bank of America (BAC) and Citigroup (C) are two companies in jeopardy of nationalization and this has led to large declines in these stocks.
Concerns about the economy and the state of banks pushed gold prices above $1,000 an ounce intraday with Treasury securities also seeing gains throughout the day (which is odd as normally when one rises the other falls).
The major market indices fell more than six percent this week, which resulted in new multi-year lows and a spike in fear. The VIX rose 14.84 percent to close at 49.30which is above the resistance at its 200-day moving average!!
Oh dear.
Until next time.
Anyway, since the last post Obama has outlined and signed off on his stimulus plan and the markets did not like it. We have moved a leg down and have come out of the channel the SPX has been in for the past two months.
We declined a play this month on the basis that we knew the Obama plan would be a market mover one way or the other and we wanted to stay clear of that storm as we are not gamblers.
The indexes have had a torrid time again over the last two weeks. On Friday we saw a second straight week of large declines. The Dow closed the session with a loss of 100.28 points to a level of 7,365.67. The SPX declined 8.89 points, finishing the session at 770.05. Both these markets are well below the techincal support levels we saw the previous months.
Again it is the financial stocks which have continued to push the markets lower on concerns many banks will need to be nationalized at least for a period of time. Bank of America (BAC) and Citigroup (C) are two companies in jeopardy of nationalization and this has led to large declines in these stocks.
Concerns about the economy and the state of banks pushed gold prices above $1,000 an ounce intraday with Treasury securities also seeing gains throughout the day (which is odd as normally when one rises the other falls).
The major market indices fell more than six percent this week, which resulted in new multi-year lows and a spike in fear. The VIX rose 14.84 percent to close at 49.30which is above the resistance at its 200-day moving average!!
Oh dear.
Until next time.
# posted by Paul @ 6:14 AM 
