Tuesday, March 24, 2009
Back in the Game
It has been a while but we are back in the game!! We got filled on our play for $1.10 which is 15c more than anticipated. We got the play on at the tail end of the big rally seen today.
President Obama finally unveiled his plan to rid banks of bad assets and this sent stocks soaring to start the week off. The Dow ($INDU) gained 497.48 points to end at 7,775.86. The SPX added a whopping 54.38 points finishing the session at 822.92. We are in the green.
Treasury Secretary Geithner provided details about the "Public-Private Investment Program", which will help clear billions of dollars in bad assets off bank balance sheets. The deal will include a combination of public and private funds that will be used to eliminate between $500 billion and $1 trillion in toxic assets. Private firms will have the opportunity to buy bad assets at discounted prices, which could result in profits or losses. Though some feel this move could make things worse, the majority of traders and economists approved the plan. Bank and financial stocks led the rally.
Helping add to the euphoria Monday was a better than expected existing home sales report. Existing home sales rose 5.1 percent in February to an annualized level of 4.72 million units. Estimates were for a flat reading at 4.50 million units. Prices also firmed during the month, albeit by just 0.4 percent. The year on year decline in existing home prices sits at 14.8 percent.
It will be interesting to see how stocks trade today. The joy of Monday's Treasury announcement could lead to a multi-session rally, or traders might take profits on the view the announcement created an overbought situation. The Dow has risen from 6,500 to a level of 7,800 in just over two weeks. Now we need to see if this level is going to act as resistance or if the bulls can push through.
Until next time.
President Obama finally unveiled his plan to rid banks of bad assets and this sent stocks soaring to start the week off. The Dow ($INDU) gained 497.48 points to end at 7,775.86. The SPX added a whopping 54.38 points finishing the session at 822.92. We are in the green.
Treasury Secretary Geithner provided details about the "Public-Private Investment Program", which will help clear billions of dollars in bad assets off bank balance sheets. The deal will include a combination of public and private funds that will be used to eliminate between $500 billion and $1 trillion in toxic assets. Private firms will have the opportunity to buy bad assets at discounted prices, which could result in profits or losses. Though some feel this move could make things worse, the majority of traders and economists approved the plan. Bank and financial stocks led the rally.
Helping add to the euphoria Monday was a better than expected existing home sales report. Existing home sales rose 5.1 percent in February to an annualized level of 4.72 million units. Estimates were for a flat reading at 4.50 million units. Prices also firmed during the month, albeit by just 0.4 percent. The year on year decline in existing home prices sits at 14.8 percent.
It will be interesting to see how stocks trade today. The joy of Monday's Treasury announcement could lead to a multi-session rally, or traders might take profits on the view the announcement created an overbought situation. The Dow has risen from 6,500 to a level of 7,800 in just over two weeks. Now we need to see if this level is going to act as resistance or if the bulls can push through.
Until next time.
# posted by Paul @ 7:52 AM 
