more selling, less buying

Shortened week last week - traveling and out of town last Friday so no post. Full week this week and a post this Friday.

Markets continue to struggle mightily with continued negative economic news coming out almost daily. Couple that with the back-and-forth dialogue regarding the nationalisation of some of the country's largest financial institutions, and one has themselves a recipe for a hearty sell-off in the equity markets.

The promise of a new administration being able to deliver us from 'evil' has failed to materialize. People are coming around to the fact that we are in a long drawn-out recession/depression and it will be a long U-shaped recovery that will not be in any hurry to resolve itself. The mortgage hangover continues to haunt the national economy and the sub-prime mess continues to ripple throughout the international economies. With more mortgages ready to re-set their rates the number of foreclosures will not decline any time soon.

Oil has edged up into the mid 40's again after re-testing the low 30's. OPEC continues to muddle through supply and demand issues and the commodity markets experience knee-jerk reactions to the mandates and quotas being supplied by those nations controlling the supply. Foreign exchanges are also in the midst of a hard downturn with the DAX, CAC and FTSE all having rough weeks.

The scandals and blow-ups at least within the alternative investment community have seemed to have subsided lately as other more prominent stories such as the ones with BAC and C dominate the headlines.

The topic of carried interest is moving to the forefront as legislators scrounge to find new ways to generate tax revenue for budget straining under a bloated deficit. All is well for now at least as the HF managers are concerned.

Turning to the indices, the DJIA is flirting with breaking through 7K. The SP500 broke through the important 800 level without even thinking twice and the Nasdaq is firmly trading well below 1500. The lows of 2002/2003 are being tested by the DJIA and S&P 500 and are definitely within reach at this point for the Naz. If we break through those last bastions of support, well, watch out below.

Still plenty of short candidates and to the long side the spread between value and price is getting wider every day.

Happy Friday.

DJIA 7,062.93 -119.15

NASDAQ 1,377.84 -13.63

SP500 735.09 -17.74

long weekend

Looks like Congress may have actually passed the stimulus package on Friday. What impact this will have on the economy is up for debate - ultimately probably not much of an impact - at least right away. However, maybe this will at the least provide some direction to otherwise choppy markets. The markets have been trading sideways and consolidating with a tight range over the past month or two. Makes for difficult trading and the healthy stocks don't want to move higher and the sick stocks don't want to move lower. From a technical perspective the market indices look weak. The DJIA and SP500 look to be setting up to move lower and the Nasdaq is all over the place; meandering along trying to find a path. Of course, no reaction until confirmation. No prediction/just reaction.

Oil is back trading around $35/barrel and the equity markets are trying to figure out what to do with the banks such as C, BAC, WFC and others. Wild volatility and big volume keep the bank sector in play.

Long weekend makes for a short week upcoming.

Happy President's Day.

DJIA 7,850.41 -82.35

NASDAQ 1,534.36 -7.35

SP500 826.84 -8.35

Bear rally?

Pretty good week to the upside. The averages were up for the week. The S&P and the Nasdaq having nice steady gains throughout. Most of the trades were to the long side as investors jumped into the stocks at the first sign of improved returns.

The economic stimulus package still looks to be passed and put into place. This will either be case of buy the rumor/sell the news, or this may actually be a catalyst to get things turned around for awhile.

Happy weekend.

DJIA 8,280.59 +217.52

NASDAQ 1,591.71 +45.47

SP500 868.60 +22.75