Stock Market Update -Dec 28th

More of the same low volume trading in the market this week, with the market drifting somewhat lower. We saw some up-side action in Gold, while Oil is now trading in the 'mid $30' range. The Grains have also been in an up-trend lately (Soybeans, Corn, Wheat).

New and existing home sales for November cratered, while retail sales for the holiday season looked pretty bleak. And lets not forget, more than 500,000 unemployment claims were filed yet again this past week -this has been a weekly occurrence for some time now! Meanwhile, we approach the end of the year with the national debt clock now clocking around $10.685 trillion.


Next week will be the final trading week for 2008, the worst year for the stock market since 1931 - Good Riddance! We will probably see more light-volume trading like last week, along with maybe some tax loss selling. What can we look forward to in 2009? I will make some predictions in the next blog update.

Some of this years winners: Family Dollar Stores (FDO), Amgen (AMGN), Wal-Mart (WMT), McDonalds (MCD), and Inverse ETFS! (like SDS)

Some of this years losers: (basically everything!) Financials (XLF) -most banks and brokers, Retailers (RTH), Emerging markets (EEM), Gold miners (GDX), Commodities, and the major indexes (S&P 500, DOW, Nasdaq).

Unemployment claims highest since '82
Home Sales Tumble Again, Hopes for a Bottom Fade (video)
Fed's Balance Sheet Is Ballooning Fast
Japanese Exports Fall Record 27%
Russia devalues rouble for sixth time, more to come
Where'd the bailout money go? Shhhh, it's a secret
Battered commodities could perk up late in 2009

U.S. stocks turn to final week of 2008
Get Ready for a Lost Decade
Year End Review and Outlook - MarketWatch
The 2008 market will go down in history
Was 2008 the beginning of another Great Depression?
The Coming Hyperinflation?

Stock Market Update -Dec 21st

The market has been stuck in a range for the last two weeks around the 900 level on the S&P 500. Oil prices continue to drop, closing just under $34 per barrel. New unemployment claims surged past 500,000 again this week. The Fed basically dropped interest rates to zero this week, while mortgage rates also dropped significantly.




Next week is the Christmas holiday week, so expect light trading.

The 2008 market will go down in history
FedEx cuts employees' pay, suspends 401(k) payments
Drop in consumer prices is most since 1932
Bush throws lifeline to U.S. automakers
Auto makers to get more than $17 billion in loans
Paulson Seeks Second $350 Billion in Bailout Funds
Euro Makes a Comeback
The Next Big Bubble To Burst: U.S. Treasuries
If Fed mimics BOJ, Treasury yield drop could be big
What's next for America?
Dollar Staggers as U.S. Unleashes Cash Flood, Deficit
Don't destabilize Russia, Putin warns foes
California posts 8.4% jobless rate, third highest in U.S.
California's budget mess gets worse
Outlook Darkens as Recession Deepens

Stock Market Update -Dec 14th

In spite of all the bad news, the market continues to hold up well. The automakers failed to get a bailout package from the government this week. Oil closed higher, so did Gold, and so did many other commodities as the US Dollar fell, following its recent rally. New unemployment claims hit 573,000 this week (a 26 year high), and two more banks were shut down by regulators. People are now investing in Treasury Bills for a zero interest rate return (basically 'paying' the government to hold money for them)!


Next week we have the last Fed meeting for this year; more interest rate cuts are expected to be announced. Goldman Sachs and Morgan Stanley will be reporting earnings as well. It is also expiration week for Options & Futures, so we can expect some volatility as we close out the last month and quarter for 2008 for these derivatives. We could see the market continue with the recent rally.

Recession seen worsening, deflation a risk
Why Would Anyone Buy T-Bills at 0%?
Ex-Nasdaq chairman charged with perpetrating massive fraud
Hedge Funds Face Big Losses in Madoff Case
Bank of America to cut up to 35,000 jobs
Wells Fargo to write down $40 billion in Q4...
GM hires bankruptcy lawyers
Dow's rally may boost stocks next week
Fears rise over possible Ecuador default

8 really, really scary predictions

Stock Market Update -Dec 7th

More encouraging signs in the market as it rallies in the face of bad news. We got really bad manufacturing numbers in the middle of the week -but the market rallied! We saw over 500,000 jobs lost last month, and another 500,000+ new unemployment claims this week. Every week we see over 500,000 new unemployment claims, yet the market is rising! The total number of unemployed is now over 10 million.

The only sliver of good news is that Oil continues to fall, closing near $40 on Friday. All other commodity prices continue to sink as well.

(click to enlarge)

Next week we should get the final word on the bailout for the automakers. The market is showing signs of a small rally here, but with all the volatility, it may not last very long so be careful.

It's official: Recession since Dec. '07
U.S. job losses worst since 1974 as downturn deepens
Economy Loses 533,000 Jobs in November
Record 10% of U.S. homeowners in arrears or foreclosure
Retail sales dropping like a rock
Investor fear drives US Treasury yields to near zero

Tribune prepares for possible bankruptcy filing: WSJ
Price of gas hits lowest point in nearly 5 years
OPEC head: oil production likely to be cut soon
Merrill Lynch Says Oil Could Fall to $25

Stock Market Update -Nov 30th

Sorry, but I missed doing an update this week. We had a huge rally, with the market showing gains every day, following through from the previous Friday. More bad news though on the unemployment front with over 500,000 new unemployment claims again this week. Not a happy thanksgiving for many people.

(click to enlarge)

Here are a couple of news stories:

Bailouts hit $8.5 trillion
Fed adds $800bn to boost borrowing
Citigroup gets massive government bailout
U.S. Mortgage Rates Fall on $600 Billion Fed Plan
A Depression Coming? Not Likely

Stock Market Update -Nov 23rd

Another wild ride in the markets this week, as we saw the Auto makers and Citigroup in the headlines. Also this week, another 500,000+ joined the unemployment lines, same as the previous week (over 1 million in two weeks, over 4 million ongoing claims, and we are expecting close to 500,000 again in the coming week).

Treasury yields (Bonds) dropped to near zero (on the 3 month bills) as investors flocked to safety. In October, Consumer prices plunged by the largest amount in the past 61 years. Oil continued to fall, closing below $50 per barrel, while Gold closed back above $800. Also, three more banks were shut down this week. The saga continues...

(click to enlarge)

The Nasdaq is down 50% from its 'high' of 2800 last October. This 2800 'high' was down from the 5100 high in 2000, a double whammy for investors! Another blow to the 'long term, buy & hold strategy' crowd. In 10 years not only did you NOT make any profits, you actually lost money, even before counting annual inflation.

Next week we have a short week because of the Thanksgiving holiday. We got a nice rally on Friday, but we'll have to wait and see if it continues, or if it fizzles like the other big rallies we had on Nov 13th, Oct 28th, and Oct 13th! President-elect Barack Obama is expected to formally announce his economic team this week. The market rallied on Friday after the announcement of his pick for Treasury secretary.

"NEW YORK (CNNMoney.com) -- Wall Streeters returning to work Monday have at least one thing they can be thankful for: Thanksgiving is one less day the market is open."

***Breaking news: U.S. rescues Citi with $20 billion capital

As stock plummets, Citi on the brink
Will Citigroup Survive? Four Possible Scenarios
FDIC to guarantee $1.4 trillion in bank debt
The Auto Makers Are Already Bankrupt
Best housing 'bailout' may be no bailout
Trillions down and still bailing
30 reasons for Great Depression 2 by 2011

Obama Targets 2.5 Million Jobs With Stimulus Plan
How a Year-End Rally Could Materialize
The Death of Buy and Hold
The Global Economy's Big Fear Becomes Real: Deflation
Putin Pledges to Prevent Financial Collapse in Russia
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Nov 16th

This was a week chock full of news. The $700 billion bailout plan got switched (it never even got off the ground; remember this is the one that had to be done 'immediately' to avoid a financial meltdown, over a month and a half ago!) , AIG got billions more from the government, and now insurance companies are converting to banks to get some of that government money too (also American Express!), GM is on the brink of bankruptcy, while Circuit City filed for bankruptcy. We saw more than 279,500 homes receive foreclosure notices in October, over 500,000 in new unemployment claims for the week, more job cuts announced (Sun, Citi, etc), and Oil settled lower at $57 per barrel. With all this news, the market dropped below the October 10th low, then bounced back on Thursday.


This coming week we have the CPI report on Wednesday, and earnings from Dell, Home Depot, and Lowe's. We also have options expiration on Friday.

This could be make or break week for the markets -I expect it to turn higher, but we could always get a downside surprise, so be careful. Unless you are a professional trader, I would still be on the sidelines at this time.

U.S. Economy: Retail Sales Drop by Most on Record
Cost of Living in U.S. Probably Dropped by the Most in Almost Sixty Years
12,000 retail stores to be shuttered next year
Are you an idiot to keep paying your mortgage?
The Big Three Are a National Disgrace
Chipmaker stocks fall as bad news snowballs
DHL express service centers in U.S. to be shut down

Citigroup Shares Tumble, Pressure on Pandit
How AIG got Uncle Sam over a barrel
Uncle Sam's Credit Line Running Out?
Your $3 trillion bailout
The United States of Bailouts
CNBC -Weekly market stats
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Nov 9th

The market was trending up before the election, then fell for two days after the results were announced. Then with everyone expecting more selling on Friday from a horrible Jobs report, the market did the opposite of what everyone expected -it rallied on bad news! (240,000 more jobs were lost). If you are a technical trader, the charts indicate that this market wants to go up, regardless of the news.

This week England and Europe cut interest rates again, by 1.5% and .5% respectively -very aggressive. The auto makers all reported gloomy numbers this week. Two more banks were shut down on Friday, and Oil settled at $61 per barrel.


Next week we don't have much in the way of market moving events. As I've indicated before, I see the market trying to move up from these levels.

Side note: The effects of printing money irresponsibly, and subsequent runaway inflation: dinner for 1 in Zimbabwe can now cost $1.2 billion dollars (not including the tip)! The US debt clock stands at $10.65 trillion this week (see left panel).

Stocks higher despite bad news on jobs, automakers
GM grapples to avoid filing bankruptcy as cash vanishes
Jobless rate at 14-year high as losses continue
Jobs lost in 2008: 1.2 million
Consumer bankruptcies in October top 100,000
Berkshire Hathaway's profit falls 77%
Las Vegas Sands signals it may not survive downturn
Circuit City gets delisting notice from NYSE

Obama plans quick action on economy
Why it's (finally) time to buy stocks
How the Thundering Herd Faltered and Fell
China to launch $586B stimulus plan
South Korea Cuts Rate to 4% to Stave off Recession
USDA crop report first on the agenda for CBOT grains
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Nov 2nd

October lived up to its reputation for being a bad month in the stock market, in spite of the 'up' week we just saw (chart below). According to CNBC, "For the first time in history,the Dow, S&P 500, and NASDAQ finished the week up over 10%." -maybe that's a good sign.
The Fed cut rates again this week, bringing the level to 1%.
Monumental profits were reported by the big oil companies this week.
The Yen continues to gain strength against most other currencies.
The US Dollar continues to gain strength too, though some say not for long.
Another bank was shut down on Friday.

(click to enlarge)

Next week we get more earnings reports, along with the election, and the important Jobs report on Friday. So far, we are getting the turning point in the markets that I mentioned last week. Lets see if the election results and the jobs report support this turning point.

"Worldwide, investors have lost $10 trillion in just the last month as share values collapsed."
For the buy and hold crowd, note that after more than 20 years, Japan's stock market still has not recovered! In the US, most sectors are now back to levels seen 10 years ago! Buy & Hold doesn't work; market timing DOES work, despite what you hear from the so called 'experts'!

Hopes are 'worst October' signals worst is past
Debt Markets in U.S., Europe Suffer Worst Month on Record
The Bet That Blew Up Wall Street
Global stocks suffer again
Fed Battles 'Big-Time' Economic Erosion With New Cuts
Fed Signals Door 'Open' for Cutting Rates to Lowest on Record
Bernanke makes it official. We are Japan
Beaten down, American consumers burrow deeper
US Home Prices Posts Record Annual Decline, Consumer Confidence Collapses
GDP falls 0.3% in third quarter on dive in spending
Chase to halt new foreclosures for 90 days

Fed currency initiative eases Asian jitters
Arab countries scramble to save their banks
Gordon Brown Asks Gulf Wealth Funds to Invest in U.K.
Barclays raises $12 billion from Middle East, others
Japan Pledges Fresh Crisis Action Measures
Bank of Japan Cuts Rate to 0.3% to Fend Off Prolonged Recession
China Cuts Interest Rates for Third Time in 2 Months
India Unexpectedly Cut Interest Rates to Spur Growth
Bank of Korea Cuts Rate by Record to Bolster Market
Iceland hikes lending rate to 18%

Ethanol maker VeraSun declares bankruptcy
Hartford Financial loses over half its market value
American Express to cut 10% of work force
Treasury sales could top $1 trillion to fund bailout
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Oct 25th

The market gave up all of the gains from the previous week! Asian and European market weakness, plus weak earnings reports helped to bring down the markets. Volatility levels hit an all time high, though it didn't feel like it.

In spite of OPEC output cuts, Oil continued to fall. Gold dipped below $700. Currencies came crashing down once again versus the US Dollar (except for the Yen). National City Bank (long on the list of failing banks) was finally gobbled up by PNC; another bank was shut down in Atlanta as well. It was not a good week.

(click to enlarge)

Next week we have a Fed meeting, with an interest rate announcement on Wednesday -could be a market mover. Also, earnings continue to roll in, and we get the GDP report on Thursday I believe, and an election in 2 weeks! For traders, I'm still looking for a turning point in the market in this area; always manage your risk on every trade though! For longer term investors, we are still a long way from any reversal signal at this point.

OPEC Says It Will Cut Oil Output
PNC Buys National City in Bank Shakeout
Currencies Fall as Fears Spread and Stocks Slip
Asian Stocks Plunge on Profit Declines; Kospi Sinks, Yen Jumps
Indexes fall hard on bloody Friday
Capital Flight Into Yen Is Path of Least Resistance

Greenspan Concedes Error on Regulation
Moody's, S&P Employees Doubted Ratings, E-Mails Say
Throwing the bathroom sink at the economy
Fed heads toward uncharted territory
GDP expected to show contraction
Mounting Layoffs: Why They're Different This Time
"Under water" mortgages are growing threat to U.S.
Foreclosure crisis vexes government
Foreclosures Rise 21% from Year Ago: RealtyTrac
For housing, no easy fix

Interesting...
Apple could buy Dell with cash
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Oct 19th

The week started off on Monday with the biggest jump in the DOW ever! We closed the week with a welcome gain, though not without the highest level of volatility ever seen. As the US Dollar climbs, Oil prices continue to drop ($71), along with Gold and other commodities.

The government announced that they would be buying ownership in banks to help ease the credit crisis. Google announced great earnings, helping the tech sector to recover a bit, while the financials gave up most of their Monday rally. The debt clock stands at $10.355 trillion this week.

(click to enlarge)

Big earnings week ahead with reports from companies like AAPL, MSFT, AXP, MCD, CAT, PFE, MRK, and MO. I continue to believe that we are near a turning point in the market at these levels. Interesting to note, the market topped on 10/10 last year, and it looks like it bottomed on 10/10 of this year!

Europe comes to the rescue
Europe puts more on the line for banks than US
Bush to announce expanded bank bailout details
Circuit City may shut stores to avoid filing
Dow off 127; have stocks bottomed?
Google Crushes Wall Street Estimates
Buffett says buy

Be ready for the commodity comeback
The next crisis: The economy
Housing starts hit another 17-year low
Mortgage rates headed to 7%
Coming Soon: The $600 Trillion Derivatives Emergency Meeting
AIG takes $122.8 billion of taxpayer money, enjoys luxury resorts
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Oct 12th

Last week I said we could be in for a rough October, but I didn't expect the worst week in the history of the stock market! They sold everything last week, not just in the US, but worldwide. Bank stocks fell again. Iceland even got caught up in the web and is now on the verge of bankruptcy. Global leaders are meeting this weekend to try and come up with solutions. Interest rates were cut worldwide in the middle of the week, but it seems like hardly anyone noticed. The Fed announced that they would backstop the commercial paper market too, an unprecedented move -but that didn't seem to make much difference either. Meanwhile Oil prices continue to fall (closing at around $80 per barrel), Gold dropped $65 on Friday, and the US Dollar continues to rise. A week earlier, the commodities index had its worst weekly decline in history. The debt clock stands at $10.290 trillion this week.

(click to enlarge)

Among the list of troubled companies, GM closed at $4.89 on Friday, while Ford closed at $1.99 per share. I've been posting information on the deteriorating situation at GM since early in the year when the stock was trading at around $26, after falling from around $40 a few months earlier (Feb 16th they posted a loss of $38 billion). Another example of how investors always have opportunities to exit losing positions before those losses get even bigger. Psychologically it's a very difficult thing to do, but it's the smart thing to do. (remember Fannie, Freddie, Bear Stearns, Lehman, Merrill Lynch, Morgan Stanley, AIG, WaMu, Wachovia, etc. -also Apple, Google, RIMM, POT, FXI (China), EWZ (Brazil), RSX (Russia), FSLR, DRYS -all examples of high fliers earlier this year which have now dropped significantly, or have gone out of business).

Next week we get the CPI report, along with a slew of earnings reports from major companies (like JNJ, KO, INTC, GOOG, IBM), as well as some of the big financial companies (C, JPM, MER, WFC). The Bond markets are closed on Monday for Columbus day.

I believe the market is close to a turning point here after the massive 22% selloff in the past two weeks, on top of another 20% loss over the past year. Keep in mind though that markets like China and Brazil have already lost about 60% in the past year, and that our markets could also fall further.

Stocks end worst week mixed after wild session
Wall Street's 8 brutal days
The Sky Falls on Wall Street
Fed to start buying commercial paper
U.S. Treasury Considers Buying Stakes in Banks
Housing Pain Gauge: Nearly 1 in 6 Owners 'Under Water'
Insurance on Lehman Debt Is the Industry’s Next Test
Bank of America profits plunge 68%
Why GE's in trouble

The Stunning Collapse of Iceland
Britain's bank bailout worth hundreds of billions
Russian markets go into free-fall, trading halted
Moscow to pump $37bn into biggest state institutions
Indonesian stock exchange remains closed
Brazil currency, stocks sink, halting trade twice
America's No. 1 Export: Debt
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Oct 5th

We got the $700 billion bailout plan approved, and the DOW dropped 500 points the day it was approved! So much for the government trying to manipulate the markets. Remember, on Monday the DOW dropped 777 points when the plan was first rejected, and all the media talking heads and all the financial 'experts' and our elected officials then got on television and insisted that we must have this plan in order to save the markets (incidentally, the amount went from $700b to $850b as the politicians added their own goodies to it). The media reports that the politicians heard from their constituents 9:1 against supporting the bailout, but the politicians voted for it anyway -so much for representation. Now the 'experts' are saying we need an interest rate cut.

Also of note this week, the national debt crossed the whopping $10 trillion level (see debt clock on the left). I've been monitoring that debt clock for several years and I've never seen it change at such a high rate. Keep your eye on this future crisis.

It seems like everything is being sold off, not just the financial companies (the short selling 'ban' was extended for another week). Even some of the mighty tech stocks like Apple, Google, RIMM, and IBM are being sold. Even commodities -look at the chart below (crude oil closed below $100 again). Adding to the bad news was a huge drop in jobs as reported on Friday -that makes it 9 months in a row for job losses. I'd stay out of the way as this bear market continues its course.

(click to enlarge)

Next week we can expect more volatility as the new earnings reporting season begins. I don't expect we will be getting much good news here, so we could be in for a rough October.

If you are not protecting or hedging your portfolio, you have probably lost over 25% in the past year. If you believe in the 'buy & hold' and 'long term' nonsense that the so-called experts preach, you haven't made a dime in the markets in the past 10 years (chart below). Zero return in 10 years -I don't call that investing. The same 'experts' say you cant time the markets, but in fact it's very easy to look at a long term chart to see when the long term trend changes direction. It changed late last year.

News stories:
For bailout to work, housing market needs to mend (what I've been saying all along)
The Housing Bubble and the Massive Rewriting of History
Fed Pumps Further $630 Billion Into Financial System
The Fed Has Made the Entire U.S. a Hedge Fund - Get Your Portfolio Ready
How the short-selling ban could backfire on the banks
Goldman is getting the best of the credit crisis

Jobs: Worst in 5 years
U.S. Payrolls Fell by 159,000; Jobless Rate at 6.1%
California May Ask U.S. for Loan
Europeans scramble to save failing banks
Financial avalanche hits Iceland amid credit crisis
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Sep 28th

More of the same this week as the world awaits the final details and the vote on the $700,000,000,000 bailout plan. Of course the 'plan' does little to address the underlying problem of foreclosures on overpriced properties!

Lost in all the news was the shutdown of Washington Mutual -the biggest bank failure in US history with $300 billion in assets. The 2nd largest failure was Continental Illinois in 1984 with assets of $40 billion, caused by, guess what -a housing crisis! Also Warren Buffet bought into Goldman Sachs with a $5 billion investment, while Mitsubishi bought 20% of Morgan Stanley. The ailing (or is it 'failing') auto industry also got some handouts from the government this week.

(click to enlarge)

Next week we get the final details and a vote on the 'plan', along with the market reaction. It's anyone's guess at this point as to how the market will react. The market will also react to the monthly jobs number on Friday -we have lost jobs 8 months in a row so far. Until this market settles down, be very careful! Also, the short selling ban should be lifted next Thursday. Interesting info -the last time short selling was banned was in 1929.

WaMu becomes biggest bank to fail in US history
Washington Mutual Bond Holders Wiped Out
What $700B won't buy: a quick fix for the economy
The Deal's Getting Done, But Will It Work?
China banks told to halt lending to US banks-SCMP
Morgan Stanley to sell Mitsubishi 20 percent stake
Citigroup, Wells Fargo bid for Wachovia-NY Times
Buffett to Invest $5 Billion in Goldman

Government Approves $25B Low Cost Loan Package for Auto Industry
US Mint suspends sale of 24-karat gold coins
New home sales fall to 17-year low
Lennar calls for government help for U.S. builders

Bank run prompts $500M infusion in Hong Kong
European Regulators Move Swiftly to Rescue Two Lenders
Bradford & Bingley Nationalised Another UK Bank Wiped Out by Tulip Backed Securities
Credit crunch banker leaps to his death in front of express train
Financial crisis: Fortis to become latest victim of bank crisis

On the lighter side...
Toilet-paper researchers create 3-ply tissue (pic)
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Sep 21st

Wow! What a week -DOW down 500, down 450, up 400, up 400 again. The financial markets are in turmoil. The Lehman bankruptcy, the government takeover of AIG with an $85 billion bailout, talk of Morgan Stanley and Goldman Sachs scrambling for survival options, Money Market Fund losses, and a massive $700 billion government bailout plan to be worked out over the weekend is keeping the market on edge. The Fed also made available an additional $180 billion to overseas banks.


'Short' sales were banned on most banks & brokers this week to stop their stock prices from going down! You would think that bank & broker shares would take off, and they did overnight, but then they all sold off on Friday -hmmm. So much for the 'shorts' causing the shares to fall -no more shorting allowed now, but they still fall. The same thing happened before with Fannie & Freddie. In spite of a ban on short sales, their stock prices still went down and the government eventually had to take them over (maybe it wasn't short selling causing the shares to drop after all, but rather something more fundamental -like being bankrupt!)

Also of note, AIG was kicked out of the DOW and replaced by Kraft Foods (K), another bank shutdown was announced on Friday, and investors are now also concerned about the safety of Money Market Funds. Lastly, Russia closed their markets to prevent them from dropping further! In the midst of all the turmoil, Gold rose over $150, along with most of the gold and silver stocks.

Next week we should get a resolution from Congress on the $700 billion bailout plan (save the bankers, let the homeowners fend for themselves)! Where will all this money come from -well, the government just prints some more! Part of the bailout plan includes raising the debt ceiling to $11.3B (see the debt clock at the top left side of this post). Seems like we keep having to raise our credit limit every year. It should be an interesting week!

BTW, in spite of all the turmoil, last week was my best trading week, thanks to the volatility and the run up in Gold. Professional traders can be profitable in any market...

Financial Crisis Enters New Phase
Stunning Fall for Main Street’s Brokerage Firm
U.S. stock indexes plummet as Lehman goes under
Government announces $85 billion loan to save AIG
U.S. Drafts Sweeping Plan to Fight Crisis
Citing Grave Financial Threats, Officials Ready Massive Rescue
Rescue plan seeks $700B to buy bad mortgages
Central banks flood credit markets with liquidity
Why did the Fed provide $180B to overseas banks?

Money market breaks the buck, freezes redemptions
Money funds see record $90 billion one-day drop
Rattled Russia orders markets to stay closed
FDIC Won't Run Out of Money, But WaMu May Be Toast
The worst is yet to come
How Financial Madness Overtook Wall Street
Gold posts record gain
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Sep 14th

The market recovered some of the losses from the prior week with a big pop on Monday following the Fannie/Freddie takeover news, but concerns in the financial sector still linger (Lehman, Washington Mutual, AIG, Merrill Lynch, all had big sell-offs this week).

Commodities also continue to sell off, though we did get a small pop on Friday. Oil sold off in spite of a big hurricane heading toward Texas on Friday. The recent US Dollar rally may be slowing down at this level though, and you could start to see Oil and Gold slow the recent freefall!

Meanwhile Johnson & Johnson, McDonalds, and Walmart (DOW components) have been strong throughout this bear market. The Financials have been the main laggards in the DOW.


Next week could be an action packed week with more volatility. We have a Fed meeting on Tuesday, earnings from some of the big brokers, and the Consumer Price Index. All eyes are also on Lehman and some of the banks mentioned above. The end of the week also marks expiration on Options, Futures, etc.

Based on the price charts above, market direction is uncertain from here so continue to use caution.

*** Breaking news ***
Bank of America to Buy Merrill Lynch for $44 Billion
Stunning Fall for Main Street’s Brokerage Firm
Lehman Prepares for Bankruptcy

News stories:
Stocks struggle on bank woes
Meltdown at Frannie, Lehman...Who's Next?
The endgame is near for Lehman

AIG in freefall
WaMu outlook weak but soothes some investors
Feds lower BankUnited’s capitalization rating
Merrill Lynch shares catch Lehman bug
Crisis Mode: Financial Sector In Dire Trouble
U.S. Gives Banks Urgent Warning to Solve Crisis
U.S. Foreclosures Hit Record in August as Housing Prices Fell
Trade deficit surged to 16-month high in July

Freddie, Fannie Scam Hidden in Broad Daylight: Jonathan Weil
Feds bailed out China, not the US
A $10 Trillion Problem
Bloomberg Video -Roubini Says U.S. at Start of `Very Severe' Bank Crisis
SPDR GLD ETF Unloads 79 Tons of Gold - Should Investors Follow Suit?
Global Equity Market Returns
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Sep 7th

The market dropped sharply on Thursday after disappointing jobs numbers, followed on Friday by a 6.1% unemployment rate announcement. This is the 8th month in a row with a drop in employment figures. The S&P 500 is now back to where it was about 3 years ago -so much for the buy and hold strategy! The better strategy is to always close or hedge your positions when the trend reverses...

Yet another bank shut-down was announced on Friday. Meanwhile there is talk of a government bailout to be announced this weekend for battered and bruised Fannie & Freddie.

(click here for a longer term look at the US Dollar)

Next week we could see more volatility in the markets. As I mentioned last week, historically we see selloffs in September (and October) -so far its proving to be true again. In spite of the recent Dollar rally, there is an overwhelming amount of bad news out there, so be careful (mortgage defaults, unemployment, credit market lockup, global slowdown, etc...)

Overseas markets have been selling off as well. Commodities also continue to sell off. We could see Gold hitting 650-700.

Breaking news:
Fannie Mae, Freddie Mac Taken Over by U.S. Government to Prevent Collapse

This Stock Rally Is Over And Here’s Why
Unemployment rate unexpectedly soars to 6.1%
Fannie And Freddie: Massive Fraud Breakdown
U.S. Rescue Seen at Hand for 2 Mortgage Giants
U.S. Mortgage Foreclosures, Delinquencies Reach Highs
9% Of All Mortgages In Default/Foreclosure
Florida Real Estate Bottom Signaled by Sale of Distressed Condo
Goldman tells clients to sell Merrill shares

Dollar Advances to Seven-Month High Against Euro as Oil Slides
Gold falls for fifth session on oil; down $32 in week
Firestorm Erupts Over U.S. Banks' Gold, Silver Shorting
Big commodities hedge fund shuts down
The $64 Trillion Question: What's the Dollar Really Worth?
Main Bank of China Is in Need of Capital
How China's Bet on US Paper Went Wrong
Russian assets tumble amid worries about ruble

Stock Market Update -Aug 31st

More see-saw action in the market this week, closing at a net loss for the week. Better than expected second quarter GDP boosted the market mid-week. Dell reported earnings after the close on Thursday and saw its price fall about $4 from the previous day's high, helping to bring the market back down. Also concerns about tropical storm Gustav (now a hurricane) heading to the Gulf, helped fuel a sell-off on Friday. Another bank shutdown was announced on Friday.



Next week the market is closed on Monday. Hurricane Gustav could impact the market as we see a reaction in Oil and Natural Gas prices. Another potentially market moving event is the Jobs report due on Friday.

Market watchers point to September as a traditionally weak month, so we could see some more selling in the coming weeks. Also be careful with Gold equities -many have jumped on the recent rally, but note that there is really no volume behind the rally!

How bad is September for the stock market
Payrolls expected to fall in August
Agency’s Head Expects Banking’s Crisis to Worsen
FDIC Says At-Risk Banks at 5-Year High
Home prices drop by a record amount
Survey: South Florida home prices fell 28%

Oil companies shutting down Gulf operations
Gustav eases to Cat 3, is expected to strengthen
Gold ends lower, posts biggest monthly loss in 25 years
Tap in to gold's yearly cycle
We'll be Worse Off Whoever's President: Jim Rogers
(UK) Economy at 60-year low, says Darling. And it will get worse
Lehman Brothers is still standing, but its foundations look shakier every day
Equities: Nightmare on Wall Street?

The world’s most powerful women

Stock Market Update -Aug 24th

We saw some strength in the market on Friday, though with weak volume, which indicates a weak rally. There are still concerns about Fannie and Freddie (experts say they are technically bankrupt -see chart below). Also concerns about Lehman Brothers’, some of the banks, and the overall credit markets. Federal regulators shut down another bank this week.

Oil pulled back sharply on Friday, the US Dollar pulled back a bit from the recent rally, and Gold started a small rally after falling below $800. Interesting to note that the US Mint has run out of the Gold Eagle 1oz coins!


Next week we close out August and the slow summer trading period. The market is still in a small up-trend, though a weak one, so be careful. We may see some new developments on the Fannie and Freddie situation next week.

On another note, food commodity prices have recently started to rise again.

A Double Dose of Bad Economic News
Bernanke: Financial crisis taking toll on economy
The Final Fate of Fannie and Freddie
The Endgame Nears For Fannie and Freddie
Lehman Could Be Taken Over Soon: Analyst Bove
Ten Financial Entities On The Brink
Billionaires say US debts need attention

U.S. Mint runs out of 1-ounce gold coins as demand jumps
Have commodities hit bottom?
Report: One trader held 11 pct of Nymex contracts (Crude Oil)
UK Economy Grinds to Standstill in Second Quarter
Japanese Banks Halt Lending as Bounced Checks Rise to Record
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

In other news...
Google founders make $2 billion each in an hour

Stock Market Update -Aug 17th

The market was up a bit this week, while the US Dollar continued its strong rally fueled by weakness in the Eurozone economy. Gold fell to just under $800, in spite of signs of higher inflation from the CPI report. Foreclosures also continue to rise. Wachovia bank said it would cut 600 more jobs, bringing the total to over 11,000.



Next week we get earnings from Hewlett Packard, Home Depot, and a few more retailers.
September Crude Oil futures also expire next week. The equity market may well continue its recent up-trend.

Europe Facing Much Slower Growth
Consumer prices rise at double expected rate
Japan Economy Shrinks 2.4%, Signaling Recession Looms
Dow off 140 as big banks slump
Morgan Stanley to repurchase troubled securities
2 Banks Will Buy Back $17 Billion in Securities
UBS carves up bank structure as rich clients flee
One Third of New Owners Owe More Than House Is Worth
Gold plunges to 8-month low as investors jump ship
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -August 10th

The recent up-trend in the market continues, fueled by even lower oil and commodity prices, and a surging US Dollar. Note that both the stock market and the US Dollar seem to have bottomed on July 15th when the financial stocks also hit a bottom in prices.



Next week we get earnings from Walmart and a number of other retailers; earnings season is just about over with more than 80% of the S&P 500 companies having already reported. Also we get the CPI report (Consumer Price Index) on Thursday morning. The recent up-trend in the market could continue for a while, but as always be cautious -we are still in a bear market.

Take a look at a couple of nice charts in the middle of this bear market: MCD (McDonalds), JNJ (Johnson & Johnson), GIS (General Mills), and TJX (T.J. Maxx) are all hitting all time highs!

Stocks end the week with a bang
Oil sinks on stronger dollar to $115 a barrel
Fannie Shares Tumble as Home Loan Defaults Rise
Freddie Mac’s Big Loss Dims Hopes of Turnaround
UBS Settles Fraud Claims for $19.4 Billion
Citigroup returning billions to investors
Bank of America subpoenaed over sale of securities
$1 trillion in losses? Bank on more
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

In other news...
Toilets Delay Boeing (BA) Planes

Stock Market Update -Aug 3rd

We basically closed the week near where we started. We got a boost from some of the financial companies, but GM's massive loss of $15 billion, along with another bad unemployment number helped to put a damper on things. Another bank was shut down as well. Oil held up this week, while Gold continues to slide, and the US Dollar continues it's recent up-trend.


Next week we have another Fed meeting on Tuesday. Fannie and Freddie also report earnings, along with AIG, Cisco, and others. Market direction is uncertain at this point, but at least we have stopped going down for now.

News stories:
Happy Birthday, Credit Crisis
NY to file fraud charges against Citigroup
Merrill to raise $8.5 bln selling new stock
Lehman in Talks to Sell Soured Debt to BlackRock
Four big banks to kick-start covered bond market
Hank Paulson's Fannie Gamble
Analysis: Is 22 cents on the dollar now the going rate for subprime assets?

U.S. Economy: Jobless Rate Rises to Four-Year High
California slashes pay of 200,000 state workers amid budget crisis
Debt Ceiling: Up $800bn to $10.615tn
Bennigan's, Steak & Ale file for bankruptcy
Starbucks (SBUX) Has First Quarterly Loss In Its History
UPDATE: GM Loses $15.5 Billion As Sales Plunge, Charges Mount
Exxon posts biggest quarterly profit ever
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.

Stock Market Update -Jul 27th

We are finally showing signs of breaking out from the most recent downtrend. The proposed government bailout of Fannie and Freddie, along with new rules preventing naked short sales of certain financial stocks gave a big boost to the financial sector.

Oil prices also dropped, helping to boost the stock market; the uptrend in oil has been broken (see chart below). Commodity prices also dropped as the US Dollar rallied. It's too early though to tell whether the stock market rally of the past two weeks will hold -only professional traders should try to trade these moves at this point.

Earnings reports continue to roll in, with many of the financial companies reporting this past week; as expected, the numbers were not good; (also, two more banks were shut down by regulators this week). We also got horrible numbers from Crox -so much for fads. Foreclosures doubled, and existing home sales fell to a 10 year low.

Next week we get the GDP report and the monthly Jobs report. Also earnings from the big oil companies.


News stories:
U.S. Shuts California, Nevada Banks as Failures Rise
WaMu Has $3.3 Billion Quarterly Loss on Delinquencies
Wachovia and Washington Mutual post billions in mortgage losses
Wachovia reports $9 billion loss
Problem banks: What you need to know

U.S. Foreclosures Double as House Prices Decline
The slump persists: Home sales tumble across US
House OKs rescue for homeowners, Freddie, Fannie
Roubini: More Than $1 Trillion Needed to Solve Housing Crisis
2.2 million vacant homes for sale
Durable goods orders in surprise rise

Last week: (sorry, there was no post last week; I was out of town)
Consumer Prices Take Biggest Jump in 26 Years
More banks may fail after IndyMac
WaMu and National City plummet
Should You Be Worried About Bank Failures?
Fannie-Freddie lifeline puts taxpayers on the hook
Dollar slides to fresh low against euro
Oil prices tumble in biggest weekly drop ever
Have commodities peaked?

Other stories:
Zimbabwe's $100bn note
Cancer center warns on cell phone use
Pakistani investors attack bourses after share collapse
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.