Market Updates – FUNDAMENTALS RULE

 

Index Percentage % Volume
Dow -4.62% up
NASDQ -4.20% up
S&P500 -4.91% up
Russell2000 -4.74% -

Trends, Politics & Economics

Sorry Late night porker game has limited today’s blog

Major Changes to Blog

As the Investors 411 blog is developed some major changes are occurring.  The entire Long Term Outlook part that gets sent out each AM going to be put on the blog as a heading as well as several other categories. It will no longer be published in the email that comes out before markets open. Hopefully all these changes will  get developed and filled by early next week.

Master’s of the Universe

How tough is the Obama administrations going to be with the Masters of the Universe (a Tom Wolfe phrase)?  Will the Obama administration (Geithner and Summers are themselves part of this infamous MOU crowd) allow the banking oligarchs to continue to run the  show? Were in between a rock and a hard place – If you make the powerful oligarchs happy, financial stocks will rally. If not, they’ll fall.  If financials are not showered with tax payer dollars then financials will suffer and perhaps collapse.  Here’s one view on this 

The Bottom Line to all this is we need a function banking system. 

Stocks

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING

Technicals

The budding rally crumbled and Major markets took a major body blow as US equities fell between 4 and 5 % in increased volume.  Volume therefore confirmed the move higher. Markets fell to the Dow support level that’s been holding up the markets for two months The Doe ended the day at 7889 and its interday low/support level  - last weeks low is 7845. The Dow is leading ther other major indexes is the plunge. They are not as close to breaking down through support.  If we break down through support the next and final support level is last years low at Dow 7449

Secondary Indicators

Both Treasury Bonds and LIBOR have moved in a bullish direction over the last few months. The Baltic Dry Sea Index that measures the flow of goods between countries, is still on fire +59% over the last 5 days and another +9% on Tuesday. = Big Time Short term bullish signal.

Fundamentals

FUNDAMENTALS RULE -Yesterday we learn what Tres. Secretary Timothy Geithner and what he plans to do with the second 1/2 of the TARP money. From yesterday’s Investors411 ” Can’t over emphasize the impact the importance of this plan to both financial stocks and world markets

Technicals do play a major role in forecasting movement. However in volatile markets FUNDAMENTALS RULE. Geithener’s speech was not a detailed rescue plan where more of you tax dollars was shoveled at banks or some slight of hand accounting system was proclaimed. Obviously markets were disappointed, especially financial stocks. This sector took a major hit – down 10.21% hit

Bakers in front of Congress today.

Short Term Outlook

As said in previous Updates the chances are will will test last years lows. The budding rally got crushed by Fundamentals.  Lesson here is Fundamentals, especially in volatile bear markets can easily trump technicals.

Long Term Outlook = Bears Rule

See yesterday’s Investors411 blog – The Outlook remains the same. This will be posted in a future heading category at top of blog.

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