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Recent Market Commentaries:
Date: 12/10/08 23:59 ET
Stocks started the day on a strong note but then lost steam and finished only slightly higher. Concerns about
the failure of Lawmakers to push the bailout bill through the senate weighed on stocks, but the pressure
wasn't enough to keep the indices in the red. Even though volume was on the light side, investors were happy
they finished in the green. Commodity stocks led the rebound at the end of the day helped by a falling dollar
and people betting that global inflation will be back soon. Financials were the weakest today but we have to
keep in mind that they had a very strong move in the last few days. So far the rally has been pushing up most
of the sectors which is typical after a sharp correction in the markets. If the rally stands and we see more
upside in equities, we will start seeing leading stocks separate themselves from the laggards in their sector,
and that's when we start focusing more on particular stocks and less on ETFs.
Date: 12/09/08 23:59 ET
Stocks lost ground today and closed lower after 2 days of solid gains. Even though the losses were steep,
volume was on the light side. The indices have been showing a lot of strength lately despite the bad news.
What triggered the selloff today was news about more problems facing lawmakers in passing a bailout for the
auto makers. In addition to that, the government announced that it successfully offered 1 month T-bills for 0%
yield and the demand was pretty high. That's a sign that Investors are still scared putting their money in
equities and would rather hold T-bills with 0 return on their money. This divergence between the equity and
bond markets is leaving some people on Wall Street very confused. However, it could just be due to the fact
that we're approaching the end of the year, and some institutions would rather hold cash instead of anything
else. As long as the markets are advancing on strong volume and pulling back on lighter volume, then it is
safe to put money back into stocks.
Date: 12/07/08 15:28 ET
Stocks ended the week on a high note with the Dow, S&P, and Nasdaq all up 3% or better on Friday. It was
the second time in a week the major indices shrug off very bad economic news and end up sharply higher
after starting the day deep in the red. The strength we have seen during the week was very positive and
confirms the rally that started in mid November is still alive. The leaders of the rally so far have been
Financials and Tech stocks, and even though commodity related stocks have rebounded from their lows, they
have been the laggards so far. Oil prices have actually made new lows this week almost touching $39 per
barrel. The collapse of oil prices could provide an additional stimulus to the economy on top of the trillions of
dollars that the Fed and Treasury has been pumping all along. Despite the positive outlook on the markets,
we still recommend investors be cautious as this rally still needs to prove itself more. One way of reducing risk
at this point is investing only in ETFs and avoid individual stocks. Also it is wise to avoid using margin until we
get a clear up trend in equities.
Date: 12/04/08 23:57 ET
Stocks ended the day lower after holding up for most of the trading session, but a broad last hour selloff
brought stocks down sharply before the close. The move came after congress showed some skepticism
regarding the bailout for the big 3 auto makers. The market has been very susceptible lately to any news
about bailouts or any government intervention. However, the last 2 times when the market sold off, it
happened on lower volume and when we had the up moves it was on higher volume. Also the economic news
lately has been awful and there is nothing to cheer about. That's an encouraging sign that the market still has
some resilience and so far confirms our belief that a short term bottom is in. Investors still have to be cautious
though as this crisis has been unprecedented and can be very unpredictable.
Date: 12/01/08 23:55 ET
Stocks plunged today and finished much lower giving back half the gains from last week. The action today
puts a big dent into the rally that started recently, however the fact that the volume wasn't so strong indicates
that it might just have been due to profit taking. The next day or two should give us a better indication if the
rally is dead or alive. Every asset type out there was hit today except for long term bonds which hit new all
time highs. Financial stocks were also hard hit after many analysts cut their earnings estimates for the sector.
The volatility index jumped higher indicating that fear is starting to spread again among investors.
Date: 11/25/08 23:55 ET
Stocks finished mixed today after we saw two days of very strong gains that pushed the Dow 1000 points
higher. Yesterday and today, the Government has announced two bailout plans, one for CitiBank and the
other for supporting lenders and unfreezing credit. This time the response was positive after the
announcement and the markets are still holding up pretty well since. Last Thursday, before the markets
turned around, we mentioned that the markets were very oversold and there was widespread fear on Wall
Street which usually signals a near term bottom. Since then we have seen positive action despite some bad
news hitting the Street. As we approach the Thanksgiving holiday, volume will most likely be thinner and the
market action will be limited. At this point we keep monitoring the markets closely and as long as we don't see
any renewed selling by big institutions, investors can slowly get back into the market. But since we still don't
have a clear uptrend, we recommend keeping positions small and then buying more when the trend is
established.
Date: 11/20/08 23:55 ET
Stocks plunged again today under huge volume after the Dow undercut its previous lows. The selloff took the
S&P 500 to an 11-year low and many stocks touched multi year lows. Panic was everywhere on the street and
people were liquidating positions and raising cash no matter how little they get paid for their shares. The
volatility index shot up to 80% and the Put/Call ratio was at 1.3. Usually this kind of panic selling leads to a
sharp rebound but in this unprecedented crisis, it has not worked so far. Unless people can tolerate a high
level of risk, they should stay on the sidelines until the trend clearly reverses to the upside. If you are willing to
trade these markets on the long side, make sure you have an exit strategy and stop loss orders in place.
Date: 11/18/08 23:55 ET
Stocks finished the day higher today on decent volume ending a slide that almost took the Nasdaq back down
to the lows made last week. Leading the action today were Energy stocks despite a lower close for oil prices.
Energy stocks have shown relative strength lately possibly indicating a bottom for oil prices, at least in the
short term. A better than expected report by HPQ also helped the Dow advance in the morning, but selling
pressure during the day erased all the gains until only the last half hour of trading when buyers came in and
lifted all the major indices. We would like to see more action like today where the markets show resilience and
can overcome the selling pressure. The coming days will be likely affected by what happens to the Auto
industry and if they can get the loans they are seeking, in addition to some economic reports on housing and
inflation due on Wednesday.
Date: 11/18/08 01:25 ET
Stocks continued to slide lower on Monday on worries about the collapse of the US auto industry and more
layoffs announcement by major institutions. This was the second day of losses after the sharp bullish reversal
we saw last week. The down move came on low volume though which keeps the hopes of a rally from here still
alive. However, if we continue sliding from here and get closer to the November lows, then it would be a sign
that we have yet another failed rally attempt. This is still the most challenging environment investors have ever
seen and that explains why money keep flowing into short term treasuries yielding almost 0% instead of
beaten down equities.
Date: 11/13/08 23:55 ET
Stocks staged a bullish reversal and closed sharply higher after touching new lows for the year. The selloff
started in the morning and accelerated when the S&P 500 broke through its previous lows triggering a huge
number of stops on its way down, then suddenly the selling volume dried up and buyers flooded the market
with orders and propelled the major indices higher by 6% or more. The total volume for the day was much
higher than what we have seen recently. Today's action shows that there are not enough sellers left to push
the markets lower from here and this might be the start of a new bull run. We have changed our outlook to
bullish but we still want to be cautious when getting into the market and wait for pullbacks after today's huge
rally.
Date: 11/12/08 23:55 ET
Stocks tumbled today and finished sharply lower after a press conference by Treasury Secretary failed to
restore confidence to the markets. Earlier in the day, we got a profit warning from Best Buy saying that the
slowdown is worse than anything they have ever seen. Selling was intense throughout the day and
accelerated towards the end of the session, and then right after the close there was more bad news from Intel
warning about its future revenues only 1 month after reducing its previous estimates. That just shows how
hard it is for even the best companies to predict how much impact the crisis will have on their earnings. The
fear indicators have been creeping up as well and approaching their previous highs from October. Again, our
recommendation is to remain on the sidelines until we see renewed strength in the markets and an indication
that we bottomed at least in the short term.
Date: 11/11/08 23:55 ET
Stocks finished lower again today after a late day rally attempt failed to push the major indices into the green.
The Dow ended 2% lower while the S&P closed 2.2% below its previous close. News about a new government
program to limit foreclosures gave a little boost to battered stocks but investors quickly sold into strength and
raised more cash. Volume was higher than the previous day but still below average for this time of year.
Everyday now we hear more talk about bailouts and more companies trying to get capital from the government
to be able to survive the current crisis. But it remains to be seen if there will be enough money to supply all
the current demand. So far the US Dollar is holding up pretty well as investors repatriate their money to the
US from emerging markets and foreign governments still willing to buy US debt.
Date: 11/10/08 23:55 ET
Stocks couldn't keep their gains from the opening and finished lower today in another quiet day of trading.
Investors seem to have lost confidence in this market and don't want to commit any money in this
environment. Without any significant volume, it will be very hard for equities to rally and make new highs.
Worries about future earnings and more problems for car manufacturers held the markets down as we saw
sell orders coming in all day long until 15 min before the close. The volatility index jumped again today over
the 60% mark signaling investors are getting more nervous. The levels to watch now are the Oct 10 lows and
if there will be enough momentum on the downside to break through the lows. If not, and we see more
strength instead, then we might get a sizeable rally on the upside.
Date: 11/09/08 23:15 ET
Stocks closed higher on Friday and recouped some of the sharp losses from the previous couple of days. The
relief rally came despite a worse than expected unemployment number that showed the jobless rate at 6.5%.
The major indices are still a few percentage points higher than the absolute lows made in October, but we
haven't seen any substantial volume on the upside. Even on Friday when the markets bounced back, they did
so on much lower than average volume levels. The coming week brings few more data points like retail sales
for October expected to be much lower and the Michigan sentiment index. We still recommend caution in
these uncertain times and will keep looking for more signs of strength before coming back into the markets.
Date: 11/05/08 23:23 ET
Stocks closed sharply lower today after getting an election induced bounce the day before. The selloff today
was broad and hit stocks across all sectors wiping out yesterday's gains and some more. We have been
cautious lately despite the sharp 1-week rally as we haven't seen convincing volume on the move up. Today's
action might have just been due to profit taking but it is still more prudent to remain on the sidelines until we
see renewed strength in the markets. After the close today, there was more bad news from companies like
CSCO, WFC, and NWS. CSCO CEO actually said that next quarters revenues will be down 5% to 10% from
last year, which shows how bad things have been in October for even the best companies out there.
Tomorrow we will also get the European central banks decision on interest rates and a big rate cut is currently
expected.
Date: 11/03/08 23:45 ET
Stocks closed virtually unchanged today in a quiet day of trading. Volume for the day was very low as
investors await the election results tomorrow. The economic data released today like Auto Sales and
manufacturing index was really bad and points to a sharp slowdown in the U.S economy, but some of that may
have already been discounted by the markets. So far, after the rally of last week, the market action has been
positive but as we said in our last commentary, we are waiting for a confirmation day before we turn our
outlook to bullish. The gains in the last few days came under low volume, and we'd like to see more
participation form institutional investors.
Date: 11/01/08 21:45 ET
Stocks kept marching higher to close one of the best weeks in years on an up note on Friday. The gains for
the week for the major indices were about 11% and were broad based across all sectors. Despite the positive
ending, the month of October was still one of the worst in history and will be remembered for years to come.
The question now is where do we go from here? When looking at the fear indicators, we clearly see an
improvement in investor sentiment and a reduction in volatility. However, we still don't feel comfortable enough
to change our outlook to more bullish. Lately we have seen many times signs of market strength and
indications that we have reached a bottom, only to see the markets reverse and give back all the gains. That's
why, before we change our outlook, we would like to see a confirmation day for the rally which would come as
a big up day on high volume. We have seen the gains in the last two days come under lower volume, which
shows that not many institutional investors are back in the game, at least not yet. So it is better to be prudent
in these times and if this is truly a bottom in equities there will be many opportunities to make money in the
future.
Date: 10/28/08 23:55 ET
Stocks exploded higher today and had one of the best days in years. The giant move came after days of
selling pressure due to liquidation of stocks irrespective of any fundamentals. The action was so bad that we
had to change our outlook yesterday to Neutral and said we'd rather wait for stocks to stabilize before we
commit more money to the markets. The questions now is: was this the bottom everyone was waiting for? and
the answer is probably nobody knows at this point. It takes more than one day's action to determine that for
sure. But the fact that we got a 10% move up despite the dismal consumer confidence numbers is surely
positive. So we still recommend that investors wait for a few more sessions to get a confirmation for the new
rally attempt before jumping in.
Date: 10/27/08 23:55 ET
Stocks ended the day lower again today due to a sharp selloff just 10 min before the close. The Indices were
actually up for most of the day until the last hour of the trading session. The action today shows once again
that the markets are still very shaky and now there is only a slight chance to see the rally off the Oct 10 lows
succeed. On Friday, we mentioned that despite seeing aggressive buy orders hitting the markets, it wasn't
enough to keep stocks in the green. That was a sign that any slight selling pressure could take stocks much
lower, and that's what happened today. In another sign of the market weakness, many indices other than the
Dow and S&P have already broken through the Oct lows and made new lows in the last 2 days, like the
Nasdaq, Russell 2000, Basic Materials index, etc... Due to all these factors we are changing our market view
to Neutral and recommend investors stay in cash and not risk any money in these volatile markets. This is
also the reason why we have been recommending trading only with small positions and to be prepared for a
market turnaround. We might be getting close to a short term bottom but at this point it is too risky to stay
invested and wait for it to happen. We can always come back in once we see signs of a renewed rally.
Date: 10/26/08 22:05 ET
Stocks ended the day sharply lower on Friday but the drop was less than some people have feared given the
collapse of the Asian markets by 10% or more overnight. However, a drop of 300 points for the Dow can not
be considered a positive under any circumstances. There were both bullish and bearish signals coming out of
the same trading session on Friday, which makes predicting the move for Monday almost impossible. The
positive thing was that the Dow and S&P held their October 10 lows and were able to recoup some of the
earlier losses. We have also seen very aggressive buy orders coming in all day long. What's worrying is that
despite the aggressive buying the markets still closed in the red. That makes you wonder what will it take to
prop up these markets again from here. The coming week will have many potential market moving events like
the Fed decision on interest rates on Wednesday and the 3rd quarter GDP numbers on Thursday.
For more commentary on the markets, check our archive.
* Investing in stocks is risky and can lead to financial loss. Past performance is not indicative of future results. We do not assume responsibility for
any profits or losses when trading stocks listed on our website. The information on this website is meant to be used as an additional tool to assist you
in your trading decisions
TheMarketNewsletter.com
Recent Market Sentiment Changes:
11/13/08 == BULL
10/27/08 == NEUTRAL
09/26/08 == BULL
09/04/08 == NEUTRAL
07/29/08 == BULL
06/02/08 == BEAR
11/13/08 == BULL
10/27/08 == NEUTRAL
09/26/08 == BULL
09/04/08 == NEUTRAL
07/29/08 == BULL
06/02/08 == BEAR
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