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NOTE>>> I have a lot to say about this Ebola thing, but since it just hit the US on Tuesday, I’m not prepared. But this weekend I’m going to talk about the entire situation. Stay tuned.
We've created a Facebook page where I'm going to be making comments about the market on a fairly consistent basis. So please go there and do the "like" thing so that any alerts or market comments I make show up on your page.
So, Wednesday had the ability to open red or green. Ebola would be scary, but it is the Fed’s job to push the market up in the face of ugly news. So it was possible they’d pump the market in a show of bravado, or it was possible that enough folks would toss in the towel to take us down. Well they took us down. Soon after the open we were deep red and heading lower. By noon we’d already seen the DOW off 175 points and the S&P off 17. Yet that wasn’t the end of it by any means. When the final bell rang, we were down 238 DOW points and a whopping 26 on the S&P.
Okay, where does that leave us? Not looking good folks. The DOW and the S&P are well below their 50 day moving averages. The small cap Russell is miles below its 50 AND 200 day moving average. Even the XLF failed its own 50 day moving average at the close. Just about any way you look at it, this market is in trouble and looking dangerous.
On Sunday the 20th I devoted the entire newsletter to warning you all that the market was set up almost perfectly for what could be a significant pull back. But let me ask you… is this a significant pull back? NO, as of right now it is not. They’ve not allowed a TRUE correction, meaning a 10% fall in over 3 years. But they’ve allowed several 3 – 5% pull backs along the way and recently even dips as low as 2% got bought. Well right now the DOW is only off about 3.5%. The S&P less than 4 from the highs.
My point is this…I’m glad I got it right concerning the market setting up for a fall, because it’s always nice when you get it right. But so far this is your ordinary garden variety pull back that we’ve seen half a dozen times. In other words for the S&P to actually achieve a 10% correction from the high, it would have to fall all the way to 1817. Well it ended today at 1946. That’s a heck of a long way down. Like wise the DOW, would have to fall to 15615. We actually closed at 16804. That’s more than a thousand points lower.
The market looks horrible, and it feels dangerous. Yet we all know that “one word” from the right folks and “blammo” up we’ll go. Well tomorrow Mario Draghi is expected to try and offer up some form of “QE Lite” for the European Union. If he goes against the European constitution and does announce QE of sorts, in a bizarre twist, our market will rejoice. Wall Street loves free money. So, while everything points to more downward action, just know Mario lurks. Not to mention they’ll probably parade some idiot Fed head out to talk happy talk.
April 3, 2013
The Beating Continues
Unless you've been living in a remote cave somewhere, you
know that a couple things have happened. One is that the DOW hit an
all time new high. Second
As I expected, they are fighting to keep the market "level" after
that ADP jobs report. We've seen them run some things higher, let
some slide. But again I feel that the overall market direction
today will be "flat". Sure they might eek out
Well this is sort of depressing. The areas I felt would be strong
simply gapped away "too" big, and I didn't chase. I guess I should
have, some of them like CNX did very well, adding to the gap gains.
That is always the