Finally, Some Holiday Cheer 20 comments
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By the end of a month featuring ever declining volatility and a relatively benign close, it was easy to forget that December began with the fourth worst trading day in the history of the markets and some of the worst economic news recorded in a generation.
This December, the S&P 500, Dow Jones Industrials and NASDAQ 100 cash indices posted mixed results of +0.78%, -0.60% and +2.18%, respectively. For 2008, that left the indices down -38.49%, -33.84% and -41.89% from their respective 2007 closes (-36.79%, -32.44% and 41.73% with dividends), capping off the worst annual market performance since the 1930s.
Sentiment for the period was characterized by an increasing sense of optimism for the new year and change of leadership as the Obama administration filled out it's economic team, the Federal Reserve cut target rates to historic lows, and an automotive bailout was ultimately engineered by the Whitehouse after a failed Congressional attempt.
All this was against an otherwise extremely negative news cycle, including relentless corporate layoffs, the highest unemployment rate in 15 years, an official NBER recession call, dismal auto sales, the Madoff scheme, and numerous overseas conflagrations. In spite of the global tensions, oil actually moved down to the low $30 per barrel range on stockpiling and the weak economic news.
Style-wise, Value stocks strongly outperformed, while Sector-wise, Healthcare and Consumer Discretionary stocks moved higher as Energy, Material and Financial stocks finished lower. While we are off to a great start here on the first trading day of 2009, we are coming into the year highly overbought on a very short-term basis. That said, we have a full 250 trading days ahead of us -- here is wishing you a happy and profitable 2009!
Sentiment: Optimistic
Volatility: Declining (VIX 40-68)
Direction: Mixed
(Click chart to enlarge.)
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This article has 20 comments:
Then again, there was barely even half the average daily volume traded on the indexes today (1/2/09).
Nothing to get excited about here.
Volume since a low in November has been barely average each day up.
Food for thought folks. Do not get sucked into hype.
I wont be buying anything.. my friends in silicon valley are not buying anything that is not necesary..
I made the mistake of watching CNBC today for a little while... nothing but cheerleaders going on and on about capitulation.. ..what BS!!
these pundit people are the same people who hype things up.. yelling "BUY BUY BUY"
sorry.. not buying into any of this hype..
Crash coming to a market near you!!!
Yes, no volume as the SPY volume was about 1/2 the 30 day avg as well with the QQQQs. Oh well, a trend is a trend. But, without volume and money flows to confirm this move, a reversal is always possible so move your stops up.
On Jan 02 04:30 PM archman82011 wrote:
> I guess.
>
> Then again, there was barely even half the average daily volume traded
> on the indexes today (1/2/09).
>
> Nothing to get excited about here.
>
> Volume since a low in November has been barely average each day up.
>
>
> Food for thought folks. Do not get sucked into hype.
>
>
>
the economy is still very weak, we're still in recession, why buy?
keep staying on the side line guys, best time to pick and choose....
This was a welcomed but very much overbought and overhyped last 5 trading days, on pitifully weak volume, on no good news. Bought some energy shorts this afternoon, will short more as the market goes up. The Dow closed above its MA(50) on December 8th and 16th as well: look back at the charts to see what happened after that. Stochastics are well above 80, this is way overbought, everyone is shouting ra ra ra and being far too sunny. If you opened any long positions today, either you know something no one else does, or you just got caught up in the hype.
HHoover is spot on: i think we'll trade in a marginally higher range until post-inauguration, then hold on to your hats, it's gonna be brutal.
Shopping is finsihed.... I know more unemployed people than I have know my entire life.
Good Luck. USO will retrace 56, Dow 9800, and then 33.6 to 50% adjustment down. Its all Fib to me ... You / I will be lucky to get out; it will start in Asia overnight by time it his US markets will be gone baby gone ...
The stimulas and OIL are on crash course for each other. Its global economic warfare between countries. Consumers versus Producers, where the consumers are about to hit post carnival time ... The faster we go up the harder this thing is coming down.
Have hedge funds rotated thier PM amonst each other ... to hide from the cops yet. I think not, they will hire in Feb. Analyze the markets in March / April and put money to work then ...
Why so serious?
Seriously you would be hard pressed to throw a stone and not nail a bear in the head. I was a bear from 2006 - 2008, but now I see values and am buying.
I don't think that the market has all the bad news built in. It's highly likely that we retest 2008 lows. This rally has that bubble feeling we had in 2000. Ignoring of reality. Optimism is nice - but REALISM is even better. Great values? Sorry - I don't see too many of those. I see lots of relatively lower prices - but that does not mean relatively cheap. To be sure, value is much better than it was a year ago. At SPX 800, I'm a buyer. At SPX 900, much less eager. And the higher we go above 900, the worse the expected reward gets for a value investor. Let others jump on the trend train. Haven't we seen that go bust enough times?
I'm not a doom and gloomer. We'll get through this eventually. But I see far too much wishing and hoping for rebounds/bottoms rather than recognition that fundamental long-term shifts have taken place. There's still far too much economic damage that needs to get unwound before a healthy recovery can take place. Did bailing out GM and Chrysler for a few months get rid of their problems? Of course not. All those layoffs and business closings are going to suddenly revers? Government trillions will take time to work their way through the system.
I hope I'm wrong, but I see this as a suckers/delusional rally. The higher it goes, the worse the outcome for those buying into it. When I sense the frantic buying of those who fear they have missed the bottom, it'll be time to short again.
All Bear markets have rallies. These features are produced by investor confusion and market manipulation, by those greedy sharks that seek to make money out of others misery and stupidity. Markets are driven by sentiment, but sentiment is over the longer-term based on fundamentals. Listen to Obama and then listen to him again hard. He is not promising Nirvana. What he is telling you is that his stimulus is required to prevent the economy getting sucked into Black Hole. He is not telling you that 2010 will be 2006 all over or indeed anything like it.
Reliably and predictably, the talking heads noted the market is forward looking and that this disturbing data is "baked into the cake", with the market already discounting the news.
I know the market is a collective mechanism, but just what is it discounting with respect to housing, credit, deleveraging, corporate profits, consumer spending, oil and gaping deficits?
I ask this rhetorically because I do not think anybody knows, which then implies the market is discounting unknowns. Maybe Erin Burnett and one of her drooling, gasping geusts will explain to me how this is done.
Obama is eloquent and inspiring but he has been instructed to play down long-term expectations.........h... later to trump is own guidance. In the meantime, Q4 profits are right around the quarter and I bet they come in lower than what has been estimated.
Ha...they all come out of hibernation when anyone posts anything positive on Seeking Alpha.
Lots of vested shorts here...
Same as to the upside all the crazy levels were broken now we must to brake all the levels to the downside.
The financial unwind will continue very well into 2009 as it seems like all those trades made on major were nothing else but evaporative trades.
If you look at the stock volume of any Russell2000 or Wilshire5000 component, you will then check company's balance sheet,it's P/L,EPS,revenue etc., you will understand suddenly that any single public firm doesn't make so much business on particular day as it's stock volume would otherwise show.
How much GOOG or IBM or GE of the world sells a day of it's products (products is still better than services) compare to it's stock volume, maybe up to 40% for the IBM ( it means for each 1$ of revenue it's volume on the NYSE is 2.5$).
I predict big declines in all worlds stock markets in 2009.
I've heard variously (1) Market up the beginning of 2009, then down, (2) Market down at the beginning and will rocket up in the 2nd half, (3) Market will move steadily up all year and finish (3a) 10% higher (or 3b) considerably higher, (4) Flat all year and (5) Range bound like the last few months.
I'm going for range bound and choppy, with a side of fries and a diet Coke.
jegan
All you bears can whine away at any hint of optimism - that just helps to confirm my feelings that now is a good time to buy a few shares here and there while this choppy, range-bound market figures out a direction.