February Week One: A Tipping Point in Sentiment?

The Dow tested the November lows again last week, and held, in the face of bad economic news associated with job losses. Earnings continued to be a mixed bag with the tech sector performing a bit better than expected, consumers performing a bit worse than expected, and financials performing as badly as expected.

With the Obama stimulus package getting closer to reality, along with various other government stimulus packages enacted worldwide, there is a sense within the market that the worst is upon us now. Because the Dow often leads the economy out of recessions by a couple of quarters, the current resolve of traders may translate into a recovery in the equity markets over the coming months. Historians may look back at the first week of February 2009 as a possible tipping point in sentiment.

Unlike 2003, when there was a bit of a snap-back, one could expect this stock market recovery to be slower, with a few scares along the way. The U.S. economy has already been on a pretty long decline with economic fundamentals eroding since August of 2007.

Comments

[bs_o_meter:]

You provided no content for evaluation. how about some data next time instead of bs.

Feb 10 02:41 AM

[ROLEX18:]

Sentiment is important indicator, but I don't see it as worth too much attention, without data we know sentiment is bad. Will markets rally because of it - maybe 5% why not, but this time investors are dead so there is no money to turn this market too much up, there is simply no money on the table, to get some chips onto the table, we need DJIA at 14500 to get money back for investors who lost, otherwise it is 5%, 6% down.

Feb 10 07:15 AM

[Cesato:]

Rolex18: There is an incredible amount of money sitting on the sidelines and it's not the USD 9.000 that you made last week, we are talking about trillions of dollars ready to jump in at the first sign of some recovery or medium term stabilization. I appreciate you being a market contrarian, contrarians are needed to balance out the market, I'm a contrarian half of the time, however make no mistake, you and I do not move the market, real money does and they have it all under the mattress at the moment. They (investors) took the DJIA all the way down from 14.500 to 7.500 and they can take it back up to 10.500 in a blink of an eye, if they wanted to, and then TRADERS jump in the wave and make money, note that economic releases have been all but ignored since a while ago. I don't have a call for DJIA but I suspect more of the same (wide range trading) will be the constant for quite some time. What I wanna say is that for a market contrarian, there is always a contrarian and despite of technical analysis, economic releases, the color of the president of USA or else, market sentiment gives you an indication of what real money (investors) want to do, and that becomes the right call.

Feb 10 08:18 AM

[Socialism c...:]

Tipping point?? Yes. I'm quickly moving from mad and disgruntled, to bloody OUTRAGED!!

Feb 10 11:36 AM