Dave Fry's Market Outlook for Tuesday

by: David Fry

The above image seems to visually describe market conditions right now. Let’s see, 200 plus points down Wednesday, 180 up Friday and another 200 plus down Monday. How do you spell volatility?

As I wrote over the weekend, I thought stocks would open higher Monday morning based on retail sales data, but wondered what kind of follow-through we might get. Well…

As you would expect, breadth sucked. Volume seemed modest given the tape action:

There was plenty of news as more credit issues continue to float to the surface like so many bodies. The major news is that Bernanke & Co. are warming up the helicopters and announced their unprecedented intention to dramatically increase “term repurchase agreements” [“repos”] to the banksters. These repos will not be of the typical 1-7 day variety but will last into January. This is an “activist” Fed and Treasury and they’re going to do what it takes - “moral hazard” be damned - to provide liquidity.

Below are a few of the trouble-makers depicted in weekly charts dating back to 1999. To ignore the destruction here in favor of holiday shopping data is downright dumb:

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