12/5/2008

Market Wrap

Never a dull moment where this market is concerned. The indices hit their lows for the day – Dow down 257 – fairly early in the morning following the poor jobs report, but spent the rest of their day working their way higher, and started to really move higher in the mid-afternoon, with the indices reaching new highs just before the closing bell.

Dow Industrials 8635.42 +259.18 +3.09%
S&P 500 876.07 +30.85 +3.65%
Nasdaq Comp. 1509.31 +63.75 +4.41%
Russell 2000 461.09 +21.56 +4.91%
NYSE Comp. 5401.25 +168.99 +3.23%
Nasdaq 100 1177.87 +50.12 +4.44%
Dow Transports 3433.33 +65.00 +1.93%
Dow Utilities 361.44 +8.44 +2.39%

Long bonds finally gave up ground today and yields moved up a bit, but the 3-month is still dragging right down near zero:
6-month: 0.20%    2-yr: 0.93%    5-yr: 1.69%    10-yr: 2.69%    30-yr: 3.13%.

Internals reversed up along with stocks, with volume coming in higher than yesterday. Advances/declines were 7 to 3 on the NYSE and 13 to 6 on the Nasdaq, with up/down volume 6 to 1 on both exchanges. New highs/lows were 2/183 on the NYSE and 1/170 on the Nasdaq.

Nearly all of the groups turned green as stocks turned up, with the biggest winners being the brokers (+11.1%), REITs (+10.3%), airlines (+9.1%), HMOs (+7.5%), steel stocks (+7.1%), banks (+6.7%), disk drives (+6.4%), insurance (+5.9%) and biotech (+5.5%).

Energy prices took it on the chin for another day. Crude dove to a closing price of $40.81/barrel, gasoline went to $0.90/gallon, and natural gas slid to $5.74/mmBTU. The dollar index moved back up to 86.94, but the PMs only lost a little ground, with spot gold down to $755/ounce and silver down a penny to $9.46/ounce.

BMB Note:   Ho-hum. Yet another 500+ point swing on the Dow for the day. Pretty much business as un-usual.

Though the indices have not yet recovered Monday’s huge losses, they haven’t moved back below those lows yet either. In the near-term, it’ll be interesting to see which are broken first, last Friday’s highs or Monday’s lows. A move above Friday’s highs would give us that ‘higher high’ we’ve been looking for, and would be a step in the right direction.

And I’d really like to see things start to move in shorter steps, rather than these huge intra-day leaps. But I don’t really have anything to say about it, do I?

Posted: 3:18 pm

8 Comments »

  1. BMB – The key takeaway today was for the market to rally on bad news…something it’s been doing for the last two weeks (really except for last Monday). Looks like my theory played out big time right today. With the close around 877, one more up push should take us to the higher high, and break the downtrend, giving Larry his intermediate term buy signal. Stocks appear to have stopped going down on bad news…a true positive IMHO. Have a good one…
    - Greg

    Comment by Greg Larsen — 12/5/2008 @ 3:46 pm

  2. The market went up on news OJ Simpson was sentenced to fifteen years.

    Comment by Fred — 12/5/2008 @ 4:08 pm

  3. And most probably consider that good news.

    Greg, that’s along the lines of what I was saying in this comment.

    Comment by BMB — 12/5/2008 @ 5:00 pm

  4. I think Fred has it right.

    Comment by Maria — 12/5/2008 @ 5:29 pm

  5. The market is still in it’s downtrend channel and Monday will likely be key to where we go next. If we go up I would go long. If we go down, well watch out below. This is probably the window dressing for funds now. Eventually reality always prevails and it will get a lot worse. I think we will touch 4000 (based on my charting) after all this is over. But timing the downturn will be key and profitable.

    FXI is certainly leading the way but more volume is desirable.

    Comment by Rik — 12/5/2008 @ 7:15 pm

  6. If people are nervous about their retirement accounts now, I can’t imagine what they’d think at Dow 4000. Yikes.

    Comment by BMB — 12/5/2008 @ 8:24 pm

  7. People get too emotional about their losses. At 4,000 they’d be as hopeful as they will be at Dow 6,000. People should ride this wave up now and exit. The stock market eventually bottoms when no one has any desire of investing. People still looking fwd to a rally is certainly no bottom.

    Comment by Rik — 12/6/2008 @ 11:12 am

  8. No need to get emotional about the losses if you can manage to avoid taking them. As I always say, people need to learn where the ’sell’ button is.

    Comment by BMB — 12/6/2008 @ 1:15 pm

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