Dow, one year view.
Posted on 01/23/2008 3:36:15 PM PST by shrinkermd
A torrid rally in financial stocks resurrected a wheezing stock market, which suffered from recession fears but then rejoiced at a possible bailout of bond insurers by New York regulators.
The Dow Jones Industrial Average languished with a 326-point loss at its early-afternoon nadir, but finished up 298.98 points, or 2.5%, at 12270.17. The Standard & Poor's 500 ended up 2.1%, or 28.10 points, at 1338.60. The broad measure's financial sector led the way, up more than 7%, with most of the gains coming in the wake of afternoon reports that New York state regulators were meeting with Wall Street firms to discuss ways to stabilize the troubled bond-insurance industry.
Shares in leading bond insurers soared. Ambac skyrocketed 72%, and MBIA leapt 33%.
MARKETS ON THE MOVE
1 Track indexes and hot stocks2, with roll over charting and headlines. Plus, comprehensive coverage of bonds, commodities and forex. Markets Data Center highlights: Most Actives3, Gainers4, Losers5 New Highs and Lows6, Money Flows7 Intraday Futures8 and Currencies9Bank stocks got a lift from Bear Stearns analysts' upgrade of several bellwether names in the sector, on hopes that this week's interest-rate cut by the Federal Reserve would enable Wall Street firms to borrow and make loans more freely, boosting their profits. Dow and S&P component J.P. Morgan Chase, one of the names touted in the report, jumped 11.8%. Citigroup, another Dow component, jumped 8%.
Composite volume on the New York Stock Exchange surpassed seven billion shares for the first time ever, and the Nasdaq posted the largest volume reading in its history, at more than 3.5 billion shares.
(Excerpt) Read more at online.wsj.com ...
Let us hope he is correct.
So can we forget about the $150 Billion stimulus package?
I hope so. Another tax cut would help more than any gimmicky, tax-my-rebate next year.
I don’t see this as over , it didn’t last long enough and I don’t see new leaders emerging which in my mind is a necessary trait.. a buying spree late in the day by a few of the biggest players that are hurting badly but still have the power to give one last up push to change worldwide thinking in the last hour before the market closes and freezes the news until 09:30 tomorrow doesn’t impress me much.
Give me a follow-through that looks strong ALL DAY and NEW LEADERS.
Dims look stupid now.
The tax rebates if it is what the Republicans want IS a tax cut. It’s an elimination of taxes paid on the first $8,000 you make or roughly $800. It’s just paid early instead of when you file your taxes. It’s only for one year also which is the unfortunate part. Now, if Democrats get their way, everyone will get a rebate of $400 regardless of whether they pay taxes or not. That is not a tax cut.
Seven billion shares traded! That is extreme.
Dow, one year view.
As we discussed yesterday, we were looking for a retest of yesterday's intraday lows followed by a rebound. Well, we got that today. The DJIA gapped down at the open and was near yesterday's lows by early afternoon when stocks started to rebound. The rally got stronger as the afternoon progressed and pushed the DJIA up to near its day high and more then 600 points higher from the intraday low at the close. The blue chip index closed up 298.98 points (+2.50%) to close at 12270.17. The S&P 500 gained 28.10 points (+2.14%) at 1338.60 while the NASDAQ rose 24.14 points (+1.05%) to 2316.41.
The rally was strong with supportive market internals and volume. Advancers outpaced decliners by a 23 to 8 ratio on the NYSE and by a 3 to 2 ratio on the NASDAQ. Volume was explosive on the upside on both short covering and new buying. Over 70% of the volume was on the upside on the NYSE while nearly 65% of the volume was up on the NASDAQ. The heavy volume suggests that we could see more gains in the next day or two.
Today's intraday reversal put in a short term bottom and had a significant effect on market sentiment. The panic has passed which will likely bring more bargain hunters back into the market. However, a one day rally doesn't mean we are out of the bear market. The market still needs to show that this is not a one day affair and it can give us some follow-through in the next several days on good volume. The correction during the past couple of months presents many chart resistance areas on the major indexes and individual stocks on the rebound and they need to be watched carefully.
For individual stocks, look for resistance at their significant downward-sloping moving averages, such as 10 day, 50 day and 200 day moving averages. Also, watch for any gap resistance when considering individual stocks should there be any downside gaps during the past couple of months. If a stock fails to break above of its resistance on several tries, it may be time to take profits if you are a short term trader.
Additionally, in a bear market, a failure to break above a significant intermediate term downward-sloping moving average, such as a 50 day or 200 day moving average, could become an entry point for short sale.
$800 bucks is a mortgage or rent payment for most of America. If you don’t want yours, feel free to mail it to me. At my age, I can easily let it invest for 40-45 years and turn it into $50k.
There is too much debt every place in society. It needs to be significantly reduced.
National debt was 4% of the GNP 8 years ago, now it's 2.5%. What is the problem?
If the media and the congresscritters would quit talking recession and would start being positive about our country, I bet the market wouldn’t be fluctuating like this. They put word curses on our country when they do that. Idiots.
I’d have more money to pay my mortgage if I didn’t have to pay so much in taxes.
So they send it to me and I turn around and send it right back x 4.
Oh, well, back to work. I have my family and that welfare family to support.
For the 2nd last time, the Republican plan IS a tax cut (cutting taxes from 10% to 0% of the first $8,000 everyone makes)— the cut is just given immediately instead of at the end of the year. Some of you are hilarious. Now if Rangel gets his way, it will not be a tax cut, but a credit regardless of whether you pay taxes. If that gets the nod, then I will AGREE with your concerns.
Sharp, brief rallies are characteristic of bear markets. They are caused by short sellers panicking to cover on signs of locally oversold conditions.
This isn’t merely a “bear market”. The problems in our banking system are due to the liquidity crisis. I will be shocked if the worst is over for the stock markets.
Losses in the banks will continue to mount. Lenders will continue to fear lending. Has all the toxic paper in ABCP been found and marked down? I am not aware that it has all been found yet. The liquidity crisis will continue to slowly unwind. It won’t end with a bang. This has much further to go.
You must be deeply saddened by the late rally.
I usually watch the DOW in relation to the NYSE COMPOSITE INDEX. They usually rise and sink together, with NYSE being 2/3’s of the DOW. When they don’t rise in proportion, I begin to wonder what manipulation is occuring.
^DJI.....12,270.17....298.98...2.50%
^NYA......8,805.68....144.51...1.67%
But, to each his own.
A little English girl on vacation in Indonesia at a beach resort with her family noticed the ocean suddenly running out in a very unusual manner. Most adults, bewildered by the rapidly ebbing tide, walked out and stared at the dry seashore.
The English remembered a recent geography lesson on earthquakes that included tsunamis, and that a “suckback” occurs before the giant waves come in. She ran around warning people, and one adult believed her, and the resort used its loudspeaker system to warn the guests to get to high ground and most were saved at that resort as a result.
Now, some would say just before the waves came in that the little English girl was crazy, and that she was only trying to frighten the tourists for no good reason.
A few (idiots) after the fact might even suggest that she “caused” the tsunami, by shouting about it before it even came. That she actually caused it by her karma, or something. Like I said, those people would be idiots.
After the fact, most folks recognized that the little English girl did a good thing by trying to warn people of the coming tsunami waves.
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