Posted on 11/08/2012 3:18:30 PM PST by blam
Stock Market Falls Over Fiscal Cliff
Stock-Markets / Stock Markets 2012
Nov 08, 2012 - 01:37 PM
By: PhilStockWorld
Down 312 points yesterday. (121 again today)
That's a hefty sell-off and we'll see if we get some follow-through but we pretty much hit our downside targets on the head in a single day as I said to Members in yesterday's Morning Alert:
About 13,000 on the Dow. 1,400 on S&P, 2,980 on the Nas, 7,950 on NYSE and 800 on the RUT are about the lows we have to hold – all seem like good spots to go long to me with tight stops if we break below but let's look at this as a head fake except with a bit more conviction as 50% of the population sincerely believes they have to flee the markets before 4 more years of Socialism take us up another 100%.
As I mentioned in the morning post, this is mainly sour grapes selling by Romney fans but there are also legitimate reasons to take some of this year's massive stock profits off the table ahead of possible large increases in capital gains and dividend taxes. Still, we knew this was coming on Tuesday, when the market rallied massively on thoughts of QInfinity and ZIRP as far as the eye could see.
We didn't quite hold our targets so we couldn't get too bullish at the lows but we remain hopeful that there was a bit of over-reaction in yesterday's sell-off and that the truth will lie somewhere in between Tuesday's ephoria and yesterday's panic – let's call it 13,100 on the Dow and 1,410 on the S&P as our goals for Friday and then we can all take a deep breath and think about things over the weekend.
Despite once-again rising bond yeilds, Draghi says whether or not Spain gets an OMT bail-out is entirely up to them and the ECB cannot/will not force them to do so. That's keeping the Euro depressed ($1.274) and the Dollar strong (80.94) and that's keeping a lot of downward pressure on stocks and commodities.
As we expected, oil had a huge build yesterday but we played it long in the futures (/CL) off the $84 line and we're sitting back at $85 this morning after a brief visit to $85.75. Clearly the build in petroleum products was due to the storm but now we have another storm in the Northeast grounding planes and slowing traffic so not too much immediate improvement in oil's…
Barrackanomics at work.
This is painful.
Smith and Wesson up 0.24 or 2.32%. There is another gunmaker on the DJIA that was up yesterday, too.
I was surprised to see that seven or so of the big ones like Remington are privately owned.
There are always good buys even when the market is tanking. Problem is how to find them.
It is only going to get worse.
No worries! Obama said we are in a recover and things are great! Just a bump in the road. It will be better real soon.
and Obama voters don’t care. they think the big white corporate white guys deserve it. they hate wall street remember? they have no clue what this means.
We sold all of our stocks and stock funds back at the end of April 2008. The Dow was sitting at around 13,000 when I sold most of it, a bit higher than it sits at COB today. I’ll let the government and market players screw the other little guys.
Not to worry; Mr. Fixit’s in charge now.
Ultimately it’s about earning expectations, set by current reality.
The magic is gone from Apple, the storms have cut into economic activity, some major miss of expectations and zero implements strangulation of the energy industry.
We’re going down from here, more than likely. Earning multiples are way above historical averages.
Obama’s United States of Socialist America at work
This is intelligent action by those who think. Those able are not only getting out of the market, they are converting their "money" (which is rapidly losing value) into real assets they can use to weather the coming world financial storm.
and Obama voters don’t care. they think the big white corporate white guys deserve it. they hate wall street remember? they have no clue what this means.
Until they see their 401k tank, without any blame bush to fall back on.
Only those who have jobs (or had jobs) have 401’s. The takers don’t give a hoot.
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