Market Talk / July 6 - 12

[Spaf]

Market Talk
Sunday Edition
July 06, 2008​

General Commentary:

Well we are in Bearsville!. From the highs of last October the DOW had lost 20%, S&P was down 19%, and the NASD was down 22%. It looks like that being in Bearsville is going to take a while. There are four major economic factors that will keep the bears out and the bulls sitting on the sidelines. We have a energy crisis in the high cost of oil that just keeps rising; last Fridays close at the NYMEX was $144 plus dollars a barrel. Until the federal government can get a handle on this crisis the price of oil will run amuck. Inflation will be a bi-product of the oil crisis; everything made or a user of petroleum products will fan the fires of higher costs. The failed and failing subprime financial loans have been a plague on the financial sector, this was a regulatory nightmare where loans were made to anything that walked in the door and then covered up in financial laundering. This has also been a weight on the housing sector trying to recover from some oversold conditions.

Looking at the charts (see attached DJIA) the primary trend is down. The trend could change to sideways or a blip upward, but any moderate action to the upside will fail, until economic failings improve.

If one is holding index funds, the probability is that there will be a recovery somewhere down the road. Holding single company funds could be wealth or poverty. Now is basically the time for capital preservation in retirement accounts and a time to be nimble in trading accounts.

A look at the chart(s)
The DJIA daily for one year and it's MACD

Charts courtesy of BigCharts​

There were three to four trading opportunities in the last 12 months, however in hindsight the risk may not have been worth it, the major trend was to the downside.

Have a good week!​

And, be careful out there!​

 

[wwwtractor]

Inflation is a byproduct of the dollar crisis. Oil, gold, and other real assets only reflect this reality.

 

[Spaf]

Tuesday.......July 8th

Been over to CNBC. Oil has gone down to $137.79, a decrease in price of $3.59.......WOW!
Must of been something our Government did?
Could have been something OPEC did?

This is July 8th and the price of gasoline could be falling, Gee my luckey day!...:suspicious:

 

[Silverbird]

[Carrots to continue, but Fed is brandishing a stick. Beatings will commence next week, until morale improves.]


Fed to crack down on shady lending practices
Bernanke: Fed may extend emergency loans program for Wall Street

Associated Press, July 8 2008
WASHINGTON - In an effort to prevent a repeat of the current mortgage mess, U.S. Federal Reserve Chairman Ben Bernanke said Tuesday that the Fed will next week issue new rules aimed at protecting future homebuyers from dubious lending practices.

And in an effort to stabilize a shaky U.S. financial system, the Fed may give squeezed Wall Street firms more time to tap the central bank’s emergency loan program, Bernanke said.

The new lending rules will crack down on a range of shady lending practices that has burned many of the nation’s riskiest “subprime” borrowers — those with spotty credit or low incomes — who were hardest hit by the housing and credit debacles. The plan would apply to new loans made by thousands of lenders of all types, including banks and brokers....
http://www.msnbc.msn.com/id/25582478

 

[Spaf]

Ah-Ha! May be a start to get out of this Bearsville rut!..........

[Carrots to continue, but Fed is brandishing a stick. Beatings will commence next week, until morale improves.]


Fed to crack down on shady lending practices
Bernanke: Fed may extend emergency loans program for Wall Street

Associated Press, July 8 2008
WASHINGTON - In an effort to prevent a repeat of the current mortgage mess, U.S. Federal Reserve Chairman Ben Bernanke said Tuesday that the Fed will next week issue new rules aimed at protecting future homebuyers from dubious lending practices.

And in an effort to stabilize a shaky U.S. financial system, the Fed may give squeezed Wall Street firms more time to tap the central bank’s emergency loan program, Bernanke said.

The new lending rules will crack down on a range of shady lending practices that has burned many of the nation’s riskiest “subprime” borrowers — those with spotty credit or low incomes — who were hardest hit by the housing and credit debacles. The plan would apply to new loans made by thousands of lenders of all types, including banks and brokers....
http://www.msnbc.msn.com/id/25582478

 

[Spaf]

Well, so much for this week. Looks like it will take some pretty strong bulls to get us out of this fine mess.

See ya next week, be careful!​

Spaf​