Daily Investment Interpretations

December 18, 2008

2008-12-18:  Stocks declined by a couple of percent today for no strikingly obvious reason. Oil fell to its lowest price in four years: $36.25 a barrel, bringing it closer to the Goldman Sachs prediction of $30 a barrel. The NASDAQ Composite ended the day down 26.94 (-1.71%) at 1,552, the Dow lightened up 219.35 points (-2.49%) to close at 8,605, and the S&P subtracted 19.14 (-2.12%) to finish at 885. As mentioned above, oil closed at $36.25, and gold dwindled a little to 860.60. The VIX dropped 2.5 to 47.34. This behavior of the VIX seems to me to be significant. Normally, when the markets fall, the VIX rises. The fact that the VIX is gradually falling seems to me to suggest calming waters (not that this trend can't reverse at any time).  
    Here's a most-interesting and compelling review by the author of the predictions he published at the end of 2007 for 2008: Five Themes You Need to Know for 2008: Final Report Card.  His prognostications were remarkably accurate, which lends credence to his current forecast: Five Things You Need to Know: Point of Recognition Still Ahead of Us