Daily Investment Interpretations

December 2, 2008

2008-12-2:  The markets rose today, with the NASDAQ gaining 51.73 (3.7%) to 1,450, the Dow adding  270 (3.31%) to close at 8,419, and the S&P swelling 32.6 points (3.99%) to end at 849.  Oil ended at $47.82, and gold advanced to $783. The VIX fell to 63. 
    Why did the markets rise today? I'm sorry, but I don't have a clue. Here are two articles: Mark Hulbert: For first time in 50 years, stocks yielding more than bonds and Brimelow sees oil bull looking for bounce. But there isn't a lot of guidance that I can find. At this time of year, a lot of dumping of toxic assets is taking place so that investment funds can enter the new year with relatively clean balance sheets. As I mentioned last night, hedge fund and mutual fund  redemptions are taking place, leading to dumping of stocks and other worthy assets in order to raise cash.
    Here's a commentary on today's action: Bulls regroup after sell-off.
    The real question is whether the world's governments can stem the receding tide with heroic monetary and fiscal measures, or whether we're doomed to remain in a degenerative spiral. I certainly have no definitive answer to that question. But I'm having to day-trade in and out of the market (in a small way), and I've made a little money this way. I've learned the hard way that this market is so unpredictable that don't know from one day to the next how the market will open the next day. For example, yesterday, as the market swooned, I bought 200 shares of QID, the Proshares Ultra Inverse NASDAQ 100 index fund. It went up a couple of thousand dollars over the course of the day. I should have sold it before the close yesterday. Instead, I ended up putting in a sell order before the market opened this morning. As a result, I lost a portion of the potential gain because the market went up today. Still, it turned out to have been right to sell it this morning. I made a thousand dollars or so. But this is an exceedingly volatile marketplace.
    Here's something from Minyanville: Captain Obvious to World: America's In a Recession 
Sears dying a slow death