Daily Investment Interpretations

August 17, 2009

2009-8-17:  The markets closed close to this morning's early values, with the NASDAQ Composite about 54.68 points underwater (-2.75%) to close at 1,930.84, the Dow dipping 186.06 points (-2%) to land at 9,135.34 and the S&P 500 divesting itself of 24.36 points (-2.43%) to end at 979.73. Oil dropped $0.76 to close at $66.78 a barrel, while gold declined $13 to $936. The VIX finally got a little perturbed, rising 3.62 to 27.89.
    My investment advisory service considers this drawdown to probably be no more than a routine correction after a fast-and-furious run-up in July. Of course, the markets set the rules, but so far, there's nothing overwhelming in the numbers.
    Tomorrow is "Turnround Tuesday".

2009-8-17 (Morning):  The The markets are off to a grim start this morning. The Chinese market closed today (Monday) down -5.8% (think 58 points on the S&P 500), penetrating its 25-day moving average (as it did on August 6th), but not its 50-day MA. Meanwhile, back at the ranch, at this moment, the S&P is down 24, the Dow is down 190, and the Nasdaq Composite is underwater about 48 points. At the same time, S&P has just broached its 25-day moving average, as it did in the June-July contraction, when it broke all the way down to its 85-day MA.
    The news this morning is good. The Empire Manufacturing index registered about 12, versus an expected value of 3, But the market indices are all ready to pull back, and apparently, it's now happening. My technical advisory service' advice at the moment is still "buy on dips", although that could change as this correction evolves.
What to do? It's too late to sell and too early to buy.