Daily Investment Interpretations

May 20, 2010

2010-5-20:  The markets fell out of bed today, slicing through their support levels like a locomotive through fog: Market crashes technical support on Fearsome volume.  The NASDAQ Composite contracted 94.36 points (-4.11%) to 2,204.01, the Dow forfeited 376.36 points (-3.60%) to 10,068.01, and the S&P 500 dwindled 43.46 points (-3.90%) to end at 1,071.59. Oil retreated to $69.75 a barrel, while Gold pulled back to $1,183. The VIX rose 10.47 to 45.79.  
    The retrenchments in the three major market indices have all exceeded 10%, qualifying this contraction as a bona fide correction: Stock indexes enter correction mode. They've also broken below their 200-day moving averages. The S&P 500 has fallen from a high of 1,217 on April 23 to tonight's close at 1,071... a drop of 146 points or 12.0%. The Dow has backed up 1,136 points from its April 23rd high of 11,204, a decline of 10.11%. The NASDAQ Composite has slid 426 points from its April 23rd peak of 2,630... a 16.8% retreat from its highs.
    The immediate causes for today's collapse lie in headlines such as Battering ram blasts Europe's bourses, U.S. jobless claims climb 25,000 to 471,000, Leading indicators dip, and 30-year fixed-rate mortgage at 2010 low .
    My investment advisory service suggests that the attitude of major investment managers is "You won't fool me again!" Managers were blind-sided by the 2008 market crash, so this time, they're selling first and asking questions afterward; the hedge funds are selling to lower their risks. My investment advisory service is warning that it would be unwise to count on a "dead cat bounce' just yet. There is even the hint that tomorrow morning the service may issue a recommendation to short the markets, using the S&P inverse fund SDS. 
    Stock market futures are % positive tonight. 
    Todd Harrison writes today: The Return of the Phantom of Deflation..  
2010-5-20:  Stock market futures are down between 1 % and 1 % this morning, suggesting large-scale dumping of equities. My investment advisory service warns the hedge funds are selling to lower their risks. I have just bought shares of the S&P 500 double-inverse fund SDS to hedge my portfolio.