Daily Investment Interpretations

October 19, 2011

2011-10-19: (Wednesday Night): The equity markets closed significantly lower today:  Fear Returns To Market Driving Stocks Lower, Stocks catch whiff of fearThe NASDAQ Composite declined  53.39 points (2.01%) to close at 2,604.04. The Dow dropped 72.43 points (-0.63%) to 11,504.62; the S&P 500 lost  15.5 points (-1.26%) to settle at 1,209.88. Oil moved up to 86.07; gold fell to 1,643. The VIX advanced 2.88 points to 34.44.
The indices are dancing around the tops of their trading ranges. The Fed's Beige Book reveals that the Fed governors saw continued advancement in the U. S. economy over the past three months, but at a quite tepid pace: Economy plods along: Fed.

    State of the Markets articles include:
    Differences Between Germany and France Stall 'Comprehensive Plan' Progress
    Investor's Intelligence Shows Bullish Sentiment On The Rise  
    CPI Comes In With Gain of +0.3%; Core Rate +0.1%
    Housing Starts Up Big In September; Starts Pull Back  
    China Warns of 'Grim Situation' on Foreign Trade  
    NAAIM Survey Shows Active Managers Stayed Bearish  
    Bullard: U.S. Avoided 'Recession Scare' Fed Board member  
    Economic Update: Fedís Beige Book Report    

    Mark Hulbert Mark Hulbert's article tonight details A recipe for stock market volatility. What strikes me about Mr. Hulbert's article is his conclusion that the situation today is unparalleled in the history of the stock market, and that stocks are sufficiently overpriced that the only thing that's keeping the indices up is the fact that yields and outlooks on everything else is at a minimum right now, leaving the stock market as the only game in town that might offer decent returns.       
    Marketwatch's Lawrence McMillen states that The market is at a crucial juncture. M. McMillen notes that October is usually a month of market lows, which sets things up for a year-end rally. Also, broad measures of investor sentiment are extremely negative, which "means that a bottom is forming". He's looking for a close on the S&P 500 above 1,230. 
    In Occupy Wall Street signals end of utopian economics, Israeli columnist Amotz Asa-El explains that the Occupy Wall Street movement, which has spread around the world, marks the end of passivity and a resurgence of Jeffersonian democracy among the disenfranchised public: Occupy Wall Streetís good, bad and ugly.  
    Darrell Delamaide writes: Cain mutiny: 9-9-9 plan may lead to backlash. GOP candidate Herman Cain is backed by the ultra-right-wing, multibillionaire Koch Brothers. His 9-9-9 plan would, allegedly, lead to higher taxes for the poor and lower taxes for the very rich: Tax Policy Center Does Herman Cain
    Stock market futures are neutral tonight.