Daily Investment Interpretations

October 3, 2011

2011-10-3: (Monday Night): the markets closed lower again today, breaking below their trading ranges and their August lows: Stocks start Q4 off 2%-3%, Market Breaks to New Lows on Euro Zone Fears. The NASDAQ Composite dove 79.57 points (-3.29%) to close at 2,335.83. The Dow fell 258.08 points (-2.36%) to close at 10,655.30; the S&P 500 closed down 32.19 points (-2.85%) to settle at 1,099.23. Oil backed off to 76.13: Oil at worst in over a year; gold jumped to 1,671: Gold rallies. The VIX hopped up 2.49 points to 45.45
    The S&P 500 closed below its August 9th intra-day low of 1100, opening the door to further declines: Breaking of lows could trigger more selling. But interestingly enough, there was heavy buying going into the close. Some traders obviously anticipate at least a temporary rally. Here are a few supporting articles: 
    Why U.S. stock funds could see a year-end rally,
    Good news: Wall Street's getting more pessimistic
    Nyaradi: Pressure building for a breakout (video). 
    Europe will save Greece from default, says Juncker and 
    Summer crash ... fall melt-up 
    Mark Hulbert observes that: Small-cap and value stocks hate October. . He also notes that it may be too early to get back into equities when volatility is so high: When volatility fades.  
    State of the Markets articles include:
    Technical Talk: Bulls Holding The Line (Again)    
    Who Has It Right On The Economy and The Markets?
    Who Has It Right? (Part II)  
    Eurozone Final September PMI's Remain Worrisome  
    Fitch Cuts Global Growth Forecast for Advanced and Emerging Economies  
    ISM Manufacturing Index Still in Expansion Mode  
    Construction Spending Up +1.4% in August  
    Recession On the Way? It's Buffett vs. Economic Cycle Research Institute and the Markets  This article weighs the fact that Warren Buffett (and the Fed) believe the U. S. economy is still moving forward, while the ECRI and other sources (including George Soros) believe it's heading into recession if not already there.
    It's worth remembering that the stock market climbs a wall of worry and slips down a slope of hope. (it's time for at least a technical bounce... that will be heralded as a rebound from the bottom.)
    Stock market futures are up a little tonight.