Daily Investment Interpretations

October 4, 2011

2011-10-3: (Monday Night): The markets plummeted, then soared today, breaking back into their trading ranges: Stocks zoom at day's end, .Stocks Surge Late on Talk of Euro Bank Recapitalization, Stocks: Bear market bounce. The NASDAQ Composite jumped 68.99 points (2.95%) to close at 2,404.82. The Dow advanced 153.41 points (1.44%) to close at 10,808.71; the S&P 500 closed up 24.72 points (2.25%) to settle at 1,123.95. Oil backed off to 76.13: Oil at worst in over a year; gold jumped to 1,671: Gold rallies. The VIX fell 4.63 points to 40.82
    It's now more or less official: with the S&P 500 down more than 20%, we're in a bear market, with rallies perceived as opportunities to sell. After dipping to 1,075 this morning, the S&P 500 staged a "Bernanke bounce", then quickly fell back as institutions sold their stocks into the rally, and then vaulted upward in the last 45 minutes of trading as upbeat talk arrived from Europe:
    Germany's FDP To Force Referendum on EFSF Support  
    Financial Times: EU Ministers Looking To Aid Banks  
    Bernanke Says Fed Is Prepared To Take Further Action. Will It Matter?, Bernanke bank bump fades.
    Michael Ashbaugh: S&P, Dow confirm primary downtrend  
    Kevin Marder: The bear is at the door    
    Has the bull been gored? John Nyardi concludes that it probably has. His downside target for the S&P 500 is 1010.
      
    Todd Harrison: Life after the market storm  Todd Harrison suggests a performance-anxiety-driven year-end rally.
    Mark Hulbert writes: Still hope for the fourth quarter. followed by: Key reversal day? A similar article is: Late reversal 'certainly a positive': strategist. Of course, the markets are very oversold and due for a technical rally.
    I think Mark Hulbert's advice to stay out of the markets until the VIX falls below 20 is appropriate when dealing with these feverish market moves.
      
    State of the Markets articles include:
    Technical Talk: It's a Bear Market, So Naturally...    
    Goldman Sachs Says Recession in Europe; Cuts Global Forecasts
    Bailout Decision for Next Tranche of Greece Cash Delayed  
    Troubled French-Belgian Bank Dexia May Be Nationalized  
    Factory Orders Down in August  
    Moody's Downgrades Italy Debt  

    Stock market futures are % lower tonight.