Daily Investment Interpretations

December 2, 2011

2011-12-2: (Friday Night): The markets took a breather again today, ending just about exactly where they started: Dow, S&P edge down after surrendering early gains, and Video Update: Weekly Market Summary. The NASDAQ Composite inched up another 0.73 points (0.03%) to close at 2,626.93. The Dow inched down  0.61 points (-0.01%) to 12,019.42; the S&P 500 faded 0.03 points (-0.02%) to settle at 1,244.28. Oil adjusted to 101.12: Oil ends higher, holds to $100 a barrel ; gold inched up to 1,741: Gold advances on hints of bank stimulus. The VIX crept upward 0.11 points to 27.52.
    The jobs-creation report was favorable today, coupled with the announcement that the unemployment rate had dropped to 8.6%. (But 0.2% of the 0.4% drop consisted of people who had fallen off the unemployment compensation roster, and who were no longer included in the unemployment rolls.)
    Wall Street, Washington reactions to jobs data   
    Marketwatch's Jon Markman has written this interesting article: False bravado undercuts Fed's risky Europe loan. In the article, he mentions that of the 10 days over the past 110 years when the indices have risen 4% or more, only on the bounce in March, 2009, did the markets move higher before they moved lower. Generally, sharp market reversals occur at the bottoms of bear markets like that in March, 2009, where the market has been moving ever lower "The only one of the top 10 net point gaining days that led to much higher prices over the next few weeks and months was March 23, 2009."
    "In sum, in nine of the ten most similar strong up days, the only message delivered by a session in which the Dow rose over 4% was that you were in the midst of a volatile bear market. Occasional waves of optimism create big but short squeezes that don't last long. That is most likely what we just saw."
    Mr. Markman concludes that what we probably saw on Wednesday was a sharp short-squeeze in which short sellers were obliged to buy to cover their bets against the markets. But we'll see.
    In 5 money moves she is making now, the Bank of America's Savita Subramanian is predicting a 2012 close on the S&P 500 of 1,350... not much above where it is today/ She also projects continuing troubles in the Eurozone.
    Howard Gold has written tonight: Make Wall Street pay for its criminal conduct
     Of course, we can speculate and interpret all we want, but in the end the markets are going to respond to what happens in the external j world. 
      
    State of the Markets articles include:   
    Technical Talk: Watching Overhead Resistance  
    Going Nowhere (and Fast); Has Anything Really Changed? The article, by Curt Bergquist, notes that the market indices are still within their recent trading ranges. Furthermore, a host of problems still hangs over European heads.
    It Seems So Simple     
    IMF's Lagarde Says G-20 Ready to Commit Funds  
    ECB Seen Lending 100-200 Billion Euros to IMF   
    Talk of EU Fiscal Union and ECB Participation Growing; Markets Like What They Hear
    Rates Falling In Italy and Spain For Third Straight Day           
   Jobs Report Shows 120K New Jobs With Unemployment Rate Falling  
    Are There Companies to Avoid Due toTheir Overexposure to Europe?