Daily Investment Interpretations
February 24, 2011
(Thursday): I said last
night that "I believe that
tomorrow will bring a further decline in the market indices before they
turn around." That part was right, but the extreme bounce off a low
that had penetrated support levels by half a percent caught me by
surprise. Apparently, the dramatic turnaround in the markets has been
the response to a Twittered rumor that Gadhafi has been shot. Still, the
robustness of this upthrust suggests to me that tomorrow may not see
further declines. But this marketplace is so deceptive that it's
dangerous to jump to any conclusions.
A Few Minutes Later: There was heavy selling into the close, followed by stabilization and a huge buy (~7,000,000 shares) as the last trade of the day: Street chips away at losses.
The markets closed mixed. The NASDAQ Composite rose 33.43 points (0.55%) to 2,737.80. The Dow slipped another 37.28 points (-0.31%) to 12,068.50, while the S&P 500 gave up 1.30 more points (-0.1%) to close at: 1,306.10. Oil fell to $98.46 a barrel, while Gold ended at $1,398. The VIX dropped 0.95 points to 21.19.
The sellers haven't all disappeared. At the same time, at some point, there could be a frantic scramble to get back into the stock market: Stocks- Bull market has room to grow. Whether or not that happens tomorrow remains to be seen. However, the markets will presumably retest their lows. (I think it's important to know that the indices will probably retest their lows before they resume their upward trend.)
Gaddafi facing final stand in Tripoli
Does More Oil Make The Problems Go Away? This article explains that oil supply anxieties were driving up the price of oil, threatening to strangle the recovery. Reassuring promises had to be made to calm the markets. In this case, they were made by the Saudis, who announced today that they're ready, willing, and able to make up the modest shortfall that even complete disruption of Libyan oil supplies would visit upon the world's oil markets. The International Energy Agency announced today that the Libyan turmoil has reduced world oil supplies by less than 1%: IEA: Up to 750K barrels of oil a day off market.
Stock market futures are up about 0.3% tonight, and are rising.