Daily Investment Interpretations

August 4, 2011

2011-8-4: (Thursday Night):  The market indices have crashed, with the Dow down more than 500 points: Dow, S&P, Nasdaq suffer worst point drops since 2008, Stocks pricing in recession, Market Dives To Worst Loss Since Dec. 2008 .  The NASDAQ Composite collapsed 136.68 points (5.08% ) to end at  2,556.39. The Dow deflated 512.76 points (4.31%) to close at 11,383.68; the S&P 500 slumped 60.27 points (-4.78%) to settle at 1,207.07. Oil closed down at $86.29; gold fell $20 to 1,650: The VIX exploded 8.28 (!) to 31.66!
    Two market mavens argue that now is the time to begin buying, when fear running wild: Why now is the time to buy, and Cody Willard: Why I'm buying. But Mark Hulbert warns that markets don't bottom in a spate of panic selling when gurus are  proclaiming a market bottom: Hulbert: It's not a bottom, and Panic in the air. Rather, they sneak up on the experts, and are generally only recognized in hindsight.   
    In Two ways to protect against the market swoon, low-cost, out-of-the-money puts against the S&P 500 ETF SPY are recommended as insurance against further losses.
    Money moves from Gary Shilling: "To economist Shilling, another U.S. recession within 12 months is a matter of when, not if. It may be here already."
    Market futures are neutral tonight.