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Market Recap: Buying On A Big Number, Now What?

November 17, 2008 6:42 PM

perplexed.jpgWell, the market was all over the place today. Was far less predictable than Friday, for certain. The lows strongly appeared nothing more than buying on a “big number” 850, and simply was not very belieavable. I am still very skeptical of the market unless we make a firm low above 818, which is probably likely. They certainly will try. Therefore, if we gap down tomorrow, there should be buyers. If we clear today’s low, then it will be what I personally consider a “close day” and will likely get very volatile into the close - one way or another.

There are a lot of issues to be concerned with right now, obviously. Citi apparently is going to lay off another 50,000. This is just brutal. I have got to the point lately that I literally may just stop watching the market again for a while. The economic news that we get on a daily basis would make Santa Claus grumpy, and I have to look at it everyday to keep up, lol. It is just getting very tiresome. This would be a LOT more fun if we had good news after good news and buying checkdowns made sense. Watching and reading bad news is really not that enjoyable, lol. I need a new hobby maybe. Perhaps cooking or something.

On another note, I would not get concerned about the change in leadership. People tend to look at the market’s poor performance when the Democrats control all three houses. After some thought, I do not agree that it matters. In fact, short term, I believe it is a net positive. The reason for this is simple - “more of the same” would have likely dashed many hopes of well, something different and better.  I think more doom and gloom would have set in. And in many ways, the economy is a self fulfilling prohecy. So hope is important. The reason I believe that history says it is not good for the markets is that they probably took control of all three because of an economy already heading south. Like they say at election time, it’s the economy stupid. So, my personal view is that these concerns are grossly over stated and Democrats taking control of the white house is very likely a positive. The economy is all that matters. Whether the change in leadership can turn it around and how soon is the issue. This will likely take a long time to fix as I see things.

Anyhow, back to the market. Tomorrow “might” be a key day. It really will depend on whether we open up or down. I would consider a gap down to maybe be a positive, depending on what happens. If we open slightly positive, I will remain very skeptical.  If we open higher, my guess is it will likely be short lived. We have no firm lows on either intraday or daily charts all the way to the low of 818. If it goes up, then it does, but once again they will be leaving the port without me.

Lastly, I still believe that GM will dictate the direction here, possibly short and long term. If they file bankruptcy then I think the market and very likely the economy is in serious trouble. The prudent thing may be to wait this out and see if they get money or do not. I think it is rather obvious that they cannot make it without a bailout. I personally doubt any of the three can. I am taking a wild guess that a few more million people out of work is probably not a good thing. I feel sorry for the workers if that happens as it certainly is not their fault. This is a direct result of poor management for at least two decades. So hopefully they all can survive somehow. We will see.  Boy, I am starting to almost sound like a Democrat, lol.

Written by Tom@StockBlade.com · Filed Under SP Futures 

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