We recently had an IDE editorial meeting in Delray Beach. I got a sound reminder of the diversified talents represented by your IDE editors at this get together. There was clearly an air of excitement and anticipation regarding ways to navigate the present economic and financial mess.
What kind of scared little girls are we here at Notes? Here we were warning our readers of the dangers of the current rally in stocks while everyone else is out there “getting some.” Stocks surged yesterday. The Dow hit its highest level since January 13, closing at 8,426.
Last week, I showed you a chart of the Nasdaq 100, which is probably in the midst of tracing out a longer-term consolidation pattern (trading range), as it hadn’t traded below its November low. That range could be from the November 21 lows up to the January highs, possibly higher.
The big comeback should already be here, according to Wall Street pundits. It was due to arrive in the fourth quarter… a 50 percent increase in earnings led by – of all sectors – banks.
“The Next Big Storm to Hit the Markets” is the headline for an essay by John Robson & Andrew Selsby of Full Circle Asset Management, who write, “Above all others, the outlook for corporate earnings is the big issue”, and they expect that earnings will “also catch ‘fall off a cliff syndrome’.”
Well we have made it to the end of another year, and this one has been quite a ride. This is the last full trading week of the year, so barring a huge rally, the Dow, NASDAQ, and S&P will all end the year with losses north of 30 percent.
In the energy market Monday, oil sank below the $60 benchmark, with crude for December delivery closing at $59.33/barrel, down $3.08. December reformulated gasoline lost 6.2 cents, to $1.3059/gallon. Early in the day, crude had fallen to $58.32, its lowest level since February, 2007, and yesterday there weren’t enough buyers to push it back over $60.
In the energy market Friday, oil moved higher, with crude for December delivery closing at $67.81/barrel, up $1.85. November reformulated gasoline fell 2.57 cents, to $1.4413/gallon.
The CBOE Volatility Index is designed to be a measure of volatility in the overall market. Without getting too technical, it is based on the volatility of S&P 500 options. The options are rotated in and out, as one month’s options expire and then a new month is added on.
In the energy market Friday, crude for July delivery moved higher, closing at $127.35/barrel, up 73 cents. June reformulated gasoline added a penny in its last day as the front-month contract, to $3.41/gallon.