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Financial Crisis Investing: Profit Even this Stock Market Rally is Really Just a Bear Head Fake
U.S. stocks just capped off their strongest two-week performance since 1938. The Standard & Poor’s 500 Index is surging toward its third straight week of gains, something it’s done only three times since the bear market in U.S. stocks started 78 weeks ago. And the Nasdaq Composite Index has erased its year-to-date losses and is now is up for the year.
The path of least resistance is now higher," Miller Tabak & Co. LLC equity strategist Peter Bookvar told MarketWatch.com, citing such factors as not-as-bad-as-feared economic reports, optimism over Obama administration economic fix-it plans, and a recent jump in commodity prices that “has…
27Mar2009 | Money Morning | 0 comments | ContinuedCan Last Week’s Rally Be Sustained?
Is it a bull-market rally or a bear-market fake?
It came right down to the wire, but the Dow Jones Industrial Average ended the day Friday with its first four-day rally since November, ending the week with a gain of 9.0%. And despite that robust performance, the Dow was the laggard among the three major U.S. stock indices. The tech-laden Nasdaq Composite Index soared 10.6% while the broader Standard & Poor’s 500 Index edged it with a weekly gain of 10.7%.
Fuel for the rally came from several sources. Stocks had sold off sharply coming into last week. But then such beleaguered banks as Citigroup Inc. (C),…
16Mar2009 | Money Morning | 0 comments | ContinuedStock Market Rebound or Just Another Bear Trap?
For many investors, the last 12 months have felt like a cross between Dante’s “Ninth Circle of Hell” and Mr. Toad’s Wild Ride.
Even so, after Tuesday’s market action – which saw the Standard & Poor’s 500 Index rebound from a 12-year low to gain 6.4%, and the Dow Jones Industrial Average jump 5.8% – many investors are no doubt wondering if it’s time to pile in.
It could well be. But then again, it just as easily could be a precursor to another financial drubbing – the kind of bear-market “head fake” that I’ve correctly warned investors against on a number of…
12Mar2009 | Money Morning | 0 comments | ContinuedWhy Today’s Bull Market is Tomorrow’s Bear Trap
Depending on your perspective, U.S. equities are either at the edge of another cliff or at the dawning of a new bull market.
We could make the case for either. But in as much as that would be an interesting exercise, the more relevant question is what the data suggests.
Let’s take a look.
Since their 52-week highs last October, the Dow Jones Industrial Average Index has lost 18.5%, the S&P 500 Index is off 18.2% and the Nasdaq Composite Index has fallen 15.1%. At the same time, the broader U.S. economic picture has darkened considerably with gross domestic product (GDP) a slim…
13Aug2008 | Money Morning | Comments Off | ContinuedHow Will We Know the Credit Crisis and Banking Fiasco Are Truly Over?
How will we know the credit crisis and banking fiasco are truly over?
We won’t.
But there’s a damn good indicator that will show us the way – the London Interbank Offer Rate, usually referred to as LIBOR.
And right now LIBOR tells us that this financial mess still has room to run.
As indicators go, recent developments have demonstrated that the LIBOR system is arguably corrupt. Until now, LIBOR always has been constructed by industry insiders – with little in the way of oversight or regulation. It drives billions of dollars of trades and transactions a day. And it’s publicly available at 11:30…
12Jun2008 | Money Morning | Comments Off | Continued
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