Things may be getting really scary on the global financial scene, but always remember to smile no matter what happens.
JANUARY 25, 2008: The nascent 2-day rally could not make it a third day as all 4 major indexes staged a ‘bearish reversal’ but pulled back in lighter volume. The Nasdaq started out strong but lost 1.5% and was down 0.6% for the week. It’s hard to believe that the Fed did a ’shock and awe’ surprise rate cut of 3/4% this week. This is an indication that we are in a severe correction. Credit concerns got the blame again today for the fall. The light volume today may be due to traders staying on the sidelines ahead of next week’s Fed meeting where they are widely expected to cut rates further. Transports, fertilizers, and solar stocks were strong today. Finance, retailers, and computer related stocks were weak. Some leaders were SPWR +6%, MTL +7%. Notable losers were YGE -5%, RIMM -4%, AAPL – 4%. This latest rally has the feel of ’short covering’ and is by no means a signal to jump back in the markets. Bear market rallies can be sharp to the upside and come back down even faster. It’s best to wait for a ‘follow-through’ day before committing money to the long side of stocks. More info at www.goldenticker.com
