Comments on: MARKET WRAP – STOCKS RECOUP LOSSES

By: Tom

Tom — Fri, 30 Oct 2009 11:55:50 +0000

I think the focus has changed from earnings to the economy. Expectations for the economy have also changed with the announcement of positive GDP growth. My guess is that investors will be looking for confirmation that the expansion is continuing, and that “less bad” is probably not good enough anymore. I think the risk is to the downside, since the market has largely priced in a recovery, but is vulnerable to economic news suggesting the recovery will disapoint.

By: Rob

Rob — Fri, 30 Oct 2009 01:01:05 +0000

My question is that yesterday sentiment was very negative. Many were calling for a correction. Monday there was a major mid-day reveral. IBD turned negative on the market yesterday. The bears like Rosenberg were out in force. I was told that Art Cashin said on CNBC this morning that yesterday was at risk of being a down 800 point type day. The bears were yearning for 1929 today.

Yesterday the market steadily fell all day (no big up or down movement just a steady trend down), supposedly of relatively heavy volume. Today the market started the day up slightly and steadily rose all day erasing yesterday’s loses on the S&P 500, more than easing the losses on the Dow and fell short of erasing the loses on the NASDAQ.

Yesterday was the biggest move down in months and today was the biggest move up. On the face of it they cancel each other out. VIX spiked and the de-spiked. What is the opinion? Is this a turning point or just more noise? Are we now on a clear path to Ken Fisher’s prediction of a 20% move up by year end. (By the way he thinks that by July 2010 the market might get back to the 2007 highs. 16 months down and 16 months up – an perfect V).

Nominal GDP was really not much better than expected. The deflator was lower than expected which increased the real GDP calculation. Is that good? A deflationary level on the GDP deflator? Or was it the decrease in unemployment that moved the market? Or PG’s results? Or the alignment between Venus and Jupiter? Did GS change there forecast of GDP from 3.0 to 2.7 yesterday just to get the sellers out in force so they could buy, buy, buy? And the sell, sell, sell, today?

Break out the lithium.

By: Aki_Izayoi

Aki_Izayoi — Thu, 29 Oct 2009 21:59:53 +0000

“Are you still in the camp that stocks are dangerous here and expecting a correction before year-end?

Today was practically a mirror image of yesterday. I wonder if today really changes sentiment
”

I do not know about sentiment, but as we all learned during the rally, the labor market is not the stock market. A crappy labor market does not lead to a bearish position in the stock market. The real economy will remain bad… everyone knows that and holding that general position isn’t “contrarian.” The real question is sentiment. Generally people who have to deal with a crappy labor market would be glum, but what about financial market participants?

By: Henry

Henry — Thu, 29 Oct 2009 21:02:11 +0000

I do wonder how many join the short camp yesterday just to get whupped today. Today jump is very bullish…
As for the last couple days, it drops on better than expected earning…

By: Rob

Rob — Thu, 29 Oct 2009 20:38:08 +0000

TPC,

Are you still in the camp that stocks are dangerous here and expecting a correction before year-end?

Today was practically a mirror image of yesterday. I wonder if today really changes sentiment.