Stocks were down today, ending a very bad week (Dow & NAZ down over 4%). Today Dow was down 64, decliners over advancers 3-2 but NAZ was up 12. The afternoon saw the lowest prices, traders did not want to hold positions over the weekend. I was surprised that good news about the economic package did not translate into buying. Worries about a recession & more bank problems (i.e. mortgage-backed bonds) were key today, banks & REITs were weak.
Bank of America (BAC) is a favorite of mine. At the low, the stock went below 34 just a few weeks ago & then rebounded 12 points. That's a lot of correction in a very short time. In the last week, the stock has pulled back 4 to 42. The markets are not in good shape when one of the country's leading banks goes thru this kind performance. VIX, the volatility index, is at 28, a very high number telling us that more very big bounces are ahead. Next week, recession & bank loan problems may be the main worries in the stock market.
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