S&P 500 -- one year
This week may be the breaking point with the apparent breakup of Lehman. Upon a break up, there may be a relief rally in the markets, however more dreary from other major financial players will not stop coming.
•Banks, Brokerages Prepare for Possible Lehman Bankruptcy Before Midnight
The S&P 500 FINANCIALS INDEX has been in a fairly narrow sideways channel for a couple of months, taking all the negative news very well. After dropping early last week, it remained flat near 280. The Alerian MLP index had a very tough week, with a relief rally on Fri. REITs, also beaten up a lot in recent times with some yielding in double digits, was up a little last week. The junk bond funds still, can't get no respect. They fell back again last week sending yields towards 13%, a whopping 900 basis point premium over the Treasury bond.
We are in Sep, toughest month for the markets followed by Oct which is known for the most memorable market days.
Last night while working on my friend's computer, she was away working, the very fraidy cat came out to see me. He was only about 8 feet away, generally he hides under the futon. His mother is in the background, is also a fraidy cat but has learned to accept me. Maybe all this brave behavior by both cats should be inspiring. However, they're not involved in trying to figure out what should be done with Lehman. After that is Washington Mutual (WM). Then maybe American International Group (AIG). And Merrill Lynch (MER) doesn't seem far behind.
I'm a little afraid at these times, preferring to continue to keep my powder dry. If I had to bet, I would bet the immovable object (S&P 500 line) will move downward.
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