Friday, December 19, 2008

Auto bailout rally fizzles

Stocks could not hold on to early AM gains. Dow ended down 26, advancers were about 25% ahead of decliners & NAZ rose 12. The Alerian MLP Index fell back 2¼ to 174½. It's been trying for 2 weeks to crack 180, but couldn't break thru that ceiling. The Dow Jones REIT Index had a good day, gaining 7½ to almost 148. Junk bond funds also attracted buyers in contrast to JNK which was down pennies. Those ultra high yields are attracting nibblers.

Oil can't buy friends any more as it sinks to levels last seen 5 years ago. The gloomy thoughts about a worldwide recession keep buyers away.

    CLF09.NYM..Crude Oil Jan 09...33.87 ..Down 2.35

    Federal regulators are getting ready to monitor the auto bailout package. Let's hope they know what they are doing.

    Retailers are already preparing for a grim future. Prices are being slashed to attract buyers. One clothing store has a sale: buy one, get two free. Retailers want to sell as much as possible before the holidays because they fear post holiday business to be awful. In addition, they dread more returns in which shoppers will want cash.

    The Madoff scandal goes from bad to worse. Now they are tracing it back over 30 years, wondering what happened to checks along the way. The new administration will push for more regulation, something Wall Street is never happy with.

    Madoff Misconduct Said to Date Back to 1970s as Client List Reached 4,000

    The major sort of good news was the VIX. It started the day by plunging 7 to 41. As enthusiasm over the auto bailout waned & then the markets waffled near break even it crept back up, closing down 2 at 45. Increased fears surfaced in the PM


    Anonymous said...

    Seems like fear and panic are leaving the marketplace.

    Avi said...

    Note VIX shot up from a low of 41 to 45 on Fri. 45 remains an extraordinarily high level.