Market Commentary

Another week of big swings in thinly-traded markets.  There is a trading range in the S&P 500 where the bears defend the top (1295) and the bulls defend the bottom (1260). So far, no one is winning. Let's see which way things break; though a short-term move down here wouldn't surprise me.

Historical patterns show a year-end rally typically starts in late September or early October. The 4-year Presidential cycle pattern also favors a year-end rally.

Here are a few of the posts I found interesting this week:

• Lehman in urgent talks to secure a capital injection before earnings call (UK Telegraph)
• Worker Confidence sinks to levels of last recession (WSJ)
• Nightmare on Wall Street: Why the Credit Crisis has lasted so long? (Economist)
• Candidates on the Credit Crisis (Dash of Insight)
• Does history favor Democrats' economic plan? (NYTimes)
• Victor Niederhoffer on why the Markets continue to surprise him (Daily Speculations)
• A positive sign for markets: 64% of stocks above their 50-day averages (Bespoke)
• Is the "Bearish Crescendo" a contrarian sign of a market Bottom? (Shaeffers)
• Ten factors that contribute to Market Mood Swings (Seeking Alpha)
• To make a stock "pop" – Innovate (NYTimes)

And, a little bit extra:

• Great Photos from Beijing Olympics (Boston Globe, LA Times, Time, FT,The Star, S.I.)
• The Business of College Football is probably Bigger than you think (Forbes)
• Does it Matter that Internet Traffic is beginning to bypass the US? (NYTimes)
• Interesting comparison of housing market price declines in various cities (Bespoke)
• Obama's acceptance speech for Democratic Presidential Nomination (Politico, Many Eyes)
• Air-Ball: Game Ball Delivered by Parachute; Skydivers land in Wrong Stadium (Inquirer)
• Microsoft releases beta of a major new version of Internet Explorer (WSJ, Microsoft)

Another week of big swings in thinly-traded markets.  There is a trading range in the S&P 500 where the bears defend the top (1295) and the bulls defend the bottom (1260). So far, no one is winning. Let's see which way things break; though a short-term move down here wouldn't surprise me.

Historical patterns show a year-end rally typically starts in late September or early October. The 4-year Presidential cycle pattern also favors a year-end rally.

Here are a few of the posts I found interesting this week:

• Lehman in urgent talks to secure a capital injection before earnings call (UK Telegraph)
• Worker Confidence sinks to levels of last recession (WSJ)
• Nightmare on Wall Street: Why the Credit Crisis has lasted so long? (Economist)
• Candidates on the Credit Crisis (Dash of Insight)
• Does history favor Democrats' economic plan? (NYTimes)
• Victor Niederhoffer on why the Markets continue to surprise him (Daily Speculations)
• A positive sign for markets: 64% of stocks above their 50-day averages (Bespoke)
• Is the "Bearish Crescendo" a contrarian sign of a market Bottom? (Shaeffers)
• Ten factors that contribute to Market Mood Swings (Seeking Alpha)
• To make a stock "pop" – Innovate (NYTimes)

And, a little bit extra:

• Great Photos from Beijing Olympics (Boston Globe, LA Times, Time, FT,The Star, S.I.)
• The Business of College Football is probably Bigger than you think (Forbes)
• Does it Matter that Internet Traffic is beginning to bypass the US? (NYTimes)
• Interesting comparison of housing market price declines in various cities (Bespoke)
• Obama's acceptance speech for Democratic Presidential Nomination (Politico, Many Eyes)
• Air-Ball: Game Ball Delivered by Parachute; Skydivers land in Wrong Stadium (Inquirer)
• Microsoft releases beta of a major new version of Internet Explorer (WSJ, Microsoft)

The Markets are up, but relatively trendless.  Yes the recent lows have held, and I'm seeing higher lows (and that is a bullish sign).  However, recently, the thing to note has been the markets' volatility.  For the Dow, there have been seven 200-point up or down days and two 300-point up days … but in that time, the Dow is only up 36 points. It is tough to hold trades overnight in this type of trading environment.  Going home bullish or bearish hasn't led to peaceful sleep lately.

Here are some other stats to ponder.  First, 300-point rallies are pretty normal during bear markets (and in the beginning of new bull markets).  Also, It is quite normal to have intermediate term rallies in bear markets that last 2-3 months. The last one lasted 2 months; but only had narrow leadership in the Commodities.  This time the leadership is much broader (most everything, except Commodities).

Also this week, the Fed held rates steady, and the US Dollar Index now trades above its 50-day and 200-day
moving averages, signaling a breakout from its five-month trading range.

Here are a few of the posts I found interesting this week:

• IPOs at 5-Year Low, Worldwide (WSJ)
• Wharton Finance Professor, Jeremy Siegel Calls a Market Bottom (Morningstar)
• Rackspace IPO loses 20% on first day of trading (WSJ)
• President Bush: "Wall Street got drunk"…"and now it's got a hangover" (Wall $t. Folly)
• Does the 4-Year Presidential Cycle have predictive power in the markets? (CXO Advisory)
• Too many ETFs, too little volume; the weakest are closing (Bespoke)
• Crisis Averted: Improvisation is one thing, Policy is another (NYTimes)
• Foreign money buying US properties at deep discounts (NYPost)

And, a little bit extra:

• Big Brother is watching: Apple shuts down "I Am Rich" Application for iPhones (Download Squad)
• Innovations show how water-starved countries could solve their food crises (NYTimes)
• At $6BB spent, Olympic Security is No Game; but they do ride Segways (BusinessWeek)
• Twitter's micro-blogging success suggests I'm old, because I still don't get it (Fortune)
• Caffeine Myths De-Bunked; go get a cup of coffee (NYTimes)

The Markets are up, but relatively trendless.  Yes the recent lows have held, and I'm seeing higher lows (and that is a bullish sign).  However, recently, the thing to note has been the markets' volatility.  For the Dow, there have been seven 200-point up or down days and two 300-point up days … but in that time, the Dow is only up 36 points. It is tough to hold trades overnight in this type of trading environment.  Going home bullish or bearish hasn't led to peaceful sleep lately.

Here are some other stats to ponder.  First, 300-point rallies are pretty normal during bear markets (and in the beginning of new bull markets).  Also, It is quite normal to have intermediate term rallies in bear markets that last 2-3 months. The last one lasted 2 months; but only had narrow leadership in the Commodities.  This time the leadership is much broader (most everything, except Commodities).

Also this week, the Fed held rates steady, and the US Dollar Index now trades above its 50-day and 200-day
moving averages, signaling a breakout from its five-month trading range.

Here are a few of the posts I found interesting this week:

• IPOs at 5-Year Low, Worldwide (WSJ)
• Wharton Finance Professor, Jeremy Siegel Calls a Market Bottom (Morningstar)
• Rackspace IPO loses 20% on first day of trading (WSJ)
• President Bush: "Wall Street got drunk"…"and now it's got a hangover" (Wall $t. Folly)
• Does the 4-Year Presidential Cycle have predictive power in the markets? (CXO Advisory)
• Too many ETFs, too little volume; the weakest are closing (Bespoke)
• Crisis Averted: Improvisation is one thing, Policy is another (NYTimes)
• Foreign money buying US properties at deep discounts (NYPost)

And, a little bit extra:

• Big Brother is watching: Apple shuts down "I Am Rich" Application for iPhones (Download Squad)
• Innovations show how water-starved countries could solve their food crises (NYTimes)
• At $6BB spent, Olympic Security is No Game; but they do ride Segways (BusinessWeek)
• Twitter's micro-blogging success suggests I'm old, because I still don't get it (Fortune)
• Caffeine Myths De-Bunked; go get a cup of coffee (NYTimes)