MARKET COMMENT
December 2, 2008, courtesy of Dave Fry at ETF Digest
Not only is it a Mad Mad Mad Mad World, we also got the Big W today as well. Stocks rose sharply early, fell abruptly by an almost equal amount only to be propped into the close. It’s volatility on steroids combined with desperate “stick saves” by the powers that be.
Major indexes made back a third to half of yesterday’s decline.
If you’re an average investor you just look at all this craziness and want nothing to do with it.
Volume was a little higher than yesterday while breadth was positive but not a 90/10 day. Our man in Geneva provides us with the data.
A really sloppy market propped higher by vested interests for their own purposes. Sometimes you just have to step aside and let them have at it. I was day-trading today and didn’t do well given the abruptness of the two-way action.
Wednesday we get more employment data from ADP plus ISM and Beige Book reports. It seems bailouts for the auto industry are imminent although doing so would be a mistake in my opinion. Let them file for bankruptcy, reorganize and restructure union contracts to reflect economic reality. Then the court appointed master could fire management.
As to major stimulus plans for infrastructure projects I was struck by a comment read today attributed to Queen Elizabeth I who in roughly 1560 stated, “All public works projects were invitations to patronage, bribery, price gouging, creative bookkeeping and theft.” Sounds like she was on to something.
We continue to lie in the weeds and wait for a sign to safely enter positions either from a short or long perspective. Cash can be boring but our time will come if we’re patient and disciplined.
Have a pleasant evening.
Disclaimer: The ETF Digest has no positions.
