MARKET COMMENT

November 10, 2008

Friday after the close stock futures rallied mightily and I posted that image for subscribers on Sunday. Something was up, as in someone or some group had some inside information and was running with it. The 5 minute chart below is Friday’s NASDAQ futures which included the ramp 30 minutes before the close and thereafter. That was a large 5% move with much of it on heavy volume.

That made me think a Sunday Surprise was in the offing once again. What could it be? AIG was going to report earnings before the bell vs after the close. That was suspicious but in after hours trading not much was going on there. [It turned out, they just needed more money. Well, of course they would…silly me!]

There were some rumors were circulating regarding a sudden Fed interest rate cut. But that wasn’t it.

No, it turned out a massive $500 billion plus Chinese stimulus plan was announced [who knew?] and that got Asian and European markets pumped-up after the US ramp higher. Now I wonder who was front-running that news? This is the kind of crap going on with markets leading to more mistrust of insiders as they play with news and a different set of rules than the rest of us peons.

Leading to more mistrust is this unbelievable story from Bloomberg reflecting how the Fed is not willing to reveal what type of assets they’re taking in that may comprise a numbing $2 trillion.

Well, it turns out that despite everyone getting all jiggy shills buying into the opening gap today were screwed while the pump monkeys sold them their acquired stock–that old “pump and dump” shtick.

Enough of all that, let’s check out the action today.

Volume was very light and breadth negative.

And here I thought we were the only ones with website problems. Looks like StockCharts has some of their own going all the way back to noon.

Okay, so we got the big stimulus package from the Chinese and no doubt that was the rumor that sent futures skying on Friday late and on into the opening today. Folks got anxious and jumped to long positions. They must not be pleased tonight.

ETF Digest Sacred Cow VII advises, “You don’t need a PhD to make money in the markets…” This reminds me of the news today that Nobel Prize winner Myron Scholes froze the assets of his hedge fund Platinum Grove Contingent Master Fund given fund redemption issues. Of course Scholes was heavily involved in the Long Term Capital Management debacle as well. While winning a Nobel Prize is cool and everything, batting 0-2 will not win him many new clients. Truth be told, all these guys seem to resurface down the road.

The week is young and volume today was light. Tomorrow is a semi-holiday and not much news is expected until retailers start making reports. While the action must have disappointed a lot of investors anxious to get going there were some bright spots in overseas and commodity markets.

Let’s see what happens.

Have a pleasant evening.

Disclaimer: The ETF Digest has no positions in any of the featured markets.

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