Beware: Markets Are Confused Right Now
Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/SAsXxx8HrFk/16014Posted on Wednesday, April 29th, 2009 | In Market Commentary
”Despite the bad news the market is confused,” says Crisis Strategy Alert senior analyst Charles Delvalle.
On Monday the futures were down over 80 points. Yet somehow, the market ended the day in the green.
Then yesterday, the Dow futures were down over 100 points. So how did the Dow Jones recover most of the losses and end down less than 10 points?
The bulls aren’t happy. And neither are the bears. For once, both camps seem absolutely befuddled. But here at Notes, we think it’s only a matter of time before we see a big move happen.
Echoing Charles’s sentiment is Jack McHugh, writing at The Big Picture…
Divining a directional change in market prices is tricky, even foolhardy, but perhaps the market leadership names will be instructive. Ever since the great bear market of 2007-2009 began, it has been led by the financial stocks. No matter which direction Mr. Market has chosen to wander, it has been the KBW bank index that has fallen hardest or soared the most. Falling more than 85% into March, the BKX rose just over 100% into mid April. But, while the other averages have been marking time, the BKX is now down 16% since its April 17 high.
No matter what our government says about the true health of bank balance sheets, the real stress test for the U.S. stock market lies in what happens next to the BKX. I have a feeling the major averages will start following the banks should they continue moving lower, but who really knows? The safest prediction I can make is that the S&P 500 won’t be hanging around 850 much longer.
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bank balance sheets, bank index, Charles Delvalle, contrarian profits, Dow 30, Jack McHugh;, Market Commentary, Sp 500, United States
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