Today the Dow closed up over 900 points or 10% today. Other indexes (S&P and Nasdaq) were up over 10% as well.
GM & Chrysler are asking for $$$. Ford as well.
Consumer confidence hit a new low today. PLUMMETING well below market forecasts, yet the market finished up significantly. This is nothing short of ludicrous to me. The consumer is 70% of the economy and we haven't seen them pull back like this, without a CONSUMER stimulus package, in AGES. Things are going to get worse before they get better.......Just my 2 cents.
The Fed started their meeting today. They'll announce their rate cut tomorrow. If they don't announce a cut to 1% on the Fed Funds Rate the market will sell off. I have posted two graphs of the S&P 500 at the bottom of this email.
While today's move of 90 + (10%+) on the S&P 500 was a HUGE move I haven't seen the market close above, and then stay above, the 20 day moving average in ages. Once a stock or index moves above such a threshhold they typically pop up some more and then re-test going below the average, on the upswing (bullish cycle.) The market still has 32 points to get to the 20 day moving average from the chart below. I'll get more optimistic once the market gets above and then stays above that average for another 30 days. By then the market might have a chance to make a run at a longer-term bearish indicator like the 20 week (100 day) moving average. The 20 week moving average is still NOTABLY higher at 1188 but moving downwards quickly.
The Bottom Line: I think this downtrend is still in full effect for the time being. I will sit on the sidelines with my "powder dry." I don't see a reason to put a bunch of my 401k to work and take it out of money market funds right now....