Farewell Financial Bear Raids - Cramer’s Mad Money (10/14/08)
October 14, 2008
Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Tuesday, October 14.
Farewell to financial stock bear raids Cramer told viewers. The Treasury Department’s new protection plan finally puts an end to this devastating, but legal, practice. Cramer said the market was able to hold onto most of its gains on Monday because the possibility of another Great Depression was taken off the table. He said that the government’s plan to take taxpayer money and invest it directly in banks has finally broken the cycle that has plagued the sector, panicked investors and brought many of the industry’s finest companies to their knees. Cramer described the process in which short-sellers and hedge funds targeted banks and destroyed them. By using unregulated credit default swaps, short-sellers were able to create unsubstantiated fear in a stock. Once the fear took hold, the short-sellers would exacerbate the situation using naked shorts and puts to lower the stock price even further at very little cost to them. With stocks under heavy pressure, rating agencies were forced to lower ratings, causing media speculation and eventually banking customer panic. Cramer said the Securities and Exchange Commission’s prior moves to ban short-selling on financials didn’t go far enough to prevent the credit default swaps from being used to spread fear. However, that has changed with the government’s new rescue plan for financial companies and its huge influx of capital. Cramer said short-sellers now have to once and for all cover their positions and leave the financials. "The financial stocks no longer have a bulls-eye on the them," he said. "SEC-endorsed bear raids are a thing of the past."
Farewell Financial Bear Raids - Cramer’s Mad Money (10/14/08)
Stocks Can Not Hold a Bounce from Extremely Oversold Conditions
October 14, 2008
Once again stocks show their true colors in higher volume. The stock market continues its extreme weakness as traders failed to keep stocks above water. No matter what the world governments will try to do to prop up the markets they will fail. Markets can not be helped, the natural cycles of the economy will continue to happen and there isn’t anything our government can do to fix it. Rather than price fix, governments should stand out of the way and let true Free Markets work. Our … [visit site to read more]
Stocks Can Not Hold a Bounce from Extremely Oversold Conditions
Bond Markets: Volatile and Weak
October 14, 2008
Brett Steenbarger submits:
(click charts to enlarge)
A recent article pointed out that bond ETFs are trading at significant discounts to their net asset values in many cases, making them like closed-end funds. While increased volatility in the stock market has gotten most the press, the volatility in fixed income has been equally significant, as we can see among municipal bonds ([[MUB]]; top chart); investment grade corporate bonds ([[LQD]]; middle chart); and 10-year Treasury yields ($TNX; bottom chart).
Bond Markets: Volatile and Weak
Will the Banks Lend?
October 14, 2008
Felix Salmon submits:
The NYT’s lead headline this afternoon was unambiguous: "Treasury Chief Says Banks Must Deploy New Capital". But in 2,300 words of reporting, reaching as far as a run on the Hungarian currency, this is the only mention of any requirement for US banks to start lending:
"The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it," Mr. Paulson said.
Better Picks - Cramer’s Lightning Round (10/14/08)
October 14, 2008
Stocks discussed in the lightning round session of Jim Cramer’s Mad Money TV program, Tuesday, October 14.
Bullish Calls:
Better Picks - Cramer’s Lightning Round (10/14/08)
Market Behaves Sanely - Fast Money Recap (10/14/08)
October 14, 2008
Recap of CNBC’s Fast Money, Tuesday, October 14.
Market Behaves - Citigroup (C)
Market Behaves Sanely - Fast Money Recap (10/14/08)
S&P 500 Largest Intraday Hi/Low Spreads
October 14, 2008
Hickey and Walters (Bespoke) submit:
Of the twenty days since January 1987* that the S&P 500 had its highest intraday high/low range, seven of those have occurred over the last 12 trading days. The only other year that came even close to 2008 was 1987, which had six of the top twenty biggest range days.
click to enlarge
S&P 500 Largest Intraday Hi/Low Spreads
Historical Bull and Bear Markets for the Dow: 1900-Present
October 14, 2008
Hickey and Walters (Bespoke) submit:
In the past, we have just focused on bull and bear markets for the Dow since World War II because the US was still essentially an emerging market prior to then. However, since the current market is unlike anything seen since the early 1900s, we’ve taken the date range back further.
Since the end of World War II, there have only been 13 bear markets and 12 bull markets using the standard 20% rally and decline measure. The average bull or bear since then has lasted 911 calendar days. From 1900 to 1946, there were 20 bulls and 20 bears. From 1929 to 1934 alone, there were 9 bears and 8 bulls, and the average bull or bear lasted just 105 calendar days.
Historical Bull and Bear Markets for the Dow: 1900-Present
S&P 500 Still Two Standard Deviations Below 50-DMA
October 14, 2008
Even though the market rallied 11% yesterday, the S&P 500 is still oversold! As shown below the index remains more than two standard deviations below its 50-day moving average.
click to enlarge
S&P 500 Still Two Standard Deviations Below 50-DMA
Is Earnings Season Bringing Back Recession Fears?
October 14, 2008
Kathy Lien submits:
The feel good factor in the markets was relatively short-lived with the 400 point rally in the Dow Tuesday morning turning into a more than 76 point decline by the end of the US trading session. The US dollar weakened against every major currency but the reversal in the Dow has caused the greenback to recover some of those losses. Given that the Dow saw its largest point gain ever on Monday, a correction would be natural. However, in this fickle and unsteady market environment where investors are not sure how hard they should be pushing the buy button, any significant correction will leave investors extremely insecure about being long stocks.
The currencies that will be impacted the most are the US dollar and the Japanese Yen because continued weakness in equities has been helping the dollar but hurting the Yen.
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