The market is never boring! The Dow sold off 1.2% on the week. I expect fireworks on the last day of the quarter on Monday. I am still very comfortable having bearish bets on the financials and home builders. It seems that everybody wants to call a bottom but the massive deleveraging that is taking place in the economy will take years to unwind. I will admit that the steps the Fed has taken in the last few weeks appears to be helping.

- BA

The financial markets had another volatile week, started with Monday’s follow through on the Bear Stearns news. The VIX was back up to 35, the S&P 500 & DJIA tested their January lows around 1275 and 11,750 respectively.

That was followed by 4% moves to the upside, but alas, that was on lower volume than the previous day. So it did not surprise us when the market took back most of those gains the next day. Thursday ended the holiday shortened week with another triple digit up day, but this time with the triple witching effect of futures and options expiration, the volume was strong.

The week ended with the DJIA and the S&P 500 stopped by their 50 day moving average. The VIX on the other hand was being held up by its 50 day moving average.

We continue to be in a trading range that has a short term upward bias, but is still part of a longer term down trend.

- JD

Just before the market opened today news broke that Bear Stearns (BSC) was having some liquidity problems, but the FED was going to help JP Morgan (JPM) with a bailout. This could not be good news I thought, but the market on the other hand, actually opened up.Its too bad I was watching CNBC at the Gym, because you actually had about 15 minutes before the market reached the same conclusion. Plenty of time to buy a few puts or put on a Bear Put Spread. In the end that news took out half of Tuesday’s big gains. The stock market seems to be back on its downward journey, dropping another 2% today.

We’re closing in on the low end of the current trading range again. This time, I would not be surprised if support does not hold. Next week could be an eventful one.

JD

The DJIA was up over 400 points today, 200 of those right from the start. The 3 1/2% gain was the largest percentage daily increase in 5 years. The S&P 500 was up slightly more, and the embattled Small Caps represented by the Russell 2000 were up over 4 1/2%.The FED announced that it was going to add considerable liquidity to the financial markets. Apparently they liked what they heard. We will see if we can bust through resistance at 12,200 for the DJIA and 1325 for the S&P 500 tomorrow…or if this just provides another opportunity to sell.

- JD

The stock markets are closing in on the January intraday lows. They are well past the end of day lows from two months ago. This time around, there doesn’t seem to be a bounce in sight. We will see how well support holds tomorrow.In the last week the only things that seem to be going up (besides inverse stock funds) are bonds, currencies (you might call these inverse dollar funds), and oil (another record high). Even recent high fliers like gold and grains are taking a break after last week’s insanity in the commodities markets.

It’s so volatile in the bond markets, Bob needs a couple days off just to regain his sanity.

-JD

The DJIA joined all of the other major indices in falling below its lowest weekly closing level in a year. A poor jobs report was the culprit this time. The market is now ‘hanging’ in the middle of nowhere.

The bad part about yesterday was the fact that the market gapped down, and then just hung around in that area the rest of the day. There wasn’t really a bounce, and there wasn’t really any follow through after the fall. The DJIA is likely going to drift lower to support at the 11,600 level. Only time will tell if the big players decide if that’s an area where they can find enough value to start buying again. - JD

The stock market was knocked down again today, just like it was on Tuesday, but this time it did not get back up again. The DJIA is now virtually sitting on its January low closing level. The S&P 500 actually snuck a little lower. The Nasdaq has made it down to its intraday low. It does not look very good for the financial markets.The catalyst for this move was the news of record high mortgage foreclosure rates. If we blow through this support level tomorrow all bets are off. I don’t think the market is ready to start singing Chambawamba’s Tubthumping yet. It may not be too late for you to put on some bearish option strategies.

- JD

Call for unusual actions. I don’t know the solution to what ails this market. I am not that smart. But I do believe its time for the Fed to stop saying one thing and then doing the opposite. They have always said that their policy was a strong dollar while the dollar is down close to 40% this decade. Oil was up 5 dollars today. Gold is approaching 1000. Ag’s are on a tear. Credit markets are in chaos. The yield curve was steeper(again) today. The Fed needs to think “outside the box” as the chairman likes to say when he proposed the ludicrous notion for banks to reduce the principal on mortgages. Its time for the fed to physically support the dollar. - BA

The stock market headed south right out of the gate today but managed a strong comeback in the last hour. In the end, the Nasdaq managed the keep its head slightly above water, while the DJIA and the S&P 500 did not quite make it back to yesterday’s close. This test of January’s closing lows resulted in a Hammer candlestick. In an oversold market this often means its time for the market to take a little bounce. We will need confirmation tomorrow to see if the bulls have managed to take control of the markets. A failure here and we could be in for some heavy selling.

- JD

It was a good day to have made it a long weekend, but I would not have guessed that going in. We had another Doji candlestick only 3 days after the last one. The big difference, this one was at the bottom of the trading range, while the other was at the top.It did not help the stock market that commodities were strong again today, in particular both gold and oil. Inflation fears are still with us. That being said, the optimists held off the bears for at least another day. It’s more likely that we just had a short covering rally. We’ll wait to see if they can turn the market around.

- JD