What a week we had in the stock market. On Monday the DOW fell 733 points to start off the week and dropped another 127 points on Friday to end the week. The good news is that the the Dow is up over 4% for the week. Go figure.
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That’s right, some how the markets were up even with all that going on. This past week has shown us the intensity of volatility in the markets. I have to say that this was a great week for people who rode out this roller-coaster ride in one of two ways.
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If you were one of the many that didn’t know what you should do with all the “The Sky is falling” news and figured that you don’t need any of your investment money. You decided to just let your money sit where it was at and ride it out. If you were properly diversified you most likely did pretty good. Most of the sector and different markets came out ahead for the week (Friday to Friday). Being diversified is what it’s all about if you want to stay afloat for the rough times so you can maximize your return over the long haul. I commend those of you that are prepared.
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The other way is if you knew what you were doing throughout this period of six trading days and saw the writing on the wall each of those days and at different times of the day. You most likely made a killing. The volatility was off the scale. With days that had over 500 point swings, it was easy to be able to pick up some broken stocks (of not-broken companies) and watch as the investors got back into them after they were oversold. Waiting for those quick returns of 5-10% gains. In some cases, there were returns of 30% a better.
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Throughout the week there was a lot of news as well as action to keep one busier more than one would care to be, but I found it very educational. I do have to say that I’m glad that it’s over.
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photo by ken ratcliff
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That’s right, again the markets dropped even more today. At this rate we’re going to be down to the market levels of 1995 in no time at all. As a matter of fact it’s been more like a roller coaster ride all day long. The day ended 191 points down for the day.
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The markets opened flat and within the first minute of open trading it fell nearly 200 points. From there it turned around and worked it’s way being up 170 points. All that happened in the first thirty minutes.
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This morning the Federal Reserve along with several other central banks from five other countries lowered their fund rate by fifty
basis points. This is something that has never happened before and you will most likely see again in your lifetime. One would think that this would stimulate the markets to rally and help the economy. Unfortunately that wasn’t the case, instead the market are showing that they don’t know what to make of it. Part of the reason may be because of the banks don’t trust each other. They don’t want to lend money to one another at this time. I understand why they do this, I wouldn’t be lending money to anyone who has shown irresponsibility with their finances. Ive heard of creative financing, but what these entities have done recently is ridiculous.
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The markets have been going up and down in today’s trading that shows the uncertainty in the economy. The swings have been big, moving as much as 400+ at several times throughout the day. The DOW crossed yesterday’s closing threshold six times going from positive to negative and back again.
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The only silver ling that is out there is the Powershares UltraShorts. Most of them have climbed more than 50% in the last five days. I not sure if there will be any more gains from these stocks that I would want to put money in at this time. If you’re a day
trader and have the ability to jump in and out of the stocks within the same trading day then you could make a killing in the volatility that has been going on today.
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It was only a matter of time that the Dow would drop below 10,000 points. Shortly after 10:00 this morning the DOW officially fell below 10,000 level. To make matters worse, it’s getting to the point that traders on the floor aren’t even trader between each other. By the afternoon trading, the only participants are the sellers. The confidence in the markets are non-existent.
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The markets have entered the same levels that we were at in 1998-1999. If you were in a IRA or 401K for the last ten years, you’ve gained nothing for all that time (please don’t shoot the messenger).
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Hedge funds are selling their interest to save any capitol they can. I’m sure there will be a lot of hedge funds that will close their doors after this horrible week. They are running around trying to save whatever assets they can. The markets are oversold and doesn’t seem like many people are jumping back in, which tells me that it just going to get worse. The short-selling ban is suppose to be lifted this week, but it’s still may be extended. If it expires, the markets will drop much more.
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No one is safe from this recession that we’re entering and I don’t see an end to it soon. Every sector has taken the hit today, there are a few winning today but they are far from being big. If anything is to be the silver lining, it’s oil that finally fell below $90. Who knows where it will go from here, but I won’t even try to guess.
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I will say that we need to continue to sell into any rally and preserve capitol as best as possible. if you hedge your investments with shorting then you obviously know what you’re doing. I’m going to wait a little and see what will happens.
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