Archives for October 2012

Back in Business

The financial markets in the US reopened today and the day appears to have gone on without a hitch. With month end and mutual fund end of fiscal year, it would have been chaotic had they not. Luckily, the NYSE and NASDAQ have had an awful lot of time to prepare for a natural disaster; but are you ever REALLY prepared?!?!  Kudos go out to their management teams on getting the system up and running while still dealing with the devastation and destruction from Sandy.

I mentioned fiscal year end for mutual funds which occurs on 10/31. That’s a much bigger deal than most realize as funds use holdings and prices as of 10/31 to analyze potential year-end distributions of gains. Many managers have to determine if they are going book profits to balance off losses or just book profits and distribute to taxable shareholders.

The next big event comes on Tuesday with election day. While the stock market has been pricing in an Obama victory for some time, the recent weakness definitely throws a monkey wrench into those celebration plans, not to mention Sandy’s effect. This election looks to be much closer than even the polls are currently indicating.

Hurricane Update Part II

First and foremost, I hope those of you in harm’s way made it through the storm okay and your lives are beginning to get back to some sense of normalcy.

The New York Stock Exchange is scheduled to open at its normal time, 9:30am edt on Wednesday. That’s beyond incredible given the state of devastation in Manhattan, but especially lower Manhattan. I expect the commodities and bond markets to open as usual as well. But I think we all know it will be anything but business as usual.

Leaving the human side out of the equation for a minute, the logistical hurdles for opening the financial markets are impossible to fathom with the subway system full of water, Metro North not running, water still encroaching on three sides of the city, some of the tunnels closed and power outages in Manhattan. It should be an interesting few days with end of month trading and mutual funds fiscal year close on October 31.

As has been the case with all these freak storms, our office luckily came through unscathed and we will open tomorrow as usual. With power at my house still out, I was happy to have somewhere to go to relax, watch tv and get work done. 

The markets are at an interesting crossroad and I hope to have a Street$marts issue out this week.

Hurricane Update

As you may already know, the financial markets are closed today and are expected to remain closed through Tuesday. The office is officially closed, but I will be shuttling between the office and home as power allows. The best mode to communicate is via email. We have several internet providers and while we expect to have at least one always functional, it can never be guaranteed. If the storm is worse than expected locally we will operate from a satellite location when the markets reopen this week.

Above all else, please stay safe as the storm bears down upon us. Our thoughts and prayers go out to all those in harm’s way.

Plan for the worst and hope for the best!

Are the Bulls Ready to Resume Control?

After Friday’s carnage, the bulls fought off early weakness and pushed stocks to close at their highs around the flat level. Is the decline over? Anything is possible, but I continue to see more downside ahead with all major indices breaking their recent lows. A pre-election low remains in the cards and that would really catch folks off guard!

25 Years Ago…

I remember calling my parents from college when I heard the stock market had crashed 22.6% in a single day. My father had literally just opened another brokerage firm and even I knew this wouldn’t be good. I remember him telling me that it was the BEST time to open a new firm since they hadn’t brought clients over and built their book up yet.  So not many folks were unhappy!

I remember a buddy of mine who traded for a living teaching me about how the whole financial system was broken. The stock market was not trading at the levels that the underlying derivatives suggested and the key providers of liquidity and stability were rendered impotent by this disconnect. The morning after the crash, my buddy showed me how the Dow should have been another few hundred points lower. It was at that moment, he dove in and bought with both hands, selling out by the next day for a year’s worth of gains.

Stocks fell hard on October 19, 2012, but nothing compared to 25 years ago. An equivalent decline would have been almost 3000 points today! Today’s carnage was interesting and I think there is more to come, even if we see a bounce first. A good buying opportunity is coming for those who are patient…

Separating the Election Nonsense from Reality

Here is the latest Street$marts:$marts20121015.pdf

New Highs Now or More Weakness First?

In the last Street$marts, I opined that the stock market should see at least another new 2012 high this year, but that we were long overdue for a pullback and a 2-8% decline should begin shortly.

So far, all we have seen has been a 3% decline and many folks wonder if new highs are next.  I think the healthiest thing would be for stocks to decline below the levels we saw last week and then mount an assault higher.  That would set up a much better foundation for a rally and perhaps begin to fix the canary problem with the semiconductors and transports.

I Guess Yelling is OK

It’s not often that I am part of an interview where guests yell and I do to!

Here is the video from the CNBC segment the other day on the Fed’s QE Unlimited.

The next Street$marts will be out shortly with a long article on the Fed, ECB and BoJ’s money printing experiments.

CNBC’s Closing Bell at 3pm Today

Going to be on CNBC’s Closing Bell today at 3pm discussing our market outlook for the 4th and final quarter of 2012 along with some comments on Ben Bernanke’s “big” speech earlier today.

We will have an extended article out this week on the Fed’s QE Unlimited and what it all means and if you should even care.