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It another roller-coaster day! The market was encouraged in the morning by GE‘s promise to keep its dividend and traded higher in the morning. By lunch time, the momentum started to turn. The market was also discouraged by the auto sales numbers in November and briefly went into the red with about 2 hours left in trading. However, with all the bad economic news, the market somehow bounced back and closed with solid gains.
Much attention is on the 3 major auto makers and their newly reconstructed business plans being sent to Congress in order to hopefully convince an approval on “bridge loans”. General Motors (GM) is asking for $18 billion total, $4 billion by the end of 2008. Chrysler is looking for $7 billion in government loans, and Ford (F) is seeking $9 billion “line of credit”, stating that it may be able to survive on its own, provided that the other 2 companies of the “Big Three” survive as well. Here’s something funny: “Ford CEO Alan Mulally, GM CEO Rick Wagoner and Chrysler chief Bob Nardelli all planned to road-trip to Washington in fuel-efficient hybrid cars for hearings on Thursday and Friday.” It does seem that the attitudes of the auto CEOs have completely changed. Last time, they all arrived in Washington in their company jets!
Financials led the market in today’s rebound: WFC +10.59%; BAC +11.83%; PRU +11.43%; C +11.94%; JPM +9.23%. Oil dropped again. USO went down 3.48% and crude traded near $47/barrel. RIG lost 4.27% and DO fell 5.37%.
The Dow was up +270 points; SPX added +32.6 points; Nasdaq gained +51.73 points:
XLF (financials) jumped +8.15%. GDX (gold miners) hopped +9.73%. XME (metals and mining) also did well, as coal stocks made solid gains. XLE (energy) added +3.38%, although USO (oil) and UNG (natural gas) were both lower. FXI (Chinese ADRs) advanced +7.36%.
SPX
SPX added +32.6 points to close at 848.81. The daily MAs were down slightly. The MACD went up.
Nasdaq
Nasdaq gained +51.73 points to close at 1449.8. It closed at the 10-day MA, but, the daily MAs slid. The MACD was flat.
Although the market rebounded from yesterday’s sharp sell-off, the daily charts of the market indices still look weak. The daily MAs are pointing down again. We’ll need to see SPX and Nasdaq close above their respective 30-day MA to feel more comfortable. Until we see the 30-day MA turn up, we do not have a bottom! VIX slid down a bit, but, still closed above 60. The sell-off was so strong yesterday, we’ll need to see much more upside to get the market back on track.
Good night and HappyTrading! ™
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