David Moenning

Middle Ground

As we ease our way into the final chapter of 2008, we find that the best five-day move in the Dow since 1933 has bumped the venerable index out of the danger zone on the charts and smack dab in the middle of the current trading range. The reasons for the blast have been discussed ad nausea (Geithner being named, the introduction of the TALF, and the massive new economic stimulus package being developed by Obama’s team) and have left investors feeling a little better about the outlook for the future.

However, this does not mean that stocks are likely to simply bound higher from here as the middle ground on a chart basis often leads to a period of backing and filling as well as a retesting of the lows. But, on the other hand, we can’t dismiss the fact that there could be some performance anxiety-based ...

I’d Like an ‘S’ Please

Although I fully recognize that yesterday’s warm and fuzzy session was sponsored by the government’s latest acronym, I will have to admit that I am less than enamored with the name. Think about it; when Hank Paulson announced the Troubled Asset Relief Program, the name “TARP� made perfect sense. At that time, the plan was to round up $700 Billion of those nasty mortgage-backed securities and hide them under “the TARP� in order to keep the bad assets away from the good assets on bank and brokerage firm balance sheets. Then once the government tied down the corners and the loose ends – boom, everything was supposed to be fine.

And while I also recognize that the TARP isn’t exactly being used as it was originally intended, you have to give the powers-that-be some credit for coming up with not only what was a decent ...

A Quick Study

With the market returning to full-on crash mode last week in response to (1) Hank Paulson’s announcement that he was passing the TARP to the new administration, (2) a big technical breakdown on the charts, (3) a grim outlook for the nation’s now not-so “big three� automakers, and (4) Citigroup (C) looking like it was about to be fitted for a headstone, traders were beginning to feel like all hope was lost by the end of last week. So with the S&P down -48.9% on the year coming into Friday and everyone and their uncle predicting more pain ahead, who could really blame investors for feeling a little glum?

During much of Friday’s session, the focus was on the saga at Citi. Shares of C were pounded again during the session and reached an intraday low of $3.05, which represented a drop of another 35%, just after ...

This Bud's For You

Stocks started out on a positive note yesterday on the back of the upbeat preannouncement from Hewlett-Packard (HPQ), relatively benign inflation data, some positive talk on the macro front on Capitol Hill, and another pullback in energy prices. Just before lunchtime, it looked like the bulls
might have something going with the Dow at the high of the day and up 205 points.

One of the biggest plusses the bulls had going for them early on was the fact that Fed Chairman Bernanke, Treasury Secretary Paulson, and FDIC Chairwoman Blair had reminded members of the House Financial Services Committee that the TARP, while not an end-all to the country's economic
problems, is indeed doing its job in terms of stabilizing the financial system.

But as has been the case for what seems like eternity, some bad news on housing hit the tape and whoosh - it was straight ...

Just Another Manic Monday

Although the Bangles are hardly a household name, their 1986 hit “Manic Monday� seems to be a fitting lyrical description of yesterday’s action. As expected, stocks initially dove on the back of reports that Japan had entered a recession and that Citigroup (C) was planning to layoff some 50,000 workers. However, the mood improved before lunch and the venerable DJIA actually sported a gain of 70 for a bit before succumbing to the usual last minute dive into the bell.

From a technical standpoint, the bulls will argue that the past couple of weeks have been nothing more than a period of backing and filling, which is a necessary part of the bottoming process. However, the bears can be heard reminding traders that the more a support level is tested, the weaker it becomes.

From a big-picture standpoint, the problem is that things are just not ...