Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Has FDIC Run out of Funds to Close More Bankrupt Banks?

Stock-Markets / Financial Markets 2009 Oct 03, 2009 - 06:28 PM GMT

By: Anthony_Cherniawski

Stock-Markets

Best Financial Markets Analysis ArticleNo new entries on the FDIC Failed Bank List.  What gives?

U.S. stocks fell, capping the market’s first back-to-back weekly declines since July, as a bigger-than-estimated loss of jobs and a drop in factory orders spurred concern the economy is struggling to recover.


News from 1930.

Market wrap: “Remorseless” drop in market that had run for six consecutive days was broken by strong rally, attributed to support finally coming in for main trading shares and to short covering. Market improved from the bell, opening at 206.16, up from 204.90 at Tuesday's close. Rally gained breadth as session wore on; US Steel and American Can led the rally; GE, Westinghouse, Allied Chemical, other majors also participated vigorously. Oils strong with Standard of NJ leading; trading favorites including Gillette, Worthington Pump, J. I. Case sharply higher. Volume moderately heavy but lower than Tuesday and fell off in afternoon; major stocks maintained gains and rose to day's highs in final hour. Bond market opened down but improved to close generally higher; foreign markedly stronger, convertibles up, corp. up narrowly; Dow 40 corp. bond avg. at new 1930 high of 97.70.

The VIX is a penny shy. 

--The VIX rallied strongly today, but stopped a penny shy of a breakout in the daily charts.  The weekly chart shows it adequately enough. It closed for the week above Critical Support/Resistance at 25.80. 

Today’s action suggests a pickup in activity on Monday, especially with the weakness shown in equities all day.

 

The SPX begins its decline.

--SPX reversed smartly this week.  The action today is very suggestive of a re-enactment of the gap down we had a year ago coming on Monday morning.  The Support/Resistance line, which defined the lows in 2004 at 1060.72 held.   

My preliminary target for this wave down was 1000.  However, due to the action that we have seen so far, it is more likely that Model support at 950 may be a more likely target.   

And the NDX follows.

--The decline in the NDX gained momentum on Wednesday and once it dropped through support levels, it could not get back above.  Today was a case in point, where the traditional Friday rally was expected but could not materialize.  It appears that the big guys were too busy selling to harass the shorts.  Knowing the condition of many of the institutions that have had their prices run up in the past six months, who would want to buy and hold over the weekend?

Gold could not retrace beyond the Fib levels.

-- Gold made a second reversal pattern this week (not shown) after unsuccessfully attempting a rally.  This is tantamount to another sell signal in gold.  Most gold enthusiasts won’t see anything wrong with this pattern until gold declines past the apex of its triangle.    The model suggests a visit to 750 at a minimum in this decline.

Oil adds “unexpected” to its vocabulary.

$WTIC had quite a surge this week that gives volatility a bad name.  However, it did not rally beyond what are considered normal retracements.  That makes it ready for a very substantial drop next week.  It tested support at 68.02 today.  Once below, I expect to see some acceleration.  The initial target for this decline will be 60, but I expect that to be just the start.

$BKX reversal is now evident.

The silence from the FDIC is shouting that something is amiss.  Is it possible that it just doesn’t have enough reserves in their Deposit Insurance Fund to close any other banks?    Georgian Bank was a stunning loss to the FDIC.  And it wasn’t even on the “troubled” list.  Where does that leave the depositors at other banks?  I just changed the bank I use for my business for that reason.

 

The Nikkkei is back.  Shanghai is on vacation.

The Nikkei index also has a clean break to the downside.  If this is a bearish wedge, the March lows may be revisited in very short order.

 

$USB makes another push in its retracement rally.

-- $USB made another push higher this week, but may have topped out today.  I exited TLT last week because of apparent divergences between the two, which resolved higher for both the index and ETF this week.  Will we see another push up next week?  The pattern appears to be a double zig-zag, which may have ended today.  Monday will clarify the pattern, IMO.

The $USD not going lower, nor higher.

--Jesse Livermore said a lot about being patient and letting the pattern develop.  Patience is something I don’t have a lot of, but maybe this is a teachable moment.  This pattern took its time developing and there’s a lot of pent up energy stored in that wedge, so I believe that those properly positioned will be amply rewarded. 

   I hope you all have a relaxing weekend!

Regards,

Tony

Our Investment Advisor Registration is on the Web

We are in the process of updating our website at www.thepracticalinvestor.com to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .

Anthony M. Cherniawski,
President and CIO
http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in