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This article was last updated on April 16, 2022
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Famed market commentator Art Cahsin remarked on Thursday that there are similarities to now and 1987. One of the readers of this newsletter asked if I agreed. My reply:"There is a big difference between now and 87… 87 was actually a far more freer and real market place. Circuit breakers didn’t exist, there were no down tick rules, etc.
Today it’s a centrally planned and mechanized (manipulated) market where the rules can be changed at any time to protect the best interests of the Wall Street and its friends and family with a side thought given to those who are invested through their 401ks, etc. The project since 87 has been to ensure a 22% down day never happens again. It has been an evolutionary process through the school of hard knocks in learning how to deal with crisis (Asian contagion in the late 90’s, popping of dot com bubble, Bear and Lehman implosions, the flash crash from a few years ago). The market is geared toward not crashing, though I’m not saying the stars can’t align in just the right way to cause an extraordinary crash. Always be hedged for the unexpected."
This morning the early read on S&P futures is signaling a firm open. Merkel and Sarkozy in Euroland are said to be leading an effort for a large bailout package for Greece. We’ll see. These politicians may not have a real clue on markets, but they know how to manage political risk. For now, the news brings some mirth and merriment. The EURUSD has firmed enough to get the attention of the Wall Street bulls. If the gains stick for the euro today it could be an up day all day, though I expect the usual bloated volume with this being a quad witching day. If yesterday’s moody market is any indication, be careful of sudden swings in some of the indices. The S&P 500 needs to close above 1271.31 to avoid down week number 7. The bulls’ assignment. Retracing back into the 1280 area and work on recapturing 1287 (close to the high of the week). Note: today’s good Greece news could be next week’s not so good Greece news. Enjoy it while it lasts.
Consumer sentiment data due around 10 could muddy the waters a bit.
A deal to take note of: Capital One $COF is using $2 bln in new equity and $3.7 bln debt to buy $82 bln in deposits from ING Direct. COF suddenly will become the US 5th largest bank. What’s in you’re wallet?
This morning’s expected stock rise ought to help $Appl shares which broke the 200 day moving average for the first time in over 2 years.
But there isn’t much hope for Research in Motion $RIMM. Not only did it post weak earnings after warning and setting some weak parameters last month, but also issued a weak outlook. This stock is down another 15%+ this morning. Qualcomm is a big supplier – makes you wonder if QCOM is a good short scalp.
$P Pandora. Just a disaster. An IPO at $16, traded into the 20s, this morning at $12.79. Some see a $5 handle before long.
Here’s a little side note. While I have expressed cautious words about the stock market outlook, this guy takes the cake. Meet Mark Spitznagel: The Hedge Fund Manager Betting $6 Billion On A Doomsday Scenario http://t.co/iIoqRmo.
Fort Knox U.S. Gold Reserves to be Independently Audited and Assayed? Congressman Ron Paul Pre… http://bit.ly/jFP5dx via Zero Hedge
Layoff Carnage Continues On Wall Street, As Goldman Prepares To Make Cuts http://read.bi/lADAW6.
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