Munching on the Numbers – by Max Whitmore

12-8-09

MUNCHING ON THE NUMBERS

It was anything but a normal day today in the stock market. It began in Japan last night, migrated to Asia, then to Europe and finally here. There are a whole basket full of reason (see some of the bigger ones below), but the bottom line is fear. Bernanke called it a “formidable headwind” and that was enough for a lot of investors.

Now despite how Congress is raking Mr. Bernanke over the coals this week, he has done a very credible job keeping the world’s financial system knitted together. Maybe it isn’t to the liking of some the way he has done it, but so far it has worked. He forged ahead in a storm that has never occurred before. He made some mistakes here and there (wouldn’t you) and he admits it. But overall, we are still in one piece, albeit a bit shaky, but one piece.

Some are sure it will all fall apart yet. How do they know? I don’t know how the coming down from the huge flood of money will play out and neither does anyone else. But, I am convinced that if someone has to step us down without going into a deflationary spin that becomes a depression, I can’t think of anyone better equipped to try and get it done.

God forbid a senator or congressman takes on the job. There is no one, I mean no one, in DC that has a clue of what to do. It is totally uncharted waters. It won’t be easy, but Bernanke is my choice to try it.

Well, got that off my shoulders. Now let’s see, oh yes, the market. We are still 30 points above the Super Chat Keyline, a considerable distance, but this is a sharp test of the recent 7 month rally and we need to be very alert this week to see if it winds up just a test, or it becomes a waterfall. Right now, 1080 S&P is an important support number. Bonds rallied a bit as a haven for money today – many, many investors sold stocks bought bonds until the weather either improves or the rains come. We will see.

When I looked at my chart monitor this morning, I knew it would be a tough trading day. It was. I trade futures every day and when we open to a big down or up morning, it is always tough as investors look for supports and resistance. The best I can say for today is that we ended the day just about where we were when the bell opened trading. That is itself is an accomplishment.

Well, not much else today, except gold is correcting in here and I again, like I do so often, tell you to be sure to be buying gold. Your portfolio should be at least 15-20% gold now. Coins are my preference, as they can be sold much easier than the bullion.

So let’s see what tomorrow brings. Love that about this business. It is never the same. Each day is so different from the last. Never a dull moment!

So, until tomorrow, hope your investing day was a good one. Will be here again tomorrow, Lord willin’ and the creek don’t rise.

NEED SOMETHING TO TALK ABOUT TONIGHT?

SEVEN REASONS THE MARKET WAS FLAT TODAY

1. Bernanke’s comments yesterday DID give us the results we see as world markets close.

2. The “carriage trade” continues to cover their past borrowing and the dollar climbs higher.

3. A Senate Committee approved for debate an increase in diesel fuel (+4 gal). We all pay for it.

4. Some corporate earnings continue to dribble in, but no big winners to move the markets.

5. Did you know? Senate asked to raise debt limit again – to $13.6 TRILLION this time. Hummm.

6. Told you so stuff – Copenhagen talks a front. Final Agreement leaked even as talks continue.

Likely the least talked about will be the diesel tax, yet it is the one that will hit us all in the pocket for higher food and goods prices. Go figure. Maybe it will get a rise out of some of your family or friends. Try it as a conversation opener and see. (Or not).

Closes as of Tuesday 12-8-09 CHANGE (cash index prices)

DOW Indu. 10,285.97 -104.14 points

S&P 1,090.50 – 13.20 points

NASDAQ 2,172.99 – 16.62 points

30 YR BONDS 119 22/32 +21/32

GOLD 1,129.50 -$13.90

OIL 72.62 NO CHANGE