The Dow has run up to -- and been turned away from -- 16,000 twice before.
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Just because everyone expects a downturn doesn't mean it's going to happen.
Is it grudging recognition that, despite the political gridlock, despite the European woes, maybe not all is lost?
Have we discounted not just a slowdown but also an actual recession, one that might not occur? Could this be a repeat of 1987, when the market's decline presaged nothing other than a momentary loss of consumer confidence?
It's hard not to think about that when in the past 36 hours of trading we've had decent employment claims and some really good numbers from retailers Ralph Lauren (RL), Macy's (M) and Nordstrom (JWN), not to mention aggregate retail sales numbers.
It's hard not to question the recession thesis when Caterpillar (CAT) comes on national television and says orders are looking good, knowing that CAT is about emerging markets, not the U.S. and not that much about Europe.
Traders can make still make money as this 13% winning trade in a down market demonstrates
When I trade stocks that are about to release earnings, I identify my picks over the weekend before the company in question is scheduled to report results. This past weekend was particularly challenging given the horrific state of affairs in the market.
Like the majority of those participating in the market a certain degree of fear clouded my vision. For a brief moment I considered cancelling trading this week given the volatility in the market. Given that all of my trading recommendations for my subscribers are long positions, downward velocity for 99% of the market did not bode well for my picks.
In the week prior, I made a handful of recommendations. My analysis of these picks was dead on. The companies traded reported strong results with positive guidance for the future. It should have been a big week to make money. While I did make money on two of the four trades, the other two picks were negative with one being down 10%.
The two winners did offset the losers making the total loss only a fraction, but the crushing losses of the last two picks combined with the negative environment had me worried. Was now the time to go bottom fishing and buy stocks?
Wall Street was given plenty of warning, and now the SEC may be looking into who knew what and when.
Unless it was all a huge coincidence, it's likely that someone in the know leaked the information. The questions are who and whether the leak led to early insider trading.
That's what the Securities and Exchange Commission is reportedly investigating. The SEC has asked Standard & Poor's to disclose who exactly knew about the downgrade before it was announced, the Financial Times reports. It's the start of a preliminary look into potential insider trading.
Apple and Amazon have held up well despite heavy market volatility. Favorable chart patterns make each a good buy on an upcoming pullback.
The yellow metal and companies that mine it remain in a bull market.
By Frank Byrt, TheStreet
Standard & Poor's is recommending gold and gold miners as top investment picks only days after downgrading U.S. Treasurys, which sparked a firestorm in financial markets worldwide that boosted the price of the precious metal.
S&P's Equity Research Services unit, which made the recommendation, is independent of the firm's Ratings Services division, which lowered its long-term credit rating on the U.S. to AA-plus from triple-A with a long-term negative outlook last week.
Gold futures tumbled Thursday after CME Group, the owner of the world's biggest futures market, increased margins on gold contracts by 22%. Gold had soared 8% in the previous three days, bringing a one-year gain to 49%, on U.S. and European debt concerns and a slowdown in global economic growth. Haven investments such as gold, Treasurys and the Swiss Franc have benefited the most.
"We believe that gold is in a bull market," S&P analyst Leo Larkin wrote in a research note, because demand will outstrip supply "for the foreseeable future."
Spooked by a severe market slump and the first downgrade of US credit, investors are on pace to redeem record amounts.
By Frank Byrt, TheStreet
The prediction, from analyst Kevin McDevitt at mutual fund tracker Morningstar, comes after July's $22.9 billion in outflows, the most since the peak of the credit crisis in October 2008, when investors pulled $28 billion from U.S. stock funds. "With August off to a very rocky start, this trend is sure to continue, with deeper outflows to come."
Investors have withdrawn a net $200 billion from U.S. stock mutual funds over the past five years. Total fund industry assets peaked at $4 trillion in late 2007, but the subsequent stock market crash a year later, the prolonged recession and last year's flash crash have contributed to skittish investor behavior that has resulted in outflows of about $500 billion since the peak, according to Morningstar.
Big upswings are good for 3 things: selling tech, selling banks and selling companies that receive most of their earnings from budget-strapped governments.
Principally because it made us forget how horrible Wednesday was. The last-hour buying that accompanies an up day (courtesy of the rebalancing of double and triple exchange-traded funds -- the machine buying) put whip cream on top of the bullish concoction.
And I hated it.
I hated it because it was a day when rumors didn't fly in Europe -- or at least they were temporarily muted by the shorting ban.
We need real resolutions to real problems.
First, we need to take off the table a possible recession, courtesy of governmental uncertainty here and in Europe and higher interest rates in emerging markets. Second, we have to see a substantive conclusion to the sovereign and bank debt problems in Europe.
Around the world, central banks are dragging out or canceling interest-rate increases. The effect, however, is unclear.
A few thoughts after a wild few days.
By Morgan Housel
After several days, a stock market plunge and a flurry of finger-pointing, we're still trying to figure out what Standard & Poor's downgrade of U.S. Treasurys really means. Here are four points to keep in mind.
1. It had no impact on Treasurys. The biggest risk of a Treasury downgrade was the possibility that interest rates would rise. That could add trillions to future federal borrowing costs and stifle economic growth.
But interest rates didn't rise at all after the downgrade. In fact, they've plunged. Monday turned out to be the eighth best day for 10-year Treasurys in modern history. The biggest irony of downgrading Treasurys is that it instantly increased global demand for . . . Treasurys. One blogger, mocking the stereotypical investor, quipped: "Treasurys were downgraded? Wow! Sell my entire stock portfolio and get me into Treasurys!"
Sales are suspended for repricing as gold soars.
These are the gold numismatic coins sold to collectors, not the gold bullion coins sold to investors, the Mint told Reuters.
The problem was that the market price for gold bullion was fast approaching the price of gold collector coins. The U.S. Mint has the right to stop collector sales when that happens, but that apparently has never happened, at least as far as anyone can remember.
As stocks flirt with losses of 20% or more, many observers are calling for the end of the March 2009 uptrend. Here's why they're wrong.
It's been a brutal few weeks. Stocks at home and abroad have been pummeled by the combination of fresh recession fears and financial panic. Instead of focusing on solid second-quarter earnings or a slowly improving jobs picture, all eyes were on sovereign debt concerns and the rising potential of two disaster scenarios: a default by the U.S. Treasury and a breakup of the eurozone.
As a result, a number of major stock averages have fallen more than the 20% technical guideline used to define new bear phases. The Russell 2000 Small Cap Index is down more than 22% from its high. The iShares Transportation (IYT) is down nearly 21%. Markets in Brazil, France, Germany, China and India have also crossed the 20% threshold.
Yet mindless terror is now giving way to a more reasoned analysis as stocks whipsaw near their lows. The surge of buying in U.S. Treasury bonds proves America still issues the reserve asset of choice and retains its haven status. And a big drop in Spanish and Italian bond yields shows that European policymakers are serious about ring-fencing their problems.
This is the bottoming process I've been waiting for. And it's a sign that the time to start buying up stocks at deeply discounted prices is nearly here. Here's why.
One enterprising designer is turning the convicted fraudster's old pants into pricey tablet covers.
And now what once covered Madoff's rear end can protect your iPad.
Introducing the Bernie Madoff collection at Frederick James, a designer that makes iPad covers from "rescued" and vintage fabrics. Frederick James won 16 pairs of Madoff's pants at an auction in 2010 and turned them into iPad covers selling for between $250 and $500 each.
For $350, you can get the Ralph Lauren Polo blue khaki pants cover.
Even after sharp recent declines, the chart patterns show that four of the most prominent global bank stocks still have more downside potential.
It's a good time to buy stocks at current depressed levels. Here's a start.
By Jamie Dlugosch, Stockpickr
In September 2008, I wrote that it was not too late to sell stocks. With the market in the middle of a sell-off, that article went against the grain of popular opinion. I was proud of the result. The S&P 500 ($INX) ultimately lost 39% between September 2008 and March 9, 2009, when the market hit its low.
I bring this to your attention as we attempt to deal with the current market environment. Should investors sell? Should investors buy? Should investors buy gold? These are legitimate questions, to which many people are desperately seeking answers.
Despite recent volatility, the Oracle has maintained his faith in the US economy and a long-term investment approach.
By Don Dion, TheStreet
The past week's gut-wrenchingly volatile market action has stoked fears into the hearts of even the most confident investors. One individual who appears solidly set in his bullish ways, however, is Warren Buffett.
On a number of occasions, I have commented on the Oracle of Omaha's unwavering optimistic view of the ongoing global economic recovery. Using a variety of mediums including New York Times op-eds, shareholder letters, and sit-down interviews, the billionaire investor has attempted to ease investor fears, arguing that the world's largest economy still holds promise over the long run.
As investors have clamored and panicked following Standard & Poor's' credit downgrade and renewed concerns over the European debt crisis, Buffett has once again taken to the stage in an effort to quell fears.
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The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.
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[BRIEFING.COM] Equity indices settled on their lows following a steady, session-long slide. Similar to yesterday, small-caps paced the retreat as the Russell 2000 fell 1.6%, extending its December loss to 3.6%. The S&P 500 settled lower by 1.1%, widening its month-to-date decline to 1.3%.
There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups ... More
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