It was an interesting week as we started with IBD calling for a new rally on Monday but then declared it dead on Friday after the DOW undercut its recent low. The Fed injected another $38 billion on Friday after pumping an above average amount of $24 billion on Thursday.
IBD’s big Picture states: “The events of the past few weeks have made it clear that we’re in a news-driven, whipsawing market.”
I say: “Listen to the NH-NL Ratio when confirming a rally or follow-through. Without confirmation, the spike among the indices rarely means a thing. They need support from leaders to sustain their move over a period of time.”
- Three Easy Ways to Expand Your Creativity:
by Chris Garrett via Copyblogger
“It is only by being creative that we can create anything remarkable. Like our writing muscles, our imaginations need regular attention and exercise if it is to serve us well. It’s so easy to get stuck on rails, always doing what we do, think the way we think, produce what we always produce.” - Friday’s Markets:
by The Bonddad Blog
“Today, the main news was the Fed’s announcement that they would add liquidity to the market if needed. This gave the market a floor. We opened lower and rallied twice. The bottom line is the markets are still in bad shape. They are are still clinging to support at areas where the psychology could change from bullish to bearish very quickly.” - Advice for Rich Uncles and Others…:
by The BigPicture
“Advice for Investors: Never buy anything you do not understand. This is a very simple rule, regularly ignored by all too many people. If you don’t understand what a company does, DO NOT BUY IT.” - Fear vs. Volatility:
by Vix and More
“We have a lot of volatility at the moment, but we have more fear than we have seen in a very long time. As the markets have rallied during the course of the day, the VIX to SDS ratio has remained stubbornly higher, suggesting that the fear component of the VIX may now be the tail wagging the volatility dog.” - The Importance Of Realistic Goals:
by No Limits Ladies
“Realistic goals can save you from quitting a project too early or selling a stock too quickly.” - Short-Term Waterfall Declines in the Stock Market: What Happens Next?:
by Brett Steenbarger
“I went back to 1996 (N = 2891 trading days) and found only four occasions in which we had a prior overnight session down by 1% or more followed by a day session down by 1% or more and a current overnight session down by 1% or more.” - I’m Ben Bernanke, I’m here to rescue you! :
by Accrued Interest
“The Fed adds liquidity almost every day, so the fact that they injected some money isn’t surprising. What happened yesterday was so many banks wanted to borrow that it pushed the trading level of Fed Funds well above the Fed’s target of 5.25%. This is unusual, and therefore the amount of reserves the Fed added was much larger than usual.” - Video Stock Market Technical Analysis Review 8/10/07:
by Alpha Trends
“There is still a lot of uncertainty in the markets and I am wondering if the Fed actions did nothing more than delay further selling. The underlying problems for this market still exist and I suspect that we will continue to see more news driven mini panics over the coming weeks.” - Search For Stocks With Fattest Profit Growth:
by StockBee
“Today Investor’s Business Daily has a piece on stock selection and importance of earnings and earnings acceleration in stock selection process. Market corrections like the one we are currently witnessing are good time to focus on such stocks. These stocks withstand such corrections. Even if they pullback, they do it reluctantly.” - Closing Comments:
by Broker A via Fly on WallStreet
“We are not done going lower. If you are just tossing dollars into the market, prepare to lose a few hairs, over the next few weeks. I am hearing lots of rumors, from multiple sources, regarding hedge fund liquidations. I can tell you there is still significant headline risk, specifically with GS. Because of this belief, I am prepared to short the financials, especially into rallies.”
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