MARKET COMMENT
February 4, 2009, Dave Fry at ETF Digest
The good bank/bad bank proposal conjures up memories of from Monty Python’s Quest for the Holy Grail. (Hat tip to pal Greg Newton who used the clip previously during an equally dumb moment in financial history.) So, the idea with this proposal (no doubt from Geithner) is taxpayers get the crap and banks get cash to play with. What a great idea?
Markets were down today as some investors worried that there wouldn’t be a bad bank owned by you and me. Count me out thanks very much. Whatever happened to: let the creeps fail?
Anyway, volume was a little heavier than yesterday with the advance/decline line going in the opposite direction. Again note the heavier upside volume on the NASDAQ as folks are still chasing the bigger tech names, especially the Four Horsemen (AAPL, GOOG, AMZN and RIMM).
What now for the DJIA? Remember, the average is computed from the stock prices of the 30 largest and most widely held public companies in the United States. It gets changed occasionally as conditions warrant so they say. But many of the current components no longer measure up to the criteria. Perhaps an addition of the Four Horsemen (GOOG, AMZN, AAPL and RIMM) and deletion of many financials and some manufacturers is in the cards. Then the index would look a little better don’t you think? When things look bad change how the index is calculated or measured like some do with unemployment data (think birth/death models) or the CPI and so forth. Maybe that’s the message of strength from the Four Horsemen. (Yeah, RIMM’s a Canadian company so maybe CSCO instead?) It’s just my muse right now.
That’s it for today and we’ll get more news tomorrow with Friday’s unemployment data being the biggie.
Let’s see what happens.
Disclaimer: Among other issues the ETF Digest maintains positions in: GLD, TLT and TBT
