MARKET COMMENT
Dave Fry at ETF Digest, March 16, 2009
TPTB (The Powers That Be) have been on a well-orchestrated binge of Happy Talk to prop markets and lift the mood of the sheeple. They got things going to the upside which was enhanced greatly by markets being much oversold as we’ve been pointing out for some time.
But all that spin can only take them so far before reality sets in.
Investors in Asia and Europe were excited by G-20 statements (they didn’t say much frankly), Bernanke’s reaffirmation that the recession will be over this year as long as the banking situation is solved and etc. Obama has resurrected his campaign organization to support his agenda and has turned to more positive statements. Today’s AP headline reads: “Obama pushes banks to lend more to struggling entrepreneurs” The add-on should read: “so he can tax them more”.
Volume was average for the recent period and breadth was positive on the NYSE but negative in NASDAQ land.
The real deal remains we’re still long-term oversold but short-term overbought. The latter needed fixing and got a first dose today.
Many posters were pretty upset by the details of the AIG bailout. While Obama and politicians make a stink about $165M in bonuses to a variety of AIG employees the real deal is the nearly $100B given to Wall Street and overseas banks in the bailout. This is the most upsetting thing I’ve seen in quite some time. It occurred on Bush’s (Paulson—the conflicted one) watch and is continuing under the new administration. The details are in this NY Times article. It should make your blood boil.
Markets rallied early on momentum carry over from last week and the overnight action in Asia and Europe. The G-20 meeting results were a nonevent but spun to suit bulls. Bernanke’s repeated prediction that the recession will end this year IF the bank situation is resolved added further happy talk for bull’s consumption.
Let’s get real. We’ve still got a severely oversold stock market from long term views. The rally we’ve experienced until this afternoon has led to short-term overbought conditions. It’s just that simple. Sometimes the chatter from TPTB can only do so much.
Let’s see what happens.
Disclaimer: Among other issues the ETF Digest maintains positions in: IEF, TLT, GLD, USL and DBB.
The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations aren’t predictive of any future market action rather they only demonstrate the author’s opinion as to a range of possibilities going forward.
