Market Observations 09/26/08

Resistance: DJIA 11465 (1200DMA); SP500 1220 (1500DMA); NAZ 2220 (1300DMA); NDX 1685 (1200DMA)

Support: DJIA 10800 (1600DMA); SP500 1180 (3000DMA); NAZ 2170 (1400DMA); NDX 1620 (1400DMA)

SP500 1209, gap down 1204, fall to 1187, rise to 1215, cloase 1213. NDX 1687, gap down 1642, fall to 1635, rise to 1677, close 1672.

FRI: AIG, FNMA, FHLMC & bad debt bailouts will add $700 billion to $1 trillion in Treasury debt.

MON: the dollar index porked 3%; oil intraday surging to $120, the largest single day gain on record.

TUE: Meredith Whitney... any government plan has "little hope of improving core fundamentals over the near and medium term."

WEN: Goldman Sachs bailed out. Both measures of bank trust balloned; Libor +27bps to 3.48% and the TED Spread +52 bps to 3.02%

THU: GE reduced its annual profit forecast for the 2nd time this year and suspended its stock buyback.

Last week, keep your eyes peeled to the sky, it could be a name brand... can you say WaMU? I Can...

Today, the largest bank failure in US history; FDIC seized WaMu overnight, deposits, assets & select liabilities sold to JPMorgan for $1.9 billion.

Still needing cash... JPMorgan sold $10 billion in shares following the WaMu purchase.

Q2 Final GDP in at +2.8%; ex-export price increases; GDP -0.1%. Prices +4.2%; gross private domestic investment -11.5%. Corporate profits -$60 billion...

Stagflation gauge: real exports +12.3% as real imports decline on crude oil prices -7.3%. Durable goods PCE -2.8%; Non durable +3.9%.

John Q. still pulling back as real domestic purchases shrank -0.1%. The economy has been contracting 3 straight quarters and the true ugliness has just begun.

Often wrong, but never in doubt, this is the Nattering Naybob and you're not.

Comments