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Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, October 23, 2008

Stock Market -- Brief Comment

The SP 500 closed today around 908 and based on closing prices
is putting in a short term base around the 900 level (Link to
chart below). That's the good news. The bad news is that the
market has yet to wiggle out from underneath the crash trend line
drawn from the 1213 level of 9/26 from whence the deepest part
of the recent decline commenced. In short, from a technical
perspective, the market is still in crash mode and needs to repair
further to exit it. So, for the moment the market situation remains
both fluid and unstable.

I still need fresher earnings data, but it looks like the Market
Tracker has the SP 500 fairly valued in a 1000 - 1025 range. This
represents the first time the market has fallen well inside the
Tracker since the crash of 1987. Then, however, earnings were
still trending nicely higher, whereas now, investors are trying to
gauge how weak earnings may be over the next 3 to 6 months based
on the quick acceleration in the business downturn in evidence

A daily chart of the SP 500 based on closing prices may be found
here. Note that the market is still deeply oversold relative to the
25 day m/a.

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