Dow Jones

Can Merck go any lower?

June 27, 2008

This article could be titled: Can (fill in the blank) go any lower? I’m not picking on Merck. The reality is you could drop in Merck, Citibank, General Motors, Ford, J.P. Morgan, along with most other names in the Dow Jones Industrial Average (and most of the largest names in the S&P 500) and ask [...]

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Bloomberg Radio Interview

June 22, 2008

OK, no names are used in this post! But holy cow! In the midst of the sell off this week, Bloomberg Radio interviewed a money manager about the current condition of the market. The money manager went on and on making predictions about the market. How would he know anyway? Now, everyone is entitled to [...]

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How can they keep missing this?

June 21, 2008

Frequent readers have seen earlier posts where I have discussed option expiration week and the volatility that comes with it. But there was scant mention of option expiration at all this week.  Options expired on Friday and the Dow Jones dropped 220 points. Instead, we heard lots of “experts” speculating with reasons why the market [...]

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Exchange Traded Funds becoming more mainstream

June 16, 2008

In just the last month, assets in exchange traded funds increased $17 billion. Total assets in ETF’s now total over $600 billion, according to State Street Global Advisors of Boston. Yeah…so? I’ll tell you why this matters. In 1994, the first ETF’s were launched. The S&P500 clone, called “spiders” or SPDR was launched, followed by [...]

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How Smart is The Crowd?

May 20, 2008

Do you remember the television program, “Who wants to be a Millionaire“?The show was actually featured in a terrific book “The Wisdom of Crowds” by James Suriowiecki. If you remember, the contestants were given three “lifelines” to help them. The first lifeline was the “50/50,” where two of the four possible answers were eliminated. So, [...]

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Why “Average Joe” Can’t Make Money In the Market

May 10, 2008

The period we’re in now is not necessarily a “bull market” or a “bear market” but more like a structurally “fair market.” I didn’t make that up on my own — Tom Dorsey, from Dorsey Wright and Associates in Richmond coined that term. I think that makes a lot of sense. From 1982 up through [...]

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Recession Worse than Expected?

March 25, 2008

There was an article distributed nationwide, written by the Associated Press, and carried locally in the Asbury Park Press on March 22, 2008. I’ve re-printed the article here, but dropped in my own comments after each paragraph. The main point to take away from this exercise is that by the time news reaches Main Street, [...]

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Bear Stearns, part II

March 16, 2008

UPDATE: Sunday evening, 03/16/2008: Bear Stearns to be acquired by JPMorgan Chase for $2.00 in stock swap deal. That is NOT a typo! The stock closed at $30 on Friday. On Thursday, it was $57.00. And yes, it was $150 last summer. This, essentially became a giant margin call on Bear Stearns. Apparently, cash — [...]

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Bear Stearns, part I

March 15, 2008

The news surrounding Bear Stearns on Friday morning was not good! There are several important elements to this story. The first element is the most important one: Bear Stearns appears to be out of cash. If you’ve ever traded on margin (or know someone that does), running out of cash happens from time to time. [...]

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Dow below 12,000

March 7, 2008

The Dow Jones industrial average dropped below 12,000 today, March 7. In technical terms, this is a significant move. On my point and figure charts this represents another sell signal and tells us that the average may have further to fall. Not that I want to be in the prediction business, but it appears there [...]

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