January 30, 2008 Stock Market Recap

The market liked the Fed’s interest rate cut for all of about 60 minutes today. Then it was back to reality as talk of S&P downgrading some $270 Billion in mortgage-backed securities made the rounds:

Standard & Poor’s on Wednesday said total losses for financial institutions from the unfolding mortgage market problems will eventually reach more than $265 billion.

The rating agency’s comment came after it said it cut or may cut its ratings on $270 billion worth of U.S. mortgage-backed securities and put $264 billion of collateralized debt obligations on watch for a possible downgrade.

So the market fell right back to where it was before the rate cut. Oh well….

Today’s action created bearish candlesticks all over the place. Right now there are 1,150 stocks in my universe of tradable stocks. My shooting star scan turned up 322 hits. Many of those aren’t textbook shooting stars but most can still be classified as doji or spinning tops. We can just lump them all in as candlesticks with “topping tails (TT)”.

The Nasdaq and S&P 500 rose above the August resistance late in the day but got pushed back down. Both are now in danger of breaking their short-term trendlines. Here are the charts:

The Banking sector has had a nice run off the lows last week but have now hit the trendline, which should be resistance:

Trend Table

No changes

Trend Nasdaq S&P 500 Russell 2000
Primary Down Down Down
Intermediate Down Down Down
Short-term Lat Lat Up

(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend

*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.

Comments

  1. Posted by Dr. Duru on January 30, 2008 at 9:49 pm

    Thanks for the memo, S&P! We would have been blind without ya!