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Friday, March 14, 2008

You Mean Bailouts Are Not Good News?

I guess somebody caught on today that when a company needs to be bailed out, that means they are effectively bankrupt. I don't know if BSC can be saved, but the Fed seems determined to save them.

The SPX had it's heaviest volume since the January 23 panic. It has had 4 high volume down days since this latest move began, and 2 up days. 1270 is the new line of death (remember the good old days when 1406 was the line of death?)

Intraday the chart was quite interesting. Apparently the selloff started when the news of the BSC bailout hit the wires. It never quite recovered, and seems to have strong resistance at 1300-1305, support at 1285, and the panic level of 1270, which wasn't challenged today.

Things look worse on the Nasdaq. Although today's high was higher than yesterday's, today's low undercut yesterday's. This is dangerously close to 2168, the low YTD.

The Russell 2000 looks quite a bit rosier. Today's low failed to undercut yesterday's low, and we may have a support level above the March low.

The only strength today was gold. GDX broke out to a new high, and followed that with a higher volume move today. Gold has hit the magic $1000 mark, so it may be ready for a pullback, but if the dollar keeps free-falling, we won't get one.

The VIX made a big move, and we are getting close to panic levels. Spikes above 35 frequently lead to sharp reversals.

If you have been following the earnings spreadsheet, I apologize for not updating it. I am currently working on it offline and am trying to find a more useful format.

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