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Monday, December 15, 2008

Mad(off) About The Market

This morning the dollar resumed it's collapse after a brief pause. The market has responded by tanking, so the relationship we have been seeing recently (dollar up, market down) seems to be changing. Oil is up to around $49, partially because of impending supply cuts from OPEC. I saw a report this weekend that Russia is considering membership in OPEC, which is strange because I recently read another report that in 2010 or so Russian production will decline and internal consumption will rise to the point where they will no longer export oil.

The Madoff scandal is spreading, which will likely shake the confidence of an already shaken market. When more facts come to light, this could end up being a real black eye for the financial system and it's regulators.

The market spent the first hour heded straight down, As is typical, after the first hour, almost to the minute, it reversed and is trying to rally. Right now the SPX is working off a bottom at 868. Energy and Basic materials are leading, and the XAU, gold and silver, is up 6%. Financials are taking the biggest beating, followed by technology and utilities.

There is no news on the earnings front. No breakouts so far, and CSKI is the only new high so far.

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