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Monday, December 1, 2008

NBER Wakes Up

Sorry about the lack of intraday updates, I was battling an intermittent internet connection all morning, and finally gave up and got on a wireless about an hour before market close. While ?I was on early, I was greeted by another collapse of the TNX, the yield on the 10 year treasury. Unlike last week, the market collapsed with it. (TNX, 3 day 15 minute chart)

I pointed out some time ago that 839 is a very important pivot point on the SPX. Today it came right down to it, and looked like it might hold, that is until the big boys came in in the last half hour and started dumping. (SPX, 5 day 15 minute)

Last Friday's volume would have been easy to beat, but today's volume really wasn't that high, which is slightly encouraging, but the magnitude of the drop is just jaw dropping. Blame has been placed on the NBER, which declared today that we are in a recession and have been since December 2007. No kidding. I wonder if Luskin will personally apologize to Barry Ritholtz for ridiculing his call. Don't hold your breath.

Both Paulson and Bernanke spoke today, which probably helped rattle investors' nerves, as it appears they are totally clueless about what to do.

The Nasdaq performed just about the same as the SPX, and relative volume about the same. Both of these were slammed up against trend lines, and could not break through.

There was no strength that I could find, but the big weakness was BKX, the banking index. The biigger they rally, the harder they fall.

Paulson again blamed this mess on housing, absolving himself of his actions at Goldman-Sachs, ground zero for the over-leveraging which is the real cause. We've got less than 2 months of him left. Let's hope we can survive it.

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