S&P 500 Re-Test Holds, for Now

A wipe-out early in the day was reversed, in part, by Charlie Gasparino's report than the Ambac bail out was back on track. Charlie's reporting on the monolines has pulverized traders over the past few weeks, seemingly dominating the intra-day action, via reversals. The market was poised to test the lows on February 22nd until Gasparino made a late-day appearance. A rally to an overbought conditions continues to be worked off, but I would like to see more work done before wading back in.

Of course, we soon might find out what happens when Ambac gets a bail out and the market sells off. But I guess we can cross that bridge when we come to it.

The recent hysteria in commodities thankfully cooled off today in a broad based sell off. It is an absolute feeding frenzy, and Main Street might see the pro's run their stops before the rally gets back on track. There is a patsy in the game and it ain't the people who have stood in the pits, or continue to populate them.

Chances are the small-cap outperformance cycle ended in mid-2007, and the Russell 2000 is not giving us warm fuzzies just yet. That chart looks dreadful, overweight them at your own risk.

Meanwhile, the yield curve is one of the few things we are trying to hang our hat on. A 50 basis point rate cut is a lock, but investors hoping for other forms of intervention might hope the government's meddling will work out better than it did in the corn market.

Ed Schafer might not be as well known as John Chambers, but the Agriculture Secretary’s comments today that we must consider phasing out ethanol incentives in favor of cellulosic alternatives that don’t compete with other crops for food is more newsworthy than anything out of Chambers mouth.

We just got our first $4 slice of pizza in NYC, and have no desire to see $5.

But we did avert the big puke today, no matter how you slice it.

Russell 2000 vs S&P 500


Cramer Spikes Ambac

Gasparino Sweeps Up

-----------------------------------------------------------------------------------------------------------------------
The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

Comments:

<< Back to main