Rusty Market Musings » GM

01/06/2009 New high for the year

LtPinback — Mon, 01 Jun 2009 22:56:04 +0000

Large gap higher continuing the last minute move from yesterday followed by consolidation at new high level for the year. Volume was a bit higher than the average.

S&P 500 SPDRs 5min Chart

The long awaited GM bankruptcy was filed but ironically the market attention was on data showing that the manufacturing sector is stabilizing. Dow Jones Indexes said GM will be removed from the Dow Jones industrial average and will be replaced by Cisco Systems Inc (CSCO). Citigroup Inc (C) will also be deleted from the Dow average and Travelers Cos Inc (TRV) will take its place.
On the technical side, the S&P 500 printed a new high for the year and price is back into the upward trend channel. As market is a little overbought, a break and kiss move form the trend line is not out of the question and if confirmed then it may signal the start of a somewhat large retracement move.

S&P 500 Index Daily Chart

29/05/2009 End of moth shennigans

LtPinback — Fri, 29 May 2009 21:42:07 +0000

Market traded is a very tight channel between yesterdays’ close and the R1 line. The day ended with a spike up in the last 5 minutes. Volume was average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The waiting game for GM bankruptcy continues.

S&P 500 Index Daily Chart

27/05/2009 Lower highs are worrysome

LtPinback — Wed, 27 May 2009 21:46:21 +0000

The market opened essentially flat and traded very tightly in the morning. At around 1:20, after a failed move to higher prices, a broad-market sell-of took place lasting till the end of the day. The close was a bit below the 900 level at 893.06. Volume was average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Market quickly forgot the consumer confidence index and started to worry about rising yields on U.S. government debt. General Motors Corp (GM) bankruptcy filing is expected any day now.
On the technical side, lower highs are a bad sign and 880 must hold in order to avoid a large move downward.

S&P 500 Index Daily Chart

27/04/2009 What is the next scare?

LtPinback — Mon, 27 Apr 2009 22:54:01 +0000

Choppy start of the trading session close to yesterdays’ lows which followed with a classic close of the gap move. After that the steam run out for the bulls and price took a dive again. The last two hours of trading were very choppy and the day closed almost flat from the opening. Volume was low.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Fears of a swine flu pandemic affected the market today. The Transport Sector and Oil prices were among the hardest hit on fears that they will be adversely affected in a global pandemic scenario. Selected stocks of drugmakers related to flu showed some large up moves. GM is trying hard to restructure in order to avoid bankruptcy and the market responded with a rise of 20 percent in the stock price.

S&P 500 Index Daily Chart

22/04/2009 Indecision

LtPinback — Wed, 22 Apr 2009 22:00:39 +0000

Market opened at the Pivot Point and printed a symmetrical day with a rally to 860, a bounce in 850, a retest of the 860 and a final sell-off to close at the opening level. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Lots of earnings today but mainly Morgan Stanley (MS) posted its second straight quarterly loss and slashed its dividend and AT&T (T) reported a profit that fell less than expected due to the iPhone partnership with Apple Inc (AAPL). Also General Motors Corp (GM) is unlikely to make a $1 billion debt payment due June 1.
On the technical side SPY printed a bearish Doji. A close below the 830 level will confirm a downtrend.

S&P 500 Index Daily Chart

Overextended and some warning signs but still trending good

LtPinback — Mon, 13 Apr 2009 22:59:53 +0000

Market gaped down and remained directionless around the 850 level until 1:00pm where a rally to test Thursday’s high took place. Price remained at those levels for a while but again took off to new highs around 3:00pm. This last mini-rally was somewhat negated by a sell off that took price to a level close to Thursday’s high in the last 20 minutes of the trading day. VIX rose 3.50 percent. Volume was average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Market optimisms continues on the Banking Sector’s strength due to an expected very good totally unfabricated (wink wink) earning season. GM was directed by the Government to prepare for a fast “surgical” bankruptcy (whatever that is). The news didn’t seem to affect the market at all.
On the technical side a 2nd close above the 850 key level is good but some warning signs should be considered. Many indicators are in short-term overbought territory. The VIX rose 3.5 percent. Early in the trading day the more defensive Health Sector was showing relative strength as if market was expecting a reversal to happen at any time now. DJTA is not leading (this one is for the purists). Finally, this time around profit taking took place at the end of the trading day so at least some long positions are being cautious.

S&P 500 Index Daily Chart

Ranging mode anyone?

LtPinback — Tue, 07 Apr 2009 22:39:28 +0000

Market opened with a gap down and then tested the 825 support/resistance level but failed to break through upwasrds. From there price trended down and late in the day another unsuccessful charge up ended on a step sell off to close almost at the LOD. VIX fell 1.32% on the day which makes this “change in direction” of trend suspect until proven differently. Volume was dismal an even lower that the previous day. Financials were for most of the day relatively strong but succumbed to the final sell off.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Some GM bankrupt chatter, Soros voicing his bearishness and the IMF forecasting toxic assets on the balance sheets of financial corporations could reach $4 trillion. Market seems more interested on AA forecast and the big banks earnings reports in the following days.

S&P 500 Index Daily Chart

Autos drag along 60 more days

LtPinback — Mon, 30 Mar 2009 22:57:16 +0000

Monday trading opened with a big gap down that followed with profit taking and a bit of relief buying at the end of the day. Volume was average. VIX rose 10.96%.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The government told GM and Chrysler that they have 60 more days to put their act together or face “orderly” bankruptcy. GM CEO Rick Wagoner was forced out. Chrysler LLC was told to merger with Fiat or face liquidation.
In Europe, Spain was forced to rescue Caja de Ahorros Castilla La Mancha and Germany and Britain also moved to prop up lenders.
Over the weekend, Treasury Secretary Timothy Geithner said some banks still need large amounts of help. Thus the KBW Banks index fell 10.3 percent. Rumors spread that banks’ profitability on the first 2 months of the year were due to AIG money flowing directly to the banks via trade settlements unfavorable to AIG.
S&P 500 rests in no man’s land between the 50 day SMA at 790.82 and the downward trendline at around 783.00. Time will tell whether this is a retracement in the rally or the resuming of the bear market.
Also some argue that I may have gone a little bold crazy in this post.

S&P 500 Index Daily Chart

Ken Lewis’ “Me too” rally

LtPinback — Thu, 12 Mar 2009 22:01:32 +0000

The trading day was characterized by an unstoppable follow-through rally to the November lows. Volume was high and very little profit taking took place.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Bank of America (BAC) CEO Kenneth Lewis said his bank was also profitable in January and February thus joining his C and JPM buddies in what can only be described as a shameful coordinated push for a rally. GE credit rating was cut to AA+ with a “stable” outlook by Standard & Poor’s. Market was expecting much worst so GE joined in the relief rally. The joke of the day was provided by General Motors’ (GM) statement that it will not immediately need $2 billion in emergency funding for March. Possible scenarios are either a bit of consolidation at these levels or going directly to next resistance at 800.00 in the S&P 500 index.

S&P 500 Index Daily Chart

Doji Goodness

LtPinback — Fri, 06 Mar 2009 22:55:36 +0000

Same old story with a twist. Relentless selling. Check. New lows. Check. Ugly economic news. Check. General Motors falling 22 percent and almost certain to go belly up. check. Volume was high. Check. Last 30 minutes reversal printing a bullish Doji on the S&P 500. Chec… WHAT!!

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The week ended so oversold that shorts were actually scared to hold into the weekend in case that for example GM announces filing for Chapter 11 or GE loses its AAA rating. Go figure market rationality. Technology Sector took a beating on news of Apple having its second-quarter and fiscal 2009 earnings and revenue estimates lowered by J. P. Morgan Securities. Apple “of course” been the poster child of the industry. Market rationality indeed.

S&P 500 Index Daily Chart

Trivia:

U.S. stocks have shed around $11 trillion in value since October 2007.
U.S. jobless rate hits 25-year high.