Stock Market Again

[lamont]

Another multiple-hundred-point up day on the DJIA, with no real subsequent follow through. No short covering rally. I'm still not buying this as a rally. We're still in a range which goes back to the Jan low and the late Jan high. Volume for the past month has also declined which is not a good sign for a rally (although the massive up days have been on higher volume).

There might be a little more upside on the bounce that started yesterday, but I don't think its going to push past the Apr 7 1386.74 ($SPX) and definitely not past 1400. I think the charts are going to wind up looking like an intermediate-term double-top formed with the Apr 7 peak and another peak in the next couple of days, followed by a downwards slide which should violate the March intra-day lows. I know there's another interpretation of the current chart which is a larger inverted head-and-shoulders pattern, and that "the bottom is in", but I'm just not buying that one.

Even with the good news yesterday from IBM and Ebay, it was mostly on exchange rate conversion. Which means they've pulled in a larger number of less valuable $USD. What we're not really seeing is a recovery in exports driven by a lower dollar and thereby propping up US manufacturing as evidenced by the Philly Fed manufacturing index declining today. Unemployment claims are also generally inching forwards towards the 400,000 mark (with a lot of week-to-week variability, but the trend is still clearly up).

The financial markets disaster may have been averted, but it still looks like we're just really starting into the meat of a broader-economy recession.

[rose-colored-coolaid]

I don't really see how we would get a recover based on exports. last year we imported some $700 billion more than we exported right? If our GDP is around $14 trillion, that means nearly 5% of our total GDP goes out the door as imports each year.

I just think that a weakening dollar can't reverse that trend fast enough to save the economy. Even if the rest of the world wasn't coming off the same binge we are, would a plunging dollar cause them to suddenly start importing a huge amount of US goods? Additionally, a huge portion of imports/exports are durable goods. It takes years to build or dismantle manufacturing. Even if the dollar lost 80% of its value tomorrow and you could promise every executive in the world that it would stay that way for at least 20 years, it would still take years to reverse the trade imbalance.

[lamont]

Agreed on all of that.

Looks like GOOG is going to give the markets a pop tomorrow AM. It'll be interesting to see what happens with volatility, it has broken down much lower than I had expected (which may be a signal that I'm wrong).

I'm not sure what else is on the economic calander that might be released tomorow AM before the open and blunt the GOOG pop tomorrow (or going the other way, reinforce and ignite a further rally)...

I'm still not seeing real strength in fundamentals or technically, though... Maybe tomorrow GOOG will make me a believer, but I doubt it...

[AwaySooner]

Well Google is making a lot of money! But how? Tim, did Google cut your eCPM? Probably, soon they get free advertising on your site and you don't get squat. If it's me, I am taking my balls and go home. I'll find local vendors to advertising exclusively. I would like to see the next few ComScore data and short the hell out of Google (via QQQQ). Your thought?

[deejayoh]

[The Tim]