[Editor's note: You may have noticed the new format of the Update. We wanted to add the Kitco.com website to the links on the left and had to upgrade to this new look in order to do that.]
The stock market had its ups and downs on Wednesday but mostly ended with little change in the major indexes. While we know it's Wednesday, this post will be necessarily brief. Maybe the market can get in gear to the downside soon. The pattern is still very negative and we are patiently, or not, waiting for some downside strength to develop.
We have previously noted the Dow and the price of oil moving up together and today, with oil at record levels (even though OPEC promises to pump 500K more barrels a day), you might expect the Dow to be at record levels. Well, that just isn't the case now. Gold has moved higher along with oil but no longer has the stock market been in this group. This seems to be a significant change.
CFC (Countrywide Financial) was in the news again on two counts the last two days. The latest news is that some employees have sued the company along the lines of Enron. The employees are saying that the company failed to tell them just how bad things are??? and they kept their money in the company stock.
The other piece of news is that CFC is looking to put together yet another multibillion dollar cash infusion, this time with JP Morgan and/of Citicorp. Meanwhile, what does B of A think of this or that the stock just keeps sliding...one blog had the title CountrySLIDE. Wish we would have thought of that.
Back to the market, today's trading was pretty quiet but the undertow was negative. The breadth was leaning toward decliners and decliners' volume. There were even more new lows than new highs. The market is not showing its strong side but we still haven't seen any serious sellers. There are still things going on in the credit markets that warrant attention but the stock market believes in the almighty Fed and their powers to bail out the stock market. This, even though, the stock market is up on the year???
Tomorrow, we will make our best guess as to what the Fed will do next week. This is kind of exciting, we haven't had a move opportunity in a long time. What will they do?