Top Line: Monday, Monday...so good to me. Well, not all that good but a good start. The stock market more than likely has started its descent down to test the March lows. There is a fly in the ointment but otherwise the slide should continue.
That fly represents some late day strength in the market after a pretty harsh selloff earlier in the day. The big news item was that S&P downgraded some of the financials this afternoon, a few banks like C (Citibank), JPM (JP Morgan), and BAC (Bank of America) and a few investment banks, especially LEH (Lehman Brothers), MER (Merrill Lynch), and Morgan Stanley (MS). LEH was actually down about 7% on the day. The referenced article quotes S&P... “The outlooks on the large financial institutions sector in the U.S. are now predominantly negative."
Earlier in the day, an important index of manufacturing came out, the ISM report. It showed that manufacturing actually rose in the period??? but the number was still under the magic 50 number so contraction was still the order of the day. The market's reaction to this report was to show some strength initially but within about ten minutes the market fell out of bed.
Our position on the market is that we have seen the peak and today's (Monday's) action supported that view. As we said at the outset, there is still a possible fly in the ointment, that being downside nonconfirmation in the indexes--a bullish one at that. How bullish? Well, only as far as getting the market back up to around 12,750 again :-( but it would only be a short term pop. The primary move is down and whether that occurs Right Now or after a small rally should not really concern us. As we said in our last post, there is some dry powder that needs to be deployed so a little more rally would give us that opportunity--but we really don't want it.
Tomorrow (Tuesday) will give us better information.
Treasury bonds were strong today. The inverse relationship of bonds and stocks continued on Monday. We are short term bullish on bonds and are in the TLT's for a short term trade.
FSI: 95.01 (down with the market, not leading it like we had hoped)
In the mean time, we promised some more pictures of Jackson, so Finally here are some:
Here is Jackson all by himself in his "crib":
Just hangin' out with the old folks, those over six months old:
Jackson and Gramma are having a laugh together...
The Fearless Foursome after a round of golf...Jackson had already taken off his cap, it says "Chick Magnet" and he gets a lot of grief on the golf course until he tees off. Those 300 yard drives straight down the fairway tend to quiet those kinds of comments...Grampa needs to get those white legs out of sight, ouch.
And, ok, one brag shot...Top of the weight loss leader board for the week...done after 42 weeks.