After the Fed's emergency rate and the shocking Bear Stearns takeover, NY markets bravely fought their way uphill all day finishing pretty much where we thought they would finish -- just down about 1%. The planet of trading, Mercury was aspected full of Saturn's bearish sentiment. The Dow closed up 21 to 11,972 but the broader S&P closed down 11 to 1276. They'll be no shortage of news tomorrow as Lehman Bros and Merrill Lymch report earnings (they could be the next corporate welfare cases) while the FOMC meets in the afternoon. I don't see much evidence for a big snapback rally here, but neither do I see a big downdraft either. Sentiment still looks negative, but I'm less convinced of that than I was of today's trading. I'd say we stand a good chance to lose another 1% although the intraday range will probably be huge. Overall, the week still looks bearish. Friday is a holiday (Good Friday) so everything will come together on Thursday. Right now, it's looking middling to negative, which is pretty amazing considering we're in the middle of perhaps the worst financial crisis since WW2.
Tokyo and Bombay were down sharply as the Nikkei closed at 11,787 and the Sensex finished at 14,809. Look for relief rallies there on Tuesday although I wouldn't expect more than a 2-3% comeback in both.
Oil fell as forecast, as crude slipped $5 to $105. Gold rallied early overseas to $1025 but was caught up in the selling mood in North America and finished marginally higher to $1002. It seems the speculators may now have de-camped from oil and set up shop in gold. Oil will probably fall further (below $100 maybe) and gold will hold firm and likely try for $1010.
The Euro was up a bit closing at $1. 573, again after hitting $1.59 overseas. The Euro will likely go into orbit tomorrow after the Fed cuts rates by likely 1 full percent.
