Wednesday, October 8, 2008

The Kirk Report

 
 

The Kirk Report

Thoughts From The Bunker

Posted: 08 Oct 2008 01:25 PM CDT

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Rate Cuts Around The World

Posted: 08 Oct 2008 08:00 AM CDT

Rate Cuts
Good morning. With markets around the world falling precipitously and investors clamoring for rate cuts, this morning the Bank of Canada, the Bank of England, the European Central Bank, Sveriges Riksbank, Swiss National Bank, and U.S. Federal Reserve finally gave up their inflation concerns and made a 50 basis point coordinated interest rate cut. The Federal Fed Funds rate is now at 1.50%, and the discount rate is at 1.75%.

Given the current sentiment, you probably won't be surprised to learn that premarket futures, while spiking higher on the news, have since fallen back as people doubt that these cuts will save the world. Premarket futures currently indicate we're set for at least a -2% to -3% drop at the opening bell.

Premarket gainers: RBS, NRF, PSPT, OMRI, ACGY, BZH, NCC, LNN, BCS, LDK, AIG, FRE, C, ETFC, GM, GOLD, LYG, ZZ, GFI, DROOY, YRCW, FDRY, AAUK, ASTI, JASO, CSUN, TAXI, UMPQ, TKS, BOOM, SLQ, & RS.

Premarket losers: BAC, AA, MON, STEI, DELL, NTGR, MER, CZZ, VVUS, JCP, ACH, RIO, ISIS, AA, PBR, AOD, MOS, TELOZ, DRYS, COST, CLNE, ENER, CENX, SQNM, DNDN, & GIGM.

Other than reaction to the rate cuts, at the 10:AM hour we have reports on pending home sales and the EIA Petroleum Status report. These reports will not be market movers, because everyone's focus will remain on the performance of markets around the world and the rate cuts.

Needless to say, this is about as bad as it gets (and I've ever seen) and it isn't going to be an easy day out there. The good news is that we probably need to see a sell the interest rate cut decision trade as we want to see every single hope eliminated from this environment. In the end, we want everyone to feel like this market is going to zero and no matter what happens, they have to sell everything. The lesson we've learned from this price action this week is that this market can't bottom with any hope left and this day has the potential to finally let that happen.

No Prisoners

Posted: 07 Oct 2008 07:11 PM CDT

While Bernanke and the plunge protection team fiddle, the bears burn down Wall Street and waste no time taking prisoners.

S&P 500: 2 Day View

Fear leads to panic and panic leads to selling and we're seeing that shock and awe on a daily basis. Once again the ultrashort ETFs (SKF, SJH, SJF, SSG, SRS, FXP, TWM, SEF, etc.) were today's big winners.

The S&P 500 has now dropped -14.5% over the past five sessions and is down -32.2% this year. In fact, the Dow dropped 508 points today which is also the exact same number of points lost back on October 19, 1987. Does anyone think that's just a mere coincidence? I don't think so. [READ]

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