Thursday, October 16, 2008

The Kirk Report

The Kirk Report

Bear Market Blues

Posted: 16 Oct 2008 10:20 AM CDT

Hope The Lows Will Hold

Posted: 16 Oct 2008 07:59 AM CDT

Good morning. Investors are hoping that last week's lows are going to hold and premarket futures are pointing to a positive open.

A large batch of earnings reports (see MER, C, & NOK, UNH, BAX, UTX, EBAY), a better than expected CPI reading and falling jobless claims have set the positive tone in addition to rumors that we're going to see more global rate cuts and more interventions sooner rather than later. The credit markets are showing further signs of improvement and oil prices remain under heavy pressure and are set to test the low $70s in today's trade.

Premarket gainers: DFR, BTU, CNTF, SIGM, CCK, UAUA, SPWRA, STLD, CAL, NOK, CS, UBS, PCX, LVS, CHTR, ACI, MEE, IFX, UBS, UNH, AU, ABK, PCX, IPI, CAR, BLK, GPS, & TRN.

Premarket losers: CEGE, CIT, AIG, EBAY, HOG, PUK, BCS, HLX, TTM, VSH, TLM, RRI, ACGY, GSS, & FLEX.

Much like yesterday, we have a number of economic reports due out including Treasury International Capital (9:AM), Industrial Production (9:15AM), Philadelphia Fed Survey (10:35AM), EIA Petroleum Status Report (10:35AM), and the Housing Market Index (1:PM). Fed members Gary Stern and Eric Rosengren will also be giving speeches. Beyond today's data and Fedspeak, rumors of more hedge fund failures and forced liquidations are going to make the rounds and frankly many believe were the source of yesterday's nasty sell off.

So, on one hand you have a great deal of hope that the lows we set last week will hold while at the same time you have forced liquidations and continued volatility that will scare even the most battle-hardened trader. I personally would like to see the market break last week's lows and clear out all hope and trap the bottom callers which were out in full force last week so we can set up for another rally once those people throw in the towel, but what I want and what the market will do is probably an entirely different thing. The best we can do is to simply listen to the market itself, put our expectations and hopes aside, preserve capital and stay focused amid some very challenging conditions. I know that's easier said than done, but that's the only game plan that will work for this market.

Go make it a great day!

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