Tuesday, December 16, 2008

The Kirk Report

The Kirk Report

Feel The Fed

Posted: 16 Dec 2008 04:01 PM CST

"The Fed is sending a message that it will print money to an unlimited extent until it starts to see the economy expanding." - William Poole

S&P 500: 10 Day View

As if we didn't already know that the government is throwing everything and the kitchen sink at the market & economy, today's rate cut and statement clearly served as a wake-up call.

As you can tell from your screens, the immediate reaction was overwhemingly positive with big gains across the board (95% of the S&P moved higher) and in one swoop managed to push back up to the upper end of the short-term trading range. In fact, with this move the S&P reclaimed its 50-day moving average (the last time we saw that was way back on September 19th.)

All in all, the "we're fine until 09" trade remains in place. Now, we'll see if they can muster the momentum to take out S&P 927 level that I've been harping on for weeks now.

Eggnog

Posted: 16 Dec 2008 01:19 PM CST

Fed Day

Posted: 16 Dec 2008 08:30 AM CST

Fed Day
Good morning. On this final Fed day of 2008, premarket futures indicate a positive open.

The top stories in focus include earnings from Goldman Sachs that wasn't as bad as rumored and the earnings/conference call at Best Buy. As for the economy, the latest read on retail sales while consumer prices fell 1.7% and housing starts remained weak. Meanwhile, the next auto bailout could be announced as early as tomorrow.

Premarket gainers: TITN, BBY, CEG, GS, DRYS, BIDU, EXEL, ALD, NG, GPS, HBAN, TBSI, XTXI, TCK, CBG, LEA, F, GM, ALU, GOLD, JASO, SA, TRA, FHN, CPE, EYE, IPI, IFX, & CBRL.

Premarket losers: CNXT, SWHC, STEC, BMO, SAY, ETN, ZQK, EJ, SFI, LPHI, FCS, FBN, & BPL.

At 2:15 the FOMC decision will come out and another big rate cut is expected.

In addition to very positive seasonal trends for the remainder of the year, we've also now worked off the overbought condition we saw on December 9th which will remove at least one factor against the tape. Whether that will be enough along with the latest developments from the Fed and bailouts is unknown, but at least we're not headed into the remaining trading days as overbought as we were just six trading days ago.

Have a terrific Fed day!

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