Holiday Woes Continue - Bailout Bids Grow Larger

Well, so far it seems as our S&P test we discussed last week has proven to be correct thus far, as the market experienced another down day of trading during the holiday week. In the morning, it looked as if we maybe would have a day in the green, but sure enough the sellers persisted as the Dow closed down 1.18% today. In fact, I believe we are lucky that it is a holiday week, because if we had higher volume levels, we would maybe be seeing these numbers doubled, as our volume is about half as much as it usually is. Either way, I think it's safe to say that we have definitely flipped momentum since Friday and have some downward momentum for the time being. Now, how long that lasts, who knows with all the government promises that are announced every week.

Despite the down market, some of the shorts, like SRS were down. This may have caused some frustration for some of you. The main reason for today's drop was that SRS, along with others, were funds announced today by Proshares that distributed a dividend. This was the main cause for the down day, coupled with this still lingering bailout issue for commercial developers. I still believe we should see a lot of strong days for SRS here in the near future. You can see a full list of the funds that are distributing dividends here.

FXP had yet another strong day of green as low oil prices and failing banks continue to punish Asia. Many investors are taking their profits from the end of the year rally we just had as well. The selling could continue strongly into 2009, as stability continues to deterriorate.

American Express got a little piece of bailout money today, receiving $3.39 billion from the Fed. I can't complain about that, as I feel that short term lending is something that can help the market a bit. However, I still feel that people should not be bailed out of their existing credit card debt, unless it's me of course. In any case, another company to add to my list of companies I have ownership in.

Other woes to hit today's market was another month of worse than expected home sales. This should be no surprise for anyone, as consumer sentiment is weakening and a lack of lending still exists with the banks. Many people think the housing market will reach bottom during the end of summer/fall of 2009. I think it may be a bit longer than that. They also announced today the suicide of a hedge fund executive who lost millions in Madoff's scheme. That kind of news can't help the already suffering hedge fund market. Either way, there is not much to cheer for this week. Autos were slaughtered today, continuing from yesterdays bad Toyota numbers. At this rate, all three of the companies will be out of business before New Years.

In any case, the rest of the week should be much of the same as we have seen the last two days. We may have a little green day soon, just to reverse the direction for a bit, but I doubt if it will be anything substantial. Remember, tomorrow is a short closing day, so make sure you don't miss the close. As for me, I am holding back at the moment, until the volume comes back after the holidays. I feel I am in a good position for the direction we're heading into 2009. This is a good week to take positions, if you haven't already, as volatility is down due to the holidays. Have a great night tonight, Happy Trading and I'll see you tomorrow.


  1. Anonymous Says:


    Could you clarify the short close tomorrow? Do you mean that market will go up at the end of the day because shorter have to cover their position?

  2. Finance Fanatic Says:

    I meant that the market is only open half day tomorrow due to Christmas eve. Sorry for the confusion.

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    good website, nice comment

  4. Unknown Says:

    I have to ask what is going on with up to a 43% drop in one ProShares ETF. Does the ProShares ETFs Distributions explain most of the large drops? Or, are there other majorfactors involve?

    Example, why did SIJ drop so much 43%, new NAV 61.19 dropped $46.89? Can we take advantage of this or should we run?

    Are any of these great values or are they low volume traps?

    Is there a chance of more mass sell off for these ETFs before 2009?

    SMN down 38.01% new NAV $43.35 dropped $26.65
    SDP down 36.39% new NAV $47.9 dropped $ $27.49
    SKK down 35.35% new NAV $71.45 dropped $38.22
    SBB down 34.40% new NAV $60.31 dropped $31.47
    SSG down 43.3% new NAV $86.66 dropped $37.91
    SDD down 27.42% new NAV $70.85 dropped $26.83
    MZZ down 25.46% new NAV $65.8 dropped $22.75
    TWM down 23.81% new NAV $71.64 dropped $23.15
    REW down 23.12% new NAV $83.41 dropped $25.01
    DXD down 20.38% new NAV $58.20 dropped $14.81
    EFU down 18.49% new NAV $100.44 dropped $22.67
    DUG down 16.73% new NAV $28.21 dropped $5.89
    QID down 12.75% new NAV $60.10 dropped $8.91
    EWV down 11.62% new NAV $78.31 dropped $9.32
    SDS down 11.45% new NAV $77.7 dropped $10.03
    SRS down 6.11% new NAV $57.51 dropped $4.52


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