11.14.08

11.14.08 

            This week, like so many weeks before, had its ups and downs; unfortunately there were more downs than ups.  And like the previous weeks, the end result was another one of sizable losses for the major indices. It is still looking for a bottom, but just can’t seem to find solid footing. The S&P has had a triple bottom formation in here, but it has not yet been confirmed.

            If Secretary Paulson had not reversed his use of the TARP funds, the market would have had a chance to put some points on the board. But the street doesn’t like it when unexplained changes of this magnitude take place.  It was a stunning revelation, given how much emphasis had been placed on it during the hearings and how effective that approach would be for stabilizing the financial system. In the two weeks Congress took to consider the TARP legislation, Paulson said market conditions worsened considerably.  Consequently, he determined that the best use of the TARP funds would be to strengthen bank balance sheets by making direct purchases of equity in banks, instead of buying troubled assets from the banks to get them off the balance sheets.  (Troubled Assets Rescue Plan = TARP)

            The G-20 had their meeting and, as expected, did nothing to calm any of the world’s problems. Investors are looking forward to Obama’s taking over soon but don’t seem to like the names being bantered about for high positions in the new administration. These are the same old political names. What happened to CHANGE? Oh, that’s right the election is over, time to start forgetting those “vote for me” promises that all politicians make.

            We have had a relaxing time sitting on the side lines for the last 2 ½ months. CNBC has been asking the question “Is buy and hold dead?” We have believed it to be dead since we started market timing back in the 1980’s.

            As you know, we are in CASH 100% and continue to hold that position going into next week.

Till next time

The MTA Staff