Roulette Anyone?
The market has become nothing more than a casino in the short run here. I guess one can make the point that this is always the case, but not to this extent. It is held hostage to rumblings out of Europe and will go up or down 300 points at the drop of a hat. This will either make traders very happy or suicidal. I am guessing the latter is more prevalent. How do you plan for these daily swings? Traders love trends to latch onto. This market is trending down overall, but the swings are ridiculous.
Feckless Fed
The once venerable Federal Reserve has become completely useless and even dangerous. The recent “Twist” program received a huge thumbs down from the market and showed that the Fed is indeed running out of bullets to help the economy. Their QE programs didn’t do much, and this latest concoction likely will do nothing as well. A market that doesn’t have faith in the Fed as the lender of last resort, or in this case the savior, is not on solid footing.
How big is the 1100-1120 level on the S&P 500? We have tested the top of this range a few times and it has held. If the bottom falls out and we break 1100, I think a quick trip to 1000 is in store. There is very little support below the 1100 level, and many sell stop orders will be triggered, which will cause a whoosh lower if that key level is broken. Keep an eye out.
On A Bullish Note
Warren Buffett has instituted a share buyback for Berkshire Hathaway, which is a rare move for the legend. Investors have been complaining about the stock being undervalued, and apparently the Oracle of Omaha agrees. Does this have broader ramifications for an undervalued market? Only time will tell. Surely this is a good sign for optimism though.
Some Random Market Thoughts – 9/27/2011 is an article from: 
