Friday, February 20, 2009

MSM misses the point

All of the papers and national media are focusing on the Dow's drop yesterday. Clearly it is the easiest number to focus on, but it's 30 stocks and unfortunately it includes duds like Alcoa, Citigroup, Bank of America and GE.

The more important number is 752 on the S&P 500. We closed at 779 yesterday and look to open around 764. We're getting close to the edge and while I still expect a vicious bear market rally at some point this year, the odds of going much lower have increased markedly in the past few weeks.

However, options are expiring this week and that often leads to irrational market moves.


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