BANKRUPT BANKER
The S&P 500 fell a sharp 6.9% on the week following the previous week’s 4.8% decline. Plans to recapitalize the US banks has the market gasping for air. All the economic indicators continue to be gloomy with few if any signs of a recovery or even a bottoming.
The stimulus package was greeted as if it was due for a Razzie rather than an Oscar. The banking sector is leading this market lower. The US banking system is effectively bankrupt. The plans from the US Treasury are vague and Treasury Secretary Geithner’s performance has been hugely underwhelming. He may have to go before he drags the Obama administration down with it.
The S&P 500 broke down out of a triangle pattern and broke below 800. Negative developments. New lows are a clear possibility.
Targets are 600/650. While the seasonals are supposed to be positive during this period our thoughts on a high
in April are now looking like a low. Investors should watch their positions carefully and lighten up on any profitable positions
acquired over the past few months. The DJI lows of 2002 were 7177. At lows Friday of 7226 we are within 50 points of taking them out. Expect them to fall.
