The volatility of late has been very similar to what we saw daily in fall 2008. The only people who enjoy this are people with timeframes of minutes or an hour or two. Our bank stocks continue to trade like penny stocks, down 30% one day, up 25% the next - it's actually quite sad since so much of our commerce has been based on finance the past 15 years especially. I had to leave early yesterday but saw in the evening there was much ado about Bank of America CEO buying $1.2 million shares of his stock - big deal; go look at his pay and option handouts the past 5 years to see this means nothing. There is a good chance he will lose almost all of it since many of our banks are going to be "AIG'd" - sitting around at $1 dollar while we make up excuses that "no, we are not nationalizing the banks". We have a bunch of zombies that are only around at this point because the taxpayer is propping them up. Citigroup (C) and Bank of America (BAC) are effectively AIG'd. If market participants lose enough faith it might even happen to Wells Fargo (WFC) and JPMorgan (JPM) - I realize for some readers they are "fun to trade" but just understand its Russian Roulette.
It's gotten so bad that PNC Financial (PNC) came out and said WE DO NOT WANT government money because they know the market thinks anyone getting more government money is going to be diluted heavily in the future, lose dividends, and have their controls taken over.
I cannot believe "they" put Parsons as chairman of Citigroup (C) - are you kidding me. He ran Time Warner (TWX) into the ground and has been sitting on the Citi board during this implosion - this shows in America it's not what you know but who you know. And why the arguement that CEO's need to make 300x the median worker is a complete joke - these are the skill sets we are rewarding? Anyhow, I'm disgusted. (and yes I realize he is not a CEO but it's the same old boys network)
As for the market it's bad - just bad. S&P 820 as you see is the line in the sand - again. Range 1: S&P 820-850 remains the bulls only hope but the more times we smash down on 820 the more apt we are to break down below it. We continue to revisit this 820 area over and over. The market has some infatuation with "big round numbers" which is why we usually seem to bounce or stall right around them (i.e. S&P 800 the past two days) but that is just psychological - there is nothing there. The onus remains on the bulls - all they got yesterday was panicked short covering when CNBC started pumping JPMorgan and Bank of America CEO buys... any rally led by "worst of breed" is not one I believe in... and financials are worst of breed.
So we're just back in this holding period - every time S&P bounces off 820 the daytraders rush in, and when we break it the daytraders rush out. That's all this market is now - because you cannot make one viable arguement about buying things on fundamentals. One cannot predict the future but seeing these repeated attempts at S&P 820 is not a good thing. If 815 breaks we go and visit those lows the past two days and once again it's the same story - the more times we test those areas the more likely they break. And then we revisit November 2008 lows.
Whomever is buying on the long side now is a braver soul than I. Catching one of those "CNBC rallies" is not worth it, for the losses that could be staring us in the fact if a round of panic sets in. And in a technically driven market, that could happen during a lunch break.
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