每日市场点评 --- June 20, 2008

Yesterday’s rebound turned out to be as short-lived. All three major indices finished this option expiry date lower by at least 1.8%. For the week, the Dow was off by more than 450 points and closed at levels not seen since early March. The S&P 500 and the Nasdaq were faring relatively better compared to the Dow and were down 3.1% and 2.0% respectively for the week. It should be noted that the S&P now is in negative territory for the quarter and is down by more than 10% for the year. There is little economic news in today’s session. Selling in overseas markets amid deepening concerns about the financial sector was cited as the main reason behind today’s weakness.

All major sectors were closed the session lower by at least 1%. Energies were no exception in spite of a $2 rise in crude oil ahead of a meeting for oil producers in Saudi this weekend. The CRB commodity index regained most of the loss from the previous session and for the week it was up 2%. The US dollar was lower against most major currencies as traders were increasingly convinced that the Fed would only use words rather than actions to calm down inflation. Treasuries rallied across the board as some flight to quality was going on. The VIX index jumped almost 6% but it was still too low for a capitulation rally to occur. One thing that did get a little extreme was the number of news lows on NYSE and Nasdaq. The combined figure was exceeding 500. But back in January and March, the figure surpassed 1000 in both cases. Another technical indicator that showed some pessimism is the Dumb Money reading, which reached 29% yesterday and reflected pessimism among small investors. Given next week we are going to have the FOMC meeting, more volatility should be a safe bet.