Day Traders Diary


One big down day on Monday. A nice rebound yesterday and more weakness today. The Dow Jones Industrial Average fell 173 points to 8,245. The S&P 500 declined 19 points to 828 while the Nasdaq Composite shed 33 points to 1,416. Plenty of bad news with a few bright spots. Research in Motion is down 3% after lowering guidance. The stock is down 75% since August. The techs are weak. One trading higher is Marvell, up 13% on good earnings. Schlumberger is down 12% after lowering guidance. The stock is down 60% since August. The commodoities are very weak. Freeport McMoRan is down 20% after lowering guidance as well. The stock is down 80% since August. The largest oil driller, Transocean is down 10% to new lows. Now the few bright spots. Pfizer is higher on an upgrade. The financials are down, but not by much. Goldman Sachs is higher. One encouraging sign is the drop in the 30 year mortgage to 5.5% after the Fed started buying mortgage backed securities. Last week, mortgage applications rose 112% to a record level. The CEO of PIMCO, Bill Gross indicated this morning on TV that mortgage rates could drop to 5% to 4.5%. That would be GREAT. The best news I've heard in a while. The retail sector is holding in there. Amazon is up 7% following robust sales over the weekend and on Monday. After the first hour the Dow was down 50 points. The Nasdaq was unchanged. By 11 o'clock all the major averages were in the green. Amazing. During the lunch hour the averages remained in the green, up as much as 100 points. Jos. A Bank is up 9% after beating estimates by 9 cents. How did a retailer beat estimates? After the lunch hour the averages moved back in the red. At 2 o'clock, a weak Beige book sent the Dow down over 100 points, but the averages rebounded following this news led by the financials. Morgan Stanley is jumping 15% on rumors Goldman Sachs would buy them. I don't know if that's logical. Bank of America is higher after the CEO issued a statement saying they think the economy will rebound by the second half of next year. Many of the techs have turned around including Research in Motion. In the last hour the averages took off. I'm not complaining, but it's crazy. Before the market closed, the WallStreet Journal broke a story that the Treasury is working on a new plan to lower mortgage rates using Fannie and Freddie. I hope it works. The Dow Jones Industrial Average finished up 172 points, or 2.1%, to end at 8,591. The S&P 500 added 21 points, or 2.6%, to stand at 870 while the Nasdaq Composite gained 42 points, or 2.9%, to 1,492.

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