12,000: We Hardly Knew Ya
One hour to go on a Quadruple witching expiry, with a near $4 rise in Oil, more trouble in the finance sector (9th inning! 9th inning!), the Duoline downgrades, Ford (and GM) downgrades, and the Israeli prep for an attack on Iran are all pressuring the indices.
Where are we: On the Dow, 11,740 was the recent major closing low (March 10th 08); The intraday low this year in January at 11,635.
Some of this is clearly expiry driven; the weak week means that options that ar ein the money are forcing a negative bias in the action. Some of it is simply a fear of holding long positions over a weekend -- thereis increasing chatter that Israel could blow up Iran. I have no opinion on the odds of that happening, but if it did, we could see Oil could pop to $175 (daily limits be damned!). In that event, the Fed could cut rates to zero and we would still have a 500+ point gap down (that's a low probability event).
Regardless, some technical breaks, negative breadth and heavy downside volume are adding to the overall negative whackage.
Let's hope Hank Paulson is smarter than George Schultz James Baker (or was it Greenspan?) who was rumored to have warned of a possible dollar devaluation over the weekend prior to Black Monday.
Dow Industrials Intra-day Day
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Friday, June 20, 2008 | 03:00 PM | Permalink
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It was James "Recount" Baker, the Paulson of his day, who came up with that brilliant comment on "letting the dollar slide" right before Black Monday.
Posted by: john haskell | Jun 20, 2008 3:17:21 PM
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