Despite the late day 100 point move in the Dow, the day had a feeling of disappointment to it. Traders made it clear we were now data-dependent, and we got the kind of positive data we needed in the jobs report. The result? A rally that lasted 15 minutes at the open, and then traders sold into it.
Bill Miller seems to have made a gutsy call to look at financials, but no one else is making the call...yes, Merrill and Citi have seen huge volume this week and are at new lows, but somehow it doesn't feel like capitulation.
And critics of Miller are pointing out that he has underperformed the last two years, was buying homebuilders last year (ouch!), never bought any energy stocks, and at any rate Miller, as a value investor, values getting in early and holding on for a long time something most will not do.
This week: Merrill down 13% (2 year low), Citi down 11.5% (4 year low). Where do we go from here? What's next? Ben Bernanke is speaking to the Joint Economic Committee of Congress next week; that will be the highlight. "Watch him dance around this one," one disgruntled trader who wanted a 50 basis point rate cut wrote.
Major indices this week:
Dow Industrials down 1.5%
S&P 500 down 1.7%
NASDAQ up 0.2%
Russell 2000 down 2.9%
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