BEHIND THE MONEY: Stocks OK Considering Citi Plunge, Worst Contraction Since 1982, Budget Bust
Stock are holding up pretty well considering that the government will soon own 40 percent of the country's largest financial institution , the economy just contracted the most since 1982, and the new president has unleashed a $3.6 trillion budget that he will pay for by taxing people who also happen to be the biggest investors in the stock market.
With Washington in the forefront this whole month, their plans largely failed to inspire confidence, with the Dow down more than 10 percent in February. The index is poised for its worst month since the 'Black October' of 2008 and its second-worst February ever.
With the news this bad and uncertainty this high, Joe Terranova, Virtus Investment Partners chief alternatives strategist, is starting to think that maybe the bottom (reached at the maximum point of confusion and pain) is near. Maybe that's why we're seeing a bullish reversal off the lows today. Catch Terranova's way to trade this possible bottom on the show tonight.
The level on the S&P 500 that traders have been watching is 741. That's the November '08 intraday low. If the stock benchmark can hold this level in the face of all this bad news and bad feelings, consider it a bullish sign.
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