Daytrading to earn a living: Mixed Signal

Friday, April 11, 2008

Mixed Signal

Dismal economic news is no longer acting as a big depressant on stock prices.
A recession seems imminent. Corporate profit growth continues to slow. Yet stocks now go up or trade sideways when bad news strikes.
Two reports released Apr. 10 presented some mixed signals on the U.S. economy.

1.) Initial jobless claims for the week ending Apr. 5 fell 53,000, to 357,000, pulling back from the prior week's 410,000

2.) The U.S. trade deficit widened to $62.3 billion in February, from $59.0 billion in January.Exports were up $3.0 billion, to $151.4 billion, while imports jumped $6.3 billion, to $213.7 billion.

S&P 500 PERFORMANCE IN RECESSIONS

Though stocks tend to slump in the first half of a recession, in the nine recessions dating back to 1953, the last half of the slump has usually been good to investors. Performance of S&P 500 during the past five recessions:
Recession 1st half 2nd half Total
Dec. 1973-March 1975 -17.4% +5.1% -13.1%
Feb. 1980-July 1980 -6.9% +14.5% +5.8%
Aug. 1990-March 1991 -9.5% +16.5 +5.4%
April 2001-Nov. 2001 +4.4% -5.9% -1.8%
Avg. since 1953-1954 -8.6% +13.2% +3.1%
Source: Citigroup Global Markets

Tracking the Dow on Thursday,10/04/08

Intel Corp shares jumped 3 percent

and helped lift all three major U.S. stock indexes after Banc of America Securities upgraded the U.S. semiconductor sector, saying a modest inventory buildup has eased.

Adding to investor confidence, Goldman Sachs Group Inc Chief Executive Lloyd Blankfein said on Thursday that financial markets are likely in the late stages of the credit crisis that began last summer.So in the last half hour before the closing bell we saw the onslught of three small infantry of advancing Deep Purple - Soldier Of Fortune