Bulls Seize the Tape...For Now

By David Fry | December 03, 2008 | 7:34 PM | 0 Comments

The bulls have seized the tape for now. The news remains terrible but those that need to prop things find tidbits of news to rationalize buying. They cherry-pick what news they like, spin it in bullish fashion, and voila, up pops another rally to try to even things out for the week.

Ignoring Research in Motion’s (NYSE: RIMM) disappointing numbers [it closed nearly 5% higher, DOH!] and focusing instead on Marvel Technology’s better than expected report demonstrated the point in the early going. Then the Fed’s Beige Book arrived at 2 PM and up we went because, as the spin goes, it wasn’t worse than feared.

Short-term the markets are now overbought once again but long-term remain much oversold. Remember, as the end of last month proved those that needed to prop things were able to do so as their fiscal year ended. In December it’s the season to be jolly and try to put some lipstick on this pig before the year ends.

Further today marked another one of those 400 point intraday swings that have become all too familiar. This means market volatility is too hot to handle.

All of this leads to the ongoing reality we face.

Volume increased today and breadth was good but not great as our man in Geneva gives us the goods.

Credit crunch easing? Not according this astonishing Bloomberg report citing difficulties with corporate debt.

I wonder how big this story from the WSJ will be if true. How much in the way of mortgage money will they lend? To only new buyers or everyone? The devil’s in the details of course. But, no question about it, this type of program will give bulls’ further incentive to keep pushing prices higher. Also, given the steady diet of bad news with markets rising in reaction we may be in for a surprising rally.

Sorry to cut this short but it’s the wife’s birthday and a celebration ensues.

Have a pleasant evening.

Disclaimer:  The ETF Digest has no positions.