Even though volumes are below 50% of pre-holiday trading, the market has shown it ‘can celebrate’ with or without the Bear or Bull fully in attendance. Yep, one triple digit up day is reason enough to party and put an end to a crazy year!. Hopefully, DJIM’s traders have celebrated some this past week by focusing on the E&P shales such as HK, GDP, CRK and just letting Journals / Alerts guide to a high note finish to 2008. Today, we got what we were looking for the day before to set this market up for a move…GMAC good news. Previous day all the noise was around the DOW-Kuwait -ROH deals and nothing on GMAC. We saw it differently as we felt the market wanted an answer it didn’t get yet surrounding GMAC. Most have become immune to the word bailout and many underestimated this potential news and its potential impact. Without going into deals, this announcement was much better than just a bailout. The follow through hit just were we wanted on the Financials/ brokers, particularly GS and JPM, respectively up over 7 and 4%, rallying the market into close and the SPX to 891 just above the 50ma resistance. (funny thing is when we said 888 is small resistance, we were looking at a chart without the 50ma on it). Almost in tandem, the $OSX (for our Shales) and GS bubbled right after our 2:15 pm note highlighting them to finish strong..“OSX and GS/ JPM to follow for last 2hr, should tell the tale if we hold triple digits".
Despite energy and Oil stumbling for most of the day, Crude trading off by a $1 to $39/bbl, off lows of $38/bbl and Natgas prices lower to $5.86MM/btu, we still got a better rebound in individual stocks into the close. Partly, we think this positive action also has to do with new SEC rules on reserves where the value of the reserves will be based on average oil and gas prices over the previous 12 months, rather than at year’s end price giving major Oil co's the ability to re-evaluate and increase reserves.
Of course, tomorrow is the last trading day of the year, we may get more action than anticipated because many will be winding up their year end activity.
Most importantly, we'd like to take a moment to say thank you to our members/ friends for sticking through this tumultuous year with us and to wish you all a Very Happy New Year and a prosperous 2009!.
Sincerely,
Demi & Jon