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Zach Bass (a.k.a Ernie Varitimos) is Chief Bloviator of Investor in the Wilderness. He has 30 years experience as a Tech Maven, Investor and Consultant. Zach has been using Macs since their introduction in 1984, and investing in the markets just as long. His mission is to help guide all level of investors through the Apple Ecosphere and make sense of the markets. Zach's take on Apple, the markets, and life pursuits, will keep your mind tuned.

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Apple and Markets Slaves to the Indices or Mr Magoo?

July 31st, 2008 • Related • Filed Under
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We had a real chance to complete a third wave up today in the S&P, the Nasdaq, and the Dow. What stopped that move dead in its track? Was it the lower than expected GDP, was it the higher than expected Jobs claims, or was it the impulsive move Oil made yesterday? It was none of these. Sure we gapped down this morning on the GDP and Jobs reports, but then the indices rebounded and climbed throughout the day.

In my blog post yesterday (Wednesday July 31) I cautioned that the S&P and Naz would meet resistance at their respective 50-Day Exponential Moving Averages (EMA). And at least for the Naz the 50-Day EMA appeared to be a real drag. The S&P and Dow however, simply fell short and could move above previous session highs. None of the indices could muster the strength, or the conviction.

AAPL behaved in a similar manner, virtually mirroring the indices behavior. AAPL gapped down, just like the indices, rose to previous session highs, and then hung there for most of the day.

So what brought us down? Was it the GDP, the Jobs report? It certainly wasn’t Oil, it acted like a normal stock today, subject to the same lemming-like behavior. So what was it that broke us down late in the session? How about our friend, that lovable Mr. Magoo? That’s right, the former Fed chairman Alan Greenspan went on CNBC, grabbing the spotlight again, and proclaiming that the mortgage crisis wasn’t over, that the global slowdown is increasing our chances of recession, that the worse is not over. WTF? As soon as he finished his diatribe, the markets fell.

Why is this guy still given any airtime is beyond me, he’s lost all credibility! He’s the one that got us into this mess in the first place! Who is he to dictate the direction of our economy with his insidious lip flapping? Man, retire already, go home and play tennis with Andrea, take a cruise, something, just stay off the television! Enough is enough! Ok, I’m alright…I need a drink!

  • kylelong100
    the fear of worsening unemployment numbers tomorrow may also have something with the lated drop today. at least, that was why i was not buying stocks today. tomorrow, i hope for some real cheap stocks if the employment numbers look bad.
  • Bryan
    I believe people wanted out before tomorrows economic report after seeing today's #s. Who would be a buyer before that. No reason.
  • marcos
    Put him in a boat and sink it. Economists have more access to immediate and accurate information today than ever in the history of modern economies. Can they get it right? No. No one in the Fed or in the OMB or governmental advisors in positions of influence has been able to provide us the basis for sustained economic growth and prosperity---ever. We are no better served by these fools today than my parents or grandparents were during the Great Depression. We live through boom and bust cycles without respite and only prosper when we survive their advice.
  • Macfan
    You've redeemed yourself! I couldn't agree more,
  • venapro
    I concur
  • Butthead Greenspan is indeed a hemorrhoid that won't go away - HEY YOU OLD BASTARD go fishing! GREAT BLOG by the way - added it to my daily read list.

    HH
  • taojones
    call me crazy but every war has been followed by a period of DEFLATION once they are over (starting with the civil war) unfortunately this country has been at war almost continuously for over 100 years. Im no economist but it seems to me if we concentrated on fixing our bridges (and everyones teeth) instead of blowing holes in sand the money would start circulating around in this country again with the biggest danger a plethora of surplus cheap consumable goods as opposed to an arms stockpile that goes obsolete and needs replacement wether we use it or not . the results of steering us away from war were clearly characterized by the clinton years prosperity and the results of the looting of our treasury by the current jokers illustrates my point i think quite nicely
    you want to stop inflation stop waging war and put everybody to work making stuff we actually want .
  • investor1990
    The markets will not recover this year. That's why we are going down.
  • IC11
    Hey taojones,

    I remember Sept 11th when we were minding out own business fixing everyone's teeth and bulding bridges when 2 guys took 3 trillion dollars out of the economy in roughly two hours. If you think America is the aggressor, you are the problem. America is not an imperialist nation. We leave if the rebuilt country wants us to and stay to defend them if they prefer. Our biggest problem is the people that we elect to choose our wars. Like when we were attacked by Japan and went to war with Germany or Harry Truman and Korea or JFK and Viet Nam for instance.

    You sound like the folks that were opposed to the Marshall Plan that rebuilt Europe after WWII.

    All economies wax and wane. Having been young and unemployed during the late seventies, I remember when things were actually bad. I remember a national malaise and the misery index hovering around 20 (Unemployment % + Inflation rate %) as opposed to less hovering around 10 today.

    Blaming Big Al is a little over the top. Oil Brought us here. Congressional mandates to make mortgages available to everyone regardless of risk brought us here. Maybe even budget deficits brought us here. All three of those go back to Congress. Big Al's job was to try and keep the economy growing at 3-4% with low inflation no matter what political, economic, or military event was thrown his way.

    While I'm not his biggest fan, I remember him telling congress that their were huge dangers in continuing the current course with regard to deficits, entitlement spending, tax policy and other areas of congressional responsibility. Congress is responsible for the financial state of the country. They have the constitutional powers. If they delegate them to the Fed, they're still responsible.
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