Things looked pretty dicey during the first half of the trading session yesterday as the major indexes headed straight south. A steady mid-day recovery effort got us almost back to the unchanged line with the Nasdaq displaying the most upward momentum.
A couple events caused some severe swings in the market. The first one was a typical case of the dog catching the car—now what? I am talking about the Irish debt saga that had traders breathe a sigh of relief on Friday as it appeared that the Irish would agree to a rescue package.
Now that it is in process of being finalized, doubts keep coming up that it might not be a great long term solution (it won’t) and that it might prolong the pain and duration of a recovery (it will).
At the same time, fears prevailed that the problem may spread to those countries in the on-deck circle, namely Portugal and Spain. In other words, the European debt crisis is in full swing and there will be more to come for sure. Stay tuned!
Adding to market uncertainty was a sudden FBI raid on a couple Hedge fund offices said to be part of a string of possible insider trading networks. Ah yes, it’s about time another major while collar crime hits the news wires. It’s been a while since Bernie Madoff…
Given all that, it’s amazing that the markets managed such a solid comeback. I would expect volume to taper off as we get closer to Thanksgiving, so any market moves may be exaggerated until we return to normal next Monday.