The American Patient

October 17th, 2008  by Lou Muddaris

Closing Data

	current	change	%
Dow Jones	8979.26	401.35	4.7%
NASDAQ	1717.71	89.38	5.5%
S P 500	946.43	38.59	4.3%
FTSE 100	3861.4	-218.2	-5.4%
Nikkei 225	8458.45	-1089.02	-11.4%
SPI Futures	4137	110	2.7%
All Ords	3988.1	284.4	-6.7%
Oil	69.81	-4.57	-6.1%
Gold	804.5	-34.5	-4.1%
Silver	9.635	-0.545	-5.4%
Aluminium	2110.5	-25	-1.2%
Copper	4880	-246	-4.8%
Lead	1440	-72	-4.8%
Nickel	11430	-245	-2.1%
Tin	13855	-155	-1.1%
Zinc	1203.5	-113.5	-8.6%

The American Patient *

Back in 2006 Uncle Sam was happy with life, indeed make that deliriously happy. He was partying, over spending and lending money to all his friends; Mr Joe the Plumber, Mr Investor, Mr Credit, Mr Stock, Mr Bank and Mr World. They were all having a great time in this new found Utopia!

Then in 2007 he caught a horrible virus from Mr Bank and started to feel unwell, he kept it a secret from all his friends and carried on partying even harder! (Typical male!) Surely this is will soon go he thought and put it down to "over exuberance". Unfortunately Sam became ill, very ill and whilst all his friends were still partying a few of them started to feel abit queasy. Then one day in August 2008 he had a heart attack and was rushed to intensive care under Dr Fed (Heart specialist), Dr Treasury(Brain Surgeon) and most important of all Dr Investor (Psychiatrist specializing in confidence and panic attacks).

Prognosis

Although Sam very nearly died those 3 Dr’s literally saved his life .The Prognosis is Sam is still in intensive care but he WILL live as time and rest is now needed for those treatments to work. However, the most important treatment is given by Dr Investor who specializes in emotional trauma and panic attacks. Sam has been rebuilt physically but all he needs is CONFIDENCE; but he WILL recover over time.

Unfortunately Sam passed this malaise to ALL of his friends who are now suffering severely; it will tale a long time before those happier days return!

Back To Reality

Overnight the price action confirmed the above. We saw:

1/Industrial output fell 6%, its worst fall in 17 years.

2/Factory orders fell to minus 37.5,worst in 18 years

3/Building Sentiment Index fell to "14", the lowest levels since records began!

We know the U.S is in recession that is why the economic data is basically meaningless; it’s all about fear and greed and that is why we are having 800 point daily swings! The next concern is , will it be a global recession and if so, for how long?

The Gnomes of Zurich

Now I’d never ever thought I’d be writing this BUT….The Swiss National Bank last night injected $7.8 bln into UBS and buying $60bln of their toxic debt.

The Safest and the capital of world banking needed help!

Battle Royale

In emotionally driven markets savvy traders turn to charts/technical’s to try and quantify "things". The market yesterday oscillated around the psychologically important level of 4000; The positive to be taken from this is we closed above it at 4015, that will encourage the technicians.

Have a great weekend.

Quote of the day:

"Children need love especially when they don’t deserve it."

* Not to be confused with the "English Patient"…the most powerful film ever made. I highly recommend it.

Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.

< Return to Market Fox home