Two year movements are now made in two days!

November 7th, 2008  by Lou Muddaris

Closing Data

	current	change	%
Dow Jones	8695.79	-443.48	-4.9%
NASDAQ	1608.7	-72.94	-4.3%
S P 500	904.88	-47.89	-5.0%
FTSE 100	4272.41	-258.32	-5.7%
Nikkei 225	8899.14	0	0.0%
SPI Futures	4041	-174	-4.1%
All Ords	4,106.50	180.8	-4.2%
Oil	60.75	-4.69	-7.2%
Gold	732.35	0.55	0.1%
Silver	9.97	0.01	0.1%
Aluminium	2012	21.5	1.1%
Copper	4071	-160	-3.8%
Lead	1478	-43	-2.8%
Nickel	12035	225	1.9%
Tin	15100	-150	-1.0%
Zinc	1145.5	10	0.9%

Overnight News

U.S. stocks sold off on Thursday in their worst two-day slide since October 1987 with disappointing corporate outlooks and bleak sales from major retailers fuelling fears of a deepening economic downturn. The Dow Jones industrial average tumbled 443.48 points, or 4.85 percent, to end at 8,695.79. U.S. gold futures fell more than 1 percent on Thursday, erasing early session gains as fresh worries about a global recession prompted funds to ditch all assets from gold to commodities and stocks.

The stock market has sold off considerably since Barack Obama's historic election on Tuesday, but given that the White House and Congress will both be in the hands of the Democratic Party for the next few years, certain sectors of the market may stand to benefit, while others may be hurt. Of course, we must provide two caveats: First, the economy remains beleaguered by deepening recession and credit freeze, making this a highly atypical juncture in U.S.market history; and, secondly, the actual impact - for good or bad - of Washington D.C.on stock market performance remains a controversial premise.  Nonetheless, based on Obama's stated policies, we can consider how certain industries - and their corresponding share prices - may fare under his rule.

The Bank of England cut its base rate by a massive 1.5% and the ECB a more modest 50bp with promises of further cuts.
The IMF said the U.S., Japan and Europe are in a recession.The universal thinking is Australia will be spared...just.

Hedge Funds

As if we didn't have enough to contend with these guys are certainly the wild card.
These traders control an estimated $1.7 trillion and account for about 30% of trading. They are certainly facing serious financial problems with redemptions continuing to force their hand to sell stocks, commodities and whatever toxic assets they have. Many analysts are predicting up to 30% of them could go belly up.

Overnight Platinum Grove Asset Fund said it had lost 29% in the first two weeks alone in October and has now banned withdrawls...I'm sure there must be some legal implications here but I guess the alternative would be fatal.

According to Hedge Fund Research the average fund has lost 20% and rising.

Tonight sees the crucial non farm pay-roll data with analysts estimating a 200,000 fall...dare I suggest this bad news is already factored in?

Yesterdays Australian employment data recorded a gain of 34,3000 jobs and the headline steady at 4.3%. Rest assured it will only get worse from now on in.

Fibonacci

Due to popular feedback we have been asked to identify any key Fib' numbers relating to the All Ord's.
There is a major one at 3,715 which is about 50 points above the October 27th low. I calculated this by taking Wednesday's high of 4,340 and applied (divided) the key golden ratio number of 1.168 equating to this major support line of 3,715.

We could see a break of the psychologically important 4,000 level and if so then we recommend buying Suncorp at $8.50 and ANZ at $16 and write aggressive calls.

Quote of the Day:

"Be yourself because everybody else is taken"

Written by Lou Muddaris and Lawrence Grasso.

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

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