Stock market fear

It feels like we are in a bad movie that just won’t end and you can’t get up to walk out because the doors are locked. Last week we had the $700 billion fraud bailout with $150 billion added on top of that just to show American taxpayers how generous we are with our tax money being given to the wealthy. Nice! Then the market fell. Today, we had an emergency federal reserve interest rate cut coordinated with a few other central banks to show how much more panicked the 3 stooges Bush, Bernanke, and Paulson really are. The market usually rallies with these artificially lowered rate cuts and today was no exception. The indexes bounce up and down. In the last hour, I was certain it would close up 200 points. The exception came in the last half hour which is when the indexes fell down.

That mix of emotions had the major indexes wavering between gains and losses until Paulson in late afternoon said financial markets remain severely strained. He also said it would be several weeks before the government’s $700 billion financial rescue plan makes its first purchases of banks’ troubled mortgage-backed assets.

Paulson’s comments showed how vulnerable the market is, and how it can shoot up or down in minutes. The S&P 500 index, up more than 20 points at 3:35 p.m. EDT, tumbled to a loss of 11 by the 4 p.m. closing bell.

“Until we have some more confidence here it’s going to be difficult to sustain any rally,” said Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa. “Unfortunately you probably sell the rallies for a little while until we run out of sellers.”

The Dow Jones industrial average ended down 189.01, or 2.00 percent, at 9,258.10 after changing direction 36 times.

Broader stock indicators also fell. The S&P 500 index slid 11.29, or 1.13 percent, to 984.94, and the Nasdaq fell 14.55, or 0.83 percent, to 1,740.33.

With its precipitous drop of the past few weeks, Wall Street is approaching the magnitude of the losses it suffered during the bear market in the early part of this decade. By the time the Dow reached its low of that market, 7,286.27 on Oct. 9, 2002, it had fallen 37.8 percent from its record high close of 11,722.98, set in January 2000.

The Dow has now fallen about 35 percent from the closing high of 14,164.53, reached a year ago Thursday. This week alone, the Dow has lost 1,067 points, or 10.3 percent. It has lost 1,592.56, or 14.68 percent over the past six sessions.

Theoretically, our chances get better with other foreign leaders discussing the global economy and the solutions available. What worries me is that Bush, Bernanke, and Paulson are taking the lead which means we are taking them down with us instead of them pulling us out of the economic turmoil.

The markets did try to rally a few times today because there are some great prices on good long term stocks. WIth all the uncertainty, there are more investors selling than buying. Google and Apple have dropped more than 50% from their all time highs. Will the DOW, Nasdaq, and the S&P 500 follow pursuit? Only time will tell. As i write this, the stock futures are pointing up: