October 19, 2014
Weekly Market Outlook
By Keith Schneider
Monty Python and the Holy Grail (1975)
Is life and finance imitating art? Amid the expanding Ebola pandemic, getting treatment for Ebola in Africa is very difficult, however getting people to the morgue is easy. In fact, there are reports that victims stricken with Ebola thought dead, have been picked up prematurely taken to the morgue only to awaken thereafter. In the cult classic film, “Monty Python and the Holy Grail,” during the dark ages while the black plague raged, oxcarts picked up the dead on a daily basis. There is a great scene where a healthy person is being coaxed onto the death cart by the driver arguing with him that he will soon be dead anyway.
So as news reports spread across the world about the disaster de jour, (Ebola), along with news about French debt being downgraded, Greek junk bonds tanking, energy plunging and Isis gaining ground amid a global slowdown, it looked like the market caught its own virtual Ebola, opening with a dizzying drop of 450 points, on its way to the morgue (crash mode) within the first half hour of trading last Wednesday only to wake up from crash levels and close well off the lows. The wild ranges, huge volume, and decent closes in most indexes on Friday, kept losses moderate for the week for most indexes. The exception has been the weakest index, Russell’s or IWM, which actually closed positive for the week.
The bounce from oversold conditions was expected, however longer term trends are shifting, Watch this weekend’s video as we review fairly rare classic short term trading patterns in several markets.
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