Tuesday, March 18, 2008

What you should be reading for today

Looks like St. Paddy's day was not one for Bear Stearns (or its employees) to celebrate. The subsequent action in the markets reflected the panic.

Bill has an excellent chart showing the relationship between the VIX and 10-year Treasury Yield. This ratio is at levels last seen in the 2002/2003 bottom

TraderMike has his usual succinct summary. He is watching 2,200 closely in the Nasdaq. Market reaction to Fed decision will decide whether we have support or resistance.

Will the Fed cut by a full 1%? Will Markets view it as the needed cure? Or a panic reaction to the current state of affairs? It sounds like a lot to me - but what do I know.

Barry has Lehmans on B.S. watch.

Steven Smith
at TheStreet.com noted heavy option trading volume in B.S. over the course of the last couple of weeks.

Kevin's Market Blog is looking for a measured move target down to $39-39 for the Qs.

Quantifiable Edges notes how Bear ruined the traditional pre-Fed rally. But, not to be outdone, the Fed impact on the market turns more negative as time passes (Oh Great!).

In times like these it is better to buy stocks for the long haul, rather than try and trade the volatility swings. For me, the best stocks to buy in these conditions are dividend payers. Why? You are buying a stock at deep discount with a yield which is (usually) far superior to any bond - a good floor for any stock. Assuming you spread your share purchases over time you can get a really good deal on stocks. Sites like Dividend Money, Dividend Growth, Dividend Guy, Dividends4Life, and Dividends Matter should be on your feed readers. Dividend Money had a nice piece about Insurers.

If/When the Fed starts to adopt a Zimbabwean policy towards money it will probably unwittingly cure the Social Security shortfall.

 
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