May 9, 2008

News that AIG would need to raise some capital and the old familiar story of soaring oil prices in response to some wacko in some foreign communist country who wants to dominate the world and destroy the United States and its allies in the process, sent the markets down today. But most of the damage was limited. Remember, the market has been up very strong for the past two months and the action from today and this week in general was done on light volume, and is providing an excellent trading opportunity with some of the index ETF’s (in particular SPY). Technically the charts from the past two months are looking solid. AIG’s news was big for the day, but not likely to have a long-term impact on the rest of the market. Investors have come to expect such news, knowing that we weren’t out of the credit crisis entirely, and it is likely that this type of news is largely already priced in to the stocks. Further deterioration next week could allow for us to reconsider the market’s direction, but as it stands right now, everything is still intact.

Now to the NASDAQ and S&P Charts…