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MV Weather Report: Cloudy With a High Risk of Risk


Rain or shine, we review the day's biggest stock stories.

Let's turn the page on another ugly week for bulls.

The news wasn't too bad today. Wells Fargo (WFC) traded strong on news that it's cutting its dividend to $0.05 from $0.34, and the market closed unchanged.

The S&P 500 closed at 683, again unchanged from yesterday's action. But Kevin Depew stated on the Buzz & Banter that the index needed to close above 705 for his TD indicators to become bullish. Here are his thoughts on the 1987 scenario.

"Minyan JB asked about the 1987 analog Tom DeMark recently discovered, and this is important: Declining below 667.60 today has extended that analog, which otherwise appeared likely to expire today. This puts us squarely back into the woods and means risk remains extraordinarily high."

Risk is high, but the 1987 crash scenario is picking up so much steam, I think it's off the table.

Here is what Jeff Cooper said today on the Buzz.

"If the morning low breaks, the next move could be 660ish, which is shown in an hourly chart for the year from my report this morning."

Click to enlarge

Cooper has been calling for the 661 level to be the bottom of this downside move. Today the low on the S&P was 666. Close enough to 661? We'll to wait until Monday.

Talk about Monday, there isn't much on the radar. But for a clue about what to watch for, check out Bill Feingold's rhetorical questions for Warren Buffett.

"Dear Mr. Buffett,

1. As a 20% holder of Moody's (MCO), did you attempt to put a stop to them diluting their AAA ratings on the securities that you rightly criticize the monoline insurers for insuring (CDOs)? Or did you ever ask Moody's management how they could assess the monoline insurers as AAA given your scathing critique of them? If you have done either why have you chosen not to censure Moody's management for its actions either now or in earlier years in your annual reports?

2. Do you believe it is a conflict of interest for Moody's to be rating BHAC (your municipal bond insurance business) given Berkshire Hathaway's (BRK.A) 20% holding in the company?

3. Please explain why the rating agencies are not among the culprits you fingered in your 2008 annual report for the roles they played in the financial crisis."

Have a great weekend, Minyans!
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