Commentary

George Chamberlin

GEORGE CHAMBERLIN has been associated with The Daily Transcript at SDDT.com since 1998 and became Executive Editor in 2006. He is responsible for the development of editorial strategies for the newspaper and website. He has introduced video and audio into the editorial products and is the public face of the company at many community events. George regularly chairs industry roundtables and conducts video interviews of participants for use on the San Diego Source. He writes two daily columns, "Money in the Morning" and a daily stock market wrap-up.

George, a long time resident of North County, lives in Vista with his wife Terry.

From the Executive Editor

The bulls are back. After several weeks of bearish activity -- the Dow industrials started this week down about 5 percent from the all-time high set on Sept. 19 -- the markets have been coming back with gusto. The Dow jumped 215 points yesterday and has returned to positive territory for the year. But the big winner yesterday was the Nasdaq, up a staggering 103 points, or 2.4 percent. It was propelled by big gains in Apple shares following a report showing big sales of its iPhones and computers.

Concerns about a violent incident in Canada on Wednesday sent stock prices lower, snapping a three-session winning streak.

For most people, last Sunday was just another day, perhaps marred only by the Chargers’ loss to the Kansas City Chiefs.

A small gain could have been a big gain. The Dow industrials yesterday rose 19 points but could have been up a bunch more had it not been for IBM. Shares of Big Blue fell more than 7 percent after reducing its earnings and revenue forecasts for the full year. Had the shares been flat on the day, the Dow probably would have been up about 60 points. The Nasdaq was actually up 1.4 percent yesterday and the S&P 500 also posted a solid gain.

Stocks posted solid gains Tuesday after a report showing strong home sales and big gains for Apple.

Stock prices moved higher Monday despite a disappointing earnings forecast by IBM.

The market crash has been delayed again. Just when it looked like the bears were going to take control and push stocks sharply lower, along comes a big ol’ rally. The Dow industrials were up 263 points on Friday, an unusual move considering the concerns about Ebola, ISIS and other geopolitical issues. As a rule, investors usually move to the sidelines going into a weekend where there is uncertainty. Instead, people were seizing the opportunity after the declines earlier in the week to pick up some bargains. Still, the Dow and other indexes were down about 1 percent for the week and are off 5 percent from the record highs set Sept. 19. Hardly the makings of a bear market.

It's probably too early to declare the recent correction in stock prices to be over, but today's early rally is a welcome relief. The Dow industrials jumped 200 points in the first half-hour of trading despite few changes in the circumstances that have dragged down stock sharply in the past two and a half weeks. The Ebola situation continues to dominate the headlines with every event -- even the bogus scare at Southwestern College yesterday -- adding to the panic. The fact the stock market is moving higher as we go into the weekend is a bit unusual. Usually, when investors are nervous, the prospect of something bad happening when the markets are closed usually results in profit-taking on Fridays.

The financial markets were relatively calm Thursday, despite growing concerns about the possible spread of Ebola in the United States.

Bull markets take the escalator and bear markets take the elevator. That's the way Sam Stovall from S&P Capital IQ describes the recent chaos on Wall Street. As a rule, corrections like we are experiencing have a tendency to be quick and violent, not unlike an earthquake. Hence the reference to an elevator ride -- the fastest way to get from the top floor to the bottom. Rising markets tend to be much calmer and slower. The rally that began in March 2009 was a steady, consistent rise with just a few stops along the way. Sam is not suggesting the bears are done and the selling is out of our system, but he believes the markets will find solid footing soon.

You know things are getting serious on Wall Street when financial websites are using pictures of the Titanic to accompany stories about the stock market. A sharp decline in European stocks overnight washed across the Atlantic today, causing a big sell-off when trading began. For a brief time the Dow industrials fell below 16K, down more than 300 points. Things have calmed down but the Dow was still down about 180 points after a half-hour of trading.

Nowhere to run, nowhere to hide. The selling continued on Wall Street yesterday with the Dow industrials dropping another 223 points, making in nine times in the last 11 sessions the index has moved lower. The Dow is now down 1.5 percent so far in 2014 while the Nasdaq and the S&P 500 are barely holding on to modest gains. The two-week slide has been mostly the result of concerns that global economies are in serious trouble. Whether it's slower-than-expected growth in China, weakness in Germany or overall tensions related to geopolitical situations, the path of least resistance for stocks continues lower. Sam Stovall of S&P Capital IQ said yesterday, "We will advise investors to look upon the recent weakness as a buying opportunity, especially considering the speed with which large and small caps typically recover from pullbacks and corrections." My favorite MarketWatch.com headline today: "15 most hated S&P 1,500 stocks in the terrible market."

More George Chamberlin Columns
Subscribe Today!