Not a whole lot happened in the market today as is obvious from the day’s price action. We moved up a little, we moved down a little, and closed near flat on the day. This price action formed what is referred to in candlestick patterns as a doji. This pattern combined with yesterday’s long real body forms a two day pattern called a harami cross and has the potential for reversal. Confirmation of this being a reversal would be a confirming close below today’s high.
Not even the economic data moved the market. Both initial and continuing claims came in worse than expected, but the ISM and construction spending came in better than expect (marginally, but don’t tell CNBC they thought that those numbers were great). Not really all that surprising that we had something of a tug of war over those numbers but one would think that the swings would have been greater. We also saw increases in auto sales although it was mostly business spending as they had to replace fleet vehicles.
What actually plaid out as the biggest news in of the day was the senate hearing held over MF Global’s bankruptcy. For those who don’t know, MF Global went filed for chapter 11 bankruptcy back in October. What remains so controversial about this is not the bankruptcy itself, but the fact that customer money was missing. Not investments that customers made which have been mostly returned, but money that was in cash accounts that shouldn’t have been touched. It started out that about 600 million dollars was missing and the deeper they looked the more came up missing. The largest estimate that I heard was that there was somewhere around 1.2 billion dollars. It has been suggested that the company used customer funds without their permission for the firm’s investments in European sovereign debt. The other possibility is that it was outright stolen. I don’t know what would be worse, whether it was one guy, or if it was the entire firm. I really hope that this gets sorted out soon and their customers get most of their money back.
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