Global stock market games continued this week with the markets still hovering nervously around key support levels, with the Dow actually falling below 8000 last week and even threatening to fall towards the lows of November 2007. This was the market’s reaction to the passing of the stimulus bill and the Timothy Geithner “no plan”. The president used a nationally televised press conference to announce that his Treasury secretary would the very next day reveal to the nation, and indeed to the world, a plan to save the banks and provide relief for distressed homeowners. Sadly Geithner’s speech was so vague and lacking in detail the stock market plunged by about 400 points. It seems the administration’s economists have not yet solved the problem of valuing the toxic assets on the banks’ balance sheets — pay too much for those assets and the taxpayer gets the bill; pay too little and the banks have to take bankruptcy-producing write-downs.
It is against this background that the earning season continues to deliver a very mixed bag of results as well as being an indication that things are only likely to get worse thereby making any long term stock market trading and investment decisions even more difficult. This is where practising in a virtual stock market can help to prevent unwise or premature decisions. A stock market game can be the best place to try out both new and existing strategies while the world waits for the financial markets to stop spinning out of control.
