Car Wreck

by Larry Levin

As America waits to vote, investors and traders passed the time by reading the newspaper, 'cause they sure weren't trading. Although trades were made Monday, the volume and action was anemic. Seasoned pit locals and fast screen traders alike wondered aloud, why did I come in today? Volume barely passed 1 billion on the NYSE.

And it's not as if the day was devoid of economic data - there was plenty of it; ISM, construction spending, and auto sales. All were bad, but the auto sales figures fell off a cliff.

According to the latest reading of the ISM data, the nation's manufacturing firms reported the worst level of output in 26 years, further evidence that the economy is slumping sharply. An ISM reading above 50.0% indicates an expanding economy. Economists guessed that today's number would be near 41.5%. Actually, it was a dismal 38.9% which has not been seen since 1982.

Although construction spending was negative, it was better than expected.

Auto Wreck, monthly sales figures:

- Toyota , down 23%

- Honda, down 25%

- Ford, down 30%

- Nissan, down 33%

- Chrysler, down 35%

- GM, down a staggering 45%

General Motors reported that its light vehicle sales plunged to 168,719 cars and trucks in October from 307,408 a year ago. The car side took a 34.3% hit to 73,466 units, and total truck sales dropped 51% to 97,119 vehicles.

If you adjust for population growth, this is probably the worst industry sales month in the post-WWII era, Mark LaNeve, head of GM sales and marketing, said. We believe there is considerable pent-up demand from the last three years, but until the credit markets open up and consumer confidence improves, the entire U.S. economy, and any industry like autos that relies on financing, will suffer.

Tuesday's early action is likely to be similar to todays: anemic. However, as poll data comes in and a clear winner is foreseen, we may actually get a tradable trend. Whether that is up or down (or both) is another matter.



Previous Day's Trading Room Results:

Trade Date: 11/3/08

E-Mini S&P Trades*
(before fees and commissions):

1) PP buy @ 8:35am at 964.75 = -1.75 (1 lot)

2) Algorithm positions (4)...combined total...-8.25

ZB (30 Year Bond) Trades*
(before fees and commissions):


1) No trades today.



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