Click chart to enlargeJust a reminder that even if we do break down, the S&P has support from its 2002 lows, as shown on the monthly chart of SPY above. Those lows are at 771, which isn't all that much lower than we are now.
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37 comments:
Snot, are we going there today or tomorrow? Will the market go up from there? I know things are pretty crazy. Please just give us an educated guess.
it's time to buy for swing trader.
Pardon me, but I'm a bit hopping mad. So the big 3 build lousy stuff that nobody wants? Suppose that tomorrow every car that comes out of Detroit had 10mpg better mileage. That would be pretty good, right? OK, so NOW folks will run right over to the dealership and snap one up? Give me a break. And because of this they are made out to be nasty evil conglomerates. Question: Why hasn't anybody else made this pie-in-the-sky car? Oh, and don't forget, in order to afford such a masterpiece of economy, the Government has to step in and subsidize to the tune of 7-9K per vehicle.
We've built many McMansions the past 20 years or so because that is precisely what people wanted to buy. The auto makers did the same thing. I can build you a 'green' house that will cost you 1 1/2 to 2 times what a normal house will run. Any takers? If I can't sell a beautiful spec home right now, does that make me a bad, evil builder?
Look, people can barely afford to shop at WalMart. What makes you think that they will run right out and buy that flashy new put put? Got lots of money sittin' in the bank just waitin' for that miracle car to come out, are yuh?
Lastly, the Unions truly need to go away. Mr Gettellfinger is possibly the most consistently out to lunch person I've ever seen. A union never created employment.
OK, I've got that off my chest and now I'll go back to work.
Snot, I track DDM, like many stocks, on my Yahoo charts and without having it labelled it looks just like so many other stage 4 stocks. I brink this up because according to our new poll, it appears the mean has been revised down a fair amount. If I was long DDM now, which I ain't, I would feel like a deer in the proverbial headlights. Either you go through lots of Tums or you have a cast iron stomach.
sbbuilder, so when are you willing to buy, I mean S&P at which level?
sbbuilder
Someone pointed out SKF.
Would you buy at that level or sell?
If you wouldn't dare to touch it that means UYG is due for a lift.
That applies to S&P 500..
The conditions are perfect with the Big3 bail-out and options exp. day.
I did sell my DXD and FPX positions today.
The VIX is in the process of testing an uptrending RSI resistance line.
http://i468.photobucket.com/albums/rr44/iconoclast421/VIX11-19.jpg
A break of such a line is THE most bearish signal there is (as far as I know). Keep an eye on it. If VIX breaks that line I guarantee DOW sets a new 52 week low. I would bet everything on it.
Anon, for the past couple of months, I've bought inverse ETF's exclusively. I wait for a run-up in the main index, buy near the close, and hold of for a few days. My very unscientific theory is that there is much more potential downside to the main index than upside, consequently holding the inverse is more attractive. As for the bottom, who cares? I'll just ride this down until it stops going down. Theoretically, the last trade I make at that point will lose money, but I will have made much, much more on the way down. Doesn't matter what index you follow DOW, Nasdaq, S&P etc. you can treat them much the same.
I called the bottom of the DOW at 6000 for out poll, but truth is, that was just shootin' from the hip.
hk22, yes, SKF is not at an attractive buy point, surely. Your next points were valid, too, but look at what icon just referred us to. Presently I think the market is unglued enough that making a reasonable prediction is unreasonable. So what am I going to do? Sit on my hands.
option play, tomorrow open low, close high. imho.
At the risk of becoming too verbose, here is another tid-bit for you guys: The mean for our poll (I weighted the below 5000 people to be uniformly 4000), is 6130. I didn't bother with standard deviation etc. but I think you get the point. This is just one reason I feel more comfortable betting against the market.
DOW is testing 8000 pts... looks like dow hold it...
btw, in DDM @27.50.... not sure if that's good or not
One thing for sure is that my timing was terrible today.
I hate being long tho :-)
DOW broke all support today. Target 7288 tomorrow and will make new low and stay low until OBAMA takes office...
C is at 6.25. GS 55. Can they BK?
I dont think so. I am seeing some support. Here is my latest chart:
http://i468.photobucket.com/albums/rr44/iconoclast421/SPX11-19-1.jpg
I added a small blue line to the rsi. That is that path I am hoping the market takes. If it does I will feel confident buying a large qty of BGZ/FXP at that time. Until then its just nibbles here and there. The key is that nearly-vertical downward sloping orange line on the right. We have to close ON that line in the next couple days.
Snot, c'mon, you're up. What's the view from where you sit?
sbbuilder,
Honda made a car a while back that got 70mpg. It was called the Insight. Brand new it sold for under $20k. Detroit just needs to recreate that car. Despite this terrible economy, there are plenty of people who would trade in their gas guzzlers and put up $10k to never have to buy gas again.
The Insight was a hybrid, but with the technology they have today, there is no need to include the gas engine. An engineer from Calif made his own electric car out of a Porsche, and it cost something in the ballpark of 2 cents a mile to drive. Hopefully with all of its resources, GM could accomplish something similar to what that one man did.
Snot,
On top of that whats your take regarding the market.
Per today's close are buying ddm or going short?
Snot,
OK, leaving the electric car thing aside, what about the rest of today's wreck? Financials: yuck. Industrials: bleaugh. Tech: splat. Are we in look out below land?
On the overall market, it's such a tough call. Our guess is that we don't crash. We'll take out all of the stops, but then reverse and rally. Just can't imagine there are that many more people (or funds) that want out that haven't already sold. Is it news to people that the market is going down? How many people are just crawling out from under a rock and realizing this for the first time? It's not comfortable being long now, of course. But our theory of putting 1/3 of our account in at Dow 9,000 and another third at Dow 6,000 and the final third at Dow 3,000 is still our goal. Of course we don't believe it will go to 3,000, but you have to think that way in order to stay in the game. When the market does eventually turn around, it's nearly impossible to buy it on the way up. It goes up a little each day, and before you know it, it's a few thousand points higher and you've missed it alltogether.
So if buying for the long term is your goal, as it is ours, now is the time to be layering into your position. Sure a 2,000 point drop would be great, but it may not happen.
That said, this is the worst market we've ever seen. The technicals are as bearish as they get. The rallies are so weak, it's hard to imagine what will ever propel the market back to the averages. If Citi goes bankrupt, then we'll bet on Dow 6,500. Otherwise, our bet is on Dow 7,500 or so. Just enough to take out the lowest stops.
As far as our position, it's unchanged. We will not sell here, and we will not buy more unless there is a capitulative selloff. In that case, we'll layer into SSO every few hundred points lower on the Dow. No intention of shorting at these levels, despite the bearish technicals.
Hi Snot,
Do you SHORT SKF?
Snot,
Thanks for your input.
I don't intend to be long in this mess for too long.
Inverse ETF's are my new addiction :-)
Hey, what gives here? Wagoner and Mulally, the CEO's of GM and Ford spent $20,000 each on private jet travel to Washington, D.C. yesterday for their hearing before the Senate Banking Committee.
A commercial round trip flight would have cost just $288, saving each company $19,712, for a total savings of $59,136.
They went there to ask for taxpayer funding because they can't make ends meet. So on top of all of your current bills, you're going to pay for their flight. And it isn't just the CEO's, it's all executives and their spouses that have access to your money for private jet travel.
If only we got to define what their bailout money could be spent on, the bailouts might actually work.
The video is on Yahoo's home page.
Here's a link to how your taxpayer bailout money will be spent...
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=10744205&ch=4226713&src=news
I have a solution for the CDS. Conor suggested that the bank and 100 other speculators bought the CDSs from JPM on his $100m debt. The solution is to force the 100 speculators to return their CDSs (naked CDSs) to JPM. They get the insurance fee back. If I am a speculator, I have no problem unless I want to screw JPM. I did not give out the $100m loan anyway. I can not imagine JPM would pay the $100 debt 101 times to these speculators. It is ridiculous. Can this reduce the total CDSs from $64 trillion to half trillion?
VIX is in the process of finishing the right shoulder.I want to think that it has reach the top and will start the fall.
Using EW, wave 5 of 3 have to end and will start wave a of 4 (ascending):
http://blog.afraidtotrade.com/possible-elliott-wave-interpretation-for-the-sp-500/
When Allan Mulally took the Ford CEO job in 2006, he insisted his family should enjoy the corperate jet as the benefit of his contract. And he had been paid $20m (ending the contract with Boeing, etc) before he came to Detroit. Ford was already very difficult in 2006.
The problem is that if they don't get bailed out thousends of families are going to suffer because of their unresponsible and arrogant CEO's.
And whats strikes me the most is that none of them would take the 1$/job salary when asked by a congressman today.
By punishing them they will end up hurting a lot of people and they know that very well.
I think one of the loan conditions should be that each of the CEO's would take a $250.000 yearly/salary until their corp. become profitable or the loan amnt. is paid off.
Chances are they will all quit leaving room for more talented, smart and innovative CEO's.
I'm sure there are plenty out there.
Mulally's salary is not high. His bonus are performance related. But Ford paid him $20 for him to terminate with Boeing and other things. The Chrysler CEO Nardelli was the former Home Depot CEO. When he left HD, he got a $200 package which made the shareholders very angry. HD did poorly during Nardelli's tenure.
For all the unidentified anon's out there:
here is a long link for u to register so we all know who u are, and you can all have an identity :-)
And it only takes 1-2 minutes.
https://www.google.com/accounts/NewAccount?service=blogger&continue=https%3A%2F%2Fwww.blogger.com%2Floginz%3Fd%3Dhttps%253A%252F%252Fwww.blogger.com%252Fcomment.g%253FblogID%253D7745908761682869758%2526postID%253D54475852169438363%2526page%253D1%2526isPopup%253Dtrue%26a%3DADD_SERVICE_FLAG&hl=en&sendvemail=true&followup=https%3A%2F%2Fwww.blogger.com%2Floginz%3Fd%3D%252Fhome%26a%3DSERVICE_ONLY&naui=8
We never felt like it was our place to comment on a CEO's salary. But now that we, as taxpayers, are collectively paying their salaries, we have every right to comment on how the money is spent.
Their compensation is approx $16M per year. In our opinion, someone making $16M should either be doing one of the following:
1.) Performing
OR
2.) Working 24/7
If they're performing, then who cares how many hours they're working. But if they're making $16M and aren't performing, then they should be doing nothing but trying to change the situation. So these guys essentially make approx $1800 per hour. If it takes an extra 2 hours to take a commercial flight, then it costs the company $3600 for the CEO's additional time. Why spend $20,000 to save $3600?
That's first grade math, and they aren't doing it.
Yes, they need to survive for the good of Michigan and the U.S. economy, but considering we're the ones paying to keep these companies alive, we reserve the right to not purchase an American automobile until the obvious, arrogant excesses are done away with.
Here is a post about the Big 3 that I wrote over 2 years ago:
http://anythingexceptthetruth.blogspot.com/2006/11/big-3-stooges.html
Here is a quote from 2 years ago: "Let these auto companies die. They should have died a long time ago, but they were too big of a cash cow. I hate to break it to ya, but it was always a ponzi scheme. Cars vs trains. Trains are better. Cars are bigger money makers. Guess which one America chose? Duh. Sorry but it can't last forever. The idea is 36 years obsolete. (US oil production peaked 36 years ago.) And for 36 years we've been lying to ourselves. That has to stop. The Big 3 have had many many chances to take the industry in a new direction. But instead of pushing a great new idea, like a modular auto/rail integration scheme, they bring us ... a bigger SUV. How [censored] creative of you! To hell with you."
Based on the Darvas method the Nasdaq and the S&P500 is in a new trading range, in a new "box". The old support (~1500 and ~830) now acting as a resistance.
Iconoclast,
Trains won't work everywhere in the states
They only work in Big Urban Cities.
USA is not Europe.
The problem with big 3 is that they have made junk cars for the past 20 years.And they got away with that.
But you need to notice that American cars have changed this pas 6 years. (for good)
They are not junk as they used to be back in the 90s.
One can argue that it is too late, thats true but vetter late than never, right?
But perception is very tough to change. "Time" is Big 3's number one enemy.
The only problem is that they got stuck in the current economic situation.
meanhile government took a free ride this pas 50 years with GM<,Ford and Chrysler paying for Health care and pensions that they should have been responsible in the first place.
Also you need to understand the if you kill the last major industry left here you are just going to get things worse than they are.
Skyrocketing healthcare cost is what all those congressmen out there should address. People can't even afford to go to a doctor without having health insurance which itslef is very expenssive.
AIG alone received $45B overnight and nobody said a word about that.
and on top of that:
NEW YORK, Nov 18 (Reuters) - American International Group Inc , the insurer getting a $152 billion federal bailout, in a regulatory filing late on Tuesday disclosed it would pay roughly $3 million to several executives under deferred compensation plans that are being terminated
That sounds about right.
That bail-out is indeed needed.
And 25 billion is nothing nowdays :-)
Iconoclast,
That was a great post, and considering when it was written, kind of eerie. Hope you were able to profit from that foresight.
We added your blog to our favorites list and will check in often. We think very alike on many things. Too bad we aren't the ones running these companies, they might actually function!
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