Click chart to enlargeThe above chart of SPY shows the breakdown from the descending triangle. We bought some SSO today figuring that once they took out the stops, the market might reverse. But considering the close we got, there's little question that a new leg down has begun. It's anyone's guess as to where this one stops. The horizontal line on the chart above is now resistance, and we'll be trading in a new, lower "box".
A few days ago, we posted a chart of SKF (inverse financials). We mentioned that the charts of the individual financial stocks looked like they had further to fall, but we couldn't imagine anyone buying SKF at 175. Today, it hit 275. Simply an amazing market we're in.
GE down to below $13 not much more than a month after Buffett invests $3 billion into it at $25... more historic action.
And Citigroup (C), need we say more? Despite Prince Alaweed's vote of confidence today, our guess is that Citi goes bankrupt. When a stock trades below $5, the odds of it returning to glory are very slim.
This is reminiscent of the dotcom bust when not only the obvious bankruptcies happened, but many companies "too large to fail" were also pulled down with the ship. At the time, we never thought that Tyco, Worldcom, or Aol would fail. This time around, we just expect the unexpected.
65 comments:
Hi Snot,
I disagree that just because a stock is at $5, it cannot rebound to say 20 or 30. One stock that comes to my mind is AAPL. In 2002, ater the dotcom bust, it was trading at $6. It traded all the way to $200 this year. Same with Citi. In 1991-1992, it was in single digits.
AK.
Snow,
How about we list some good shorts? I know you do not invest in individual stocks but go ahead and share with us.
Also what is your plan for now? Sell SSO and DDM?
j
I am still target DDM buy at $11-$15. I will set up and buy from there. Sell on any rally now...
Too quiet today! SPEAK!
I think C is running out of time...What the f... country...Biggest Bank since 1829 now will gone forever...Trading at 3.60 at 7:30 on 11/21/08. So SAD... Some body has to stop the bleeding. My entire retirement account is in C, my kids college fund and else. I am in the mid 50. What I am going to do... I think my life is in deep s...Who ever buy and hold in this country is f.
look at SKF...
Wow, SKF, nice! We sold the SSO we bought yesterday at a 2 point loss, and added some QID at 96. Just trying to buffer the loss if this really turns into another full leg down to 6000.
The day Citi goes bankrupt, the market will drop hard.
Hopefully you're kidding about having 100% of your retirement account in Citi, anon.
Sure, it could come back, but considering what's going on in the financial world, a Citi bankruptcy would come as absolutely no suprise. Would roil the market, though.
There are a lot of good shorts out there, but many of them look oversold at this point. BCSI, for example, is a great short. They look to be headed for BK also, but the stock is too far from the moving average to short it safely now. When Gary shorted it, at 13.50 near the 100dma, that was a great short. If we find one that is not only a good short candidate but one in which the timing is also favorable (has yet to break down), we'll post a chart of it.
Where is PPT these days? Run out of money?
forget SKF, look at FAZ! Up 100% this week. lol in one week.
Snot
I'm currently remodelling an old farmhouse in the north woods of Michigan, 12.5 mi from the nearest high-speed connection, so I'm only able to check in in a limited time frame. Being unable to check in as often as I'm used to, I have come to realize how much I depend on this blog to stay current. Back home for the Grand Turkey Day, though.
Bear with me as I return to the poll for a moment. You re-opened on Mon. 17, and since that time (5 days!), the mean has fallen from 6130 to 6047. No surprise there. But get this: 7882 is no longer any good! And 7500 looks to soon follow. That means that about a quarter of the voters are probably squirming right now. More importantly, where do we go from here?
I'm watching wide-eyed as the indexes go nuts the past 4 days (4 days that I have nothing invested). Like hk22, I'm waiting for a pull back before going back in. (Remember I do the inverse ETF stuff.) icon asked me if SKF looked good last Tues. and I replied that it looked too toppy right then. But holy cow, what a run-up since! I'm getting a neck ache from shaking my head every time I check the charts.
Snot
Oh, and it appears that there is a seismic shift in your investing style. Sold SSO and bought QID. Hmmm. Feeling a little schizoid?
The market can not see the bottom until all stocks are traded at single digit and all the inverse funds are traded at 4 digits.
Here we go again last two hrs sell off...
As soon as SKF hit 300, I pulled the trigger on FAS. Call me crazy, but SKF at 300 is crazy too.
Dow will be up 300-400 points. look at c, msft, ge, xom. MMs always cheat small investors, don't make second mistake.
btw.I bought lots gold stocks yesteday.
Guys, Don't selll now.
We are in a transitional time.
SNOT , I understand your bought QID to hedge your longs but i think u did it too late and looks like a panic reaction.
Chances are QID will go down.
Guys,
Turn off your screen if you can't handle this crazy Volatility and put your well thought (and realistic) limit orders in place.
I've noticed that my limitis somehow always get reached but I always end up buying or selling to soon.
If I would have just turned the monitor my profits propabl would be double.
And as you can see shorts have to cover before the weekend.
Anybody with a reason would do so.
Beautiful human mind creates greed and Fear.
BTW I just sold UYM at 10.28, my limit order got filled. Bought yesterday at 8.83- I know I got lucky (all time low)
And since everything is manipulated over here, "Great" news is going to start pooping out of nowhere, starting this weekend.
And of course you know who owns them.
Big Money loaded up on longs while selling their shorts.
Time to drop those inverse ETF's down again so they can load up for cheap.
Pure speculations.
If you can't fight them, join them.
.My only 2 cents.
Dont forget tho, Long term we are going way lower.
http://i468.photobucket.com/albums/rr44/iconoclast421/SPX-11-21.jpg
SPX closed right on the magic line, as I hoped it would.
I added 4 possibilities that I think are likely to occur monday and throughout next week. I then highlighted with purple the path I think the market is most likely to take. Selloff on monday, with a rally that generates the first buy signal we've had in 3 weeks. Note that if we rally on monday, we do not get a buy signal. Monday must close lower. If we get a rally on monday, it must be a sucker's rally. I'll need to think about this some more, to see if I got the logic correct.
Everytime SKF brakes down from its all time high it falls for 7-15 days.
So I have pretty much a week to achive my target sell for UYG.
One problem - I bought it way to early at 5.10 and avg. down to 4.10
If all goes good I will get out at 5.30/share.
On a side note:
Take a look at FXP. Down 30% today.
Ouch.
One day to erase all its gains of a week. Thats not a good sign.
The chinese must be doing something right.
ahahah someone bought QID at the top.
When Snot buys QID, the end is near. The bull is about to come alive.
hk22, pooping? That's good, really good. Might have been a typo, but I like it.
Think about it, the market gets all whoozy because some dude gets nominated to lead the Fed. This will fix all our ills? Also, with opex, and end of week, I didn't want to buy anything. Hard rule for me lately is not to hold much of anything over the weekend. If Monday gives us a little more rally, I'll jump right back in. Like Snot says: rinse and repeat.
The MM's have been shaking the bushes real hard lately in order to take out the stops (and the small guy). If you go by the assumption that there is short term manipulation, then these events become predictable. I like that.
Back to the CDS's. Two years ago, we hardly heard didley boo about sub-prime. Now it's suppossed to be a big ugly, and wasn't everybody alerted somehow? My guess is that CDS's will be the next big ugly. Everybody will start talking about them just like the sub-prime mess. This is one reason that I will purchase SKF on its next leg down and hold longer than usual. Once the market gets a whiff that there is a real threat on the horizon, then the banks that are teetering now will get blown away.
Got to get back to the woods....
OK so I didn't run out there quite yet. I haven't checked the ferts in over a month. Simply took them off of my watch list and more or less forgot about them. Here's a couple to ponder: POT at 60, down from 237; MOS at 25 down from 161. Snot was dead-on right about these. They are broken and will probably go down to single digits. Also, MTL went from 54 to 4, so they are already there.
Sorry..I mean popping.
Same thing anyway :-)
And as of today they already started doing it:
By and large asset markets are "terribly oversold" now, while investors are going overboard into the U.S. dollar and U.S. Treasurys, Faber, editor of the Gloom, Boom & Doom Report, told "Squawk Box Europe."
"What you could see in the next three months is a very strong rebound in asset markets, in equities, followed by a selloff in bonds and eventually a selloff in the dollar," he said.
Source : CNBC.
And 135 would be a good entry price for SKF.
Meanwhile why not play with UYG?
Have a good weekend everybody
We may have bought QID at the top, only time will tell. It's a 3% position compared to the 30% we have in the Ultralongs. Not the end of the world. No one knows yet if this most recent selloff was just Wall Street's way of taking out the stops or the start of a new leg down. The possibilty of C going BK still looms.
Congratulations to all of you who were short or out alltogther over the past week. That was the way to play it.
We are entering a Thanksgiving rally! Nobody wants to eat turkey with empty 401k account! In other words we rally next week.
Sometimes you need to look beyond the charts.
After Thanksgiving.... back to reality!
j
Icon,
Very interested in your charts, Ill be watching that on monday. If it rallys then we go through your line and fail to make 3 point connection, right? So must fall and then rally, but all the way through the line, so the buy signal cannot be generated until Tueday afterhours earliest.. I'm guessing that a rally through the longest line (ending around 50) will be a big big buy signal?
SSB
You are possibly too late with the CDS's. I have no doubt that this drop in Citi is as a result of the exposure that they have to these coming to light. There may be a trade there if HSBC steps in and buys them though, especially if govt dosent guarantee the liabilities. JP morgan & Goldman also have plenty of distance to fall and could be worth a punt, but god, its a scary trade.. Where the hell do you enter? I'll be waiting for a big rally if we ever get it.
On the idea of MM's driving out weak hands, give me a break... I got real tired of hearing that line on the LDK board. Which Hedge fund managers are strong enough or confident enough to be playing that game with the whole market right now? Those feckers are all leveraged 10/1 and in worse shape than most of us.. The selling is all guys deleveraging or trying to meet margin calls and forced sales.
Anyone in a strong position at this stage in the game is 100% committed to the short side, not trying to push down prices to better entry point to go long..
anyone interested in snots favorite book can download it here
http://rapidshare.com/files/166206705/Darvas__Nicholas_-_How_I_Made_2_Million_in_the_Stock_Market.pdf
anybody else have a book they like give me the name and ill post it too for the group...
Not so fast bulls.
It would be a good sign for the bulls if it can climb back over the October low level but it’s now a resistance. And we are still under that level.
Yesterday was short covering -> maybe bulltrap.
96 USD for QID is a "little" high price, I bought it fog 86.
GOOG and AAPL is the key.
noname :)
Conor, can find the book "Reminiscences of a Stock Operator" by Edwin Lefevre? It is a 70 year old book.
Do you still hold YGE and LDK? Did you sell them when YGE bounced back to $7 and LDK $25?.
Sbb, glad to hear you have work! Also glad to know how much you enjoy the blog. With the minds assembled here, the next bull market will be very profitable for all... even if it doesn't begin for some time.
Conor, you must have a stomach of steel to deal with the swings involved with options. We've seen many people go from down 80% to up 300% in no time. What do you do to ensure that your account balance is growing over the long term? Do you lock a certain amount of profits each year so that your baseline grows while you invest the rest of the account?
We do this, which is why we invest only a portion of our account. We also move some money from our trading account into other accounts that we never touch. This ensures that even if armageddon happened, we'd still be in the game. It prevents us from averaging down into the Dow at 4,000 on that one time that it falls to zero and a new currency is created. Supposedly this happens eventually to all currencies not backed by something material, like gold or silver.
Cramer on how hedge funds get their price...
For anyone who hasn't already seen this, it's a must see. Cramer discusses how when he ran a hedge fund, they would sell a stock (like RIMM) in order to push it lower to create a panic and start a selloff. Then they would step in to buy.
Granted, the actions of the current market may be a lot bigger than hedge fund manipulation, but it's nevertheless something to be aware of.
Ironically, the poster of this video is "NicDarvas". http://www.youtube.com/watch?v=vfWSRuNm6do
Thanks for the link Snot,
I think is more than Hedge Funds (even tho there is a lot of money waiting on the sidelines) who brought the market up. Look at the DOW volume on friday, almost double.
I still think is the government channeling the market direction since its impossible to stop the downturn.
Interesting statement from Obama this saturday, I quoted part of the article:
Obama said he had directed his economic team to draft the stimulus proposal and predicted the Democratic-led Congress would quickly approve it for his signature.
"We'll be working out the details in the weeks ahead but it will be a two-year, nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy," Obama said.
Congressional Democrats have promised to make a broad economic stimulus a top priority when they reconvene in January.
The package is expected to include middle-class tax cuts and billions of dollars for public works projects, such as the construction of roads, bridges and mass transit.
Hobbled U.S. automakers are negotiating with lawmakers and the White House over a bailout package they say is urgently needed. While supporting the idea of a cash infusion for the automakers, Obama has kept a low profile in that debate.
Here is the full article:
http://www.cnbc.com/id/27855899
THE SECOND NEW DEAL
Americans,
so what do you think about Obama's initiative to create 2,5 mio new jobs in the next two years?
New bridges and roads - sounds like FD Roosevelt to me. And Obama also spoke via radio, another parallel. Interesting is the support of alternative energy.
Will this bring new confidence to the stock market? It should, since we rest on the lows of 2002/03 plus 1997/98.
Will solars rally?
Or will de-leveraging continue? Interesting sign: The deflationary push has eased a bit - gold jumped to 800 USD, even though the dollar did not weaken. There were rumors, that China will buy lots of gold. Maybe, risk-appetite returns.
My input: If Citigroup and the Big Three will be saved/nationalized, we should finally see a small relief rally.
Greetings from Germany,
newfrankyboy
Interesting article regarding Citigrup:
http://blogs.wsj.com/deals/2008/11/21/citigroup-you-cant-step-into-the-same-crisis-twice-right/
my opninon:
1-Its way too big to fail,
2-TARP is in effect
3-Treasury’s Capital Purchase Program is also in effect.
After all thats why 700B bail-out fund was created for , right?
I don't see them letting Citi go down. That would be a major disaster.
I think a statement from Hank is due to reassure investors, which frankly happen to have forgotten the reason why the 700B and Tarp exist.
If that actually occurs, that would create a perfect environment for a rally.
They are soo good at controlling the market direction, you ought to be blind not to be able to see this.
Snot
You may have purchased QID at the current top, but I think that we'll shortly blow right by 98 in short order. We are entering into America's biggest farcical annual buying binge. When word starts to come back about how weak sales are, esp. the high-end electronics, then the Nas will take yet another hit. Eventually Americans will finally have to adjust their spending habits to reflect their earnings.
Other news this weekend is that GM is actively mulling bankruptcy. Here's my analogy, and I'm being as serious as a heart attack: People tend to think that since their particular job/industry is not directly connected to the Auto's, then they will not feel the impact. Well, back a few years ago on there was a tsunami that devastated SE Asia. Those closest to the epicenter naturally got hit the hardest, but many lives were lost in Sri Lanka and as far away as Kenya. If one of the Auto's goes under, I believe the impact will be much the same. Unlike the banks, which more or less shuffle money around, real money is made in manufacturing. Anyone doubt that, look a China. They literally manufactured their way out of the stone age.
Conor: Why the deafening silence re CDS's? I don't pretend to understand the metrics involved, or how they may be currently affecting C or GS, but I become suspicious when a newsworthy event is patently ignored.
Also, and this is a guess, there may be fewer MM's left to influence the market because it is so weak, but when those that have capital left jump back in, then there is less resistance to their moves. I would imagine that there are a few left that have managed to preserve the bulk of their porfolio.
hk22: What do you think? Small run-up on Monday, then jump back in with the inverse ETF's? I can smell it coming.
Here's the end of the week tally: our poll mean is now 5134. I checked the math twice because I couldn't believe the number. That's basically a thousand point fall in six days. I would imagine that nobody is stuffing the ballot box. Snot, can you see why I suggested re-opening the poll? Parse this anyway you want, or ignore it altogether, but I think this is significant.
Well, got two deer to skin. Hope to get another buck tomorrow PM. Those buggers are eatin' all my corn.
sbbuilder,
I like what you said here:
"Unlike the banks, which more or less shuffle money around, real money is made in manufacturing. Anyone doubt that, look a China. They literally manufactured their way out of the stone age."
I will add:
In 63 B.C. the famous Senator of Rome,
Marcus Tullinus Cicero, stood before the
Senate of Rome and said:
"The budget should be balanced, the
Treasury should be refilled, public debt
should be reduced, the arrogance of officialdom
should be tempered and controlled,
and the assistance to foreign lands
should be curtailed lest Rome become
bankrupt!"
These words are almost applicable to the
events of today just as they easily might be
applied to the events of the Great Depression.
Their importance is far-reaching if
taken apart and reviewed carefully. Indeed
the Roman Empire did crumble from
within before the final blows were struck by
the encroaching peoples who surrounded
it. Rome fell victim to a social struggle in
which its population began to feel that its
labour was too valuable. Trade deficits
mounted as labour in outlying provinces
produced goods and services at prices
which were far more attractive.
Within every great society since the dawn
of civilization, this tendency for labour to
rise in price as prosperity befalls its economy
has been present without exception.
When the United States was in its infancy,
it too was the source of cheap labour for
Europe. But as Europe lost its competitiveness
due to rising wages, America flourished.
As prosperity came to the shores of
the new world, eventually American labour
rose in value and now our unions complain
of cheap labour in the Far East.
This is merely one of the natural orders in
which wealth is transferred from one society
to another. Sumptuary laws and great
tariff walls cannot prevent this natural
gravitation and transfer of wealth.
You have to read the rest:
here is a link to the full article
(well only the last chapter called -Gobal perspective)
http://www.geocities.com/cyclepro2/Share/Armstrong/V2C17.pdf
The book is called:
The Greatest Bull Market in History
by Martin Armstrong
and regarding going short this Monday if a rally occurs,
I wouldn't do it yet.
And job creation is the best thing it can happen for an economy.
And Inverse Etf's are still very expensive.
Cash might be your best friend :-)
Hey Anon,
Heres your book in PDF format
http://rapidshare.com/files/166425625/Jesse__Livermore_-_Reminiscences_of_a_Stock_Operator.pdf
Snot,
Your right about the swings in options but i approached them with a long term view. When i bought the financial puts i bought Jan 09 expiries and just held them through the swings with the view that fins would eventually drop down. I will admit though that the swing in citi from $30 to $15 and back to $30 played havoc with my portfolio value and was a major contributor to me selling at $12 as i was expecting another recovery. What a mistake that was huh? Straight to 3 without stopping..
Last year i took a lot of money out to pay down debt after the win from LDK options and put the rest into stock. The idea was that options expire but the stock will eventually recover. Next time ill listen to you, i swear.... I also took a lot out from the AIG win after their bankruptcy which is why i am down so much now on whats left. Basically the lesson i learnt with options last ear was not to trade in and out of them, buy long term and just hold and trust your instincts.
At the moment though i have no options, only stock. My account will need to see a signifigant recovery before i have enough surplus cash to play them again..
Someone asked about LDK and Yingli and yes i rode them both up 100% with the Citi Short profits and felt like the greatest trader in the world! Still holding now and feeling like a damn moron for falling for this shit yet again!
Ssbuilder.
I've been wondering the same thing about the CDS's. Barely a whisper about them and it makes me think that there is still time to make a play.
Read any of the stories about guys who predicted the downturn and bet on it. Bill Ackman, that guy ernie some one posted about the other day, they all say they bought hundreds of millions in Credit default swaps.
Now as they are like options on steroids as far as appreciation goes i'm wondering why we arent hearing more about the people on the losing sides of those trades. I dont 100% understand the mechanics either but i think i understand the concept alright. The problem is you cant say for definite that JPM haven't bought profitable swaps as well as writing losing ones and the entry points just look so bad right now after the recent plummet. I've not got any bets n on that side right now, but maybe after a rally i might dip a toe in...
Hey Conorsh,
Any chance you have the book "Secrets for Profiting in Bull & Bear Markets" by Stan Weinstein on that rapid share format?
I believe Snot said this was one of his fav books about the market too.
Thanks!
Thanks everyone for the great info and links. Is does feel like the New Deal is going to reincarnate itself.
hk22, we agree that Citi is too big to fail, but look at the hoops their making the automakers jump through before bailing them out. Almost seems as if they'll only provide a bailout when a company is less than an hour from total collapse. How long can they let Citi fend for itself before stepping in, and how will this uncertainty play on the market?
Pullo, Weinstein's book is the better of the two in that it provides a lot of hard info and charts. Darvas's book, although similar in theory, is more of a story.
sbbuilder, thanks for keeping a tally of the votes. It is interesting to see how dramatically sentiment has changed. We'll reopen the poll again once the market makes another large move, up or down.
There shouldn't be double-dipping in the poll, because once you vote on one IP, it locks you out from voting again. Maybe there is a way for people to bypass that? Multiple computers, sure, but why bother?
sbbuilder, if we do go into a great depression, it sounds like you'll survive better than most. Builders are resourceful people, and if you're a hunter, too, than why worry about the economy? Your survival is already in the cards.
Snot
The double dipping was tongue-in -cheek. Unless, of course, you preregistered with ACORN.
Although I live in A2, we have a farm in northern MI, about 460 acres with about 120 arable. Fourth generation. Farming has a way of keeping you very connected, very pragmatic. If you can make a living on crops you have grown from your own soil, I believe you can do just about anything. Want a package of seasoned venison steak? How about summer sausage?
A couple of months ago, you mentioned buying land. Haven't heard much talk about that in a bit. That hit home, so to speak. For an investment vehicle, land, especially now, is an awesome choice.
The Big Three were sent packing, hat in hand this last week. Got a tongue lashing for flying jets. Turn the tables a moment. They are hearing this from the same blithering idiots that created the mess to begin with, and couldn't run a paper stand without a bailout. Our gov. is 11 trillion in debt. And these same folks have the balls to lecture others on how to run a business.
sbb, good point. Seems fair for ABC news to make the comment, as they're still in business. But you're right, it's wrong for our gov to criticize how others spend their money. No doubt our gov wastes billions a year on luxuries that are at least as excessive.
We know where you're coming from with the farming. We don't need to heat with wood, but we choose to do so for home and office for fear of getting too dependant on a system that may not always be around.
Our monthly performance from June 1 to Nov 1 has been virtually flat, despite some wild intra-month swings. Now that we're nearing the end of November and we're down 11%, does that suggest a rally is in store? Somehow it seems that by the first of each month, we're back to even. If recent history is any guide, we should make 11% this week by remaining net long.
Snot,
Whats your opinion on this guy's tech. analysis.
http://www.stocktock.com/2008/11/23/plotting-capitulation/
I disagree and i see no reason for his prediction. Too soon for that move.
750 proved to be a very good support for now.
And so far no event seems to support that kind of move, in contrary, the events will probably support an uptrend move.
And this is what I think:
http://s426.photobucket.com/albums/pp345/hk22_2008/spx/spx1.jpg
and in the long run:
http://s426.photobucket.com/albums/pp345/hk22_2008/spx/spx2.jpg
And 2 other charts regarding SKF and UYG. What do you think?
http://s426.photobucket.com/albums/pp345/hk22_2008/spx/UYG-SKF/UYG.jpg
http://s426.photobucket.com/albums/pp345/hk22_2008/spx/UYG-SKF/skf.jpg
HK, I have similar projection as yours. DJI is returning to 9500 area quickly. Then will go down to the 7000 area.
I added 2 more charts-
1-2004-2008 weekly S&P 500 chart
2-1929-1932 weekly Dow Jones chart (taken from Armstrong's Book)
As you can see even then (the great depression) there was a sharp drop in September that coincides with our sharp drop in September that lasted about 2 months.
The links are:
http://s426.photobucket.com/albums/pp345/hk22_2008/spx/dow-1029-1932.jpg
and
http://s426.photobucket.com/albums/pp345/hk22_2008/spx/spx-weekly4year.jpg
What are both of you guys? Oracles?
Then you must be billionares...
No one can tell what will happen in this market. It's a casino.
Snot, hk22
Both of you guys agree that an upswing is in the making. (Nice charts, hk.) If that's the case, I may do the SSO, DDM thing and ride it up a bit. It's the reversals lately that have been brutal, and that is why I'm more hesitant to play the up-swing.
Our gov. for decades has been sending Congressmen on "fact finding missions" to the four corners of the earth. They're called Congressional Delegations or CoDell's for short. They leave Andrews in Air Force jets with their wives and staff, any excuse will do. The host country embassy bends over backward to ensure their every need is met. I have stories that would blow your mind as to what sometimes goes on. The wives do the extreme shopping thing, the congressmen meet for about 1 1/2 to 2 hours each day, everybody plays, then they go home. Now, do you think these CoDell's cost a bit more than flying a Gulfstream from Detroit do DC? This is one of the purest examples of the pot calling the kettle black.
Also, ever notice that when the big guys meet, its often in Geneva or Vienna or some other swank place? My dad, who worked on peace treaties, thought the best place for these knuckle heads to meet would be in the middle of the stinking dessert. Get a lot more done a lot faster that way. (And no going anywhere until the job is done.)
Sorry about the digression. I'll try to keep the political stuff to a bare minimum.
Anon
No, not oracles, but perhaps ordinary folks with a healthy dose of humility, and a real desire to learn from others, even if they want to be anon.
hk22, thanks for the charts. Of most interest is the 1929 chart and your prediction for SPX.
Even in 1929, there was a sharp return to the moving average during the decline. Even though the market eventually moved a lot lower, there was a period of relief in there. Our current market lacks that (one reason we're personally getting slammed). Like your prediction about SPX. We have a similar feeling about the market, although we use moving averages more than trendlines on the way down. Same concept, though. Obama can inject a lot of hope into investors about "change". The market will likely get carried away on the idea that this change will happen quickly, and after rebounding, will be set up for another drop. We're not betting on a break of the lows so quick, though. If the market makes it back to its 100dma (10,422) or its 200dma (11,417), then a drop to recent lows may be enough for 2009. The theme for 2009 may be trading in a broad sideways range from 7500 to 11000, back and forth, back and forth.
If the market does hit 5 digits again, let's make sure to not get carried away with the hype and return to the reverse ETF's, as none of this change will really help GDP for several quarters. The worst of the earnings news is still ahead.
sbb, thanks for the political rants. It gives everyone a different viewpoint. We hadn't thought of the pot/kettle thing until you mentioned it, and it happens to be right on.
hk22, one question about your SKF/UYG charts...
If SKF went down as much as you've drawn (back to 120 or so), wouldn't UYG go up a lot more than you've drawn?
Thanks sbbuilder,
Snot regarding SKF-UYG if UYG goes aprox. up to 7 that would be 100% increase from the 3.5 recent lows.
And that would result in a 50% decrease from 240 to 120 for SKF.
And I have noticed that everybody (online/borads/articles) the last couple of days point how everything is going to go much lower, everybody is so negative, so a downside is very expected.
Meanwhile weeks ago everybody was calling the bottom and a upside was very expected.
we never so that upside, it never happened.
Now, when everybody is expecting a downside expect the opposite.
My 2 cents.
We're with you on expecting that upside, hk. Let's just hope that cooler heads prevail over the next few weeks. The depression mentality that people have is killing the market.
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