Everybody Back in the Pool
Here I am, seen diving back into the water:
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As the photo reveals, I no longer diet. Instead, I am waiting to hit a specific high weight, at which point I will merely declare a 2 for 1 split.
From Thursday’s Yahoo:
At their intraday lows, the Dow was below 8000, while the S&P and Nasdaq were below their respective October lows of 840 and 1,504.
“We are buyers as markets approach those levels again,” Barry Ritholtz CEO of Fusion IQ wrote on his Big Picture blog, noting markets typically move in a pattern of “bottom, rally, retest, rally.”
Since major averages subsequently rallied about 18% from their October lows the first time, traders are hoping for a repeat performance.
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Source:
Everybody Back in the Pool: Dow Soars 553 on ‘Retest’ Bets
Aaron Task
Yahoo Tech Ticker, Nov 13, 2008 04:17pm EST
http://finance.yahoo.com/tech-ticker/article/127915/Everybody-Back-in-the-Pool%3A-Dow-Soars-556-on-Retest-Bets
November 14th, 2008 at 7:03 am
Barry–
Good to see the diet’s starting to kick in. I commend you on your discipline–not everybody can stick to that 3 steaks, 2 baked potatoes loaded with butter and sour cream, and 2 bottles of bordeaux a night routine. You’re looking good, boy.
November 14th, 2008 at 7:31 am
Everyone is probably getting back in on all the layoff news. Doesn’t most stock rise after a layoff announcement? Then in a few days the reality of no customers and no spending becomes more aware and right back down it goes.
Somehow layoffs have come to be rewarded as a sign of genius.
I have an idea. Worldwide there must be an HR Certification implemented immediately. The details would all have to be worked through obviously. To do business with any government or any sub on any deal like that or any large company to large company business would have to be between two HR Certified companies. Much like all the minority requirements, IS9000, etc.
HR Certification
- Good pay a person can live on. Somehow a minimum pay level would be established.
- Great Medical, Dental, Vision Benefits
- Guaranteed Pension Plan
- Layoffs would have to be approved and only in times where they are really justified.
If all companies across the globe had relatively equal employee cost that cost could not disguised as CEO genius. They would actually have to innovate their business to grow “real” business to be respected and grow stock price.
That way these companies would be protected against themselves from eliminating all the customers in the world, because they have no money to spend.
How do I get that to Obama? LOL
November 14th, 2008 at 8:02 am
You’re “making waves” Barry!
Regarding yessterdays stock market action, it is important to note that the intraday lows of October 10, when the NYSE made an “internal low” with 92.7% of stocks hitting new lows, have not yet been violated.
A further positive for the bulls is that, according to Stock Trader’s Almanac, the Dow has been up 12 out of the last 14 years during the week before Thanksgiving.
With the likelihood of further short-term gains a possibility (especially if the major indices record upside reversals on the weekly data by the end of today), it remains too early to tell whether a secular low has been recorded.
http://www.investmentpostcards.com
November 14th, 2008 at 8:34 am
Maybe that rise in the market yesterday was simply the rebound from the large amount of water BR moved out of the way when he hit.
November 14th, 2008 at 8:38 am
Historic stock market data isn’t as relative as it has been in the past, because the scope and scale of this crisis are unprecedented. This economic crisis is different than all previous save one. Just ask Peter Shiller. It’s the same issue that got us into the housing market problem. We used historic data for default rates, even though the financial instruments were brand new and there was no data.
Consumers are broke and getting broker. Uncle Sam ain’t far behind. If he ain’t careful, he might get laid off to.
Stagflation.
November 14th, 2008 at 8:53 am
Have pity on that poor water. Fish have to swim in it after you’re done there. I don’t think the Navy sonar ruling covered the aftermath from that indecency. God, I’m going blind. If this doesn’t chase away the buyers, then I don’t know what will.
So thanks. I want to buy the dip today if one shows up. What we need is another low volume down day that nobody touches. Fast buck artists will want to sell into the rally. Screw ‘em. I’ll pick something up at the end of the day from some desperate hedge fund loser when it floors out. If not today, then next week.
November 14th, 2008 at 9:05 am
Profits of retailers way down and headed lower. Profits of tech and consumer electronic companies down and headed lower. Profits of the car companies and financials — what profits? Exports? Fugeddabouit. Unemployment? Screaming higher. Federal deficit? Screaming higher? Money velocity? Slowing rapidly. And people think the stock market is going higher? I-man, what are they smoking?
This is not your father’s recession (though it might be your great-grandfather’s). We’re headed lower — much lower, befre this is all over.
November 14th, 2008 at 9:07 am
barry, you should do all your cnbc interviews topless.
it might help kudlow/ gasparino sound less ridiculous.
excellent work.
you are the master cleanse.
November 14th, 2008 at 9:50 am
That just made my morning. I almost spit up my coffee when I saw this……..
November 14th, 2008 at 10:14 am
That water does not look deep. I’ll take my response off the air.
November 14th, 2008 at 10:48 am
Barry, you keep diving into pools like this, and you’ll lose enough toes to effect some sort of reverse split.
November 14th, 2008 at 11:01 am
I love this “it’s different this time” and “unprecedented times” stuff.
Here is an excerpt from Time magazine:
Henry Ford II last week called the auto industry’s slump a “depression” and warned that Washington had better take quick action to help the unemployed.
Federal Reserve Board Chairman Arthur Burns warned of a possible “permanent decline of our nation’s economic and political power” unless the Administration takes more vigorous action to curb the flow of wealth into oil-country treasuries. House Speaker Carl Albert offered an unnerving defense of the costly program that his fellow Democrats are talking up to help out faltering corporations and unemployed workers: “Someone said this is digging up F.D.R.’s New Deal. What if it is? It [the New Deal] got us off the soup lines, didn’t it?”
Sideways Waffling. Even Treasury Secretary William Simon, the Administration’s chief economic spokesman, conceded that the recession “probably” (he could well have said certainly) will be the longest that the nation has suffered since World War II.
That’s from the Dec 1974 Time Magazine cover story. Hmmmm, sounds similarly ominous to 2008.
S&P 500 returns
1975 – 37.2%
1976 – 23.8%
It’s always going to be different. The confluence of so many varying factors will make all of these crises appear different and unprecedented. Things will get better and the market will get better way before economy actually does.
November 14th, 2008 at 11:42 am
“Things will get better and the market will get better way before (the) economy actually does”
So what “things” are getting better?
Have housing prices bottomed? Have foreclosures tapered off? Has the rate at which jobs are being lost ceased to accelerate? Are people out of money, so that no further losses are possible?
Is the Debt Bubble really pierced? There are reports that our total debt is STILL RISING.
All I see is that people are repeatedly misunderestimating the size and scope of this problem.
That part is pretty much constant across all bear markets.
If this IS a “V” style downturn, then the bottom of the “V” may well lie at S&P losses closer to 70% rather than 55%.
However, I doubt that it will turn out to be V-shaped. Just a hunch.
What kind of Fear and Panic emerges when other countries besides Iceland plunge into default?
And when concerns emerge regarding nations, do stocks kind of fall back into insignificance?
People do not yet realize how the Miracle of Globalization and instant communication have bound us all very closely together. In this regard — at least — things are different this time around.
People hoping for some sort of moral hazard emphasis should consider the example of the parent disciplining a child who has set himself and the house on fire, playing with matches. The correct order of remedies is to first save the child, then the house, then deliver the moral hazard lesson. Alternative sequences are suboptimal.
There.
I seem to have delivered enough sermons to carry me over for the next quarter, at least.
Now go forth and Do Good.
November 14th, 2008 at 11:51 am
History always repeats itself……..until it doesn’t. This is a totally different animal we’re wrestling with here. Me-thinks the old “buy the dips” philosophy (and hold) is aking to recent proven myth that “housing prices never fall”. Common sense told me disaster was coming then (in ‘04-’05) and it tells me its coming now. I’m a buyer in small increments of selected stocks but nothing is an “investment” at this point and is subject to immediate trade on any strength.
We have a whole generation of people that will likely tire of this “market” and check out completely. Once that happens, we’ll have a bottom. Too many are trying to be the “smart guy” in the room and calling THE bottom, which means we aren’t even close to being there yet. This game would be too easy if that were true. It’s not.
November 14th, 2008 at 12:17 pm
Does SPX 870 mean we have a rare “quadruple bottom”?
November 14th, 2008 at 12:17 pm
Mannwich:
My sentiments exactly….there is no such thing as a triple bottom…the SP500 back in 2002 was NOT a triple bottom. It hit a FRESH low on 10/10/02…the “test” was on 3/12/02 and it did not put in a new low…it held 20 pts above the previous low…sellers were clearly rejected and sell side pressure was finished.
And I have all the respect in the world for Carter Worth and Barry Ritholtz…I really do. And the fact that these two guys are a little bulled up should give uber-bears some pause. Carter said he’s “all in long” yesterday.
But here’s what I’m stuck with…and you alluded to it…in really bad bearish markets, EVERYONE ends up looking bad. EVERYONE loses their mind and cash. Hell, I’ll probably go broke and I can make an easy technical argument for SP500 at 300, and i actually believe we will see 600, the 61.8% lifetime retrace.
- AT
November 14th, 2008 at 12:23 pm
Agree AT. To me, it seems far too easy in such a bad market to just say buy these retested “bottom” dips and call it a day. If it were that easy, we’d all get rich doing it, wouldn’t we?
That’s why it reminds me of the housing fiasco. So many “smart” people said to “just buy real estate….it never goes down and is a great investment”. Seemed a little to “easy” or too good to be true to me, and alas, it was……
November 14th, 2008 at 12:36 pm
“Everybody Back in the Pool”
For how long? A week? How does that work for institutional investors? I mean they are like a big ship, really hard I would guess to be that nimble with that much money. They have posession of vast sums of money through 401Ks and the like. This accumulates as retirement plans for our countrymen. I think it was Mannwich who compared investing in today’s market as a “casino” the other day. We’re playing with people’s futures here. If you want to gamble go to Vegas or Jersey. Like everything in America we like it fast. Speed kills.
November 14th, 2008 at 12:48 pm
For how long? A week? Speed kills.
November 14th, 2008 at 12:50 pm
Andy Tabbo @ 12:17
“…I have all the respect in the world for Carter Worth…”
Carter Worth was correctly bearish throughout all of 2008… one of the few “mainstream” analysists to publicly declare his bearishness. But on 10/13/08, with the SPX at 1003, he turned unreservedly bullish. I found his call to be disappointing, since he had been right for an extended period.
November 14th, 2008 at 1:07 pm
In looking at that picture again, it occurs to me to ask if that guy is actually casting two shadows.
November 14th, 2008 at 1:14 pm
Those in the bullish camp should go review the (recently touted here) PBS program on the Crash of ‘29 and the Great Depression (mostly on the Crash, tho’). Carefully examine the nature of MAJOR bear market moves, especially those that are deflation-driven (as is this one), as deflation is an exceedingly difficult puppy to house-break.
That’s why Bernanke is so unthinkingly frantic in his attempts to inflate our way out of deflation (but it ain’t working yet — most of his capital infusions are clogging the banking arteries and not spreading throughout the body).
The nature of these sort of bears is repeated and STRONGLY VICIOUS chaotic moves, designed to flense the cash from those attempting to anticipate it or reverse it (a large number of VERY wealthy individuals, including William Durant (founder of GM — how ironic), were reduced to paupers with nothing left but the shirts on their backs. Think Kodiak bear, not black bear or even grizzly. These beasties are not to be taken lightly.
The nature of deflation-driven downturns is to persist far longer than anyone believes possible — just ask the Japanese.
November 14th, 2008 at 2:20 pm
SP500 looks to go unidirectional on a break above yday’s highs….watch out if you’re short.
- AT
November 14th, 2008 at 3:10 pm
The bears also have to look out for bear market rallies. As constantnormal apparently saw the 5 month 50% rally starting in late 1929. It’s ok to stay bearish, as long as you have the resources and will power to sit out an adverse move that could last months. Not saying it will, but you have to take into account.
Was wondering if we might see a short squeeze develop at some point if this thing has legs. The conventional wisdom, instead of being buy and hold has become “sell into the rallies” for some like the bald guy on Fast Money.
November 15th, 2008 at 6:54 am
this has got to be the 3rd or so bottom call that most pundits have served up since October. Not sure what models these guys use to time the market but I’m still on a short call from 9/3. No sign of a cover/buy yet although it came very close on 10/28. I’ll stay the course as the Bears are still well in control of the court.