S&P 500 Review
Chart courtesy of FusionIQ
Sometimes the KISS method (Keep It Simple Stupid) works the best. In an era of high tech math, computational algorithms and new data streams sometimes something simple works the most effective. That said the S&P 500 has been and continues to trend lower below its’ down sloping 30-day moving average. This average (for whatever reason) has provided short-term resistance like clockwork since the decline began back in August and once again repelled the most recent rally off the lows on Monday.
However, this is the shallowest pullback from the 30-day moving average resistance and the quickest subsequent attempt to move back above it (after a decline) since this all began. That said we will be watching trading activity closely the next couple days. We would view it technically significant from a near-term (trading) perspective if this index could finally move back above its’ 30-day moving average (and the 900 level on the S&P) as it would suggest a tradeable rally (from the long side) may ensue.
December 4th, 2008 at 11:53 am
that’s the one i was watching
December 4th, 2008 at 11:56 am
KISS:
When I start to explain the market to newbies I tell them there are only three ways any trade can go. Up, down or sideways. Our job is to figure out which way it is most likely to go and then make money off it. Pretty simple….*cough*
December 4th, 2008 at 11:57 am
Meanwhile…looking a little deeper at today’s numbers…factory orders down 5.1%…but they were down 3.1% in September and 4.3% in August…so that means that over the last quarter factory orders were down by 12.5% or 1/8…..
Now figuring out the “recovery” for 2009 that will allow this recent blip/rise in the S&P 500 stock prices to continue..where will the E go in P/E ratio if orders for the last 3 months have fallen like a rock? And it appears that the decline in orders is increasing in velocity…
..just wonderin’…(and what will be the result of factory orders in November and December?)..
December 4th, 2008 at 12:10 pm
Bruce, I believe it’s all because the media was showing depression news, old shows history on it, etc. etc. They panicked people and it worked. But it won’t last long.
December 4th, 2008 at 12:17 pm
jm…the orders in August and September would not have been due to media influence…the “crisis” started in September…and that is too short a time frame..I suppose the October orders could have been influenced by Paulson’s “end of the world” speech…
just be careful jm…
December 4th, 2008 at 12:17 pm
I’m hoping for one more drop to about 800 by the end of this month. (However, the only obvious catalyst that I can see at the moment is that the auto bailout hits a snag).
I also betting that January 20th will be an inflection point for the market (but nothing dramatic).
December 4th, 2008 at 12:20 pm
I’m thinking the KISS methodology should have been applied to the bailouts in general. The population of the United States is under 400,000,000. The number of taxpaying citizens even less. If the bailout funds were divided equally among us… and at least we’d know how our own money got spent.
December 4th, 2008 at 12:23 pm
@jmborchers: So all of those recently laid off (and soon to be laid off) people were merely scared off by the media and the feds to stop spending? Sounds highly dubious to me…..
@karen: That’s why I was so frustrated with last night’s rumor about the latest “plan” from Hank & Co. It seems they’ll try everything BUT the simple, most logical and potentially far less costly, solution possible for as long as they can (while wasting untold billions/trillions). It’s mind numbingly stupid and all about ideology, which has been the hallmark of this administration.
December 4th, 2008 at 12:26 pm
Your conclusion is illogical. You point out the pattern that there is resistance at the 30 day MA thus you should place a short at this level.
Saying you should go long if breaching the 30 day would require a pattern that shows upward movement once passing this level. This has not been demonstrated.
December 4th, 2008 at 12:27 pm
Am I going crazy? Here’s an article via Bloomberg misspelling Sheila Blair’s name, repeatedly? Sheila Bair???
http://www.bloomberg.com/apps/news?pid=20601103&sid=aTFflUwD.Qbg&refer=news
December 4th, 2008 at 12:31 pm
Bruce In Tenn, The stock market is trading on Technicals if anything. No fundamentals mean anything anymore at least for a while. So only support and resistance zones, pass through of MA’s, time, etc will probably only work for now.
December 4th, 2008 at 12:31 pm
@karen: Are you drinking again?
It’s Bair.
Or are you just thinking about “The Blair Witch Project”?
December 4th, 2008 at 12:32 pm
This is becoming quite an odd day. We had the predictable “sell the rumor, buy the news” of the Euro, Pound and Swissy on rate cuts today. And yet, commodities are all setting fresh lows, with crude and grains all breaking down badly today. And yet, the stock market continues to ‘hang in there’….something has to give very soon.
- AT
December 4th, 2008 at 12:32 pm
Karen @ 12:27
Blair witch project.
December 4th, 2008 at 12:39 pm
I’m underwater in my most recent SRS and SKF trades. Call it stupid, but I’m gritting my teeth and holding on to the positions because EVENTUALLY this never-ending cascade of bad data and news is going to catch up to the markets… I’m amazed we’ve spent the last two days in the black. It may be irrational, but I’m expecting a huge down-draft tomorrow… thought it might come today.
December 4th, 2008 at 12:40 pm
okay, okay, thank goodness i have you guys to keep me sane. i just visited the fdic site. i have seen her name countless times misspelled Blair. sorry. hopefully i’m good for a laugh.
December 4th, 2008 at 12:40 pm
it looks pretty similar to 200ma on a s&p500 hourly chart
December 4th, 2008 at 12:43 pm
is it just me or does it feel better making money in a bear market?
any monkey can make money in a bull market..
it feels like this time is different, i belive that the retail investor is leaving and ain’t coming back for a while..so what to do? wait until FII, LM, TROW go up and then perhaps start a shorty…? Big Bad Barry lets say we break the 30 day and 900–what is our target? or will it be grinding move higher that favors stock picking or a rip snorting rally where it just makes sense to jump aboard the etf’s…
December 4th, 2008 at 12:44 pm
Most of the negative data are the result of a panic. Same as what happened during 9/11 to beginning of 2002. I see the same pattern here.
~~~
BR: Post 9/11 saw a 17% drop, a 48% rally, and then a new drop to bear market lows a year later.
Is that what you see?
December 4th, 2008 at 12:46 pm
@jmborchers: There really is very little that today’s confluence of events has in common with 9/11 on so many levels. Is there panic, yes, but I think it’s somewhat justified this time. It’s called reality. Time will tell on who is right here but I’m sticking to my guns until I see evidence to the contrary.
December 4th, 2008 at 12:53 pm
Look for the final lows to be hit in January 2009. If you want to nail down a date, try 21 January 2009 (Why not? That coincidental method worked for calling the intermediate low of 20 November 2008!)
December 4th, 2008 at 12:59 pm
jmborchers:
This isn’t really anything like 9/11. This is the reaction to a very loose money supply when economic conditions change. Most of us here realize you aren’t an engineer, my undergraduate study was in electrical engineering, and engineers have to rigorously look at all aspects of a problem prior to finding a solution…I suspect you are just having us on…and may not even be invested in the market…who knows?
I do appreciate your Luskin-like take on the market…at least it makes me think of the other side, and since I don’t short the market, I would very much like SOMETHING to convince me to put $$ back in…but thus far it looks far from a panic, and much more like a serious dislocation…
The ONLY positive thing I see is the amount of money being thrown at this by the government…the taxpayer and business looks like they have gone in for halftime….we’ll see what happens next year with the kickoff on January 20th..
December 4th, 2008 at 1:08 pm
by now you people ought to know that curve fitting is a recipe for disaster, further more the decline began in mid October 2007, so try the 30 DMA from there and see what you get
December 4th, 2008 at 1:09 pm
Equities are murky right now. I’m coming around to Jim Rogers’ points of view. Ag commodities and Potash/MOS are actually looking like the more attractive long-term buying opportunity now, compared to equities. With emerging markets farmers/ producers – corn, oranges, coffee, soybeans, etc requiring credit to purchase fertilizer and seeds, and no credit to be had, yields are going to suffer and supply will be down. While the economy is currently depressing demand for these products, it won’t sustain itself because people need to eat.
December 4th, 2008 at 1:17 pm
TrickStar @ 1:09
With every new bailout and backstop that the government comes up with, the more bullish I’m going to get on commodities next year (but not quite yet).
December 4th, 2008 at 1:18 pm
I’m not sure what the risk/reward calculation here is on shorting domestic equities. But even absent Armageddon, CRE and emerging markets still face a long road down.
December 4th, 2008 at 1:20 pm
Nothing is happening now. Volume has dropped off, it appears sell pressure is still higher than buy. Tax Loss selling my kick in as people want to take advantage, if they haven’t already been scared out of the market.
I’m still waiting for things. I think there will be an early rally in Jan as hedge fund redemptions work their way back into the market. Money has to work. It will probably culminate around the inauguration and be perceived as positive support by the market for Obama.
What I’m really waiting on, and the market clearly can not show is the effects of the credit freeze and now the higher rates for borrowing. It takes a good 60-120 days for this to be seen visibly. Small business is the most severely affected and is the least visible. Small businesses are also the most likely to not layoff until after Christmas. They are not like the “to big to care” corps. The Jan unemployment report will be larger than the other months reported for this cycle.
4th quarter earnings season will start to show the picture, Focus on the balance sheets will be needed. Yes earnings will be down, but a close look at short term assets and liabilities will need to be done.
Tsunami’s only raise and lower a boat a few feet out at sea. It’s when they make landfall that they are disastrous. I’m waiting for the credit freeze to make landfall.
December 4th, 2008 at 1:37 pm
Barry, Make it even simpler. Step back and look at one of the most distinctive, classic double tops I’ve ever seen in a major index (take your pick dji or spx), the violent drop of the right hand shoulder makes this pattern even stronger, as does its pause at the neckline. I can’t imagine this setup without a violent break of the neckline. Are there any statistics on the failure of such a pattern?
Thanks!
December 4th, 2008 at 1:41 pm
there are just too many crosscurrents occuring now-sometimes it is best just to go to the sidelines and make this a spectator sport. .
December 4th, 2008 at 1:44 pm
KISS and Crisis and evaporating E
From 2001-2003, artificial stimulus caused a contraction of economic time preferences, i.e., qualified home buyers and would-be home buyers acted to take advantage of low interest rates. The result was that 5-6 years of economic action took place in a shorter time frame. However, if you have six bullets that have to last six years, firing all six the first 3 years does not cause bullet cloning to occur – the next 3 years all you can do is pretend, stick out your finger and say, “Pow, pow, pow.”
From 2003-2006, the qualified buyers and would-be home buyers had acted, leaving an economic gap that could only be filled by extending the “recovery” to non-qualified home buyers, using a combination of speculative borrowing (cannot afford principla but can afford to pay the interest) and Ponzi borrowing (can afford neither principal nor interest). As payment on principal became unimportant, price appreciation lost its restraint – false values occured. The borrowing and spending against this false increase in asset value was termed “growth”.
KISS View: No real growth occured – speculative and Ponzi borrowing simply increased. What we called growth was mostly pretense, a combination of altering time preference by mismanagement of interest rates the first few years coupled with – the last few years – a belief in illusion, caused by hubris, that risk had been tamed. Minsky capatalism in action.
And now, blinded still by our hubris and belief in false ideology, clinging desperately to the illusion of make-believe wealth, we are trying to salvage what is left of those phantom profits by throwing pretend money at a mirage.
Dear Uncle Sam:
Pretend all you want, but the reality is that paper profit is not national wealth.
Pow, pow, pow.
December 4th, 2008 at 1:45 pm
We’re headed lower, much lower. Maybe not this month — institutional money and MMs will fight like hell to put lipstick on this pig. But count on it in 1Q09. Everything is slowing down as the velocity of money slows; that’s what happens in a global deleveraging. We’re going from 30:1, 35:1 to 10:1, maybe lower. Do the math and you’ll have an idea of where the S&P will be midyear (600). Sorry, there’s nothing anyone can do about it. And all the bailouts from Treasury are intended to do one thing and one thing only: Allow over-leveraged hedgies and I-bankers to liquidate in an orderly fashion. Paulsen and Bush could care less about Main Street. Worst.President.Ever.
December 4th, 2008 at 1:48 pm
So I am with most people in the l0ng term we will go down. Short term I am not so sure. When they bailout the Automakers and the holidays season comes in as bad but not end of the world. People will say the worse is over and market will rally. I figure this will hold till March. However I would bet sometime between June and Dec of 2009 we find the bottom, but it will be bad. 3000?
December 4th, 2008 at 1:51 pm
it’s either balls of steel or brains of cement.
“Dec. 4 (Bloomberg) — American International Group Inc., whose bonuses and perks drew fire from lawmakers after the insurer accepted a federal bailout, will make special retention payments that more than double the salaries of some senior managers, according to a person familiar with the matter.
Some executives in the group of 130 recipients will get more than $500,000 to stay through 2009, about 200 percent of their salaries, said the person, who declined to be named because the information hasn’t been publicly disclosed. An undetermined number of lower-paid employees will also get cash awards to dissuade them from quitting, the person said.”
December 4th, 2008 at 1:52 pm
@mitchn: Like I said, all-in in SRS (and QID). All aboard! I’ll keep nibbling on those SRS dips so that I’m ready for when the ugliness begins in earnest in ‘09. We might get a brief Obama bounce on/after Jan. 20th, but then reality sets in when people realize that things are still getting worse and must do so before we recover (probably late ‘09/earl ‘10, although by then the pain will be truly palpable so we won’t even know that we’re recovering until well past that point), the mass selling into any significant rallies (when I will be shedding most, if not all, of my remaning longs) will lead us to the next big leg down.
December 4th, 2008 at 1:55 pm
@Stuart: My questions to those in the financial services industry (and their media enablers) who say these retention packages are “necessary to retain top talent”:
(1) Where are they going to go in this market and get the big bucks (or any bucks)? Work for Kashkari on the bailouts? I think not.
(2) If these jokers were/are “top talent”, then why is AIG at this point? I’d sure hate to see “lesser talent” if these jamokes are “top taletn”.
December 4th, 2008 at 1:59 pm
Mannwich:
> 2) If these jokers were/are “top talent”, then why is AIG at this point?
Amen, brother.
December 4th, 2008 at 2:02 pm
These intermediate swings are fun for trading, but my channel checks with software and tech sales guys indicates that the economy is getting worse by the day. Q1 and Q2 sales leads are evaporating. Eventually, reality will sink in. 2009 S&P earnings of $50-$60 might be optimistic. That said – I bought some calls in case they scream it into the close again today
December 4th, 2008 at 2:04 pm
Well that was strange.
I place a limit order with ETrade to buy 1,000 SSO at 26.00. It filled right away at 24.66.
What did I do wrong? Did I just get a crapy fill?
December 4th, 2008 at 2:04 pm
Just a question for anyone. I’ve been short spys for a long time now, 1000 shares@142. Every so often, every two weeks or so, I get a note from Interactive Brokers alerting me to be prepared for a forced buy-in due to SEC rules between 3:30 and 4. Nothing ever seems to happen, I’m still holding the short. But soon after I get this notice (six of them thus far) the market suddenly drops like hell. Anyone else dealing with this? It tends to shake one up.
December 4th, 2008 at 2:05 pm
Tech Ticker just posted a video in which Roubini lays it out:
http://finance.yahoo.com/tech-ticker/article/138999/2009-Recession-Will-Be-Severe-%27There-Is-a-Global-Deflationary-Risk%27-Roubini-Says?tickers=%5Edji,%5Egspc,TLT,UDN,UUP,GLD,SPY
December 4th, 2008 at 2:13 pm
OK as I sometimes do, I have looked in depth at the manufacturing numbers…I will post the government’s own release below because there are some very interesting things that aren’t apparent at first:
HIGHLIGHTS FROM THE PRELIMINARY REPORT ON MANUFACTURERS’ SHIPMENTS, INVENTORIES, AND ORDERS
October 2008 ————— Released 10:00 A.M. EST December 4, 2008
(M3-2(08)-10)
Note: All figures in text are in seasonally adjusted current dollars
For Data – (301) 763-4673
For Questions – Chris Savage or Jessica Young
(301) 763-4832
——————————————————————————–
Summary
New orders for manufactured goods in October, down three consecutive months, decreased $21.9 billion or 5.1 percent to $407.4 billion, the U.S. Census Bureau reported today. This followed a 3.1 percent September decrease. Excluding transportation, new orders decreased 4.2 percent. Shipments, also down three consecutive months, decreased $13.8 billion or 3.2 percent to $417.7 billion. This followed a 3.1 percent September decrease. Unfilled orders, down for the first time in twenty-six months, decreased $5.1 billion or 0.6 percent to $823.1 billion. This followed a 0.2 percent September increase. The unfilled orders-to-shipments ratio was 5.69, up from 5.50 in September. Inventories, down two consecutive months, decreased $3.2 billion or 0.6 percent to $555.1 billion. This followed a 0.8 percent September decrease. The inventories-to-shipments ratio was 1.33, up from 1.29 in September.
New Orders
New orders for manufactured durable goods in October, down three consecutive months, decreased $14.3 billion or 6.9 percent to $191.7 billion, revised from the previously published 6.2 percent decrease. This followed a slight September decrease.
New orders for manufactured nondurable goods decreased $7.6 billion or 3.4 percent to $215.6 billion.
Shipments
Shipments of manufactured durable goods in October, down three consecutive months, decreased $6.2 billion or 3.0 percent to $202.1 billion, revised from the previously published 2.4 percent decrease. This followed a slight September decrease.
Shipments of manufactured nondurable goods, down three consecutive months, decreased $7.6 billion or 3.4 percent to $215.6 billion. This followed a 5.8 percent September decrease. This decrease was led by petroleum and coal products, which decreased $6.5 billion or 12.2 percent to $47.2 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in October, down for the first time in twenty-six months, decreased $5.1 billion or 0.6 percent to $823.1 billion, unchanged from the previously published decrease. This followed a 0.2 percent September increase.
Inventories
Inventories of manufactured durable goods in October, up fifteen of the last sixteen months, increased $1.5 billion or 0.4 percent to $341.3 billion, unchanged from the previously published increase. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.2 percent September increase.
Inventories of manufactured nondurable goods, down two consecutive months, decreased $4.7 billion or 2.1 percent to $213.9 billion. This followed a 2.3 percent September decrease. Petroleum and coal products drove the decrease, down $4.8 billion or 12.0 percent to $35.1 billion.
By stage of fabrication, October materials and supplies increased 0.2 percent in durable goods and decreased 3.2 percent in nondurable goods. Work in process increased 1.2 percent in durable goods and decreased 5.5 percent in nondurable goods. Finished goods decreased 0.3 percent in durable goods and increased slightly in nondurable goods.
OK…note that the inventories of manufactured durable goods are at their highest levels ever..
New orders decreased by 6.9% of manufactured durable goods
Inventories are stacking up and new orders are plummeting…to me this means the numbers are even weaker than the headline numbers..
——————————————————————————–
Released December 4, 2008. Note: All figures in text are in seasonally adjusted current dollars. The advance report on durable goods for November is scheduled for December 24, 2008 at 8:30 a.m. and the full report on January 6, 2009 at 10:00 a.m. For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.
Our internet address is: http://www.census.gov
December 4th, 2008 at 2:14 pm
SWMOD52
you set the buy order above the price which means it will hit the ask immediately, you should be able to adjust that so the departure from your order is not too radical but you need to use a stop limit if you’re interested in buying above the current price.
December 4th, 2008 at 2:15 pm
Barry the result of the 9/11 panic helped cause that recession in 02. I argue that we have the same thing now just the time frame is severely compressed. News of the worst bank failures fince great depression helped CEO’s retract spending and also consumer spending.
Once that panic subsides everything will be okay.
December 4th, 2008 at 2:21 pm
@jmborchers: You’re comparing apples to oranges. It does not compute.
The dot.com bust had more to do with that recession than 9/11. I remember it like it was yesterday (and I was also there on Wall St. on 9/11) – we were already heading down by the time 9/11 hit. I was working in corporate recruiting for a Wall Street firm and remember how slow I had been for the 6-9 months leading up to 9/11. In fact, there were days that I couldn’t believe I was even employed it was getting so slow and marvelled at just how many times one could take a walk to Starbucks throughout the day, surf the Internet and still not waste enough time to get through the day. Granted, the firm I worked for was in flux (and I think still are, some things never change), we were doing very little hiring during that period because the bubble had already burst and it was sending us into a recession.
December 4th, 2008 at 2:25 pm
I should be more detailed. The first arrow in the chart shows the banking panic from letting Lehman go under. The second arrow shows the downfall in the economy because of the panic. The third arrow line will be broken upward.
December 4th, 2008 at 2:28 pm
@jm: Are you really Phil Gramm?
Me-thinks you are oversimplifying things a bit. We’re talking about maybe the biggest bubble in the history of the world here and you think that it’s all due to “panic” and that it’s pretty much over? We’ll just have to agree to disagree and see how it all plays out. Believe me, I hope you’re right but I’m protecting myself in case you’re not……….
December 4th, 2008 at 2:32 pm
How about the way the price action hits the 30 day MA—- right at the same when there happens to be a blue arrow???? 3 times in a row, no less! Coincidence? I think not.
Amazing stuff!
December 4th, 2008 at 2:34 pm
Watch the money flow come in when that 30 day MA gets broken. All the technical buyers holding cash will be on it.
December 4th, 2008 at 2:41 pm
Now I’m even more convinced we haven’t seen the worst of this yet: Cramer calling THE bottom again saying that 7,350 was “the low”. I guess he has to be right sometime but I think he’ll be calling yet another bottom below that number within the next 3-4 months.
December 4th, 2008 at 2:43 pm
Does anyone think Bush has ANY involvement in things at this point? I don’t think he’s “evil” – I think he’s sitting around going , “Holy shit, I really fucked this thing up.. and I thought I was doing so good! I better not touch anything.. someone else is going to have to clean up this mess” (just like all his other business ventures)
December 4th, 2008 at 2:49 pm
@jm and @Mannwich: you both make good points, but I am not sure who is right. Even Barry doesn’t know, or his friend “Baggadonuts” from the Kudlow show. One day Borchers will be right, the only question is … when ???
I liked TrickStar’s point about ags – and so I am watching AGU, POT and MOS closely. As you know I am accumulating and trading around core positions in commodity stocks, but I also have started some SRS today. It’s not happy out there in retail land and I want some insurance for tomorrow’s payroll number. If we rally into the close today I will get more. It’s a technical market here.
AT was correct – this is seriously weird – $ down and oil and gold down as well? I wonder if hedgies are trimming again? I hear Citadel is having a heckuva year. Well done, boys.
December 4th, 2008 at 2:51 pm
When I was in school the talk was about how the policy wonks were trying to re-create the 60’s. Low unemployment, high government spending and everybody happy, well almost everybody.
I guess they forgot what happened next.
December 4th, 2008 at 2:55 pm
Oh good, further evidence supporting my theory that we’ll have an extremely slow slow slow bounce up to 1100. Or I hope so…I’m 100% long now. If I’m wrong, well I just lose all my money, but that’s OK because I’ll just get a second job. Jobs are easy to come by nowadays. I’m sure they’ll be even easier to come by when S&P drops past 200. If I had a time machine I would go back to September 15th and try my best at re-trading. I’m thinking I’d jump back in when Lehman fails all over again, figuring the bad news is all discounted for now. S&P 1100…come to papa…I want my money back!!!
December 4th, 2008 at 2:58 pm
I’m with you Barry. I’m a buyer for a short term move if we hit 900.
December 4th, 2008 at 3:00 pm
I think the fact that the fed has finally broken the back of the long bond is a positive for equities.
it signals a change in the winds of the investing enviroment.
December 4th, 2008 at 3:05 pm
vermont, that’s a temporary move down in the long bonds if there are no foreign buyers of these bonds, thus far asia has backed away, as has europe, you can’t buy your debt notes to reduce your debt, asia has already signaled they’re out of here, as far as I can tell. wouldn’t you be if you were looking in from the outside?
December 4th, 2008 at 3:07 pm
Could it be that the bounce off the 30 day ma is a coincidence?
I believe that what we see when we look at this chart is lower highs, and lower lows. In order to see a change I woul like to see the low of Monday hold and break through 900 on the upside.
But then again, what the hell do I know?
December 4th, 2008 at 3:09 pm
Here we go into the close! Buckle up!
December 4th, 2008 at 3:10 pm
@ Fenner: Right on. I am shorting this rally in long bonds. Once a rally begins in stocks or the credit markets the long bonds will be an accident waiting to happen – ever see a fire in a crowded theatre? The Chinese will have already left the building.
December 4th, 2008 at 3:13 pm
I rather enjoyed the FT’s take on yesterday’s Fed Beige Book report.
“… the 47-page document reads like a modern day ‘Grapes of Wrath’.”
December 4th, 2008 at 3:14 pm
I was wondering where today’s volatility would come from. I was thinking high side but it looks like I’m wrong for today. Knew my streak would end. Still very bullish going forward here. My long term trade for 2011 Jan is locked in.
The LEAP call option play is a very good one here. Someone is taking all the stock risk. Right now stock risk is higher I think than option risk.
December 4th, 2008 at 3:16 pm
Gotta love 3:00!
December 4th, 2008 at 3:19 pm
Long way to go today. 40 minutes is an eternity in this market.
December 4th, 2008 at 3:25 pm
This is the fastest hourly fall in weeks.
December 4th, 2008 at 3:26 pm
The last hour does go incredibly slowly….
Anyone buying? JM? The babies are starting to go out with the bathwater here.
There are some stocks with dividends and a P/E of 3 out there.
All of that will seem obvious in hindsight…
Whatever I do I will leave my SRS on overnight.
December 4th, 2008 at 3:26 pm
AT, great call.
December 4th, 2008 at 3:27 pm
@leftback: Was thinking about nibbling at some ACI and VLO but haven’t pulled the trigger yet. Both are down pretty big today.
December 4th, 2008 at 3:28 pm
Also was thinking of some RTP but that thing has just gotten crushed in recent days. Might grab some here but where is the low on this one?
December 4th, 2008 at 3:33 pm
I’m not even worried. My main option stock is holding up very well (GRMN) -1.59%
I guess NOK panicked AAPL holders, that didn’t help. NOK has a business problem. It’s phones aren’t up to date enough.
December 4th, 2008 at 3:34 pm
Good day for a 401K buy in. Mine is going in today at the close as it does every Thursday I have a job, lol.
December 4th, 2008 at 3:39 pm
On another note (way off topic but I had to share this): Got a call from the mall today. Apparently I’m the winner of a charity raffle that I signed up for yesterday at the mall. They were auctioning off autographed framed sports photos. When I signed up for my auction (an autographed black & white photo of Larry Bird with the stogie in his mouth and Red Auerbach after Bird’s first title with the Celts; a very famous photo). The opening bid was $220. I bid $230 and predicted that with the economy, nobody else would likely bid and that I would win. Well, guess what? I won. Another side note: I also noticed that many of the other auction pages were either blank (nobody had bid) or there were mabe one – two bids, tops on each of them. There was also nobody at the booth when I was there yesterday (no workers or potential bidders)………..
December 4th, 2008 at 3:44 pm
Well…
This is the little “c” wave down we’ve been expecting the last 48 hours…
the .618 “a” = “c” is 825
the “a” = “c” is 795
If you ever wanted to buy…maybe tomorrow’s job numbers will deliver us 795 – 800 print, which is a nice level to cover short or initiate longs. The 800 level is the 61.8% retracement for what it’s worth.
- AT
December 4th, 2008 at 4:00 pm
Wow, tomorrow should be a very interesting day. Not sure which way we’ll go, but I’m leaning slightly towards going red……..
December 4th, 2008 at 4:17 pm
Maria B on grilling Nardelli (who is awful, by the way) regarding auto bailout. Funny, but I don’t recall the same tone when Maria grilled the financial services CEO’s…..wait, that’s right, that never happened. Silly me…….
December 4th, 2008 at 4:33 pm
@ – AT
Another great call.
Thanks – I was watching and waiting for that sell-off.
I agree about support and was buying into the close.
Lots more room to overhead resistance than underlying support.
Bought AA, AUY, VLO, COP, SLW. 80% long: 20% short overnight.
Just a modest piece of SRS overnight in case we get an ugly start.
December 4th, 2008 at 4:35 pm
@ Mannwich: Maria B grilling Nardelli. Funny, but I don’t recall the same tone when Maria grilled the financial services CEO’s…..wait, that’s right, that never happened. Silly me…….
LOL, Maria was too busy b***ing that guy in the private plane, no wonder she didn’t say much……
December 4th, 2008 at 4:38 pm
@leftback: Silly me. Thanks for the reminder. Her mouth was full (sorry to be crass).
December 4th, 2008 at 5:52 pm
@ Mannwich: Great choice of photographs to bid on, a classic.
December 4th, 2008 at 6:50 pm
Mannwich,
You probably won that raffle b/c no one else went to the mall.
December 4th, 2008 at 6:54 pm
@AT
To be honest I know nothing of Elliot Wave but your posts have been really great for several months. very cool.
December 4th, 2008 at 7:22 pm
@CPJ13: Agreed. I have always loved that picture. It’s autographed too. Am dating myself a bit but I was just 11 years-old at the time when he won that championship. As someone who played a lot of hoops and is from Boston, Bird was by far my favorite athlete growing up. I almost walked right by it but it caught my eye, so on a whim I went back and signed up. Remember chuckling thinking that I would probably win the thing as the second bidder, and lo and behold, I was right!
December 4th, 2008 at 10:48 pm
The solution is the Global Resource Bank at www. grb.net
December 4th, 2008 at 11:17 pm
Good call, Barry. I suspect the thing one might best fear here is not a melt-down, but rather a melt-up…