I’ve been in a conference all day, but from down 250 to flat on the Dow is pretty impressive.
(I know, Its still early, but . . .)
Is this anything more thannoise, or is somerthing else going on here?
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. —John Kenneth Galbraith
Knowing that the vote over the weekend in Greece was really a referendum on Euro membership, a majority of the Greek Parliament said yes to staying. European Finance Ministers meet again on Wednesday to solidify the 2nd bailout package for Greece at the same time hopefully a deal is consummated between Greece and its creditors this week. The Greek 14.5b euro bond that matures on March 20th is up by 2 pts. The optimism that all will be completed and contained AGAIN to Greece has yields lower in Portugal, Spain and Italy. The iTraxx Financial Index is also narrower by...
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January 22nd, 2009 at 2:38 pm
this weekly chart thread explains the reversal in my opinion -
http://forums.technicalwatch.com/tool/post/fib_1618/vpost?id=3232479
one chart item of great significance is the retest with success this week, so far, of XBD 63.52 horizontal price of importance on the long-term XBD weekly chart
January 22nd, 2009 at 2:49 pm
Just some mustard seeds sprouting….nothing of interest yet.
January 22nd, 2009 at 2:53 pm
Long way to go today but it looks like the reversal could be fading fast.
January 22nd, 2009 at 3:10 pm
Welcome back, Volatility.
January 22nd, 2009 at 3:11 pm
US rail freight car-loads down 17% for 1st two weeks of 2009 YoY. Containers down 14%. If this trend holds, look for a 12% contraction in the physical goods part of US GDP. I am assuming some of the rail freight losses were picked up by truck freight due to lower fuel costs helping trucking over rail.
AAR report:
http://www.aar.org/Pressroom/WeeklyTrafficReport.aspx
January 22nd, 2009 at 3:12 pm
Question moot right now as market reversing again.
My best ideas right now are — which are the two best?
TBT, QID, DBA, EVF, GDX, XLF, short FXB?
January 22nd, 2009 at 3:12 pm
@ hiker
I am getting the feeling that all the technical analysis is a self fulfilling prophecy. If the technical folks are all watching the same data and then make the same conclusions on that data doesn’t it reinforce buying or selling on that data so that everyone jumps in at the same time or gets out at the same time and thereby drives the direction of the market? So maybe technical analysis works because everyone thinks it works and by drawing the same conclusions are causing to happen what they thought would happen.
Please advise.
January 22nd, 2009 at 3:15 pm
THE DOOMFREAKS have a deathgrip on the markets but the stubborness of those in the know outperforms the timid behavioir of the lost and ill-informed.
January 22nd, 2009 at 3:18 pm
Well, um, uh, er, uh, GEE GOLLY. If I told you I was perfect, I was um, uh, er, WRONG.
January 22nd, 2009 at 3:19 pm
@boomer108 — not only which two are best, which two are worst, or are most vulnerable to things like nationalizing the banks or having the government take over the mortgages?
Recently, SDS has been outperforming QID, but I think that with such outperformance comes commensurately greater risk …
I’d like to see some discussion along these lines — WHY one might be better/worse than another.
January 22nd, 2009 at 3:28 pm
Noise.
January 22nd, 2009 at 3:31 pm
@ Call Me Ahab
I agree with you for the most part. However, I think the main point is that when the “technically important” barriers do get broken, then it REALLY says something that even those who knew that things should bounce at the support (or drop from the resistance level) still don’t jump in and buy; hence the proverbial “breakout” where the technicians are not involved in support or resistance. Of course, there are other factors as to why support or resistance is broken. However, the fact that the technicians don’t buy the support or sell the resistance means that much more.
Herschel
January 22nd, 2009 at 3:40 pm
@ Call Me Ahab, “by drawing the same conclusions”
Not really. If you open up the typical charting software you’ll find a 100 indicators and trend lines can be drawn from anywhere to anywhere. If there actually was consensus then there wouldn’t be any liquidity.
January 22nd, 2009 at 3:40 pm
Again with the cheerleading?
January 22nd, 2009 at 3:42 pm
@ mlomker
Valid points. There are many different indicators. But we all know about the most popular ones that everyone quotes (e.g., 50 EMA, 20 EMA, MACD, RSI), and it would appear that seemingly everyone looks at those. I guess it’s that they all use different ones for back up to confirm whatever it is they seek.
January 22nd, 2009 at 3:43 pm
@ Herschel- if the tecnical barriers are broken- then wouldn’t that lead to all the tecnical folks selling which would reinforce what I am saying- that they all come to the same conclusions and sell or buy on the same information- so if the barrier held they would buy and barrier is breached they would sell? Am I right?
January 22nd, 2009 at 3:45 pm
Ahab: I’ve thought that for a long time.
constantnormal: Interesting post by David Merkel about the credit risk of currency ETF’s. He doesn’t discuss the ultras explicitly, but it is something tha comes up on here from time to time. I’d like to se his ideas on the risks of things like the QID, SDS, SMN, etc.
January 22nd, 2009 at 3:49 pm
call me ahab @ 3:12
“I am getting the feeling that all … technical analysis is a self fulfilling prophecy”.
No. Technical analysts are not a monolithic group. They operate with different time frames, and they weigh the various parameters differently. Moreover, the fundamental analysts probably have a greater effect on the market, at least over a period of a few weeks or more. And of course, there are those with inside information that move the markets on an hour-by-hour basis.
January 22nd, 2009 at 3:52 pm
Uncertainty about Geithner , after he’s confirmed, then we know the TARP money will flow like it did before, for this quarter. That will table all of this nationalization noise for a month or two. When it’s time to feed at the public trough again we’ll get this again.
Geithner strikes me as the kind of guy who won’t admit his plan is no good until it is proven beyond a shadow of a doubt that it doesn’t work.
January 22nd, 2009 at 3:53 pm
Opps: forgot the link
http://alephblog.com/2009/01/22/hidden-credit-risk-in-currency-funds/#comment-20773
January 22nd, 2009 at 3:57 pm
It’s market confusion and noise. The trends are clear. The market, contrary to conventional wisdom, is not efficient nor is it forward-looking. Such beliefs are consistent with “cultural confusion” – agnotology.
January 22nd, 2009 at 3:59 pm
Here’s one that still has some upside: BOM (2x inverse DB base metals) The index went up a bunch last week because of index rebalancing, but the inventories are still rising briskly.
Might be a good hedge too for people holding DBA.
But I’m mostly cash now, with some put spreads expiring the end of this year and JAN 2010, some TBT as a hedge for my muni holdings and a little SRS.
I think the bear rally consists of a trading range for the SPX of about 8-900. It might not make th efinal descent for a while, but it seems unlikely to rise much above that. With option premiums so high, kind of tough to make any short-term money.
January 22nd, 2009 at 4:10 pm
Very whipsaw sort of day. The intraday charts are starting to carve out a “pennant or triangle” type pattern. Potentially hugely bearish implication if we break down below. As a blunt measurement, if we take out the 804 recent lows on the cash S&P in the next few days, then you want to be GONE GONE GONE out of this market. There is NOTHING bullish about the patterns I’m looking at. I’m not big time short, yet. The market has not definitively broken and so I must allow for some kind short term bear market rally.
The daily candlestick turned into sort of neutral spinning top. It should be considered a “let down” to bulls after yesterday’s somewhat impressive “engulfing candlestick.” After such a seemingly bullish day yday, you would have liked to have seen some upside follow through.
January 22nd, 2009 at 4:22 pm
No reversal of any import. If I were long, I would be deathly afraid of the Dow breaking 7500.
January 22nd, 2009 at 4:22 pm
AT,
I was looking for the same thing. I really think the claims and then MSFT right after that with bad numbers and no guidance hurt us bad today. As always it wasn’t, only that, but it would have been nice to see those AAPL numbers continue to the boost into today/Friday.
If GOOG and GE are ugly we could get hurt bad next week.
January 22nd, 2009 at 4:27 pm
@SB,
Well you called it again, I just looked quick at the GOOG numbers, if the dollar continues to get stronger it is going to suck some of these techs dry. It’s just a recipe for disaster.
Blaaaaaaaaaah!
January 22nd, 2009 at 4:31 pm
http://finance.yahoo.com/techticker/article/162398/Circuit-City‘s-Closures:-A-Commercial-Real-Estate-Tipping-Point
Interesting take, too late to short retail/mall REITs?
January 22nd, 2009 at 4:32 pm
Interesting take, too late to short retail/mall REITs?
IMO, no.
January 22nd, 2009 at 4:38 pm
@ben22:
Google beat estimates, but they do not include all costs in their pro-forma earnings…if you include stock option compensation and investment losses, GAAP earnings are down 68% y/y…that’s a Depression in my books. The strong dollar will crush them the next 2 qtrs. On top of that, they are re-pricing worthless employee options. What a blow to bagholders.
January 22nd, 2009 at 4:50 pm
It’s market Bradycardia (slowing of heart rate). It happens when the market is about to have a Syncope. A Syncope in humans is when the natural pace maker in your heart “forgets” to send the electrical impluse to activate the heart muscle. The heart stops, the patient feints, the heart restarts. It all happens on a human scale in about 10 to 15 seconds. The patient recovers and feels fine. The medical proffesion does NOT consider this a heart attack. They believe it has to do with the vagal nerve which in turn is affected by depression.
Maybe I’m anthromorphizing our economy too much but could it be this is a sign of severe Depression?
January 22nd, 2009 at 4:52 pm
SB,
I’m not ready to call it a depression just yet, and maybe because I’m in denial, but you are correct, if you look at the GAAP decline, the real decline, they have certainly fallen from grace. I have been looking it over in more detail now. I no longer read these reports on what the earnings were, they are all spin.
I have a hard time anymore understanding what Google’s business actually is. I never owned shares and I probably never will, when I can’t figure out what the business is I tend not to consider it.
January 22nd, 2009 at 4:59 pm
K. Noisewater @ 4:31
“too late to short retail/mall REITs?”
You could probably short them here, but a better opportunity will probably come after the next bailout.
(Probably won’t have to wait long for another one of those).
January 22nd, 2009 at 5:00 pm
Look, you wnt to make some money as a day trader…then buy the f$#king indexes every day at 11 am and sell at 11:45 as the quants do the same thing over and over. It is a joke, should be banned but who would that?…the SEC? Don’t hold your breath…..rotflmao. Reversal? This isn’t any sort of technical reversal…jsut coputer geeks running their garbage programs….
January 22nd, 2009 at 5:02 pm
Hmmm… If the market continues to bounce back from shelacking at the open, ie: thur, fri, wed, today…
Then I’d say we are closer to a rally than a crash.
The tape is indecisive for sure, but it does appear that the selling just doesnt have the force that it should.
Thats two days in a row that bears couldve whacked this thing hard and failed to do so. To me thats a sign that things arent as ugly as they seem.
Its pretty obvious that new tech, materials, healthcare, and infrastructure are outperforming the overall market, I’d say they are going to be the leaders if we can break out. Out of the three uptrending longs I put on on Tuesday: DRYS, AKS, and SGR… SGR is the only one left standing.
Opened some IYM today.
Scoping out some long DGP too, but not enamored with the double smackdown at 17.55… I’m beginning to think that gold might be a better short than long more and more every day.
I-Man is watching 835 on SPX very closely tomorrow… if we break out from there with good volume we will surely reclaim 850… and this weeks tag of 800 sure will look alot like a “higher low” to me… but no one is talking about that one… which makes me feel even better about it.
January 22nd, 2009 at 5:13 pm
@AT, “Very whipsaw sort of day.”
In the sense that we didn’t have any 5-wave moves, I’d agree. We opened at the end of an ABC, had an ABC down, an ABC up, and the close was a mess.
My all-in number is 794. I was actually looking for 804 as today’s low but it didn’t happen.
January 22nd, 2009 at 5:19 pm
Market was “only” down 1.28% for the day – nothing unusual about that when compared to recent history. Is this a good thing, or a bad thing?
January 22nd, 2009 at 5:21 pm
Uncertainty about the new Prez and advisors. Lots of money wanting to get long the market, but hair trigger selling on any noise. Volitility will be high for a while, and uncertainty ain’t going away anytime soon.
January 22nd, 2009 at 5:26 pm
I-man,
I have been thinking about dumping my GLD. I have been holding a long time as sort of a hedge with the few longs in my accounts. I have done pretty well. BUT, if there were ever an environment that gold should do well it is now or was 2008, I just don’t think it is going to have that one big jump that I was expecting it to have and I can earmark that capital somehwere else. Or maybe we already got the jump and it was when it was @ 1k. I owned NEM before and might go back and try at that again. I wonder if Karen is still holding some gold?
I know lots of people mess with DRYS but I think it is a little easier to trade DSX
January 22nd, 2009 at 5:29 pm
Reality set in because we are slightly down today? No way.
Let’s take MSFT which I bought today along with DIS. MSFT made 10% less than last year’s net. Only 10% less? The stock is trading at almost half price and has pretty stable earnings. I was expecting some 40-50% down. This is easy money for the long term for anyone who has money left at this point to buy stocks in the market.
January 22nd, 2009 at 5:40 pm
For those who think we are seeing an inflection to the upside, here is a link to a Jan. 16th press release from the CME on Swaps for oil contracts and related:
http://cmegroup.mediaroom.com/index.php?s=43&item=2782&pagetemplate=article
Here’s the pertinent text:
“CME Group, the world’s largest and most diverse derivatives exchange, today announced four new Chicago petroleum products swap futures contracts on CME ClearPort®, scheduled to begin trading on January 25 for trade date January 26. These contracts are listed with, and subject to, the rules and regulations of the New York Mercantile Exchange, Inc.
The new swap futures contracts and their commodity codes will be: Chicago unleaded gasoline (Platts) (2C); Chicago unleaded gasoline (Platts) vs. RBOB spread (3C); Chicago ultra low sulfur diesel (Platts) (4C); and Chicago ultra low sulfur diesel (Platts) vs. heating oil spread (5C).
The contracts will be listed for 36 consecutive months beginning with the February 2009 contract. They will be available for trading and clearing until the last business day of the contract month. ”
Viewed in connection to the rumblings about backwardation appearing in AugSep and the retreat in March to July contracts, perhaps inventory build is over and new positions are being plotted.
DXO is moving into an interesting price frame. A few humble thoughts.
January 22nd, 2009 at 6:02 pm
DXO is one hell of a lottery ticket if you ask me…
DCR anyone? Remember that one?
Sure, DXO could pay off nicely, provided its still around when the trend changes. USO has enough juice for me if I’m doing that trade.
January 22nd, 2009 at 6:13 pm
Sorry for the double post folks…
@ Ben:
Clarification: I’m not counting GLD/DGP out just yet though… I do think it has a much better shot of successfully breaking out this time around due to the support at 50 day MA… I’m actually expecting it to do so, but IF it fails again then its shorting season.
I’m looking to open my position on a move above 17.70 DGP.
January 22nd, 2009 at 6:18 pm
Saw Carter Worth on CNBC today.
He was talking about he was bearish consumer staples but thought that the SP500 at 800-825 was looking good. I respect Carter because he seems like a sensible/dispassionate sort of technician…well spoken…and he was very correct back at SP500 1400+…he was way bearish and kept clients out of losing long positions for sure.
So, I really don’t like trading opposite to technicians that I respect. However, I think there’s a flaw in his views. The “consumer staples/safe stocks” are what has kept the market from coming completely undone. Investors have rushed into all these “safe stocks”. So I agree with him that the Consumer Staples sector is a very crowded trade…stocks like WMT, XOM look very, very bad. However, I believe it will be this particular sector that inevitably sends the market to new lows. Walmart was a harbinger….
When investors finally give up on their “safe haven stocks,” then we will likely see a new and perhaps final low in the SP500.
I’m real bullish at 600.
January 22nd, 2009 at 6:54 pm
My guess is any rally from here is likely to me short-lived based on intermediate term sentiment levels.
January 22nd, 2009 at 7:29 pm
An additional problem for REIT longs is that several have started to pay some of their dividends in shares, including VNO.
I have 100 shrs of SRS, I almost bought another 100 today when it dipped below 60. But if the FED statrs actively supporting CRE mortgages, REITs may jump.
With GLD, bought some calls and call spreads for JAN 2010/11. So I minimized my investment, and if the dollar plummets I should do very well.
January 22nd, 2009 at 7:40 pm
Reversal Day?
Looking at the preceding responses/reactions, I would have to say,
“Nobody knows — check back again on Sunday”.
And maybe the weekend after that. We could wander in this choppy wilderness for a while.
Plenty of caution out there, so nobody seems likely to do anything too stoopid.
January 22nd, 2009 at 7:59 pm
@AT, I was looking at my end-of-day charts and I’m inclined to hold my breath tomorrow.
http://mlomker.typepad.com/.a/6a00d83452e54d69e2010536e5c62e970b-pi
January 22nd, 2009 at 8:00 pm
@Andy Tabbo
Going against Carter Worth has been a very profitable trade. I have heard him tout AA, WFT, AMTD, and most importantly about a month ago his favorite sector was the Regional Bank index, he is getting blown out on that one. I agree with you that the staples will be the final sector to get puked out, which will take us lower. Best of luck.
January 22nd, 2009 at 8:09 pm
@mlomker.
This is certainly becoming a more complicated pattern, which is good. Because if it was easy, anyone could do it.
circa SP futures this is what I “think” is happening.
942.75 -> 812.75: Five Wave “initial” leg down Wave I
812.75 -> 865.75: an “a” wave up that reversed at an exact 38.2%.
865.75 -> 797.50: an irregular “b” wave down that bottomed into a 1.236*”a”=”b”
797.50 -> 844.00: the “c” wave up that completed the Wave II at an exact 23.6% of Wave I
844.00 -> 807.50: an initial minor Wave 1 down of Wave III
807.50 -> 836.50: the minor Wave 2 up of Wave III the peaked into an exact 78.62% of 2.
For me, this is the model that best fits the price action at this point. It’s confusing for sure so I’m not placing any big bets here, yet. However, if this count is correct, IT’S VERY BEARISH. If the Wave II (or maybe B Wave) was indeed an “inverted running correction,” it’s very bad. That’s the most bearish type of corrective pattern you can get.
It means we’ll see a vertical drop in the market in the next few days. If we take out 797.50 in the next 24-48 hours, we should see a very strong move lower.
Good luck.
January 22nd, 2009 at 8:10 pm
Oops, thought you meant Thaneoise, as in another dirty lying bastard bites the dust and fades into an undeserved comfortable early retirement in the Virgin Isles.
January 22nd, 2009 at 8:17 pm
Follow the ecomomies….the markets will follow.
January 22nd, 2009 at 8:18 pm
economies, I think he meant..
January 22nd, 2009 at 8:22 pm
So…why is 738 not a level of support? Looks like an obvious one to me, but no one has mentioned it. But anyway, I swear by the Presidential Cycle, and I see very little chance that stocks could fall to 600 now and hit a multi-year low at that point. This is because never before have stocks bottomed more than a year before the end of the recession, and I see little chance of the recession ending this year.
Thus, once again, my argument that we should regain the nice crash-rally pattern going on in early 2008. I think anything between S&P 400-600 is reasonable for a multi-year low, but I just couldn’t imagine the market falling 60% in 8 months! Judging by the 100% rally between 2002-2007, the market couldn’t possibly be smart enough to discount this recession more than a year in advance. It’s getting ahead of itself.
That said, I’ve prepared myself for the painful fall to 600 if it’s coming to that. But there’s no chance I’m getting out when everything I track shows the market going up short-term. I might consider getting out at S&P 1000, but I’m hanging on all the way down to 200 if need be.
But no, to answer Barry’s question, I don’t see this as any short-term bottom. I personally feel we need to fall to 738 before we can have an good rally. I hope I can be proven wrong.
I feel like Steve Barry’s evil twin, where I’m holding onto the long ultra funds through all the noise (and losing more and more money with every passing day) hoping for an enormous rally. Ah well, it’s humbling to know that everything I’ve learned about market timing is now obsolete.
January 22nd, 2009 at 8:35 pm
@globaleyes Says:
January 22nd, 2009 at 3:15 pm
Strangely I see it a little bit differently.
THE fundamentals have a death grip on the markets…
Show me some earnings or revenue growth, and then we can talk bottom.
January 22nd, 2009 at 8:50 pm
Blackhalo:
Preciseamundo! The fundamentals globally are continuing in a death spiral. Really no other way to look at it.
Initial claims are 1/2 what they’d be if they weren’t manipulated…
The man in charge of declaring recessions in Japan says they are in a 3 year recession, and to expect deflation.
The Swiss are manipulating their currency with even more elan than we are. The Swiss…
Homebuilders themselves expect another 29 per cent decrease in the price of houses.
Several of the countries of Europe expect downgrades of government debt..
..what does it take to convince some folks that times will get much worse?
January 22nd, 2009 at 8:51 pm
Havent heard much talk of it on the board but there are some Regional Banks that are trading if they are mere days away from being shut down…Regions Bank, Fifth Third Bank, The South Financial Group just to name a few…these arent too big too fail but definitely would shock the system. Not sure if any of the big boys have the balance sheet to swallow them anymore.
January 22nd, 2009 at 8:57 pm
@KC (my evil twin…or good twin, depending on your viewpoint)
What do you see indicating the market going up short-term? Everything I track shows the exact opposite. II Bulls at 40%, where it was last September before a vicious market drop…21 day put/call at September level…short interest still very low…blogger poll too bullish. Dow has been in a trading range since Nov on low volume. I believe when volume picks up, and it is starting to, the lows will be taken out.
January 22nd, 2009 at 9:02 pm
@Ventura…screw the regionals…a blogger who has been very correct says a bigger bank is insolvent…
http://boombustblog.com/Reggie-Middleton/766-Re-JP-Morgan-when-I-say-insolvent-I-really-mean-insolvent.html
January 22nd, 2009 at 9:13 pm
@Steve Barry: “The Do-Do 32″. That is sadly hysterical (and true).
January 22nd, 2009 at 9:15 pm
@SB,
I was just going to say… while the few things you mention are true (II Bulls, put/call, short interest) there was in fact another catalyst last Sept. and it was Lehman. While Jan-August was no picnic until Lehman went under not much happened, then all hell broke loose. Then I was going to ask why you think things would play out like September without another Lehman type episode and before I got a chance you posted the JPM thing.
I didn’t click the link yet, but if JPM is insolvent, and went under, I think two things
1. We will go 600 and probably lower still in what will seem like a heartbeat
2. Dimon is going to look pretty stupid with that 11.5 million purchase
I can’t believe I’m even about to say it but would he really be that stupid?
That said, with the government handing out TARP candy I think it will be hard, at least right now, for a september situation to play out in the short term. I think those that can will prevent that from happening the first month or few of OB’s presidency.
I guess we’ll all know soon enough.
January 22nd, 2009 at 9:15 pm
SB, the market might have continued going up in Sept. What equivalent exogenous event will we see here?
January 22nd, 2009 at 9:20 pm
@ben22: You might be right but me-thinks that this president won’t dither on the banks (he’d better not) and may take drastic action (e.g. nationalization) sooner than you think. There’s your event (rww) right there.
And to answer your question: it’s not about stupidity, it’s about arrogance.
January 22nd, 2009 at 9:25 pm
@SB
I agree JPM is insolvent, however, that turd is not looking at a catastrophe in the next week. Fifth Third is down to 2.85 and dropping hard…I would have to think a run on the deposits is under way. I see no Bank able to take them over right now…if they get shut down there could be mass bank runs at the regionals…I think this is a very significant event that could happen by the end of next week that I do not hear anyone speak of.
January 22nd, 2009 at 9:26 pm
SB, don’t get me wrong. I’m betting the same way. It’s just a question of timing.
January 22nd, 2009 at 9:28 pm
http://www.bloomberg.com/apps/news?pid=20601080&sid=aBimSLLEdoLU&refer=asia
Roubini Sees S&P 500 Slump on China, Edwards Predicts 40% Drop
JM Bourchers…this post’s for you…
January 22nd, 2009 at 9:28 pm
Mannwhich,
Yes arrogance is a better way to say it. I should clarify what I was saying above about Jan-Aug, I didn’t mean to say nothing happened, I was thinking more about the indexes, not so much things like Bear/FRE, etc.
Indeed JPM going under would certainly help O push the rest into nationalization, in fact, I could even then see people demand it.
The whole thought of that just makes me sick to my stomach but it is the reality we find ourselves in. I’m thinking about making Into The Wild apply to my own life.
A little OT but did anyone catch Prick Armey on CNBC this morning. That guy is a damn loon. At one point someone on there called him an economist,… please.
January 22nd, 2009 at 9:30 pm
@ben22: Just don’t suffer the same fate as foolish Mr. Alex “Supertramp”!
January 22nd, 2009 at 9:35 pm
@ALL:
I am not predicting an imminent Lehman event…and I believe JPM is too big to fail (will be bailed out). If you are looking purely technicals, you ignore what the catalysts were…it makes no difference. Using technical analysis just compares current indicators to where they were at past market points. I conclude that levels seen today in those indicators are consistent with those at recent market tops.
BTW I hate it when things are couched in terms of Lehman…every idiot on CNBC cries that things would have been much better haad they only saved Lehman. This is hogwash. The path to the bottom is being shaped by policy decisions…the eventual destination cannot be changed…nad it is going to be butt ugly when we finally get there. Think massive credit defaults.
January 22nd, 2009 at 9:38 pm
@Mannwich,
LOL
@Bruce,
Faber has been saying things along those lines for a little while now. I will say though I’m not a huge Jim Rogers fan. Don’t really like bow ties either..
I feel a little silly sharing this but someone I work with told me something yesterday that gave me some chills.
He knows someone that works in what he described as an emergency planning unit that is part of the US military. At the end of last year this person was given a much higher than normal cash bonus. His superior officer told him to take the money and pay as much of his debts as he could and then to use the rest to stock up on canned goods. I know, I know. He told this person that I work with that either a major change in currency or war is coming. Probably the former via the latter.
Now I’m not much for conspiracy theory but after the stuff I’ve witnessed over the last 18 months I just won’t rule things out anymore.
January 22nd, 2009 at 9:41 pm
@SB
I agree with what you say about Lehman, hope I didn’t imply that without that we would have just moved along they just helped the inevitable get going, things are/were terrible and Lehman pushed us over that edge, helping break the buck on money markets, tons of bonds defaulting, etc. CNBC is a soap opera.
January 22nd, 2009 at 9:43 pm
Also, I remember listening to a very long podcast by Soros last summer and he discussed what he thought was off JPM’s balance sheet and the numbers he was throwing out were just huge.
January 22nd, 2009 at 9:43 pm
and of course, if credits are defaulting, equity is almost assuredly wiped out…(note stocks are called “equities”). Bond holders get paid before equity holders.
January 22nd, 2009 at 10:04 pm
Ben22
Let’s see Roubini says down 20 for the year, wall street prognoticators say up 17….
If I were in Vegas….where would my bet go?
When downturns occur, some seers stay positive all through the downturn…it has happened in every recession in my lifetime, and when I am looking at grass from the wrong side, there will still be morons who call sober judgment in times of economic pain fearmongering…
Oh, well. Some analyts “just don’t do downturns or windows”….
January 22nd, 2009 at 10:04 pm
I see some people asking “What’s the event that can send us lower?” I don’t think there will be an “event.” It’s just going to a continuing realization that we’re facing a global economic depression. I look at stocks like GE/WMT/XOM/VOD/MSFT/INTC/VZ/BP and they ALL LOOK HORRIBLE. These are some venerable mega companies there…and they all look like dog shit on the charts.
My “hunch” is that GE is going to come out with something “surprising”…..
January 22nd, 2009 at 10:16 pm
I suspect that you all need to start looking at the little picture, not the big, nor the fundamentals. Try looking at the 30 minute candles of sso, spy, $spx, sds for starters. even the dia finished in a bullish pattern.
January 22nd, 2009 at 10:27 pm
@karen: The “little picture” is that confidence in our markets is shot and isn’t coming back any time soon. Sure, we might rally a bit in the short term, but until we won’t likely break out of the upper end of the range we’ve been in. That’s my story and I’m sticking to it.
January 22nd, 2009 at 10:35 pm
@karen.
per your suggestion I took a look at the 30 min SPX….I don’t see anything there. The last 30 min. stick was a neutral spinning type formation. The last couple days of intraday action on the SPX looks like a “triangle” type pattern. Triangles are usually congesting patterns during a trend. In this case the trend has been down, so any break of the trendline lower would be very bad.
January 22nd, 2009 at 10:42 pm
Andy, i suspect you didn’t look hard enuf. besides, you are the one that suggested yesterday’s candles were bullish engulfing, which they were not. maybe you stick to elliot wave and i stick to japanese candlestick charting. so sorry that i am a b*tch; it comes with the money.
January 22nd, 2009 at 10:51 pm
Karen,
I for one, appreciate the bullish outlook, even if I’m not yet on the same page. Maybe we could call you a reflationista, or probably just Karen.
BTW, I gave you a hat tip today, your charting picked 36 on TBT, that looks pretty smart as of today’s close.
January 22nd, 2009 at 10:58 pm
ben, lol, i do have that nickname already. give me one more day to figure this out…. : )
January 22nd, 2009 at 11:08 pm
@ Steve Barry,
My “indicators” are really just a mix of a whole bunch of reliable indicators from PAST bear markets (and not seeming to work so well this time around).
1) The 100 and 200 day averages for the VIX are higher than at any point in history, including the 1929-1932 crash. Even during that time, the VIX went back to 20 several times from the extremely high levels (3 times from what I remember).
2) The “trend line” that got drawn through the 4 “peaks” in October/November/December is all the way up at S&P 1100 now. The 200 day moving average is at 1155, and hasn’t been within 10% to daily levels since July.
3) We haven’t had a real long-lasting rally since June. Even during 1929-1932 there were significant rallies that took the market back up to the 200 day moving average, retracing at least 50% of the previous short-term decline, and up to the same support level that the previous short-term decline bottomed at (this would mean we’d have to go back up to S&P 1200…but that definitely isn’t going to happen). 1025 is the 50% retrace from the July high. We didn’t even come CLOSE.
4) I truly believe we’re falling down to the 400-600 range. But I also believe in the Presidential Cycle that states we’re going to bottom in late summer 2010. This makes sense, since I highly doubt this recession is going to end by then. So if the market is about to fall to 600, how can it keep going lower for 18 more months following that? I think 250-350 is a very real possibility for the S&P in 6 years or so, but I have my doubts it’ll fall that far this time around.
5) Your data that shows money managers/CEO’s/etc etc are more bullish than at any point since the highs of 2007 doesn’t seem to mean much to me. I’d figure after stocks fall 52% they’d be more bullish than they were when they hadn’t started falling. I’d also figure that if the market fell another 80%, they’d be even more bullish.
6) A fall to 600 in the next 1-3 weeks would make a 60% drop since June. I can’t believe the market is that good at discounting bad news. After all, the market peaked on October 10th 2007, 1.5 months before the recession began…it’s obviously not very good at factoring in the future.
7) November 20th was the farthest below the 200 day moving average ever. The only times even close were during 1929-1932, and each time they fell more than 30% below, they returned to the moving average within a few months (currently 31% below).
So I’m definitely pessimistic for the long-term, but I’m mind-boggled over the short-term. Stocks don’t go down forever without a decent rally. But if we really do break below 700, it really does look like we might hit a major low by this spring. Which is something I could never imagine happening in the middle of a severe recession.
My argument is quite simply this: I believe this bear market is going to last another 1.5 years. Therefore, the only way that can happen is if we have rallies. 60% drops should happen over 14 months, not 8 months. Not allowed. Not in my happy world anyway. But if Mr. Market wants to hit bottom earlier, hey, I’m already long! Makes my life easy.
But look at this; can you realistically “see” yet another leg down forming in the coming weeks? It doesn’t add up in my view.
http://money.cnn.com/quote/chart/chart.html?pg=ch&symb=spx&time=10yr&freq=1dy&charts=0&comp=&compidx=aaaaa~0&ind_compind=&uf=0&lf=1&ma=1&maval=200
January 22nd, 2009 at 11:13 pm
karen.
ha. I said it was “almost” an engulfing pattern for yesterday….
I heavily rely on Japanese Candlesticks…they are a very important factor for me.
How do you classify that last 30 min. Candlestick on the SP500? I see a somewhat smallish 821.60 – 832.90 range with a very small body located near the middle. I see a decent shadow overhead and a decent shadow below. To me this looks like simply a “standoff” between bears and bulls into close???? I call it a “neutral” stick…
I use a lot of various technicals….
E.Wave/Fibbos
Japanese Candlesticks
Classical Pattern Analysis (Edwards and Magee)
RSI (mostly looking for divergences)
Seasonal cycle analysis
Time cycle analysis
ADX
M.A. (only occasionally)
You can’t be one trick pony in this biz….
So, please tell me how to categorize that last 30 min o mistress of the Stick?
January 22nd, 2009 at 11:17 pm
@KC, “never before have stocks bottomed more than a year before the end of the recession”
Who suggested that this would be a final bottom? K-wave theory suggests that we’re in this until 2020 or so. We’ll have an impressive rally after this low but it won’t be final, at least according to wave theory.
If what is forecasted unfolds over the next decade then we won’t be any comparisons to the Great Depression anymore.
January 22nd, 2009 at 11:20 pm
andy, luv that nickname. : ) thank you. thank you.
laughing to hard to be serious, now. you gotta look at a bunch of the sticks. anyway, i just feel it.
January 22nd, 2009 at 11:41 pm
Karen…the mistress…
Very good then. If you can “feel it” then that’s a suitable assertion to make. Sometimes good traders have “a feel.” So I’m hip to that. Intuition is a spiritual quality, usually associated with woman. So go with it….
But if this pig breaks down below 800 tomorrow, then I would suggest conducting a “Yours Fest” with whatever length your holding.
Good Night.
January 22nd, 2009 at 11:48 pm
Regarding Carter Worth (comments @ 6:18 & 8:00)
He was clearly bearish in late 2007 and remained so until early October 2008. Then he did an about face and turned bullish.
I think he’s been on the wrong track the last few months, but he still deserves credit for being correctly bearish for nearly a year. (A rarity among “mainstream” analysts).
January 23rd, 2009 at 3:58 am
CNBC/MSNBC have become shouting cesspools and – most certainly – no longer credible sources of information. The last time I tuned into either one was last week – and was for no other reason than to watch Barry. He got treated like s^*#t, the atmosphere was toxic, and once his bit was done I baled.
I see no redeeming value in either of these channels. Pure undiluted crap and noise.
Please excuse my obvious irritation, y’see I have this utterly irrational expectation that channels covering economic, financial and market news will be sober, serious, and focus on their subject, forsaking fluff and noise……OK, I’ll admit it – I used to enjoy Louis Rukeyser, for perhaps no other reason than the guy was knowledgeable, and interesting but combining a wicked and gleeful sense of humor with his commentaries. Fair enough, he was light on charts ‘n stuff, but that was “back then”.
Oh well.
[sigh]
January 23rd, 2009 at 4:13 am
followup…sorry about all the bold text, that was purely accidental.
Mea culpa (etc)
January 23rd, 2009 at 6:11 am
Rukeyser was a perma-bull who often blacklisted bearish guests. He was largely right, given he was popular from 1980 to 2000…the greatest bull in history. He’d probably still be bullish.
BTW, futures getting pummelled…just woke up, don’t even know why yet…but totally predictable…so yesterday was almost assuredly noise.
January 23rd, 2009 at 7:03 am
CNBC got an amazing exclusive…interview with Jeff Immelt!!
He didn’t like the first question about the dividend…he answered a totally different question.
January 23rd, 2009 at 7:12 am
And ooohhh…somebody got up on the wrong side of the bed….I hope we won’t have a chip on our shoulders…(and frankly, I can’t imagine a job that would provide less daily joy)
http://www.foxnews.com/politics/first100days/2009/01/22/obama-suprises-white-house-press-corps-visit-briefing-room/
Irritated Obama ‘Stares Down’ Reporter During Press Corps Visit
January 23rd, 2009 at 7:19 am
Steve Barry Says:
January 23rd, 2009 at 7:03 am
CNBC got an amazing exclusive…interview with Jeff Immelt!!
Priceless!
January 23rd, 2009 at 7:21 am
Alright, just woke up, flipped on Bloomberg, and then shut if right off, the very first thing I heard was:
“contracted more than economists expected”
Now I don’t even know what they were talking about but it doesn’t matter anymore. What is it exactly that economists have ever expected. I’ve heard that line more in the last 6 months than I have in my whole life.
January 23rd, 2009 at 7:32 am
How long before GE has to cut that Div? Any bets?
January 23rd, 2009 at 8:14 am
Vince Farrell just explained to the audience how “lower oil prices are saving the consumer 400 billion….”
I must say right here….I’m tired of this meme. The fact is oil is the same price it was in 2004-2005. The consumer basically got raped in 2006-2008 and we’ve merely popped the bubble that was COSTING consumers 100′s of billions the last few years.
If you told an oil exec. in 2004 that oil in 2009 would be $42 bucks and the forward strip would be 50+, they would have been very happy.
I think Barry refers to this as the “recency effect”
January 23rd, 2009 at 8:54 am
What do Jim Borchers, Karen, Don Luskin, Jerry Bowyer, Larry Kudlow, Vince Farrell have in common?
January 23rd, 2009 at 9:10 am
Andy, i’m holding lots of gold this morning. : )
January 23rd, 2009 at 9:15 am
After reading the Jim Borcher and Karen posts the last few days I still realize there is plenty of low hanging fruit to be picked even at these depressed levels.
January 23rd, 2009 at 9:25 am
Can someone please shoot the twerp Goldman on CNBC. Complete idiot and shill. As long as you beat expectations, you are golden.
January 23rd, 2009 at 9:37 am
What I take away from CNBC is what not to buy. If it’s being touted as the place to be, then it’s the place you should be leaving or staying away from. The more RA RA I hear, the more I fear.
High yield bonds are being pushed. Who cares what the yield is now. The value of the bond can only go down. Your yield will be fixed one bought. Very bad situation to be in 1-2 years from now.
The bull is dead stop beating it, just bury it, and get on with it.
January 23rd, 2009 at 9:54 am
karen and gold:
Gold is certainly “acting” well relative to currencies…it should be falling but it’s hanging in there and going up. So, must give gold some credit there. I must confess the whole pattern is a bit of a jumbled mess to me. I see 904 (61.8%) as a level that will get tested. A break of 961 would be a “break out” for me on the longer term charts. If gold can start taking out those kinds of levels it will also resemble a break out of a pennant type formation.
Weekly candlesticks looking pretty good….last weeks hammer bottom getting confirmed with a near engulfing stick. If it can close 886+ today then it will look bullish for next week.
January 23rd, 2009 at 9:58 am
@ AT and Karen, “Mistress of the Stick”
I really dug the interchange between you two last night… You got I-Man feeling like old Charlie Sheen in Platoon, torn between Sgt Elias and Sgt Barnes. :)
Only thing I’m wondering now is…
Why didnt I make an intuitive early stab at DGP… instead of IYM!!! Damn intuition. No worries though…
January 23rd, 2009 at 10:07 am
Andy, would you care to concede that if 820 is regained and holds, prospects for a short term rally have improved?
January 23rd, 2009 at 10:22 am
@ Karen:
Our approach of 820 is nicely coinciding with the old 10:30 EST surge of orders that always seems to occur at the conclusion of what a vet always told me was “amateur hour”…
Should make for an interesting inflection point.
January 23rd, 2009 at 10:55 am
going nowhere fast… which is better than one alternative, anyway.
January 23rd, 2009 at 11:04 am
I think we’ve got it… no follow through on the break down. Although I rarely check them… my intraday 1 minute bars tell the story for me. Check the volume spike on the MA crossover that just happened…
I run a 9 day SMA and a 45 day EMA… so I saw it a little early.
January 23rd, 2009 at 11:10 am
hey, i like that trick. thank you very much, i-man.
January 23rd, 2009 at 11:26 am
No prob Karen… cant remember where I picked that up from but I like it. Its real trippy when you think about 9 and 45 being both divisible by 5… 5 being a prime number, and 5 trading days in a week…
January 23rd, 2009 at 3:55 pm
Mike in Nola @ 9:25
Jim Goldman is a mouthpiece for the tech companies;
Steve Leisman is a mouthpiece for the Fed and the large banks;
Phil Le Beau is a mouthpiece for the auto companies;
Kudlow is a mouthpiece for “long-only” money managers;
and Dennis Kneale is just a mouthpiece for idiots.
January 23rd, 2009 at 8:53 pm
“Reversal Day”? Are you kidding me??