Barron’s Mike Santoli explores whether the Dow hovering around 8,000 and the S&P around 800 carries a certain significance and what this could mean.
1/26/2009
In any great organization it is far, far safer to be wrong with the majority than to be right alone. —John Kenneth Galbraith
Asian currencies continue to sell off vs the $ on the heels of the news yesterday that South Korea said they will look into hot money inflows stemming from the $ carry trade and the Bank of Indonesia said they are looking into the foreign buying of bills. This follows the news a few weeks ago that Taiwan was limiting foreign deposit holdings and Brazil was taxing foreign inflow transactions. As I mentioned yesterday, we may have reached a short term pain threshold in terms of $ weakness and foreign countries are fighting back as they certainly won't wait for...
read more »
January 27th, 2009 at 5:19 pm
Keep hope alive! It’s exactly this sort of thinking that tells me the market is nowhere near a bottom. We are in the midst of an epic collapse- this should be obvious by now. How on earth can anyone think otherwise when the entire banking system is essentially bankrupt: Freddie, Fannie, AIG, Lehman, Bear, Merrill, Citi, Bank of America, Wamu, Wachovia, and on and on. Does an epic collapse stop now? at DOW 8,000? If it did, then it wouldn’t be an epic collapse- it would simply be another painful post WWII recession.
The Nov lows are now a little over two months old. We’re just about ripe for another leg downwards. Within the next month we will have broken through 800 and 8000. Hopefully we get a little rally before then from these levels so I can put my S+P short back on. The trading ranges are narrowing(lower highs and higher lows) and the resolution to this pattern should be obvious: a major break to the downside. S+P earnings at $40 this year means 600 on the S+P becomes a magnet as the year moves on.
January 27th, 2009 at 7:30 pm
going higher to what though, we can’t break 850 on the SPX.
January 28th, 2009 at 10:05 am
I was looking for an upward bound of 865 – 915. We pretty much hit the bottom of that range and, yes, I did get some futures off a tick below the overnight peak. I’ll scale into more if and when the market moves higher.