Since I am still up North, let’s go to David Rosenberg for a look at how the current bounceback compares with the 2002 / 2003 bottom:
>
chart courtesy of Gluskin Sheff
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
Retail Sales in Jan rose .4% headline m/o/m, .7% ex auto's, .6% ex auto's and gasoline and .7% at the core. The headline figure was less than expected while the rest were slightly better. But, with respect to non headline sales, because Dec figures were revised lower, taking the two months together were about in line with forecasts overall. Sales rose in electronics, building materials, food/beverages, clothing, sporting goods, dept stores and restaurant/bars and fell interestingly for online retailers, health/personal care, furniture and motor vehicle/parts. Bottom line, headline sales were below expectations due to the greater than expected fall m/o/m...
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July 23rd, 2009 at 9:11 am
Double dip in the market will reflect the double dip recession at hand (similar to 2002). But maybe worse this time.
July 23rd, 2009 at 9:27 am
Key Factors
•The market didn’t show much reaction to the data since it recognizes it is still filled with noise as the Labor Department sorts out its seasonal adjustment factors to account for the layoffs in the auto industry that occurred earlier than normal.
•It hasn’t been lost on the market that the initial claims total is still uncomfortably high and ensures we will see another big drop in nonfarm payrolls in the July employment report.
•The improving trend in continuing claims, meanwhile, isn’t being taken at face value (nor should it be) as a hallmark of an improvement in hiring activity. Instead it is seen as a head fake of sorts based on the notion that a number of claimants are dropping out of the computation after having exhausted their unemployment benefits.
http://briefing.com/Investor/Public/Calendars/EconomicReleases/claims.htm
July 23rd, 2009 at 9:32 am
ask them what the correlation between the two charts is… usually the number is very low – it’s basically an optical illusion where we CREATE correlation where none exists.
July 23rd, 2009 at 9:36 am
There was 9/11 in 2001-2002. Which do you think will be a similar event this time? Swine Flu?
July 23rd, 2009 at 9:38 am
We drink and rob and rhyme and pillage! – beastie boys
July 23rd, 2009 at 9:46 am
But, as Rosie acknowledged on CNBC a week or so ago, the 2001-02 recession didn’t impact the “real economy” to the extent this one already has. So maybe the usefulness of this is limited to trading and timing market bounces in a secular bear market/recession.
July 23rd, 2009 at 9:52 am
This chart is a good image to keep in my head over the coming weeks and months.
While this rally has helped to heal some portfolios, there is most likely more pain to come.
July 23rd, 2009 at 9:58 am
Shouldn’t this chart have started in Sept or October 2008 – when the crash started? More fun with numbers…
July 23rd, 2009 at 10:05 am
Great Chart Bruce; I guess that stimulus is beginning to work as intended.
July 23rd, 2009 at 10:12 am
Trip out to 9000 and then reversal. Financials not participating in the rally. Watch out.
July 23rd, 2009 at 10:23 am
@BR: Got through about the first 100 pages of your book on the flight home last night. It actually made me feel worse about things overall but I think I’ve had a change of heart regarding stock prices. I think they can go up for quite a bit longer but am still thinking we get a major pullback in the fall. Now, I’m not acting on that thought but I really think this charade can go on for quite a bit longer after reading your book last night. It’s clear that the Fed’s only care in the world is to support the stock market (and bankers & speculators) at all costs, even to the economy and country, so that’s what they’ll continue to do until another blow up happens. They don’t really give a rat’s ass about the economy or they think the economy follows the stock market and the manipulation (devaluation) of the dollar. This is truly idiotic. Smoke & mirrors.
July 23rd, 2009 at 10:26 am
33 pts to ben22′s 1000.
July 23rd, 2009 at 10:28 am
Personally I think this type of scenario is very much in our future. But this time we get a bigger drop from the intermediate top because not only will employment continue to worsen but we’ll actually get contraction in GDP again as we find the new stagnant level of the economy. But using these comparisons based on chart similarities only is fraught with problems. And it only allows people to dismiss the whole idea because they can point out those weaknesses in the thin argument if it’s only based on the lines.
July 23rd, 2009 at 10:38 am
@manhattanguy
Sorry I think you are wrong – this rally is just getting going.
Unfortunately the average American buys into green shoots and with minimal encouragement from our media will believe the good times are back again.
Most people on this site have predicted the market to roll over about 20 times each, all have been wrong!
July 23rd, 2009 at 10:39 am
I don’t see why we should compare to the last downturn in stocks, I’m gonna say it: It is different this time.
emmanuel,
thats right, despite the fact that on the thread below this, bill from chicago claims I’ve been saying for months the market would go down. wrong. Fwiw, my target was always 965-1k, it’s been hit. I have to admit, a few weeks ago I questioned whether or not it would happen, but here we are.
July 23rd, 2009 at 10:40 am
WEEK ENDING
July 18
July 11
Change
July 4
Year
——————————————————————————–
Initial Claims (SA)
554,000
524,000
+30,000
569,000
413,000
Initial Claims (NSA)
580,944
671,242
-90,298
581,145
411,408
4-Wk Moving Average (SA)
…I think this is getting into the interesting side of government numbers again….seaonally adjusted claims are 1,078,000 for the last two weeks. Unadjusted is 1,252,186. 175,000 difference. Hmmmm….just color me skeptical…
http://www.dol.gov/opa/media/press/eta/ui/eta20090846.htm
July 23rd, 2009 at 10:41 am
oh and bill, just to clarify as you seem to need full clarification on everyone’s calls, I would not be surprised in the least to see 1,100 before this is over, but I won’t be long trying to grab that last 10-12% gain. and yeah, I still haven’t changed my larger bearish stance on things.
July 23rd, 2009 at 10:43 am
We will have another crash at some point. I just don’t know when. Think I’m going to watch the rest of the summer. It’s not going to happen now. Barry’s book really gave me an “ah-ha” moment. Was a great reminder of just how silly things have gotten in the markets in the past before the bottom fell out. Don’t see why this time would be any different. We’re on this boom, bust treadmill and can’t get off thanks to the Fed who tinkers more and more as the busts become bigger and bigger. But for now, might as well enjoy the run up in our 401k’s! Psychologically, people will feel richer again circa 1999 and 2007.
July 23rd, 2009 at 11:01 am
Morning all! are we having fun yet? it’s getting scarier and scarier.. maybe 1000-1050 spx is too low a target for us, ben… i’m beginning to wonder if we couldn’t approach 1162 now. insanity rules the day.. it’s been that way for years so we’ve got to keep expecting it, i guess.
July 23rd, 2009 at 11:05 am
@karen: I now think it’s too low but I cede to your expertise. You and ben22 were dead on here. This is getting absurd but why fight it, right? I’m certainly not jumping in now though. I’ll just mostly be a spectator for now. Will sit and watch the spectacle unfold.
July 23rd, 2009 at 11:08 am
manwich,
If there is one thing I’ve learned its that these kind of things go on way longer than you think. There are still a few talking about 666 and how this or that is going to blow up. Given that the market continued to rise for over 2 years after the RE bubble burst, anything is possible on the upside. This is like the crash running in reverse and what do you bet we continue upward until the euphoria is as strong as the gloom was at the bottom. We are nowhere near.
July 23rd, 2009 at 11:10 am
karen,
That target might be too low, you are right. I think I know why you came up with 1162, I’m going to be sitting at the home desk tonight with some charts and a pencil trying to figure out my next steps since we are in my range now. Gold’s got me all kinds of confused right now as well, any new comments on it?
I’d really like to see sentiments among other things to be more extreme to say that the rally is over, I have no confidence right now that it is, but I feel more and more every day that we are going to set up for something really bad. I know what this is going to bring out, money chasers, and though I believe retail has been in for a little while now, not everyone was, and I think people that really got burned last year are going to start to perk up very soon and buy more equity.
The deflationary spin cycle is still in full effect as far as I can tell though.
July 23rd, 2009 at 11:11 am
@thetanman: Exactly. Wish I had read Barry’s book a few months ago when it first came out. I think we all know this, but I needed that reminder laid out for me just like the book does in the first 100 pages. Think others did/do to. Be careful here. There’s a time to be patient and that time is now. And, hey, it’s summer. I’ve taken some days away from this crap and it’s done a world of good for my psyche.
July 23rd, 2009 at 11:12 am
I don’t understand Rosenberg’s fixation with the 2000-2002 bear market. I fail to see how it is relevant to current market conditions. The 2000-2002 bear was about the collapse of the biggest stock market bubble in history. The current bear market is about a crisis of confidence and the complete implosion of the world economy. Totally different animal in my opinion. We are in uncharted waters here. I think charts like the one above will damage a trader’s understanding of the situation rather than providing any illumination as to where we go from here.
July 23rd, 2009 at 11:21 am
Mannwich
You have spiked my interest in Barry’s book. Do you forsee a time when it will be worth investing again – i.e. basis on ‘normal’ fundamentals – or is this irrational shit the new way forward for Capitalism?
July 23rd, 2009 at 11:23 am
ben, as for gold, it like EVERYTHING else, seems to be in direct correlation to the dollar.. the dollar is oversold the market is overbot.. doubt a correction will be a “crash” though.. i’m not playing gold short term at all here (just holding all my long term core stuff for now.) keep getting in and out of dto, though. tossed my goog back after a better than 10 pt run up.. (don’t tell my son!)
July 23rd, 2009 at 11:25 am
@bill: Honestly, I have no clue. Fundamentals haven’t really mattered for at least 20-25 years now (until the obligatory rush for the exits). Pure “investing” is dead, IMO. It’s all about technicals and speculaton now. Keep dancing until the music stops, then find the exit before everyone else. Pretty sad if you ask me.
July 23rd, 2009 at 11:27 am
Ben you are right – you did predict north of 1000 – apologizes…1162 is just plan scary.
July 23rd, 2009 at 11:35 am
Bill – I would suggest you pay close attention to some of the predictions certain people on here make. A number of them have been spot on since I’ve been reading this blog over the last few months. The people here who make good predictions stand out – what I’ve come to learn is that when you read folks saying things like “I think” or Ben’s recent “The target might be too low” this is a clue (to me) that the posters making predictions are very very open to changing their predictions when new data becomes available. Others will often make a very specific predictions “The market will hit such and such number and fall (or rise). If you follow the blog closely you’ll very quickly see who usually ends up being right and who doesn’t.
I’d name names, but I don’t want to seem more like a sycophant than I usually do ;-)
July 23rd, 2009 at 11:45 am
Manny,
It easy to forget very important things after what we’ve been through. I’ve done that many times myself and then looked back and thought “damn, I knew that.” Anyway, for me its the ERCI and their forecast of a growth phase. I’ve ignored them before-no more! And thanks for the warning, since I have a lot of SSO and some other molten material and that’s the phase right before vaporization. I could really get taken to the cleaners. Usually what I do is switch from 2X bull to the regular eft on the way up, so it really has to crash to take me back to even. I did that on the way down selling SPY and buying SSO. It actually worked but not before I lost some hair and for a while I thought I was going to get stuck in a decaying SSO forever.
July 23rd, 2009 at 11:46 am
@Karen,
that’s your KISS method I think, it is all about the dollar. Do you think we are going to see a $77 handle on the dollar index? I’ll be buying in larger blocks if we do though I’m already long the dollar but small for now.
@Bill,
No worries man, I get plenty of calls wrong so you can hit me on the one’s I get wrong, I can take it, on this one though, I’ve been right. Good luck to you and I agree with Manny that you should pick up Bailout Nation, it’s a good book and an easy and fun read. BR is the man.
July 23rd, 2009 at 11:49 am
Greenspan saved me in 1998, and now gentle Ben to the rescue.
July 23rd, 2009 at 11:49 am
Don’t forget… things often get funky and unpredictable in August as a lot of the senior people on trading desks take time off and let junior guys run the book. You’ll see a thinning of volume, some weird price behavior (esp in the last two weeks) and then a reversal of much of that in Sept when the senior guys come back on the desk.
July 23rd, 2009 at 11:52 am
@thetanman: What’s really depressing to me is that it’s all an illusion to keep stock prices high. That’s inflationary, no? They are destroying the dollar (and not doing much in reality to fix the problems that ail our ECONOMY) so that speculators and financial services firms can make big dough. I know for some in this country this is all very complicated and hard to understand, as well as sobering to admit, but I just can’t believe that more people aren’t riled up about this.
July 23rd, 2009 at 11:52 am
ben, it used to be about the euro:yen.. i change how i kiss all the time! (just not who!) lol.. yeah, i’m betting on a dollar up as well… buying dto deeper and deeper.. latest add at $83.38.. and bot SRS at 16.86.. might have to hold it a few months : )
July 23rd, 2009 at 12:02 pm
A little frothy maybe:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6723529.ece
Chinese market is on a tear. Everybody and their brother is jumping in again, it seems.
July 23rd, 2009 at 12:03 pm
Karen,
I know you aren’t a prechter fan but he made me gasp with his oil call in his latest theorist letter. He’s talking $10!!!! Your DTO will buy you some nice stuff if that actually happens. I have a really hard time seeing that right now.
Also, that 11:52 post was funny, I change how I kiss, just not who. lol.
Speaking of the YEN, shorting Japan as we go a little further almost seems to easy. I thought we had problems until I read Mauldin’s OTB letter on Japan. My dear lord.
July 23rd, 2009 at 12:06 pm
manny,
I know what you mean. You can do stupid things for years like stay up all night, eat crappy food, drink and smoke dope until one day you grab your chest and keel over face first into the dust. I know several people who went out that way. Its about the now. If it weren’t we’d probably never get in trouble, but we repeatedly do.
July 23rd, 2009 at 12:11 pm
Onlooker,
There was a city in China where RE prices went up 6.4% in a week. The volume is so high its like stocks. Canada also has a blazing RE market primed for a crash.
July 23rd, 2009 at 12:14 pm
ben, if prechter is really calling for $10 crude, it confirms that he is a crackpot, in my mind. totally insane.. his marketing genius has gone to his head… hide this comment from Andy.
July 23rd, 2009 at 12:14 pm
Pumping the market (and bubbles) is the easiest thing to do in comparison to really trying to fix what are likely intractable, unfixable problems (at least without some short to medium term pain that would cause political and social upheaval), so we will get the same “solution” until it no longer “works”. We could be closer to that moment than people realize. Makes me glad I didn’t have kids.
July 23rd, 2009 at 12:20 pm
tom sez
things often get funky and unpredictable in August
In Aug 98 (at least I think it was 98) I figured things would crash, so I waited and waited and nothing but up. I wanted to buy EMC and GPS and finally did. EMC immediately fell from 58 to 42 while GPS was halted for giant gaps down 3 days of the first 10 days I owned it. I held onto both, but a friend of mine sold EMC at 42 and bought puts. Yowza.
July 23rd, 2009 at 12:27 pm
@karen
“and bot SRS at 16.86.. might have to hold it a few months : )”
LOL – that’s the definition of a “core holding”…
July 23rd, 2009 at 12:37 pm
@ ben22 at 12:03 pm
“Mauldin’s OTB letter on Japan”
What was the title of the OTB letter? date?
July 23rd, 2009 at 12:39 pm
The USD is looking like Yen a decade ago..it is trapped as a Carry-trade currency meaning…we have become Japan. There will be no growth going forward, no recovery in employment. Pretty sad how GS thinks by pumping the market, it can make people feel good about the economy. In reality things are much worse than what MSM tells you.
If Karen really thinks S&Pis going to 1100+ why bother buying SRS right now? Beats me :)
July 23rd, 2009 at 12:42 pm
@batmando
http://www.ritholtz.com/blog/2009/07/buddy-can-you-spare-5-trillion/
July 23rd, 2009 at 12:43 pm
Manhattanguy – If Karen really thinks S&Pis going to 1100+ why bother buying SRS right now?
Gee, I dunno, what happened to your prediction that the market was going to roll over at 9000 this morning? ;-)
July 23rd, 2009 at 12:49 pm
PS – I’m teasing you, in case you thought I was serious.
July 23rd, 2009 at 12:49 pm
The way I see it this rally is built on 1) companies beating dramatically reduced analyst forecasts 2) month over month RE improvements during “building season” (not YOY) and 3) a flattening out of job losses at very high levels (ignoring furloughs and shorter workweeks). Overall jobs,earnings and RE suck.Suck more than 9K LOL
July 23rd, 2009 at 12:51 pm
Jc
Can’t argue with you, I think that’s bang on.
July 23rd, 2009 at 12:54 pm
manhattanguy, what’s wrong with being long and short at the same time??? i’m dying for fxp but won’t get in front of that train, yet. anyway, nothing moves in a straight line as you know.. tried to keep a friend out of it in the 10s, hope he listened to me..
July 23rd, 2009 at 12:58 pm
There are a lot of pros with great track records that are shorting this melt up, and also when I feel like this things are usually getting ready to tank. About 90% accuracy. On the other hand selling some into this melee.
July 23rd, 2009 at 1:00 pm
Why oh why didnt I take the blue pill???
July 23rd, 2009 at 1:20 pm
LB arrives at TBP, observes the carnage and greets his homies, skilfully avoiding those who are mud wrestling on the floor and name-calling about predictions and calls… :-)
This rally continues to amaze, and obviously one tips one’s hat to ben22 as we are now sitting squarely in his target rally topping zone.
Well today’s push above many traders’ stops officially kind of BITES for many of us, (eh, I-Man), but on the other hand it’s a nice cool day in Manhattan and a whole lot of crooked politicians just got arrested in Noo Joizey so it’s not all bad, after all.
LB is gazing at the FXP chart and thanking his lucky stars that he didn’t go there. We were stopped out of SCO but otherwise holding on here, with SPX 1000 forming what one imagines to be a fairly significant backstop.
July 23rd, 2009 at 1:30 pm
about time you showed up, lb… only a brit would spell skillfully skilfully.. you continue to amaze far more than the $spx, lol.
July 23rd, 2009 at 1:34 pm
spx could roll over here, any minute based on the 30 minute chart..
July 23rd, 2009 at 1:34 pm
Any of you older timers (note, I did not say “old”) remember a time when you could see the SPX, VIX, the VXN, and the 10 yr note yield, rally together?
I always thought that couldnt happen. Strange days have found us.
July 23rd, 2009 at 1:39 pm
@leftback: “Crooked politicians in New Jersey?” Isn’t that a bit redundant?
July 23rd, 2009 at 1:39 pm
here is your big treasuries news..
Fed’s Fisher against any more Treasury purchases
1:35 PM ET 7/23/09 | Marketwatch
WASHINGTON (MarketWatch) — Richard Fisher, the president of the Dallas Federal Reserve Bank, said he is against expansion of the central bank’s purchases of Treasurys beyond $300 billion. In a speech in Carlsbad, Calif., Fisher said the Fed faces some risk of being viewed as a “handmaiden” to the Treasury and making it easy for them to sell their debt. Fisher said he is confident that the Fed will exit its non-traditional monetary policy without regard to political factors. “We know full well…that we will have to ‘pull the trigger’ of tightening policy well before it is politically convenient,” Fisher said.
July 23rd, 2009 at 1:40 pm
Up, up and away! To the moon, Alice! What a relief. We’re all rich again.
July 23rd, 2009 at 1:45 pm
“Fed faces some risk of being viewed as a handmaiden to the Treasury and making it easy for them to sell their debt”
Handmaiden?
More like personal concubine.
July 23rd, 2009 at 1:52 pm
http://finance.yahoo.com/news/States-Where-the-Unemployed-usnews-3479448580.html/print;_ylt=AptCDwggcR4hu8BuT6Fa6WkEbq9_?x=0
States Where the Unemployed Are Giving Up
“In some U.S. states, nearly half of the job seekers who have stopped looking for work have done so because they simply don’t believe they’ll find anything. Indeed, the number of discouraged workers nationwide has more than doubled in the past year. This trend won’t be reflected in the widely publicized unemployment rate, as discouraged workers aren’t included among the unemployed. Still, in states as diverse as Mississippi, South Dakota, and New York, the span of this often invisible slice of workers signals a population losing its hope.”
July 23rd, 2009 at 1:52 pm
LB has had a substantial short of the 10-yr note going since January as part of a curve steepener trade that may have just about run its course, and it is all coming off today. The short, we mean, as this sell-off proceeds ahead of the auctions next week. We are getting to the point where the administration starts to talk DOWN the stock market so they can SUPPORT the Treasury market in order to finance the government debt.
Obviously we like TLT from here, but we like the 5-year best of all.
We even like being baited by mindless tossers who don’t normally post here, as long as they don’t overstay. It usually indicates that sentiment extremes are approaching.
July 23rd, 2009 at 1:54 pm
is anyone else holding their breath here? anticipation and wonder has me at the edge of my seat… just sold out of my remaining sso 29.43.. the hell with it really…
July 23rd, 2009 at 1:56 pm
@karen
I am. This is kind of exciting. In a completely insane sort of way…
July 23rd, 2009 at 1:57 pm
Holding breath?
Sheeee…….
I’ve been doing that for about a week now. Nice trade karen. I long you.
July 23rd, 2009 at 1:58 pm
Bruce – I’m curious about the number of people who are actually falling off the unemployment report because their benefits have run out. Aren’t most states just extending unemployment benefits now? Anyone know the number of people who have exhausted even the extended unemployment insurance?
July 23rd, 2009 at 1:59 pm
If I had more time on my hands I could spoof that chart in so many ways. Was that even worth posting?
July 23rd, 2009 at 1:59 pm
@Thor: I think they extended bene’s 13 extra weeks but those weeks are running out for many people. I may be wrong though.
July 23rd, 2009 at 2:00 pm
Karen:
I only hold my breath when I want something that I can’t have…didn’t work too well for me as a child, but I’m giving it a second try as I enter my dotage….
July 23rd, 2009 at 2:02 pm
Thor:
From what I’m reading most states have already extended benefits…Bookvar wrote a little note today on the EUC (extended unemployment compensation) and Mish went off on this about a week ago, and nearly burst a blood vessel….
July 23rd, 2009 at 2:05 pm
Bruce, think of it more as a deep inhale, or gasp, if you will, in excitement. holding your breath in a fit of fury is not so good.. bad for the blood pressure as i’m sure you could attest.
July 23rd, 2009 at 2:08 pm
Karen,
Been holding my breath all-week. Rally started looking like it was losing steam tues/wed and I held off to late on putting my hedges in-place. World of pain being short. At some point there is going to be a pull-back right? Then again I’ve been saying that since 930. Sheesh
July 23rd, 2009 at 2:11 pm
I-Man: Did you just “long” another poster? Was that an official declaration of longing?
July 23rd, 2009 at 2:23 pm
LB:
I “long” karen in a different way than I “long” you.
I “long” karen because she seems to always see the opposite of what I see… and I’m kinda into chicks that dig charts…
I “long” you, because we alwasy seem to see the same things…
BTW… in retrospect, I knew when you posed the proverbial “how many times do you need to feel the cold steel on your balls” question back at 888… that you were really posing that to me, as a younger and dumber, you.
What I SHOULD have known… was that the reason it pissed me off was because I knew that you were right.
CV was too. I wouldnt come down off the ledge, so I just gotta deal with the consequences now. I was being stubborn, because I really wanted this short to work as a position trade… you know, catch the “bigger move” and not “dick around countertrend”… looks like I caught a bigger move than I had in mind.
But whatevs. To cover here would be stupid and emo. I know how charts that look like an upside down V end up. And if I get the call, well, fuck it. Tuition.
July 23rd, 2009 at 2:24 pm
Numbers on employment, car sales, and housing will continue to be a lot better than the bears predict, because the stimulus will work. When you hire people to build infrastructure they get employeed, when you give people strong incentives to purchase cars and houses they do (especially as credit continues to losen up). The problem is that the major fizz of the stimulus will be gone by January and with the improvements in all these numbers, we will lose the political will to continue the success with another stimulus. The usual leaders of our idiocracy will say: “it’s all getting better and now we need to pay down the debt”. Republicans and conservative democrats will again find their inner republican and try to do the right thing at the wrong time. So we will repeat the great depression (with a nasty second dip), but at least it will be done at a lower level. I would not be surprised to see the S&P get above 1200. There are trillions of cash sitting on the side-line and crying :-( at < 1%. That cash wants to believe that it’s all over, and that happy times (=doubble digit returns) are here again. It will take a lot less to convice it, than to convince the bears at this site. However, when the numbers begin to turn bad again in early spring (because of a lack of a second stimulus), the experience of October 2008 will be so fresh in mind that we will get another panic.
July 23rd, 2009 at 2:36 pm
This is the bear capitulation rally. I’m pretty sure it’s not over yet. Perhaps a set back and then the final leg higher.
The 80′s and 90′s taught everyone to buy the dip. Now you need to sell the spike. Don’t think it’s done yet, but were finally seeing the doubt about the rally melt away. In fact, it’s starting to hit a tipping point. Like in late February/early March when everyone who was saying it’s a buying opportunity through ’08 started becoming all of a sudden bearish.
The fundamental error of 99% of market participants is to not realize they are dealing with a complex system. They are starting to become really positive now like someone witnessing a warm spell in December and declaring the winter over.
The S&P high on October 14th (remember that spike) was to 1043. 1030 to 1050 is my very leveraged short opp.
July 23rd, 2009 at 2:37 pm
DeDude, i’m a believer in spx 1162 right now.. doesn’t mean we go there straight up… and i prefer to be cautious on acknowledging the UP when there are so many closeted bogey men..
July 23rd, 2009 at 2:39 pm
Anyone notice how the Euro and Sterling have been declining, while SPX up. Now that’s one hell of a divergence.
July 23rd, 2009 at 2:44 pm
Bruce,
They will extend benefits until the cows come home. My brother lives near Pulaski and says that part of Tenn is a total wipe out. I went up there near the Ala-Tenn line and the people looked like zombies. Chalky white, stunned and poor as hell.
Those poor guys long in UNG. It was 14 earlier today and now is below 13. What a ride, but may be a good long before long.
Anyone play S&P deletions? GGP was supposed to go bankrupt too, and eventually did, but it exploded after being deleted. They won’t let CIT go under, at least not right away.
July 23rd, 2009 at 2:44 pm
I-Man, that was quite a description of being “long” someone.. i long you, too, btw.
July 23rd, 2009 at 2:47 pm
Mr. O, Karen, nice observations as always, and Karen your ability to avoid bad trades never ceases to amaze. :-)
To many of us it seems like there is only ONE TRADE here, a leveraged hedge against the $, or there is a $ carry trade as someone expressed it this morning. Weakness in the € would tend to suggest exhaustion of this trade. Of course JPY fell off the cliff today and EUR:JPY has been the best predictor of SPX for most of this rally. € can’t get past 1.43 in my opinion, so I’ll stand with my back to the wall at 1.43 and SPX 1000 for now.
July 23rd, 2009 at 2:48 pm
OK, all you dollar-illuminati … I see stories that indicate the Treasury is going to have a tough time moving all the debt that they want to next week — doesn’t that bode ill for the USD? (and maybe good for gold?)
I suppose that if they skate past another auction without losing control of things, we might see a rally in the USD emerging from it, but my expectations for the (hypothetical) rally in the dollar would come from a sell-off in stocks, which is more than a little like waiting for Godot. Might happen tomorrow, might happen in October, might happen sometime next year. Might happen after I’m broke.
July 23rd, 2009 at 2:48 pm
Oh, and karen — here’s a link for you …
http://www.mineweb.co.za/mineweb/view/mineweb/en/page34?oid=86392&sn=Detail
July 23rd, 2009 at 2:51 pm
“I “long” karen in a different way than I “long” you.”
I-Man: That’s kind of a relief, really, considering. But here at Schadenfreude we long you back, dude.
July 23rd, 2009 at 2:51 pm
@thetanman: “Chalky white, stunned and poor as hell.”
Sounds like a really big swath of our country. Great line, by the way.
July 23rd, 2009 at 2:52 pm
oh, holding my breath again.. anyone following the spx on the 30 or 15 minute charts?! unbelieveable.. holding the 5 day ema… but topping candles at 1 and 1:30 still hold precedence.. rsi rolling over still… gotta remember to breath.. : )
July 23rd, 2009 at 2:56 pm
constant, shame on you thinking you i hadn’t seen that : ) mineweb is delivered to me fresh every morning.. but remember, believe half of what you see, a quarter of what you read, and none of what you hear…
July 23rd, 2009 at 2:59 pm
Words to live by.
July 23rd, 2009 at 3:00 pm
“I see stories that indicate the Treasury is going to have a tough time moving all the debt that they want to next week — doesn’t that bode ill for the USD? (and maybe good for gold?)”
Depends upon whether the stories are BS. Treasury market has been “sell the rumor and buy up the higher yields”… Sure, all that auction fail, gold to the moon hyper-inflationary stuff will come up at some point, but much later.
July 23rd, 2009 at 3:01 pm
NAS closed a big gap today from early October. Could be the end but I think much more probable / low risk scenario is setback or sideways for a week or two and then final euphoria-generating, but ultimately-ending-in-tears leg up.
1063 was the low point on the S&P from ’04 to Sept/08. The futures hit 1067 on the morning of Octobere 14th. 1050 +/- is huge.
S&P just broke through the mid 900′s (the bull stalled there in ’97, was the bottom in the ’98 crash, the bottom after 9/11, and top of the two 2002 rallies). Hard to imagine this is the exact end of this rally. Big rallies end when everyone is bullish AND the market is going up. Remember the $150 oil call by MS and others and we almost hit it. But THAT was the end.
As well, notice Karen’s change of target today. Even the best traders get affected by the market. In early March, even George Soros said “no bottom in sight”.
1030 to 1050 looks ot be a massive short opp.
July 23rd, 2009 at 3:02 pm
excuse typos. pls. on the dollar.. one thing confusing me.. at some point rising rates will support the dollar over holding gold.. at some point an equilibrium will be reach with risk aversion being the unknown variable…
sorry if i’m not making sense.. generally why i keep my thots to myself..
July 23rd, 2009 at 3:08 pm
“Not making sense” means you are prolly “in the moment” …
July 23rd, 2009 at 3:09 pm
@karen: Please don not keep your thoughts to yourself. Keep ‘em coming!
July 23rd, 2009 at 3:11 pm
Jeez,
I was tired and decided to take a nap at 12:30…
The S&P was at 978 and it’s STILL there…I think I’ll go back to sleep…
July 23rd, 2009 at 3:12 pm
OT (like that matters :) ) but an interesting item I saw elsewhere. John Mack, Morgan Stanley CEO, is taking heat for not being aggressive and taking enough risk here, lagging behind Goldman Sachs and JPM. This is exactly the type of short sighted investor attitude and reckless behavior that led to the financial practices that got us here. How can these guys possibly stand up to that and run a prudent operation when it’s like swimming against a rip tide?
And even with that MS is undoubtedly doing some things that are questionable even now. Like the story about selling crap MBS bonds with AAA ratings again.
July 23rd, 2009 at 3:13 pm
Looks like we need a bad (but not too bad) jobs report tomorrow to set up next week’s auctions.
July 23rd, 2009 at 3:16 pm
thetanman Says: They will extend benefits until the cows come home.
I agree, I have a very good friend up in SF who has had her benefits extended twice. Just wanted to throw the extensions out there are I hear a lot of “people are exhausting their benefits” when the U3/U6 numbers comes out and I’m not sure that’s really what we’re seeing . . .
July 23rd, 2009 at 3:21 pm
Karen;
I don’t do charting and also don’t believe in taking a current curve saying that it looks like a previous curve and therefore the future is predictable. So in my book S&P over 1200 is not so far away from 1162, and I agree that it is likely that we will find the top via a lot of ups and downs. I just know that all those shell shoked investors that have been siting in cash since they were trounced in October has a desperate need to belive that it all is getting better and soon will be fixed and back to normal (S&P close to it’s late September value). Remember many of them are looking at retirement within less than a decade of they have not already been forced to retire early. They really really want to believe and they desperately need to catch the next wawe up to have a decent future. So they are ready to be sucked into a panic bying event. Everything I see at calculated risk suggest to me that Barry and his bears are wrong about housing and that it will surprise us to the up side for the rest of this year. That would just be the kind of thing that could turn the stock enough to trigger panic bying.
July 23rd, 2009 at 3:25 pm
@DeDude: Many of those people that you’re talking about are either: (a) out of work already, (b) a small business who is making little to maybe even no money (like mine) or (c) scared shitless they could lose their job any minute. Now you might be right that some of those folks will come back into the market now, but I doubt as many as you think will in the end. Most people don’t really trust this market, but some might try to play a bit at the c@sino that it’s become until the slightest hint of trouble and then they’re heading for the exits again…and quickly…….
July 23rd, 2009 at 3:26 pm
I’m with Dedude here – never underestimate the power of psychology, especially when it comes to money. Also love the term “panic buying”, first time I’ve heard that used and I think it fits for what we’re seeing, and could potentially see before things tank again.
July 23rd, 2009 at 3:32 pm
Sucker rally in housing, IMO. Many will regret buying, except in the lowest end of the bubble states. And even there I’m not sure they’ll not regret as the job markets are terrible there with little prospect of getting better soon. So those who’ve scooped up cheap rental RE will be disappointed as rents drop and they have a tough time keeping occupancy rates up.
July 23rd, 2009 at 3:32 pm
Definitely some panic buying today.. you can almost smell the euphoria.
De dude, there is a short-term pop in some housing markets but it is all due to the temporary effects of low interest rates, foreclosure moratoria, realtor scare tactics and happy talk psychology. Another tank in the stock market and continued high unemployment will see this thing turn around quicker than you can say Cramer’s Bottom.
July 23rd, 2009 at 3:32 pm
@thetanman.
I believe that is Buford Pusser territory…
July 23rd, 2009 at 3:36 pm
Whats the Dow PE index after all these quarterly earnings surprises to the upside?
July 23rd, 2009 at 3:40 pm
What will be interesting to watch, if indeed many of our opinions turn out to be correct, is what a continued run-up in the stock market and a short term uptick in housing, followed by another cliff-dive, will do to the long term psychology of investing and home ownership. Will we have another generation who wants nothing to do with stocks of any kind? Or will we just keep repeating this cycle endlessly?
July 23rd, 2009 at 3:44 pm
The gummint has been acting like it’s 1932 and now so are investors.
July 23rd, 2009 at 3:46 pm
We are still in the early innings of this fiasco, IMO. Remember, we’re really only 9-10 months into it. I think it’s easy to forget that. Many chapters to come. Pull up a La-Z Boy and make yourself comfortable. It’s going to be a triathlon not a sprint or even a marathon.
July 23rd, 2009 at 3:47 pm
@Thor
I’m almost already there swearing off stocks entirely. Has anyone got rich from playing the stock market? Everyone that I know is poorer as a result, well I do know ONE person that did well.
A small up-tick does not mean the crises is over, we are in far worse shape then 2001. Market continues to see everything with rose colored glasses – until it doesn’t.
July 23rd, 2009 at 3:47 pm
Roubini’s double dip. I guess this marks the end of the first dip. In the 30′s we had a half dozen dips. Are these companies that “beat” quarterly forecasts hiring? (Only some investment banks, incredible!)
http://www.bloomberg.com/apps/news?pid=20601087&sid=ad4t9KriSQNE
July 23rd, 2009 at 3:49 pm
On another note, Barry’s buddy Charlie G. in a little dust up with Tyler Durden at Zero Hedge:
http://zerohedge.blogspot.com/2009/07/i-was-interrupted-from-peacefully.html
July 23rd, 2009 at 3:50 pm
A few months ago everybody was scared shitless now they’re joining Maria in a chorus of “Happy Daze are here again”. Will Kudlow compliment O’B for the recovery or criticize him for the deficit/higher taxes, duuh!
July 23rd, 2009 at 3:50 pm
The market won’t get off the canvass after the next cash for at least a decade. At worse, I get the feeling that the market will be something I’ll tell my kids about.
“Son, in my day there was this mega-casino that broadcasted a tick-by-tick number on every channel just so they could dupe ordinary, hard-working folks into…..”
July 23rd, 2009 at 3:51 pm
Mannwich; I think that what you are saying is true for a lot of the <50K investors. But they are only a small part of the 9 trillion in cash that is waiting for somewhere to go. I think enough of that money is desperate for an easy way out of the retirement dilemma to bring the market up a lot higher in a panic bying phase. But I agree it has a lot of fear and distrust so after the slightest hint of trouble it will panic sell and we could get another October style drop sometime next spring.
lb, I agree that the housing market is not being pushed up by basics; but that does not matter. Those who have been waiting for a turn around and/or want to make good in the government subsidy will jump in now and make the current trend self-sustained in the short run. Come January with the next reset wave etc. etc. it will go bad again.
July 23rd, 2009 at 3:52 pm
@Thor
The market won’t get off the canvass after the next cash for at least a decade. At worse, I get the feeling that the market will be something I’ll tell my kids about.
“Son, in my day there was this mega-c@sino that broadcasted a tick-by-tick number on every channel just so they could dupe ordinary, hard-working folks into…..”
July 23rd, 2009 at 3:54 pm
@Mannwich 3:25 pm
c@sino? if this were a casino, somebody would be pushing free drinks at me to keep me at the tables …
July 23rd, 2009 at 3:54 pm
Oy, I used to be able to afford a copy editor
July 23rd, 2009 at 3:55 pm
@Thor
The NEXT cliff dive ought to pretty much wipe out any “savings” that the average American might hold…
At the point that happens, any SAVINGS will be almost fully concentrated with the wealthy few…
So after the dive, anyone who was brought up on the culture “save for your retirement”, will basically pull out the remaining cash and hope it’s enough to live on…Many families will probably end up having to move back in together…As that happens, real estate (and even rental property), will take yet another dip, and since economic activity will be challenged, the YOUNGER cultures won’t even have jobs to create savings for investment…
So unless they manage to crank up the credit cycle again, that’s pretty much what you’re looking at…
So congratulations to all the “facilitators” of the process…Goldman, and anyone else who participates in “melting the S&P back up” to 1,100+…You all can sit in a room together and raise a glass to your mastery of the universe…
At this point, participating in running up the S&P to such lofty valuations is as bad as anything Mozillo, or any of the others did…
July 23rd, 2009 at 3:56 pm
@DeDude: The “smart money” you’re talking about got in a long time ago. Sure, I already said we’ll probably go higher from here, but I think the “sideline cash” meme is a bit of a myth. Sorry, but I’m not buying it.
July 23rd, 2009 at 4:00 pm
Only 11 more trading days until CNBC pulls out their promo splicing the NASDAQ’s hit streak vs. Joe Dimaggio
July 23rd, 2009 at 4:01 pm
Indeed, as fraught with peril as comparisons to particular periods of history are, I would put us closer to ’30 than to ’32; and to ’02 than to ’03.
The parallel to ’03 would be much more apt, with the Fed having the money fire hose on full force, but the situation is much more dire than then, as has been pointed out endlessly. We don’t have a housing bubble to inflate, which was the dominant source of job growth via the FIRE sector. We’re trying very hard to inflate assets, but the debt problems will not allow us off the mat so soon.
July 23rd, 2009 at 4:05 pm
cvienne
re: “At this point, participating in running up the S&P to such lofty valuations is as bad as anything Mozillo, or any of the others did…”
It does indeed feel that way, doesn’t it? It’s what bothers me and others here about the whole thing because it’s so clearly unsustainable. It’s not a “healthy” market advance by almost any historical measure and will only serve to draw more money in to be destroyed or fleeced. It reeks of desperation and denial.
July 23rd, 2009 at 4:07 pm
Anybody here talk to many retirees? I’m thinking people who have pensions and Social Security sufficient to exist on, but rely on ladder’ed CDs to live. I think I’m detecting signs of distress among those folks. Hard to tell for sure, as people of that vintage tend to be a taciturn lot about money.
July 23rd, 2009 at 4:07 pm
@Onlooker: But remember how long everyone here was screaming about the housing market bubble. It was for YEARS, not months. I’m not saying this market run up will go on for that long but it could well go on for A LOT longer than many rational-thinking (that’s our problem, I think, thinking rationally in an irrational culture…was touched on in another thread by ihopeimwrong) people believe it will.
July 23rd, 2009 at 4:08 pm
Crash versus slow burn… I have not done too much analysis to the 1929 – 33 problem..but I often wonder if the next downturn in the market will not be a crash…it will be retail buying the dips and getting excited with every dip…only to see the dip coming lower and lower..and then panicking. Basically, something very different from October and more Japan style. OR are the problems so big that it will be a crash like October?
July 23rd, 2009 at 4:08 pm
Whatever happened today in the casino doesn’t alter the mountain of debt out there that will drive deflation. It was the hardest thing for me to grasp here in 2009, but this really is the 1930s all over again, in almost every financial detail that matters. The reason we can’t grasp it is – although it is in the books, there is almost nobody alive that saw it with their own eyes, and Japan, well, that’s like a whole other country over there, nuthin’ lahk here, idn’t it?
July 23rd, 2009 at 4:11 pm
jc
Roubini is right, commodities and interest rates are going to put a ceiling on the recovery and market. I’ve said this myself many times. However, recent rumblings limiting speculation in oil market says to me that the administration recognizes this. If they can take the hot air out of commodities it will simultaneously accomplish 3 things: strengthen the US dollar, shift capital back to equities and bonds, keep interest rates in check. I’m not sure how forward looking the administration but limiting specs in the commodities market is one of the smartest things I’ve heard in a while..
July 23rd, 2009 at 4:24 pm
tonytony: “I often wonder if the next downturn in the market will not be a crash”
I am on the same page here. Last year the buy and holders hung on and just like they have been told, look here, “the market came back”. Now just imagine what is going to happen when they buy in here and then in October we see signs of a second collapse. You really think they are going to just sit there again? I predict a panic.
It’s the 1930s. It really is. Just because it was a long time ago doesn’t mean it can’t happen again. There is still a mountain of debt out there and there are few signs that it will be inflated away in the near future. Market dynamics are eerily reminiscent of those in the 30s, or those in Japan in the 90s. Eric Sprott has some graphs on REAL economic activity that you haven’t seen on CNBC:
http://zerohedge.blogspot.com/2009/07/sprott-its-real-economy-stupid.html
July 23rd, 2009 at 4:29 pm
Hmmm…
Looks like earnings a bit of a let down tonight?
AMZN… whacked
MSFT… whacked
COF… whacked
AXP… whacked
BRCM… whacked
NFLX… whacked
Wonder what ole NFP will bring us in the AM?
July 23rd, 2009 at 4:35 pm
Am I the only one that finds it ironic that Microsoft could be the company responsible for “crashing” the Nasdaq…..so much for the Joe D hitting streak promo
July 23rd, 2009 at 4:39 pm
I find it even more ironic that so many tech names shit the bed on earnings on the same day the Naz fills a long standing gap like the one it filled today.
We’ll see though…
Probably nothing that a little overnight futes pumping, or BTE lipstick on a pig NFP number, cant fix.
July 23rd, 2009 at 4:42 pm
@leftback: I’m with you. This could take years to play itself out and will break many of us in the process. We’re not even close to the maximum pain that we will feel before this crisis truly ends (whatever that will look like). I get the sense that investors are trying to recoup as many lost dollars as they can in this little panic buying spree amidst the fake rally before they head to the exits en masse. Most get the sense there is something really wrong with our economy and markets, but simply don’t care right now. It’s all about survival and people are doubling down on prior losses. That usually ends badly for most.
July 23rd, 2009 at 4:42 pm
lefty
but if you look at the 1930 chart…it seems the second round..though down, played over many months. Basically, the panic set in but not as quickly (and today I am assuming we have even more retail investors) What I might surmise is that the double and triple shorts do not work out as well in such a scenario. So the panic will play out but at a lower level. Basically the initial fall will be like this “hey whoever bought the last time made money, this drop is like manna from heaven”..:)
July 23rd, 2009 at 4:42 pm
I’d agree with your sentiments for next week.
Though tomorrow, the Nasdaq dines in hell.
If the Nasdaq goes green tomorrow I’m hoping aboard the 1162 call, and I’m so bearish now I could join the Berenstein family immediately.
July 23rd, 2009 at 4:43 pm
@I-man: AXP and COF will drive market down tomorrow. MSFT and AMZN will kill the 9 day rally in Nasdaq.
July 23rd, 2009 at 4:45 pm
Amazon profits decline. Interesting. Must be time for a little pullback. Time to slowly reveal some of the earnings warts that had been “smoothed” out over time Jack-Welch style. Must be time for a sell off in the NAZ…Sorry, J6P, you lose again…….
http://www.bloomberg.com/apps/news?pid=20601087&sid=aBv88QqQk4VI
July 23rd, 2009 at 4:47 pm
LB got really really short into the close today and is now smiling quietly. Rome wasn’t burned in a day, chaps….™
(™ – just in case anyone decides they like that one…)
July 23rd, 2009 at 4:48 pm
@manhattanguy
AXP must not have gotten the $10,000 check I just wrote them to pay off my platinum business card loan…
July 23rd, 2009 at 4:49 pm
Pretty ominous sign that the best run online retailer has a decline in profits. I’m sure that won’t have any bearing on Abercrombie, Gymboree and Co.
July 23rd, 2009 at 4:50 pm
QID at $27 and change. Time for a quick trade? Did anyone pick that one up today? I had thoughts but did not.
July 23rd, 2009 at 4:51 pm
Oh… how could I forget… my old friend BNI…
WHACKED
July 23rd, 2009 at 4:54 pm
This market blow off today seems almost scripted in light of the bad earnings reports now coming out. OK, let me now take off my tin foil hat.
July 23rd, 2009 at 4:55 pm
@I-Man: Looks like “better than expected” game not good enough anymore? We’ll see tomorrow. And it’s Friday. Should be fun.
July 23rd, 2009 at 4:57 pm
This one’s for you Manny:
WRE (Washington REIT)… whacked.
Oh… and KLAC, you too, whacked.
What a piece of shit. If the NFP comes in June ugly, then you know its scripted. Bunch of bitches.
July 23rd, 2009 at 4:57 pm
@Mannwich – and yet people were making fun of my call earlier today. Markets running out of breadth and momentum here.
July 23rd, 2009 at 5:03 pm
@I-Man: Yep, time to get the dregs out now after a nice pump. Anyone who bought today will be real thrilled they got sucked in yet again. What a joke.
@manhattan: I wasn’t one of them.
July 23rd, 2009 at 5:05 pm
I’ve seen this story before … the bears get all lathered up, and then not so much comes of it. We can’t be talking of SPX at 1162 AND CRASH … gotta be one before the other.
I’m gonna get another bowl of popcorn and watch to see whose ox gets butchered.
July 23rd, 2009 at 5:07 pm
@constant: It sounds nuts, but sure we can. We could get a nice pullback now and then resume the run-up after the dip-buyers come in. We then crash well down the road once the market reaches absolute silliness and enough people throw in the towel to join the panic-buying frenzy.
July 23rd, 2009 at 5:09 pm
I didnt say anything about crash… I just find it highly amusing that we get all the negative reports (and negative reactions to negative reports) on a day of sheer “buy at any price” buffoonery.
I’m actually fine with both scenarios, but finer with the one that makes me money.
July 23rd, 2009 at 5:22 pm
Mann, Thats funny, Gasparino accusing bloggers of putting out misleading info.Pot calling the kettle black.
July 23rd, 2009 at 5:24 pm
@I-Man
I was lucky enough to cover half of the “shorts” I’d been working on way back down at 870 (remember that)?…I still think that was a lucky guess on my part…At 908, I took the rest off…
Yesterday, I initiated a very small short at 959 again with a very tight stop (which got taken out this morning while I was at the gym and not even watching the markets)…
So I’m free & clear right now, but I’m telling you…Over 960 (the 233 EMA) got my attention…Maybe we see a little pullback here, but I’m NOT TOUCHIING ANYTHING until I see a new pattern develop…
I simply refuse to play this market to the upside…I don’t care whether ot not it’s profitable…I’m about two ticks shy of considering it IMMORAL to bid the market up…Yet I’m a little afraid to go short as long as we’re in LA-LA land (which we officially are OVER the 233 day MA)…
I mean, that’s “new bull market” territory, so I’ll give it time to prove itself in this area…
Meanwhile, I’m still watching for those final moves in the currency markets…Probably a lot of the story will be told there…When those moves are completed, I think the arrows will start pointing (1162, or 576) as the case may be…
July 23rd, 2009 at 5:29 pm
I wish I were in your boat and not in mine CV…
It doesnt feel good being where I am, but better then the alternative, which would be to truly take the leap over the ledge.
Oh…
I almost forgot… I didnt think this one would hit the list, but it says something…
BIDU… WHACKED.
July 23rd, 2009 at 5:30 pm
@I-Man
Note: The theory I’m working on right now is that the SPX can go play a game a “tag” between the 233 day EMA and the 144 day MA…
That would put you in a range between 960 and I think 908 (although the 908 number is on the rise)…
I think that would confound a lot of people because it would end up busting a bunch of intermediary H&S patterns in the process…People wouldn’t know what to do…but COMPUTERS would…
Keep that in mind…I’m just trying to figure out what the computers are doing now…
July 23rd, 2009 at 5:31 pm
constant – Agree with Manny – we could have a re-run of the last month over and over, up 10%, down 7, up 12, down 8, slowly inching up new highs for the year – until it either crashes like some people think, or does a long slow step down.
July 23rd, 2009 at 5:32 pm
Nothing against LB, but I took a meaningful short position in the Sterling futures today. Looking sterling so far:) This is a shorter-term trade.
All the market needs to go lower right now is a very small spark…. like Microsoft.
But my running hypothesis is we see just a temporary pullback. My contrary sentiment indicators (20 people from the investment industry) are not yet flashing full-on green for a short equities position, but they are starting to look brighter as of today.
July 23rd, 2009 at 5:43 pm
With all these earnings announcements that disappoint even in the slightest getting whacked, it sure doesn’t feel like a crash to me. Look at AAPL — iPhone sales up 7X (!!!) on the comparison to 3Q08, with revenue AND earnings beating even the most optimistic estimates. And we get, what, a 3% pop? That’s not the kind of bullish excess that drives to the levels from which crashes occur.
This market feels more like it’s being dragged higher, by nebulous dark forces, rather that being pushed higher by a lotta bubbling demand. Any blow-offs are likely to be be pretty well-controlled, at least until the leash snaps.
July 23rd, 2009 at 5:44 pm
@Mr. Objective
“But my running hypothesis is we see just a temporary pullback”
I’m with you on that call…I’m more of a LOW TECH visual observer of things (and don’t use any forecasting tools)…
…but one thing I noticed is now EERILY the move of the most recent bottom mirrors that move off the March 6th low…EXACT SAME TRAJECTORY…(and that lasted 14 days – here, we’re only on Day 8)…
So FWIW – It “feels” to me like somebody hit the exact same BUY program and let the market do its thing and take us to wherever it finishes and drops us off…
Re-assess…Re-evaluate…BTW…the 14 day number on the same trajectory takes you to 1,030…
July 23rd, 2009 at 5:47 pm
@cvienne
you should have pulled a leftback and tell us (after the fact) how you astutely went “really really short” into the close. Of course, had mister softee surprised to the upside and igniting the AH actions, you could always tell us you were “stopped out” before the close. this is how you gain credibility on this board.
July 23rd, 2009 at 5:48 pm
In short, a VERY DIFFICULT market to make any money in, unless you happen to be a day-trader with significant precognitive abilities.
July 23rd, 2009 at 5:48 pm
Shorting COF is so easy even a caveman can do it..what’s in your portfolio? :)
http://www.reuters.com/article/marketsNews/idUKN2341988320090723?rpc=44
July 23rd, 2009 at 5:52 pm
@bubba
I’m not sure what you’re talking about…
My only reference was that YESTERDAY, at 959, I went a little short (with a tight stop)…Thor should remember that call because it was directed in response to one of his posts…
Anyway…I was feeling good about that yesterday, but this AM I got stopped out of that for a small loss…
I was clearly wrong, now I’m back in evaluatory mode…That’s all I think I’m saying here…
July 23rd, 2009 at 6:00 pm
@cvienne
my point was you’re too honest with your calls. it was actually a jab at the great leftback. hehe btw, I enjoy your many posts.
July 23rd, 2009 at 6:07 pm
@bubba
Thanks…I try to “have fun” with my posts as much as possible…It is “TBP” after all…
As far as TRADING is concerned, I don’t count myself among the elite (but I do enjoy tossing my 2 cents in FWIW)…There are many good traders who post here (and are “generous” to offer their views)…I consider LB one of them…
July 23rd, 2009 at 6:10 pm
@manhattanguy:
I completely forgot about adding to my COF short today. Mucho :(
July 23rd, 2009 at 6:12 pm
Bruce,
I think McNairy county is only a couple of counties to the west.
July 23rd, 2009 at 6:13 pm
@ CV…
Well, I’ve said already that I’m looking for 910, and ready to cover in a heartbeat (or millisecond) on a pivot reversal at that level.
So your 908 sounds about dandy to me. Just hope it happens, so I can throw these positions off my back… they’re starting to weigh down on I and I irie-ness.
@ bubba…
Sup with the beef on LB? We’re all held to our “calls” around here. And most of us know that there are plenty of folks here to speak up if we’re wrong. They are also easy to document using the Search tab. Give us some examples… I smell some hater in those remarks.
July 23rd, 2009 at 6:15 pm
cvienne,
I was thinking the exact same thing. The power of this move feels very much like March. BUT the massive difference is the level of doubt (I am not refering to the posters here). In March and early April, I was repeatedly accosted by almost everyone in the investment industry that this was a bear market rally (often by the same people who accosted me to tell me in early January that this was a generational buying opp). It was definitely one for the books from my investment experience.
Even the strategists were in on it. Goldman called for a 700 to 800 trading range on March 30th and JP Morgan called for a big pull back right through late April. Now they a re gleefully raising their targets.
The one sentiment that is a huge money maker for me is watching the doubt and apathy. We had it in March, but not now. The probabilities are much higher now that this is a final leg of a bear rally. I would love to see one more increase in strategist’s year-end targets to be confident of a large equity short position. It is AMAZING what a big up leg followed by another upleg does to people’s confidence in the market. Their pre-frontal cortex takes it a “proof” of a safe market. It doesn’t realize it’s dealing with a complex system that sends all sorts of misleading signals.
My view since early April was S&P to struggle with the mid-900′s with a very good chance of eventually getting into the 1000′s”. So I’m a little over-excited right now with how things are unfolding. Trying desperately to stay objective right now on my sentiment read:)
Not sure about the 12 days. I would put that as a minimum. 12 days to 2 months is my “plausible” range.
July 23rd, 2009 at 6:15 pm
@emmanuel117
My 2 cents on COF…
I have no doubt that trading that on the “short side” will end up profitable at some point, but that chart has me scared beyond reason that it couldn’t easily blow stops out up to 32…
July 23rd, 2009 at 6:19 pm
The market of a hundred paper cuts.
July 23rd, 2009 at 6:30 pm
@Mr. Objective
My 14 day reference was towards the “trading days” from 3/6/09 – 3/26/09 (when there was the first major pullback)…
What got my attention is that the TRAJECTORY from bottom to top (and even where the market rests today), is EXACTLY the same if you draw it on a line…
It’s almost like it’s running a carbon copy of a programmed rally…
…and I understand your points about “enthusiasm”…A couple of more legs up like this and people will want to pour into this market…I simply can’t bring myself to PROFIT from this upside…
Franklin411 has posted on this site before that it is UN-AMERICAN to short stocks…I wonder how UN-AMERICAN he thinks it is to have normal people “fleeced” out of their life savings by an Administration & Treasury that is so controlled by bankers that they take JOY in what is happening (while the REAL econmomy is in shambles) and make pretend everything is alright…
July 23rd, 2009 at 6:40 pm
CV,
I am Canadian and I short stocks. So guess I’ve proved that it IS un-american to short stocks. Sorry :)
July 23rd, 2009 at 6:44 pm
@Mr Objective
PERFECT!
July 23rd, 2009 at 6:52 pm
@Objective: You’re still an American, NORTH American…… :-)
Is it considered “Un-Canadian” to short stocks?
July 23rd, 2009 at 7:00 pm
I’m Canadian, I short stocks so ummm NO lol
July 23rd, 2009 at 7:07 pm
…from short squeeze to bull trap
July 23rd, 2009 at 7:35 pm
@I-Man
I don’t hate I-Man and I got nothing ‘gainst you. You’ve been a pretty straight arrow, not in the same company as the great leftback. But tell me, aren’t you just a little bit annoyed at the likes of LB…you know, telling us how he went lock, stock and barrel short just before the close but (conveniently ) only letting us know that AFTER it’s clear that those shorts will payoff. Do you really think LB would disclose that he “kitchen sinked” it on the shortside had MSFT not reported dismal #s and taking the whole market down AH. I’m just saying…
July 23rd, 2009 at 7:37 pm
Bubbu – what exactly are you implying? Spell it out for those of us who are slow in the head.
July 23rd, 2009 at 7:52 pm
@bubba
In lefty’s defense, I don’t really think he was implying he “kitchen sinked” it…
If he did, it was a nice call, but you have to consider other things as well…
OK, let’s look at tomorrows open…Sure, MSFT & AMZN, & probably AMEX are going to weigh on tomorrows open…But I see the futures pointing at around 965…Hell, that’s not that big a dip considering the move up today…
For me, I have to consider that 960 (the 233 day MA) may actually act as “support” for the S&P right now…There’s no way I can talk lefty’s book, but who’s to say he’s calling a market turn here, maybe he’s just playing for a TRADE and will cover tomorrow morning…I certainly don’t know…
Anyway…FWIW – I think we’re in new territory here…Toss out the playbook you’ve been working with since June 11th…Anything from 910 to 1,060 is on my radar screen for probably the next 2 months…
July 23rd, 2009 at 7:59 pm
@Thor
I have a BS meter that goes off the chart when LB post a comment, especially ones intending to display his trading acumen. thats all. don’t sweat it.
July 23rd, 2009 at 8:10 pm
I think there’s a problem with the basic 2001-2002 cycle chart. By my look the low of that cycle shown corresponds with the July 24 low. The cycle low came nearly 3 months later on October 10, 2002. The value was not appreciably lower, but the time is greater by 55 market days.
Looking for 590-610 (actually 597) on the S&P index before this is over.
July 23rd, 2009 at 8:23 pm
@cvienne
I’m just another joe retail “investor” looking to make some pocket change in the market. I don’t have a “playbook”, dabbled in TA a bit before but found it wanting…it’s good at telling you what happened yesterday, last month, last year etc.. but not useful practically as a predictor (aside from support/resistance levels). Now, I’m mostly into GA, “gut analysis”, no kidding. Like 90% of the folks on this board I expect another leg down before the end of the year. I was about 1/3 short going into this week (ouch!) and my GA told me pile into some SPY puts today. Hopefully it pays off short term.
July 23rd, 2009 at 8:37 pm
man, I had client meetings all day so couldn’t get in on the thread. Today was pretty amazing, but yes, after the bell, some interesting developments.
@batmando,
I’ll dig up that OTB letter and post it here. Japan is done for as far as I can tell.
July 23rd, 2009 at 10:15 pm
here it is:
http://www.frontlinethoughts.com/article.asp?id=mwo071009
July 24th, 2009 at 12:40 am
Ben – just read the article – very good, thanks! Forget Japan – this weeks letter is on banks in Europe, scary shit!
July 24th, 2009 at 9:33 am
[...] One of my favorite economists, David Rosenberg, put out a nice chart comparing the current recovery to that of 2002-2003. Although history does not repeat exactly, as Mark Twain noted, it surely ryhmes. (Source: David Rosenberg; Hat Tip: Barry Ritholtz) [...]