October 14, 2008

Way down, then right back up. And then...?


I see trendlines.

38 comments:

Anonymous said...

Hooray!!

That's the best 1-day gain since the early 1930s!!!

17 of the 20 largest 1-day percentage gains in DJIA history occurred in late 1929 and the 1930s.

What a cause for celebration

- bryce in canada (vancouver & calgary bubbles)

Anonymous said...

Um, ever heard of the derivatives bubble?

Derivatives Bubble

keith said...

This is no longer a market for investing - it's for gambling. If you need the cash, get popcorn and just watch.

The market is crazed and will likely continue to be irratic

Just like 1929 - 1933.

Massive swings with an ugly trendline

Enjoy the ride

Anonymous said...

.







DOPES!







.

Anonymous said...

Isn't the key to investing is to think like a fundamentalist and trade like a technician.

http://www.istockanalyst.com/
article/
viewarticle+articleid_2702289.html

Last night Trichet and other policymakers in Europe basically forced Bernanke's hand, initiating 100% guarantees of interbank lending.

This forced Bernanke to follow suit early this morning, lest the US markets and US credit system implode into a smoking hole instantly.

This was not a position Bernanke was willing to take on his own, or he would have. But when the rest of the world has done it, you literally have no choice, unless you intend to be turned into an instantaneous credit island - an event that the United States would literally not survive.

So the die was cast and Paulson and Bernanke's refusal to endorse this step in the G7 meeting Friday was literally rammed down their throat.

The reaction in the credit markets was less than inspiring.

The TED Spread and LIBOR came in, but not what should have happened.

Both should have been flattened - they weren't.

This leaves us with an obvious - and uncomfortable question - what if this doesn't unlock the short-term credit markets?

What if lending still doesn't happen, because banks still don't believe their counterparty is good - sovereign backing or not?

area 51 said...

Why is everyone BUT the Asian banks planning $Trillion injections into their banks?

Hmmmmmm........

Anonymous said...

The dead-cat bounce?

Uncertain Buyer said...

Just want to say great Blog and I was from Vancouver and I have been reading for a couple of years now.

Just wanted to make some comments about you relating these events to the book Mania's, Panics....there is one thing that is missing. You are forgetting the "government intervention" component. This is an element that needs to factored in.

I think we "haven't" reached Panic yet. The majority of the people I talk to still feel the government is going to fix everything. If all this socializing of the world's banking systems doesn't work over the next few weeks there will be serious Panic. Panic that will make the last week seem like the good old days.

Ross said...

classic head and shoulders trend line. We've broken through a resistance level and that means the market is headed down folks.

Cinch said...

For the life of me I don't see how we, I mean our children, can get out of this debt hole.

Our suburban happy motoring lifestyle is coming to an end.

Cinch

Anonymous said...

"Derivatives Bubble"

After that it will be something else, and so on while prior problems are still being worked on.

Meanwhile I have not even been assured that the credit markets are thawing.

I'm cautiously optimistic after the 1k rally, but we are not out of the woods yet.

Anonymous said...

Take a look at this great video I found called:
"How the markets really work (from 2007)"
http://www.brasschecktv.com/page/187.html

Surfing the Crash said...

Big Crashes are usually followed by Big Bounces. Hanky Panky and the PPT will be doing their best to make sure that this bounce will last a few days or weeks, maybe until the election!

But, eventually people will realize that the New Improved Even Bigger Bailout will not work any better than all the other bailouts, because they do nothing to fix the underlying problems. People still connot afford their Houses and will continue to default on their mortgages and other loans.

Its only a matter of time before the next wave of the crash will hit. It will be a cascading waterfall slow motion crash as the PPT will be trying fight it every step of the way, but they will not be able to stop it.

Wait until the bounce starts to run out of steam and roll over, then buy Put Options. Sell them during the next down wave of the crash.

Aaron said...

I'm guessing we'll see a bounce that lasts several weeks to a few months before the market dives rapidly to a new low, very much like 2002-2003. Who knows where it stops? But if the Fed has to intervene due to a derivative bubble bust, then it's armageddon.

Anonymous said...

going to 10 k this week foreign markets up and bushy is dumping 250 big ones into banking..

Anonymous said...

The stock markets across the Asia-Pacific region were trading sharply higher for a second day on Tuesday after Wall Street rallied overnight, posting its biggest one-day percentage gains since 1933. The Nikkei stock average surged more than 13%, making up for its worst one-day loss since the 1987 stock market crash

Benji Franklin said...

That's the best 1-day gain since the early 1930s!!!

Nice, except it's one day after the DJIA dropped more than any other day, too, LOL! The Dow is down 3,000 points from a week or so.

This rally was expected: isn't it an amazing coincidence how the timing of the 'gov't interventions' coincide with what the charts 'need'? I'd say not...

Tomorrow? Just my hunch, but expect a pre-market rally that continues to over-extend the S&P to the upside, and we see a gap-up opening that quickly drops lower (within a few minutes). The market levels off, and after the appropriate set-up, we see a moderate, fairly low-volume rally.

After a double-top, we see the market turn down, starting around 2:00 pm Eastern.

That's where the crystal ball turn hazy....

http://jr365.vox.com/ said...

Where's the money coming from for all this? Still waiting for an answer. NYSE to 12K - the people were told by the nightly news that it's all good. We've reached bottom and it's all up and right from here.

Consumer sentiment drives this economy. Don't forget that. The idiots think the water is warm and inviting. Thoughts on Hyperinflation or is Jim Rogers the lone voice of reason?

Anonymous said...

In the early 1930, didn't the government use money to buy stocks in the 1930.

http://www.iht.com/articles/2008/
10/13/business/nationalize.php

"Putting this plan on the table makes a lot of sense, but you can't call it nationalization here," said Simon Johnson, an economist at the Massachusetts Institute of Technology's Sloan School of Management. "In France, it is fine, but not in the United States."

Yet the nearest precedent for the plan the Treasury is weighing, finance experts say, is the investments made by the Reconstruction Finance Corporation in the 1930s.

The agency, established in 1932, not only made loans to distressed banks but also bought stock in 6,000 banks, at a total cost of about $3 billion, said Richard Sylla, an economist and financial historian at the Stern School of Business at New York University.

Rational Renter said...

Keith, in the spirit of your "I see trendlines"...

To all those throwing money back into this market: "I see dead people."

Anonymous said...

Like the 4th of July. Lots of fireworks and pomp and circumstance.

But the next day, the streets are littered with trash, the beaches are full of broken bottles and sleeping drunk people who will not see that the whole place still needs to be cleaned up, if it can be.

How long can this system continue? I'm convinced it will continue a long, long time.

Markets are people-driven and as a result they will always suffer extremes.

People are greed driven and as a result they will seek the extremes in order to satisfy their greed.

Since eveyone is essentially greedy, this version of capitalism will be around longer than any of us here.

Most everyone here probably doesn't have any chance to change it nor profit from it like big money and big power does. People here and all across America are just digging in and looking to find their own place to hang on on the ledge - like seabirds - shitting on those below and getting shit on by the big birds above overlooking the cliffs.

The Executioner said...

Didn't the Intertube companies all crash before they came out with new improved Intertubes to that bigger trucks could drive through them? You bet they did.

The next boom is just around the corner and this time it can't ever pop. It's got the backing of the Greatest Country On Earth!!

That's right, you heard right, Bailout 2.0 is coming and it promises much more financial bandwidth and R2ER "Cloud Accounting" (R2ER - Rich to Even Richer)

Many top companies are already using Bailout 2.0, how can you profit from it too?

Attend my seminar in Las Vegas this weekend at the Luxor with special guest Casey Serin.

There will also be a public execution from one member of the audience so you won't want to miss that, not to mention our cast on stage including some Lithuanian Invenstment Consultants.

keith said...

The trendlines are powerful and scary

Short term though, the rocket has been lit

Buckle up

Anonymous said...

I still have about 10% of my money in the market. A few more percent up and I will bail. The next leg down will be truly terrifying. I think it will be a while before the next meltdown, like 6 month or so. It will happen once the market realizes that the bailout didn't help, it only made matters worse. It provides incentive to responsible people to quit making their payments so that they can get their payment reduced and their loan re-written.
Quit making your mortgage payments, run up your credit card, buy that new BMW. It's your patriotic duty to live beyond your means. The government/taxpayer will bail you and your lender out. Don't worry be happy and spend, spend, spend!

Anonymous said...

Please remember what the job of the Bear is. His aim is to destroy your capital. But he can only do so if you're willing to stay in the market and keep your capital at risk. In the last week, fear and panic were so prevalent that there were no buyers in the market. Capital fled, indices fell and the marketplace was deserted of bulls.

The Bear's job now is to sucker you back in, to make you think the worst is over and that this is a rally you can't afford to miss. He does that by giving you a rally that seems convincing. A rally you can't resist.

Anonymous said...

BWA HA HA HA HA HA HA HA

BWA HA HA HA HA HA HA HA

BWA HA HA HA HA HA HA HA

What a bunch of DOPES!

Keep stuffing your money in your mattress losers.

Derivs said...

Look at chart going back to '90... much better picture. 15 yr break how can it not be tested again? Crash low.. how can it not be tested again either???

Have fun.

Anonymous said...

I see blind people. People blind to the fact that their doom and gloom predictions are simply not coming true.

Dow 15K by 1/1/2010

The Housing Bubble Ate My Balls. said...

Anonymous Anonymous said...
The dead-cat bounce?
October 14, 2008 3:49 AM


But the cat isn't dead anymore...

Now it is the cat "Church" from Steven King's Pet Sematary.

Dead, buried and resurrected but, not quite the same..

From Wikipedia http://tinyurl.com/4uwtd

" Louis buries the cat on Jud's instruction in the stony soil.
Not really believing, Louis thinks that the subject is finished until the next afternoon, when the cat returns home. However, it is obvious that Church is not the same as before. While he used to be vibrant and lively, he now acts ornery and "a little dead", in Louis's words. Church instinctively hunts for mice and birds much more often, but he rips them apart without eating them. The cat also smells so bad that Ellie no longer wants him in her room at night. Jud confirms that this condition is the rule, rather than the exception, for animals who have been resurrected in this fashion. Louis is deeply disturbed by Church's resurrection and begins to wish that he had never done it."


Just as Jud Crandall says in King's book: "Sometimes dead is better."

Miss Goldbug said...

I see trendlines too- heading no where but down...

Miss Goldbug said...

Right before the stock market crash in 1929, bankers were buying up stocks to show the people that the stock market was stable.

A roller coaster ride, with extreme highs and lows.. then the crash.

Can anyone tell where this is going?

Anonymous said...

The entire USA is just one Ponzi -scheme or used Yugo car lot.

A piece of shit that doesn't make anything of value (iPods and web sites are no longer novel or value-driven) is amoral and broke and destitute.

The DOW goes up and down like a honeymoon dick with no rhyme or reason and you have utterly corrupt and stupid (Paulson & Bernanke) with their hands on the economic throttle all backed up by Chimpy the dunce in the OUT (White) House.

1929 has only ben postponed a little while so the fatsos can restock their fried dough and cheese doodles supplies from Wal-Mart and Bushco-Cheneyburton can escape to whatever low-rent dungeons they will operate out of after January 2009. Bushco from Paraguay (you people deserve that idiot) and Cheneyburton from some sleazy Halliburton office in Dubai.

Bela Lugosi Pelosi is now croaking like a raven at the door for more free money for the dolts to waste on shit they do not need and cannot afford.

I wonder if Canada will let me emigrate?

The United States of America is a steaming heap of festering shit.

Anonymous said...

benji franklin called exact.

Nobama said...

What's up with that Dopes guy?
I mean, he posts here so often that it makes you wonder if he's employed or anything.

Anonymous said...

We'll see.

My wife went all bonds late last week. She'd had enough.

I am staying the course, 25% each in domestic large-cap, domestic mid-cap, domestic small-cap, and international.

The beauty of a marriage is that if it's right, you complement each other. The only thing that complements a renter with a bunch of canned food, bottled water, and a tin-foil hat is his own good right hand.

i've had it said...

bought in friday 10/10 at 3:50pm and got out today, 10/14 at 1pm. Nice little profit before the market tanks again.

Benji Franklin said...

benji franklin called exact.

Glad you noticed, LOL! I hit my profit target for the day within the first few minutes of the opening, as I bought SKF when it plummeted, right after the rebound (C/B = 107.80, I think). I sold out around $114, I think.

Looking back, I could've held on a bit longer and ended up with 2x as much, but I was having computer problems (grrr!), and decided to bail when my charts started acting like the computer was ready to seize up (and at least they give me some warning). I've got to remember, though: it's better to set a trailing stop than bail when that happens!

In general, though, it's a bad idea to get TOO greedy.

I also played on the 2PM move to the down-side with SKF (and got stopped out right before it launched, as I set the stop a bit too tight). It peaked about $8 from where I bought... I know: coulda, shoulda, woulda doesn't put cash $$$ in your trading account!

But as Casey says, it's all good. :) You live and learn, and if you protect your capital properly you'll survive to play another day. That's what counts, as does following your trading discipline.

Anonymous said...

As a professional trader for many years I might add that unless you spend 12 hours a day working on your stock longs and shorts...dont bother. Remember when you buy or sell anything, someone is on the other side of that trade, which could easily be a someone back with an army of people and information that makes this his/her full time profession.