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starbucks4ever (86.46)

This was the bottom - sort of



October 08, 2008 – Comments (7)

As I kept pointing out, US stocks are not entirely worthless. Barring a desintegration of the mortgage market (which won't happen without help from the outside), 9200 should be it. This is 35% below the maximum level, and every top fool has capitulated and announced that this market has no bottom. Now, that was it. The Chinese Central bank can still spoil the party, but perennial stupidity of US bondholders seems to be a reasonably safe assumtion. Let us pray for the Bank of China to come to its senses, dump its bonds and sink the mortgage market, but let us also buy this bottom, very cautiously, and with no margin. The danger of missing the next rally is too great, and we don't know if the bear cavalry from Bejging will ever arrive.

7 Comments – Post Your Own

#1) On October 08, 2008 at 3:53 PM, TDRH (96.87) wrote:

defaulting mortgages, high inflation, rising unemployment, declining consumer spending- next corrections:

1)  Commercial REITS

2)  Municipal Bonds


Plenty more to come.

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#2) On October 08, 2008 at 4:33 PM, MaskedMan2007 (99.19) wrote:

I am not buying right now! Technical analysis is telling me that there is not bottom confirmed nor no uptrend.

Trying to catch the bottom could be very dangerous. What if the DJI fall to 5000 ?

I don't know where is it going in the next few months, I will only follow the trend. Right now the market went down very hard, we will have a rebound for sure. But it doesn't mean that we will not go deeper in the next few months or in 2009.

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#3) On October 08, 2008 at 4:41 PM, Imperial1964 (94.02) wrote:

So far, technicals say there is no bottom to be found.

Fundamentally, I think we're close enough that long-term money doesn't have to worry about it that much.

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#4) On October 08, 2008 at 4:47 PM, MarketBottom (28.52) wrote:

A capitulation day is needed

Dow drops 1000 and recovers to 400 down, for a short term bottom to be formed. If this happens the 8000 level may hold to the beginning of next year.

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#5) On October 08, 2008 at 4:48 PM, biotechmgr (< 20) wrote:

More to come. Tomorrow we have the always interesting jobless claims report which has been increasingly bearish. Today's close was bearish as well.

I agree with MaskedMan2007 above.

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#6) On October 08, 2008 at 6:53 PM, nuf2bdangrus (< 20) wrote:

Too late to short.  Too early to buy.  Lighten up a bit on amy majore rally.  Buy your best picks on panic selloffs.

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#7) On October 08, 2008 at 10:04 PM, oldfashionedway (34.02) wrote:

IF we are fortunate, there MIGHT be a bottom by mid 2009, after the presidential election and a NON-EXISTENT Santa Claus rally.  There is way too much GLOBAL ECONOMIC UNCERTAINTY to expect a meaningful upward move in the U.S. markets near term.

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