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starbucks4ever (97.86)

Unexpected correction, with nothing to explain it.

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October 30, 2009 – Comments (19)

Things are not going very well. Clearly, I was wrong to expect a consolidation in the 1100 range and we can already say that what's really happening is very different. And first of all I must congratulate player GoodVibe who accomplished a task that was next to impossible by successfully calling what is, at the very least, A top, if not THE top. Hats off to those who can read it from tea leaves, animal entrails, stock chart, or any other paper or electronic media. 

I am still in the bullish camp, and my feeling is that what we see now is a fake bear market, masquerading itself as a true Elliott wave, just enough to trick every technical analyst into selling all his long positions. The reason why I believe this is that a) the corporations are certainly NOT in a worse shape than they were in March, and b) the market makers can't hope to catch the bulls off guard now that leverage is out of the system and everybody who needed to hedge has done so. That leaves technical traders as the last remaining victim of manipulation, after the bulls and then the bears have been decimated. Having said that, I will not be surprised if we hit the March lows, GS willing.

Today was the sector rotation day; if the slide continues the next week, it should give more credence to the ultra-bearish scenario. Does anybody have an opinion as to the probability of retaking the 1100 high or the 666 low? 

19 Comments – Post Your Own

#1) On October 30, 2009 at 4:40 PM, JaysRage (88.72) wrote:

There is certainly a developing fear factor in the markets.    I certainly didn't think that the news today was bad enough to trigger a move as sizeable as the one that we saw.   Even more disturbing is the zig-zag effect of the past three days.   It screams capitulation, which is a clear sign of a market top (or bottom).    The good news is that most of the movement continued to be in commodities and financial services which had reached speculative levels.    China continues to move with the commodity market (which I still don't fully understand), so that area took a bit hit as well.   

I'm very curious to see what Monday brings.   Some of my favorite stocks are approaching my target-buy prices.     

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#2) On October 30, 2009 at 4:42 PM, wvwheeling (99.78) wrote:

I see the correction as being around 12-15 percent.  If you look at the charts (and the earning expectations) of many stocks it seems the market got a little irrationally exuberant over the past month or two.  But not that markets are rational so who knows.

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#3) On October 30, 2009 at 4:52 PM, portefeuille (99.66) wrote:

Does anybody have an opinion as to the probability of retaking the 1100 high or the 666 low?

I posted this on 10/26/09 here.


enlarge

The upper grey line is at around 1100. It would be quite a drop to the March low. You can obviously derive probabilities from the price of options.

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#4) On October 30, 2009 at 5:00 PM, portefeuille (99.66) wrote:

-----------------------------------

#1) On June 25, 2009 at 5:27 PM, zloj (98.20) wrote:

It's interesting to see that the Russian community here in Caps is just as divided as ever. We've got the ever-bullish AndreylikesMTL, the perma-bearish russiangambit, and finally, yours truly who is decidedly middle-of-the road.

-----------------------------------

(from here)

This comment somehow keeps entering my mind when I see one of the russians, hehe ...

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#5) On October 30, 2009 at 5:00 PM, SolarisKing (< 20) wrote:

Congats on your wrong call. That is, if you were wrong, which we don't know yet.

 

I think that the market may not bomb as it did in march, for the reasons you state/hedging, but that we could edge down in a few vigorous but let violent steps, and that the process could take years. 

I think the 1100 high is nothing to be scared of, and the chances of actually blowing to 1300 without ever seeing 1100 are slim. Good place for a series of long term shorts. 

OTOH, i also see some bottoming of certain sectors. The 'green energy sector' is approaching the November 08 lows.

-solaris

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#6) On October 30, 2009 at 5:07 PM, davejh23 (< 20) wrote:

I think the correction today was expected by many...although larger than I expected.  Short interest was high yesterday.  The GDP report, while positive, was expected, and cautious statements from the Fed and Treasury don't breed much confidence.  Looking at market movement over the last few months, I wouldn't be suprised to see the market return to recent highs in the next couple of weeks.  However, there are some more bearish indicators that weren't present in earlier dips.  So, to sum things up: I don't know anything.  I wouldn't be suprised to see the S&P reach 1100 fairly quickly, and I wouldn't be suprised to see a more dramatic drop from this point...although, I would be suprised to see 666 again...

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#7) On October 30, 2009 at 5:07 PM, portefeuille (99.66) wrote:

"ever-bullish AndreylikesMTL", by the way, is currently #3 in the "caps" game as to "outperform score points". I like his IRE pitch.

-----------------------------------

Pitch by: andreylikesmtl 5/14/09 12:08 AM

My arguments are very simple low PE.

That’s my real portfolio

1/3-MTL,

1/3-AIB,

1/3-IRE,

-----------------------------------

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#8) On October 30, 2009 at 5:21 PM, matthewbanis (54.11) wrote:

it's crashing, it has to.  the return of "normal " that obama spoke of is american's buying more than they can afford - the problem that originally brought us here, the gov't has supported this run, and i believe we'll see a 50% crash, or worse, hyper-inflation.  go long agriculture, metals, and foreign markets.

 best of luck.

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#9) On October 30, 2009 at 5:35 PM, IIcx (< 20) wrote:

portefeuille pegged it

The fund managers needed to buy into the game / sat on the sidelines to long and the value of the USD needed to rise for the bond sales this week.

USD futures are still in the top end of the down channel so next week will be interesting but I'm not betting on the Bears or the dollar to rise.

There simply isn't a good reason for the dollar to get stronger and for the markets to crash.

PS The VIX was manipulated by Trick or Treat this week... ;P 

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#10) On October 30, 2009 at 5:41 PM, AndreylikesMTL (95.54) wrote:

Thanks Porte

Lately these three stocks are making my head spin a little.

Two Irish ones got hammered, and ones more, became a pretty good buy.

Any thoughts?

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#11) On October 30, 2009 at 5:48 PM, AndreylikesMTL (95.54) wrote:

As to your question Zloj On taking 666, I think S&P will take 2000 a lot sooner.

Market, in my opinion, is just letting some steam out.

Big deal!!! Report this comment
#12) On October 30, 2009 at 5:51 PM, starbucks4ever (97.86) wrote:

JaysRage,

The fall of China is nothing strange, I fully expected it. I was amazed to see that this pig of a market could fly that high. 

AndreylikesMTL,

seriously, if I were you, I would take some chips off the table. Actually, I would have done that a long time ago. MTL, for one, has never traded higher than today except for one year from Oct 2007 to Oct 2008, and that was an anomalously successful year for the world economy in general and for PUTIN.OB in particular.

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#13) On October 30, 2009 at 6:55 PM, AndreylikesMTL (95.54) wrote:

 zloj (98.20) wrote "seriously, if I were you, I would take some chips off the table."

I did two days ago, but yesterday morning and this afternoon.

put them all back on.

Go Bulls

,

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#14) On October 30, 2009 at 7:51 PM, UltraContrarian (31.94) wrote:

zloj (98.20) wrote:  "leverage is out of the system and everybody who needed to hedge has done so."

...

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#15) On October 30, 2009 at 8:10 PM, starbucks4ever (97.86) wrote:

 Безумству храбрых поём мы песню.

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#16) On October 30, 2009 at 8:21 PM, IIcx (< 20) wrote:

GoodVibe is much better at this and I agree that his call was pretty amazing.

Based on the fib fan, its unlikely that we'll see anything near the March lows.

 

Larger Version

USD_2

 

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#17) On October 30, 2009 at 9:17 PM, AndreylikesMTL (95.54) wrote:

Привет Братан!
Наконец-то ответил на Русском, Мне очень приятно.

 

I could be wrong,

But these few days, my beloved stocks were testing the bottom repeatedly.

MTL @ 17.00 

AIB  @ 5.50

IRE  @ 10.00

Lets wait and see, I think we will be all smiles next week

Andrey

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#18) On November 01, 2009 at 1:42 PM, XXX222 (< 20) wrote:

We're "Riding the W" right now. If we are at the top of the rally, we will fall back to Dow 8,000. I think we're at the top of the rally, but it's going to be at least 2 weeks before we see a large fall back.

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#19) On November 01, 2009 at 1:55 PM, AvianFlu (21.95) wrote:

Well, everyone has an opinion. I may as well add mine.
I think due to inflation we'll continue to see increases in the nominal values of the indexes. However, in real terms after adjusting for inflation there will be decreases.

The two factors that will have the most impact on us in the next year will be:
1) the failure of CIT and the resulting failures of many small and medium sized businesses and

2) Catastrophic meltdown of the commercial real estate market

Lastly, we all know big inflation is coming. The only question is: when?

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