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  • jvi
  • 11 Comments

  Nov 13 03:25 AM
  No, this is hedge fund redemption notice period.
  
  Funds are liquidating, dumping shares indiscriminately. Take advantage of the bargains because the redemption notice period ends December 1.

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  • investor88
  • 748 Comments

  Nov 13 03:50 AM
  Markets are looking very weak so we have to be positioned taking this into account. Agree with Toro that hope is not a viable investment strategy.

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  • patio
  • 101 Comments

  Nov 13 08:00 AM
  In past markets, if you ever wanted to surely be guffawed at, all you had to say was, " It's different this time". 'Cuz the old-timers, the wizened greaybeards would sagely tell you how wrong you were.
  Well, sorry, but it's different this time. The markets are merely reflecting the daily unfolding of just how bad the fundamentals truly are, and how they are going to get a lot worse. And no matter how many people wake up to projected future, and the new lower projections, the visceral impact isn't really felt until the realities blast you in the fact each day- lower and lower unemployment numbers, all asset classes deflating, stocks swooning worldwide, US gov't wasting trillions throwing good money, our money, after bad, on and on.
  I believe we are only in the second or third inning of this Bataan death march.
  

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  • txpenguin
  • 7 Comments

  Nov 13 02:38 PM
  Tax loss selling combined with hedge and mutual fund redemptions will make the going rough for a while longer. Eventually the bargain hunters will outnumber the distressed sellers.

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  • Peacelover
  • 3 Comments

  Nov 13 02:42 PM
  Yes it is panic, but not surprising. When the market was skyrocketing with no sky limit: Was it rational? it was the opposite of panic. In other words, it was irrational exhuberance. As things tend to reverse to the mean, this is a natural correction. I wonder why people are surprised when the market tumbles but are not when the market skyrocket with no reasons. Mark it down, the market will go down over the next year and a half, we may have mini-bear rallies from time to time. But to reverse to its mean you need at least a Dow at 6500. Time to see a psychologist.

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  • Did U Think The Ponzi Scheme Wo...
  • 229 Comments

  Nov 13 02:47 PM
  I am constantly amazed when I hear that people are amazed about this economy tanking. Everyone knows the economy was juiced by low interest rates, a housing bubble, the yen carry trade and a variety of other financially manipulations from Greenspan et al. including repealing of Glass Steagal, money market sweeps to get around reserve rules (so that more leverage could be used), vendor financing of the US economy by China, use of artificial home equity as an ATM...
  
  AND THE LIST GOES ON AND ON AND ON.
  
  It is an incredible list of fake, unsustainable economic stimulus that is unmatched this century, and perhaps in all time. And now when the bubble has popped, people cannot grasp what the unwinding must mean to the stock market and to the economy. There is no fixing this, people. Bernanke (who we never even hear from anymore if you haven't noticed) can't fix it. Paulson (who is preparing to exit stage right if you haven't noticed) can't fix it. And Obama certainly can't fix it, in fact it is very likely he will make it worse with more unwise spending programs.
  
  The market hasn't even started REALLY collapsing folks. Get used to it. The party is OVER. Did you REALLY think the Ponzi scheme would last forever? Really???

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  • iThinkBig
  • 1055 Comments
  • My Website

  Nov 13 03:01 PM
  Yeah, it's called market capitulation time. Now when I see what Washington policy is at the end of Q1 it will be time to buy. If the worst possible happens and the U.S. economy entirely collapses, then I'll eat my wheat pasta rations and take a year off, helping some people in Washington pack there bags. There is a silver lining in every cloud.

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  • PASTOR TOM
  • 5 Comments

  Nov 13 03:48 PM
  IS THERE ANY HOPE FOR US LITTLE GUYS THAT ARE HARD WORKING DAY AFTER DAY? (LIKE JOE THE PLUMBER).
  
  WHAT IS THIS TALK OF WHEAT PASTA RATIONS?
  
  QUESTION....DOES THE STOCK MARKET UPS AND DOWNS, DOWNS, DOWNS REALY MATTER TO US LITTLE GUYS? OUR LIFE WILL GO ON WITH ARBY'S, CHURCH, AND PUBLIX. SHOULD WE KEEP OUR CASH UNDER THE MATRESS? WE NEED ENCOURAGEMENT AND HOPE.

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  • aarc
  • 69 Comments

  Nov 13 04:05 PM
  1929 to 1932 crash was only a part of a rally into 12,000 of Dow Jones of the year 2000 that ended the century old rally.
  
  
  Dow Jones is now defining an expanding flat correction with a price target of 4750 somewhere in the middle H2 of 2009.
  
  DJ quarterly and yearly chart is similar to MER quarterly chart only that MER has gone well ahead of DJ because it was one of the first ones to drop like a rock. MER has a price target of $9 while DJ has a price target of $4750.
  
  Expanding flats are ABC corrections with the C wave defining a 1-2-3-4-5 pattern similar but not the same as an impulsive rally 1-2-3-4-5 to the upside. The main difference is that in the 3rd wave of an impulsive rally is subdivided by minor corrections similar to DJ 1932 to 1965 rally; while a C wave correction has no discernible minor corrections during the 3rd wave run down except during the early stage and the final stage of the vertical sell-off. DJ and SnP run down during Sept to Oct 2008 is a prime example on the monthly, weekly and even daily charts. Basically no pullback while the iii-rd wave of the 3rd wave of the C wave was in progress. We are now in the iv-th wave an/or 4th wave of the C wave with the iv-th wave questionable whether it has been completed or not since the iii-rd wave is an extended wave that usually produce a truncated v-th.
  
  At any rate; next target is 7300-7500 conservatively for the 3rd wave of the C wave that is projected to happen within the next few weeks. Then another consolidation range that should last for several months before the final 5th wave run down of the C wave to 4750 target in Q2 to Q3 2009.
  
  There is a 20-30% chance of an expanding flat for DJ to morph instead into a running triangle and not be able to reach the tentative normalized target of 4750. This usually happens when the 3rd wave has been completed and the usual relief rally turned into a bullish rally. It is called a C wave failure because the 4th and 5th waves of the C wave failed to materialize.
  
  Very low probability but it can happen - only if Dow Jones is able to break above 11000 and possibly reach 12000 on the first run up. 7200 low of Oct 2002 must not be broken for this scenario to work. Then the next scenario would be a running triangle. Running triangles do happen with strong stocks.
  
  It can happen with DJ if the govt can find an effective market intervention strategy with instantaneous effect to prevent the economic weakness deteriorating beyond what it is now.
  
  Apocalypse is if the C wave over-extends to the 700-1000 area of the 1965-1980 consolidation range. C waves do over-extend due to its viciousness. 50-50 chance the run down to 5000 psychological support will not hold due to global chain reaction panic. We dont have the 5 horsemen of Wall Street (GS, JPM, MER, LEH, and BS) to save us this time. Those that still survive are now trying to acquire banking mentallity and are still deleveraging their trading desks - which are needed to countertrend the market.
  
  Investors do not buy bottoms and the govt usually act once everything has gone beyond cost-effective repair. With Paulson (who understands the stock market but not the investors) discredited and will be gone next year; who is gonna save the stock markets by Q2-Q3 2009.
  
  Expanding flats are bullish specially on shorter time frames but can become a killer on longer time frames. It killed MER, can it kill Dow Jones as well?

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  • DaveW
  • 230 Comments

  Nov 13 04:08 PM
  Toro, enjoy your articles, thanks. BTW, did you liquidate your positions afterall?? You must have, as the markets screamed skywards from some mysterious buy signal, like everything suddenly is fine and dandy. Enjoy the rally folks, 40% upwards from here get ready to go short again!

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  • Ryan Barnes
  • 34 Comments
  • My Website

  Nov 13 04:43 PM
  Wow, lots of fear mongers around here. I thank you folks like Ponzi for being loud and unfaltering, even though rhetoric is all you have. Today might be a bottom, it might not, but don't be swayed by the loud voices with no data in hand. Listed to the dozens of small, modest voices that made strong arguments and present numbers.
  
  Nice comments Toro - selling off of top fundamental names may have been the closest we get to capitulation.

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  • iThinkBig
  • 1055 Comments
  • My Website

  Nov 13 05:20 PM
  Yes Pastor, there is hope. Actually mankind has lived better in the last 100 years then any time in history and will live better yet in the next 100 years. But first, those things you are familiar with in the bible will unfold. Actually, many peoples around the globe for thousands of years understood our societal evolution and grand finale to reach global consensus. With the wheat pasta comment I am trying to remind people that the nation will recover, even if hard times remind people what is important in life.
  
  
  On Nov 13 03:48 PM PASTOR TOM wrote:
  
  > IS THERE ANY HOPE FOR US LITTLE GUYS THAT ARE HARD WORKING DAY AFTER
  > DAY? (LIKE JOE THE PLUMBER).
  >
  > WHAT IS THIS TALK OF WHEAT PASTA RATIONS?
  >
  > QUESTION....DOES THE STOCK MARKET UPS AND DOWNS, DOWNS, DOWNS REALY
  > MATTER TO US LITTLE GUYS? OUR LIFE WILL GO ON WITH ARBY'S, CHURCH,
  > AND PUBLIX. SHOULD WE KEEP OUR CASH UNDER THE MATRESS? WE NEED ENCOURAGEMENT
  > AND HOPE.

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  • Diabolo
  • 8 Comments

  Nov 13 06:24 PM
  ur article would have made sense 2 months ago - after a crash, u want another crash???

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  • Rafael Grillo
  • 22 Comments
  • My Website

  Nov 14 03:59 PM
  Great comments! There are no bullish signs out there. None. There is not reason for the stock market to go up. More and more, the not-so-long-ago unthinkable scenario of Dow 6500 becomes a possibility. At some point, I even considered the 8000's very unlikely. Yet, I have to agree that some stock prices have reached an almost surreal level. It feels like we are heading towards a dramatic depression. And yet, folks, I truly believe a depression like the 30's has been averted. The recession will follow its course: people will curl in their homes waiting for end of the times, a few strong companies will take the opportunitiy to strengthen their positions, and after a few months, we will realize the sun still come up everyday and we will go out and re-ignite the economy again. I am not trying to under-estimate the challenges ahead. But I think the worst part of the financial crisis is behind us. It is re-construction time. Taxes will have to raise, we will have to curtail our consumption, interest rates will have to go up (think 3%) and a few inefficient companies will have to disappear (think auto industry). This has been an economic earthquake. The plaques had to reacommodate and the pressure liberated. The pain is not over. But tthe overall stock prices, at these levels, are pricing this adjustment. We will be in a 7500-9500 trading range until next summer. Dow 10,000 by third quarter next year, and then, slow growth. Expect the new Government to launch a national initiative to re-energize the country behind renewable energy. Get positions in wind, solar and nuclear at some point during the next quarter, but be prepared to sell. That is going to be the next short-term bubble; after that, they'll become a solid investment for the long haul. Pollyannish? Perhaps. But I think we are rather rattled by the violence of this correction. We've had in a couple of months what took two years and a terrorist attack to unravel in 2000-2002. There is light at the end of the tunnel. And, by the way, Toro and I must have the same portfolio: I am sure if I sell now, this was the bottom; and if I don' sell, we will get to Dow 6,500 :-).

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