Possibilities

What are the possibilities here for the market to act irrational on the downside as it did on the upside. The Possibility or probability of irrational movement is 100%. Very often the market, swings to various degrees out of its mathematical technical means. This should be observed carefully because just like how we zoomed to 14000 on basically wall street telling us to buy buy buy future potential earning growth, we might just be entering a period where wall street is getting short and we exaggerate the move to the downside.
Now here is where it gets tricky. Nothing goes in a straight line as we know especially when it comes to the Markets. I believe the market will find a short term bottom within the next few sessions and bounce but as I said before it will be a tradeable rally. What is a tradeable rally? I refer to tradeable rallies, as market moves where you can go long for a period of time but take profits along the way as it wont be sustainable. The next bounce will be 100% shortable no matter how solid it looks.
Looking at my charts, I might be going out on a limb here to say that the S&P which is now 1325, looks venerable to test the low range of 1000. That's a pretty big hit from last years highs but if we look at the over exaggerated moves historically in the markets up and down it is not so far fetch that we might see 1000 on the S&P before we ever see new highs again.
S&P at a 1000 value might seem a bit harsh as we speak about it now but lets look when was the last time we were at 1000 on the S&P?. Anyone want yo guess? Well the last time was summer of 2003. So in retrospect we have moved nearly 60% in the S&P index over a 4 year period, that's an astonishing move, so let's not get scared when I say we can easily trade down back to these levels.
No matter what, most of the people I know read my blogs are traders and for that we dont care where the market goes, just that it has volatility so we can trade it but it is good to know where the long term trend line is so we get better trade it.
Where will the DOW be if we go back to S&P 1000, well it should also trade back to its Summer 2003 level which was 9300. Yep almost 3000 point lower than where we are today.

Stay tune because we will be following the market very closely tomorrow to see what happens.
DOW Futures are down 522 points at 8 PM Monday

Worst might be here tomorrow

As the US Markets are on holidays for the Martin Luther King holidays the overseas market are taking some heavy declines. The news out is related to our subprime market here in the US and the Bank of China preeminent announcement of a significant write down. As i am writing to thee blog the German DAX is down 7.2% and the Indian market down 7.5%. Those numbers are significant as a 7% decline in the DOW would translate to around 850 points.
As of 1:40 pm the DOW futures are down 400 points!!!!! but the most significant barometer, the S&P 500 is down 90 points!!!! All I can say is that tomorrow morning will be pretty or should I say very ugly if the futures stay at this level. Well seem we hit the nail right on its head, that of the markets going down a possible 750-1000 points but we will have to see how it plays out tomorrow.
Without a doubt I will be buying futures on any significant gap down as we should form some based tomorrow or wednesday as this should confirm the capitulation I have been noting in the Blog.
Let's see what opportunities lies on this bad news and take advantage of it and I will leave you with this.

IT IS NOT TIME TO BE AN INVESTOR BUT A TRADER.

Heard it here first 750-1000 point down down!!!!!!!!!