Okie dokie folks here is one for the road, it is almost 12 midnight and I have been reading and studying charts and this is my take:
There is a good shot we break the November lows BUT I am not calling for armageddon when we do because I think that level will bring in the buyers. At that level many will say we have confirmed a double bottom and possibly get a huge rally. Now this rally in my opinion will set up the mother of all shorting profits, YES IT WILL. I hope we rally to 10000 on the DOW and 1000 on the S&P as it will be the easiest money in your pocket shorting at those levels. I see some action and many talking heads changing to the bearish side and that's my clue that we will soon see some form of rally but I just think we want those November lows first.
We will see soon enough! if that scenario plays out it will reap huge rewards if you know how to trade and again if you are holding stuff in that 201k opps, 401k you better sell when we do bounce because we might never see those levels again for a long long time.
Stay Tuned
Monday, February 2, 2009
Updates
Sorry for no updates today but today was a heavy paperwork day for me so I just watched from behind the scenes. I will be back tomorrow!
How about the game last night? pretty good game in my opinion.
Talk about this bad bank scenario not looking so good but I will catch up on some reading tonight with my technicals.
How about the game last night? pretty good game in my opinion.
Talk about this bad bank scenario not looking so good but I will catch up on some reading tonight with my technicals.
Sunday, February 1, 2009
Financials
I know I am beating a dead horse but I was just reading some numbers and the financials sector is just on a life support machine.The sector is down a whopping 26% in January and there is no bottom in site. Top of the list of losers were Fifth third, SunTrust, Bank of America, Capital One, Citibank and Wells Fargo. I think if you own bank stocks here period you are foolish and a matter of fact if you own any stock here for other than a bounce you are going to get your head handed to you.
There is also major trouble in insurance industry. Warren Buffet bet on the insurance industry is now down a whopping $14 BILLION. Man oh man Berkshire Hathaway shares were at high as $150,000 in 2007 and now @ $80,000. Even the richest in the world are making dumb moves here on wishful thinking.
Many people will be surprised when we trade in the DOW 6000 area but you have been warned it wont end there. There is too much optimism out there still for me to believe the bottom in this market is even close and lets be real we have had almost a decade of bullish action, do you really think the bear market will just last a year!!!!
Also interesting reading about troubles in China and how the chinese might start selling US dollar treasuries and buy gold as a move to alleviate the pressure of the US crisis on their government books. My thoughts on this is not so much buying of the gold versus the US dollar but the chinese will be redeeming our debt as theie will be a short fall in their exports, therefor will be looking to raise cash for their continued expansion. You all know what I think will happen when this scenario plays out, just bad bad for us, our grandchildren might still be paying off this debt at this rate or we will see very high inflation in the future, either way it is not a good scenario.
I hope we find a way to get off oil from the middle east as this will help tremendously in the future as we wont we spending our dollars on increased commodity prices.
Last week I said the market looks so heavy so lets see how they want to play the first few days of February, if we go into the mid March time frame without an significant lift higher forget about it for the rest of the year, this year might be alot worse in performance than 2008.
Here and now the S&P line in the sand is 785, if we lose that the next stop November 2008 lows
MARKETJEDI
There is also major trouble in insurance industry. Warren Buffet bet on the insurance industry is now down a whopping $14 BILLION. Man oh man Berkshire Hathaway shares were at high as $150,000 in 2007 and now @ $80,000. Even the richest in the world are making dumb moves here on wishful thinking.
Many people will be surprised when we trade in the DOW 6000 area but you have been warned it wont end there. There is too much optimism out there still for me to believe the bottom in this market is even close and lets be real we have had almost a decade of bullish action, do you really think the bear market will just last a year!!!!
Also interesting reading about troubles in China and how the chinese might start selling US dollar treasuries and buy gold as a move to alleviate the pressure of the US crisis on their government books. My thoughts on this is not so much buying of the gold versus the US dollar but the chinese will be redeeming our debt as theie will be a short fall in their exports, therefor will be looking to raise cash for their continued expansion. You all know what I think will happen when this scenario plays out, just bad bad for us, our grandchildren might still be paying off this debt at this rate or we will see very high inflation in the future, either way it is not a good scenario.
I hope we find a way to get off oil from the middle east as this will help tremendously in the future as we wont we spending our dollars on increased commodity prices.
Last week I said the market looks so heavy so lets see how they want to play the first few days of February, if we go into the mid March time frame without an significant lift higher forget about it for the rest of the year, this year might be alot worse in performance than 2008.
Here and now the S&P line in the sand is 785, if we lose that the next stop November 2008 lows
MARKETJEDI
Saturday, January 31, 2009
Charts
On January 8th I posted a chart of the market and it showed the overbought levels of the S&P, when everyone was saying to buy this market. The levels were 940 area and three weeks later we are 120 points lower. I hope folks are using the information here to there advantage because it is very useful and profitable.
Take a look back on that chart and you will see it playing out perfectly, notice how we bounced off that mid teens area in the low 800's on friday. I might do a chart this week looking at the next few weeks.
Take a look back on that chart and you will see it playing out perfectly, notice how we bounced off that mid teens area in the low 800's on friday. I might do a chart this week looking at the next few weeks.
Friday, January 30, 2009
Worst January ever
Well CNBC just confirmed through Trim Tabs investment research that January 2009 will be the worst January performance for the markets on record. The DOW, S&P, transports, Russell and Nasdaq all included.
As I said last night so does January goes so does the year and this might be a worse year than 2008 for the long term investors in the market. What folks need to realize there are many place to make money in the market but not in the hold fashion buy and hold method. The GDP numbers still morning was the worst in 27 years and I only fear that the contracting numbers will continue for the next 4-6 quarters.
Right now the metal trade is gonzo and seem like they wants higher. Commodities my friends, have been singing on that for weeks but last week I proclaimed this is the place to be, since then gold has dramatically traded higher. The inflation play is my play for the next few years and although it is very early to the game it will prove highly profitable than holding common stocks. Bonds are a short here as they are vastly overpriced and the spread will close soon.
Have a great weekend folks and those still having faith in your common stocks I hope you decide to get out soon because we don't look too good here.
MARKETJEDI
As I said last night so does January goes so does the year and this might be a worse year than 2008 for the long term investors in the market. What folks need to realize there are many place to make money in the market but not in the hold fashion buy and hold method. The GDP numbers still morning was the worst in 27 years and I only fear that the contracting numbers will continue for the next 4-6 quarters.
Right now the metal trade is gonzo and seem like they wants higher. Commodities my friends, have been singing on that for weeks but last week I proclaimed this is the place to be, since then gold has dramatically traded higher. The inflation play is my play for the next few years and although it is very early to the game it will prove highly profitable than holding common stocks. Bonds are a short here as they are vastly overpriced and the spread will close soon.
Have a great weekend folks and those still having faith in your common stocks I hope you decide to get out soon because we don't look too good here.
MARKETJEDI
SKF
How are we doing with SKF. SKF +$18 in 2 days..
Bad bank plan won't save us from the downside in financials.
Bad bank plan won't save us from the downside in financials.
Thursday, January 29, 2009
So goes January so does the Year
Well it is called the January barometer. Market statisticians watch the market activity in January as a major guideline for the upcoming months. The first trading day of January the DOW ended alittle over 9000, today with one day left in the month to trade we closed@ 8149, that's approximately a 10% drop.
The internals are worrisome we had the worst January, Days up/Day down ratio in years and the sector internals are further worrisome. The thing about the January barometer is that the yearly outcome is usually 2-3 times the effects of the January move, so in theory most statisticians might be looking at a 25-30% drop in the market this year. I firmly believe we will be at that low 6000 sometime this year and with more and more weakness showing up daily with companies profits and lay offs it is not out of the question even for the average joe to see.
Yesterday we had a trade call on the blog for SKF, another awesome call. Its up 15% and I think playing SKF alone this year might be a money tree. The financials are DEAD and they are barely holding up here. There is no doubt in my mind that when the administration sometime in the next week or two announce the details of this bad bank 'solution', we will see the cascade selling of the banking stocks to new lows.
Somewhere before we get back to that November lows I think we get a meaningful bounce but as of today we seem long away from that scenario. I hope you all read my post yesterday on what Jim Rogers, Roubini and George Soros have been saying about the markets. If you dont want to listen to me, PLEASE listen to them, they are echoing the same things I have been saying, position yourself and you will be ok and dont forget this massive inflow of cash into the system only has one way out through:INFLATION.
Global job losses are being estimated @ 50 Million this year that's a staggering number, so if you are crazy to think we getting a bargain on stocks here, they will be alot cheaper later.
MARKETJEDI
The internals are worrisome we had the worst January, Days up/Day down ratio in years and the sector internals are further worrisome. The thing about the January barometer is that the yearly outcome is usually 2-3 times the effects of the January move, so in theory most statisticians might be looking at a 25-30% drop in the market this year. I firmly believe we will be at that low 6000 sometime this year and with more and more weakness showing up daily with companies profits and lay offs it is not out of the question even for the average joe to see.
Yesterday we had a trade call on the blog for SKF, another awesome call. Its up 15% and I think playing SKF alone this year might be a money tree. The financials are DEAD and they are barely holding up here. There is no doubt in my mind that when the administration sometime in the next week or two announce the details of this bad bank 'solution', we will see the cascade selling of the banking stocks to new lows.
Somewhere before we get back to that November lows I think we get a meaningful bounce but as of today we seem long away from that scenario. I hope you all read my post yesterday on what Jim Rogers, Roubini and George Soros have been saying about the markets. If you dont want to listen to me, PLEASE listen to them, they are echoing the same things I have been saying, position yourself and you will be ok and dont forget this massive inflow of cash into the system only has one way out through:INFLATION.
Global job losses are being estimated @ 50 Million this year that's a staggering number, so if you are crazy to think we getting a bargain on stocks here, they will be alot cheaper later.
MARKETJEDI
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