Cramerica on Brink of Depression
Now Cramer is calling a bottom and another depression:
“We are on the verge of a Great Depression.”
Did somebody spike the water supply of Cramerica?
Ah Hah! The Real Reason for the Fan-Fred Bailout
“U.S. Senate Banking Committee members urged Fannie Mae and Freddie Mac, the mortgage companies placed under federal control this week, to freeze foreclosures on loans in their portfolios for at least 90 days.”
Talk about buying votes! Congress just bought half the houses in the country to keep the foreclosed-upon from seeking vengence in the voting both!
Make sure to study the “broadening” pattern on the post prior to this, and watch the comments for updates throughout the day.
that link did not work.
http://stockcharts.com/h-sc/ui?s=$NYLOW&p=D&yr=1&mn=6&dy=0&id=p56208758569&a=150513112&listNum=16
I guess you’ll have to take my word for it. the links won’t work. One more try.
http://stockcharts.com/h-sc/ui?s=$NYLOW&p=D&yr=1&mn=6&dy=0&id=p56208758569&a=150513112
i’ve played technical charts and did pretty good until i got addicted to apple which has SCREWED ME
Made 36% in PGTI a ways back just by playing technical june 22 to july 8
that’s the one i’m most proud of. others are from -20% to 18%.
helped a coworker make 76% scalp on the last freddie rally. he got in at 3.16 and out in mid 5′s. that felt good in a way.
but now i’m in this “forum” and am learning much more from more experienced and high net worth investors.
I hope to contribute what i have learned just as you guys contribute yours.
Matt,
what discount rate did he use to figure that they money on Chrysler? If you hold whatever thing long enough inflation will let you save face value.
I’m always sceptical when no private investor wants to step in and savy public officials have to use taxpayer’s money to achieve the miracle.
i got my fill on SDS @ 67.50 i was hoping for…very odd, the fill occurred 7 min. after closing time…
David thanks for that!
here’s what i’m seeing. 52 week lows are ready to rise?
http://i38.tinypic.com/dow31z.jpg
David,
Try using TinyURL:
http://tinyurl.com/
Matt
it does seem like we might have a rally before things shake up big time again hehe. of course my chart is just general view and not time specific
whoa $NYLOW:SPY in one chart… pattern anyone?
http://i38.tinypic.com/2up95q0.png
also notice the hills getting steeper? i wonder if the next one will be a cliff and not a hill?
Yerk – I will post that for you
I hate to bug the blog. but I think it is an important chart. I made a public list and put it in there. Let’s see if this works.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3055700
also UGA (Us Gasoline Prices) stock averages 16k volume today it was 130k volume.
2 days in a row of rising by volume. might be just ike but anyone think it;s time that people are jumping back into the stock betting gasoline prices will rise again?
well i use ADX mostly and fast stochastic along with volume indicator to go on trades longer than daytrading and this has just met my standards. (UGA that is)
i think after we see what ike does monday that thing might either take a pounding or gasoline will go up still.
-anyone have an opinion because am wishing tomorrow was a trading day
K
i have to learn almost everything about charts ……BPT is easier
for me to follow
any and all insghts r appreciated
and thanks to everyone on blog
thanks, Matt
Matt,
yea, the trin as you’ve indicated. What other inds are supporting the coming down move?
no rally monday no way
K,
Thanks for pointing out the new lows. They are almost up to March panic levels.
Matt
I just saw my first Tesla Roadster driving by my building. It was awesome. I need one of those:
http://www.teslamotors.com
David,
Awesome chart. I’m going to set one up just like it in my trading software. I already watch the highs and lows, but I like your setup better than the one I have now.
Also, I have high-low indicators titled “All US” which includes all the exchanges instead of just the NYSE. I don’t know if StockCharts has it, but you may want to look for it.
Matt
Thanks Matt.
It looks like the next leg down will start Monday.
http://tinyurl.com/49enb4
http://tinyurl.com/4gb6q2
Has anyone watched a person die? I think the stock market is dying, but if you’ve watched a person die, as a general rule they have a rally phase before it’s lights out. Maybe that may happen next week.
Good luck to us all (We’ll need it),
Jim
Jim. same thing when cellphone battery dies out.
i had my phone stolen and i used it’s gps to keep track of it. i usually got within 260 yards. when it was on it’s last straw of battery it sent a stronger signal of 64 yards and then it’s the last i heard from it =P
now stock market won;t go out of sight but will go somewhere down there.
Yerk – here ya go.
The first thing I found out was that the VIX was up 13% this week, while the market was 1.3%, which means this week doesn’t fit the criteria of what was asked.
The second thing I found out is that there are no instances of the VIX going up 20% in a week while the S&P was in a +/- 1% range. At least since late 2000, which is the extent of my VIX data.
However, there are 7 instances of the VIX being up 20% in a week, while the S&P stayed within a +/- 2% range for the week.
I made the size and color of the box relative to the result of the trade, and the size of the gain or loss. I made each box two weeks in width. I used a vertical red line to differentiate between the bull and bear market.
Chart
Conclusions: When we were in a bull market, that type of VIX spike/market action usually meant the worst was behind us, at least for a few weeks following the incident. In a bear market, a VIX spike with a flat market portended all kinds of hell for the next two weeks. The three instances since August saw the S&P fall between 40-80 points over the next 5 sessions.
Some “short on red, cover X days later” analysis:
1 Day: (note: the reason the trade length is 3 bars but my criteria is exit after 1 bar is because the rule says short the next open, exit the next open, which adds 2 bars. In testing this proved to be a more conservative assumption).
1 day
1 day results
2 days
2 day results
After a week, the edge goes down, but testing multiple time frames pretty much always gives you a PF of > 1.
Now, here’s were shit gets really awesome. Let’s look at the results, just in the context of a bear market. To accomplish this, I made the “start test” date 8/1/07, instead of “all available history”
Since 8/2007
6.6x Profit Factor!
Remember, we DID NOT meet these conditions this week, since the VIX was up 13% and the S&P was up 1.3% for the week.
I tested those conditions while covering 1,2,3,4,5,10, and 20 days later and there was an edge on the first and second days, but not after, it became a losing trade.
Matt, if you wouldn’t mind, would you fix my links? I forgot to add a “” to the end of the links that are broken.
Jim – unfortunately several times from parents to the industrial accident. Understand why oncology nurses have trouble, especially pediatric. And agree with your comparison.
FWIW – here’s my take: http://tinyurl.com/4w68b4
More top-down, macro-view than you guys but consistent and reflects my week’s learnings here. Think we’re seeing a major attitudinal shift where Kubler-Ross stage 1 Denial is slowly, painfully giving way to Stage 2, Acceptance. A new 12-step program perhaps ?
Feedback from you techno-wizzes solicited.
David,
those are really educational charts. Thanks!
So gang, do we all feel monday is likely a down day? Any chance SPX gets back up to 1263 ?
Danny,
WordPress doesn’t let me edit comments other than my own. So, go ahead and post a new comment.
Matt
Odd, my wp blog gives me God-like power to edit anyone’s comments.
Anyway, here are the broken links.
day one short rules
<a href=http://www.ibankcoin.com/dannyblog/wp-content/uploads/2008/09/66.png<6.6x profit factor if you just look at post bear market results
crud, I’m sorry
same link as above, but fixed
Danny,
So if I understand you correctly, you are saying, based on your VIX analysis, that there is a good chance of a 6 to 7% decline from here. Wow!
1. The rally off the July low which was a rising wedge has a breakdown target of roughly 1172. = 6% from today’s close.
2. Depending on where this present little wedge tops, I have two targets base on Elliot Wave Theory, but both (or any)would amount to a 7% decline from the top of this present rally.
3. There are two assumptions, but these don’t change the fact that the theory calls for a 7% decline from where this rally tops. a. if today’s high was the top, the target is SPY 117.39. b. If the top is the broken support at 126.58, the target is SPY 117.72.
Here is an interesting SPX chart.
http://tinyurl.com/3ww73k
When there are patterns within patterns, which should be followed or is the more powerful?
Danny,
many thanks for the analysis. You interpreted my question in the right way – s&p rangebound and vix moving. Seems to be a set-up we should have an eye on. As you pointed out last week did not match the criteria you’ve used in your analysis so let’s not get too jumpy.
Apologies for the wording of the question. The data series I looked at comes out at +17% for the week and hit 20% Friday intraday. For whatever reason we have a deviation.
Yerk
George,
That’s a good question. My technical-analysis textbook says to only play on the side of the major trend. So, in a bull market, you only play on the long side, and in a bear market only the short side. And that is probably a sensible approach for most investors.
But if you are a skilled day-trader, bear markets offer a series of very sharp counter-trend rallies as excess short-interest is periodically purged. If you can do it, I don’t see anything wrong with trying to catch those rallies though it is probably a good idea to keep your time-horizons short.
Matt
Hi Matt,
I follow the same strategy. Be short in a bear market. But this week was another one of those chances I missed by a hair. If SKF had gone a bit higher ($125.90) I would have sold them and would have went long in LEH!!! I could have sold LEH with a profit between 20-30% on that day.
Danny,
The last time I tried to fix a typo in somebody’s comment, WordPress wouldn’t let me. Maybe that was before I installed a newer version, or maybe I just screwed up. In any case I have fixed your links.
So, everybody make sure to take a look at Danny’s charts from his comment at 10:33pm.
I’m thinking that a spiking VIX and a steady market indicates that traders have a bullish outlook and are buying puts to tide them over during a scary period. That works during a bull market, but in a bear market, it fails badly.
Matt
Matt,
did you make up your mind regarding a rate cut next week? I’m still sitting on a fence. I hope next week the markets will go into rally mode so I can short my brain out.
Dressguard,
It looks like the market has priced in a rate-cut, but I don’t think it will happen. So far, Bernanke and Paulson are refusing to put up money to bail out Lehman as was done with Bear Stearns, so I’m thinking that the Fed will continue to be stingy with rate-cuts too.
Matt
What about the emergency meeting the fed just held yesterday??
I just woke up so haven;t looked into but i wonder if something is announced this sunday yet again.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTuMeSVx29BE&refer=home
Loads of meetings but no result so far.
i like this guy. Nouriel Roubini on bloomberg video.
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vmUV7PR4JGX8.asf
I just made a new post, so let’s continue the discussion over there.