On CNBC Friday, graybeard floor-trader Art Cashin was worried about “cascade selling.” Looking at the futures so far, maybe his fears are coming true.
On Friday, economists expected the jobs report to show 100,000 jobs lost. Instead, we got a nasty surprise of 159,000 jobs lost. But that’s nothing. Over the weekend, a Fed Head said that if the commercial-paper problem isn’t fixed soon, future jobs reports will hit the -300,000 to -400,000 range.
Many traders have taken long positions in anticipation of a surprise interest-rate cut by the Fed and perhaps other central banks. Doug Kass is one. He announced that he was all-in long on Friday morning (on RealMoney.com) and so far is getting a serious beating. For every trader like Kass betting on a rate cut, there are a hundred more waiting to short a rate-cut rally. So, Kass will need to take profits quickly if he gets his cut.
Finally approaching double bottom status now.. Watching for volume buying.
SDS testing double top 15 minute.
Stochastic and MACD are pointing slightly down in the 15 minute time frame so it will take a lot to overcome that.
If the market crashes too hard and they shut it down, I would want to be in cash at the time.
Positive stochastic divergence SSO 5 minute. Looks like it.
In case anybody’s interested the Afraid-to-Trade blog had an interesting post on longer-term damage to the markets: http://tinyurl.com/3wqhpz
“SP500 Damage Done on Monthly Chart”…. quote, “First, let me state that we’ve now officially ‘blown through’ the long-term (large scale) Fibonacci retracements from the 2002 lows to the 2007 highs. The sellers took out the 61.8% Fibonacci retracement at roughly 1,080 this morning.” endquote.
Matt.. do you think they would do that in North America?
I know Russia was shut down twice and I think Brazil was shut down, but would they shut down say the NASDAQ or the Dow? I find that hard to believe… but then anything can happen.
You want to see panic, shut down the US markets. It would be worse than McCain getting elected
Wow.. the Toronto exchange was down 777.77 points a second ago. Just thought that was interesting…
If the market crashes too hard and they shut it down, I would want to be in cash at the time.”
Matt, could you elaborate a bit in case you have the time? Wouldn’t you wanna be short nor long? Thanks.
I bet the Fed is pumping life support about now.
Poked throught the double top… now see if it can clear it.
Dang, I was just teasing about 777.
Shouldn’t kid around in this market George!
This is shaping up to be a pretty ugly close….
At least we’ll have some stories for the grandchildren.
PS – If I recall, NYSE stops trading for one hour if the DOW drops 10% in one day before 2PM, 30 minutes if after 2PM. If the drop continues down another 10% after that they double the times of the halt….closer than you may think….
http://www.cnbc.com/id/22465881
But, hey, we eliminated short-selling on financials so banks like BBT can’t be down $2 today – can they?
Besides, George said this would be a green day all-around. Yeah, right!
SPX broke the daily downward channel. look out below!
Through all of this, the thing that scares me most is Cramer’s position of “sell it all.” I don’t like it when my views and his views align…it usually means we are both wrong.
Sellers are not giving up.
SDS did clear the double top on the 15 minute.
This is a good place to get out of SDS.
Pakistan facing bankruptcy… can only afford 1 more month of imports.
(Source:Google News).
Some time in the future (years?) when this does bottom, it will be a buy of a lifetime.
You mean a “generational buy”!
Dressguard,
If they close the market and you own securities, then you can’t do anything until the market reopens. If you have cash, then you have options. For example, you could withdraw cash and go buy gold coins. It might be better to have inverse ETF’s since the market would probably continue falling after re-opening, but who knows? Suppose they shut the markets down after the close, and then the central banks of the world announce a coordinated rate cut tomorrow? Would you want to be short?
Matt
Good point. No I understand better. Thanks a lot, Matt.
We are getting close to complete capitulation.
But to answer your last question: yes!!!
A pause here while SSO tests 36MA on 5 minute.
Was there some announcement? SPX is going waaaay up.
Matt;
Do or would they close markets during the day, or after close?
Roubini is back on the plate. Question now is, what will the FED do now? Interest rate cut is useless. Roubini has some very drastic propositions to make. But I doubt that would help either. The main problem is lost confidence. Doesn’t come back overnight.
That was a big bounce Towelie…
Wondering was just an oversold bounce.
George,
I don’t know, but traders are talking about it today.
Matt
Towelie,
I think Cramer once said that the margin clerks finish their work at 2:30pm for some reason. So on days like this, when the margin clerks are butchering the over-leveraged, you will often see a bounce in the afternoon as the selling pressure lets up.
Matt
Somethings going on. BBT just gapped up >$1 intraday.
And SSO is paying off big time.
Not enought time to go green, but I bet Cramerites are wondering.
It’s been a long time since I’ve seen this much data come across the screens.
SDS will try to make a stand here, nearing 15 minute support of 36MA.
Did anyone get SKF today? I didn’t unfortunately. I should know better than to piddle with ICE when I can have SKF cake.
it is an orderly decline i wonder if we`re going
to some extreme level like dow 5000 or 4000
if u can scalp the wild dog known as ICE
u can get large$ quick
sold my swing trade in SKF @124 today
will re enter next rally
WTG Average guy.
Yes, scalping the ICE man.
Anyone find any news or is this a technical move?
I hate to do it, but I’m clearing out of everything now.
Fundamentals. All is well.
We don’t know yet. But those who know now do what to do.
SPY’s rally since 3pm has come with a surge of volume, so maybe this one will stick.
George,
Maybe the market has rallied back enough so that they will stop thinking about closing it for now.
Matt
If we had only been down 350 points, we’d be green right now. So I was half right(?).
You were dead wrong.
Trying to put an order in right now, but my broker is down..
Newbie;
I was impressed when you said you had regained 70% of your account since being on Matt’s blog.
Good for you. Keep it up.
lots of money doing all day trades in the casino`s
should I sell my $20 GE’s? hahahahahahaha
yes i got in but kept quiet to see how things would go.
Dressguard, have some compassion. LOL
K;
Good deal. I’m going flat today.
Ok, your call wasn’t too bad.
MA up 5%
wow that after hour drop on GE just now scared my pants off
Amazing.. Dow regained 10,000!
Very nice day. When these long moves are made, it’s easier.
I have one more prediction – I will not predict anymore! hardy har.
haha. i seems to have predicted the precise drop of GE today. dow -500 today wouldn;t hold that early
So what did those guys knew when the volume buying kicked in 3 pm??
What a volatile market! I just watched from an all cash position and it was exciting.
George,
I recovered 70% of my small loss. I was down 2%, now down less than 1 %, almost flat.
newbie;
That’s great. Doesn’t matter how much, just the successful goal that’s attained. Keep chipping away.
Yerk;
My take on big swings like this is that’s were the money is made. De Boyz swing it enhance their profits. Makes sense.
To put that in colloquial language, they eat us suckers then puke us back out again. They get the nurishment, we get the acid aftertaste.
i don;t like GE afterhours lol. but might keep LONG LONG term i they still keep their dividend
(6% 
)
wait wait wahaaat? DOWN PLUNGED AS MUCH AS 800?
i only saw 500’s LOVELY
wow glad i was at school KINDA
Yerk, that’s exactly what I’m thinking…
New announcement pending? Short covering rally in everything except financials? Something is fishy…..
towelie,
You can’t have a short-covering rally in the financials!
Matt
When the market gets deeply oversold, you really don’t need a catalyst for a short-covering rally. As soon as shorts see that the market isn’t going down any more, they start to cover and a chain reaction can start.
Well then it’s a good thing I said everything *except* financials.
BAC just said its 3Q Profits dropped 68%, is cutting its dividend in half, AND says they will be selling $10 billion of stock to raise capital….OUCH!
looks that spring is still getting sprung. all we need is a few better than expected earnings (Please GE)
This could be it:
“The Federal Reserve is working with the US Treasury on plans for a dramatic move into unsecured lending in the hope that this extreme step could help bring credit markets back to life.”
http://www.ft.com/cms/s/0/ce6dca6c-93ce-11dd-9a63-0000779fd18c.html
Yerk: Wow. That would really be the last straw. Wouldn’t this also require approval from Congress? I don’t see them being very eager to pass something of this magnitude considering they barely passed the bailout less than a week ago.
If they go through with this, I think it would indicate that things are far worse than even most of us imagined. Has a central bank ever done this in history?
Yerk
interesting article….”Got Gold”
towelie
i can`t think of any other way out of this , can u
One word: Revolution
The DJIA moves 800 points down followed by 400 up in a single session and the traders are complaining?
newbie;
Really: I’m not. Maybe long-term investors are complaining.
warren buffet is long term and he’s not complaining
.
K;
Yes, but Warren is guaranteed 10% ROI plus other benefits. I’d take that and not complain. LOL
The world is ending!!!!
“There’s talk on The Minor Planet Mailing List about a small asteroid approaching Earth with a 99.8% probability of colliding. The entrance to the Earth’s atmosphere will take place October 7 at 0246 UTC (2:35 after this story goes live) over northern Sudan, releasing the energy of about a kiloton of TNT. The asteroid is assumed to be 3-4 meters in size; it is expected to burn up completely in the atmosphere, causing no harm.
LOL
For those who are interested, here is the link to the NYSE Circut Breakers. They are set at 10%, 20% and 30%
http://www.nyse.com/press/circuit_breakers.html
Gerard;
That’s great! I didn’t know that existed.
Thanks