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.
Kass again on the wrong side of the trade? This guy has become the perfect contrarian indicator!
As long as the credit markets are not fixed I do not see much reason for a trend change. This article gives a good overview about all the things Doug Kass is ignorant about. Big Bertha shells incoming:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3141428/Germany-takes-hot-seat-as-Europe-falls-into-the-abyss.html
Even if the funding mess goes away soon, financial results of quite a few companies will have taken a beating.
And the ultimate question is: What will happen to long-term US interest rates when the short squeeze in the dollar is over?
The following is from BPT, it is not proprietary to them. One of their members found this on the Internet. Rather lengthy, but well worth the listen.
“Discusses such things as CP (Commercial papers), CDS (Credit Default Swap), the Bailout package, etc…a great listen!Matthew Frailey”.
http://podcast.thisamericanlife.org/podcast/365.mp3
I am not a member of BPT (Break Point Trades). They send me a video each week and sometimes during the week.
If anyone is a member, it would be nice to have some feedback about them. I hear they are very good.
for once my gut feeling was right to keep the gold stock and sell everything else.
“Monday will be an up day for SPX from what I can tell.”
“Monday will be an up day for QQQQ from what I can tell.”
Those were the predictions I made over the weekend. My first attempt at forecasting looking at the indicators I watch each day.
Alas, the futures, indeed the World, markets have handed me a short-lived attempt at forecasting human behavior.
george it might change
they might be right hehe
K;
I suppose miracles do happen – lol.
see? it’s already turning haha ok am late for school laptop in bag ready for trade maybe
Things must be getting bad……….
After the Archbishop of Canterbury had a dig at evil short sellers the other week, the Pope is now having his say:-
Pope Benedict said on Monday that the global financial crisis showed that faith in God trumped a lifetime spent pursuing material wealth.
“We see it now in the collapse of the great banks that money disappears, it’s nothing,” the Pontiff said.
“Whoever builds his life on this reality, on material things, on success … builds (his house) on sand. Only the word of God is the foundation of all reality,” he said.
Damn darren never heard the pope speak so harshly against money. that GoldEn bounce should help me today.
George, just sold puts I bought Friday. Will reasses when we drop below 1065 and nothing happens… Waiting for the next intervention – rate cut, whatever. If not today, tomorrow. We are trading below the lower bound of the channel and I doubt this line can be crossed without the intervention we’ve had every time it was touched. So don’t give up too early – day is not over yet.
We should nevertheless go below 1000 soon.
Yerk;
Good point – day not over yet. I’m not in anything right now. Just day-trading each day.
K,
Perhaps the Vatican Bank / portfolio is taking a bit of an hammering lately !!!!
After his outburst, the Archbishop, Rowan Williams ended up egg on his face after it was discovered that the Church of England had actually lent stock to a short seller.
ehehe when i see apple’s price and think about my $800 lesson i realize i just saved me $800 more by finishing my lesson back at $130′s wohooo.
George, and all
I am a member of BPT. It is an excellent site, both for technical analysis of the general market as well as stock selections for trade. They also have a great blog for use in trading during the day. As a bonus, one of the two men who run the site has a real knack for commodity trading, especially gold.
They have basically been on the correct side of the market (bear) since last November. Their charts are provided in multiple timeframes to allow a full picture of the indexs they cover. Their view of the fundamentals of the market are unbiased and ususally lend credence to the price action of the markets.
I have been a member of several trading sites over the years, and this is by far the best I have been involved with.
I highly recomend you give them a try, it is well worth the fee.
BPT
Here is the link to their site.
http://breakpointtrades.com/blog/?section=daily
What a spectacle in asia and europe. People are really starting to panic.
All cash.
Yes, very entertaining. Better than the UFC!!!
I think that this might be a period of short term capitulation. In cash right now.. but will see what happens. Might be 1 of 2 things. 1) Wallstreet anticipating the lifting of the short selling ban on Wed is going to send financials hurdling down to earth and/or 2) People are actually starting to see the reality that Paul, Ben and George just took 800 billion and wasted it on bailing out their banking buddies.
JMO…
Speaking of Apple – K – you might want to check this out on SeekingAlpha:
iPhone Sales Drastically Surpass Q4 Consensus; Apple Reaches 10m Goal
Surprised noone has posted a link yet to Barry’s SP500 technical outlook pointing out that Th/Fr the index busted major resistance and FusionIQ’s take is it’s headed for resistance around 960-1014 or so at best.
My own view is that we’ve seen a major shift in sentiment. Putting the Fibs to a long-term chart using the ’02 as the bottom but chopping off the tailend of ’07 as a feeding frenzy bubble still find results that are consistent. Blew thru the 50% resistance line at 1134 and headed for the 61.8 at 1055 before reaching Barry’s level. IF we rally off that suspect it’ll be weak and we’ll see a 100% retracement to 800 region. And if the economy really turns south, well..
the iphone projection is swell but people expected more after att subsidized it and they moved into more countries…I think. every day I want to get in. when I see a bullish reversal heck yea im going in. but not this week. waiting for rate cut and some earnings reports.
Futures down. But could be more. Rate cut is keeping the markets a little bit propped up. Rate cuts won’t change the sentiment though. On the contrary. In the future private persons will be getting paid to take loans.
EBay Will Cut 10% of Jobs as Auction Growth Slows
btw when does apple announce 4q earnings? it seems around mid to end of october.
I felt their guidance was quite a bit conservative lol. damn I can’t get away from aapl
Eli;
Thanks
Darren,
In the Bible, Jesus was not really fond of bankers. Bankers provide a service, but it is the public (through the FED) that gives them this power. They have to much control right now.
Also, FED will start paying interest on bank reserves today.
Paul F,
I understand your position that bankers are evil. Please stop repeating it every minute. You are not adding value.
Matt
That is a heck of a daily gap on SDS. I wonder if that is a breakaway gap, which would be filled later rather than sooner?
Note the 15 minute on SDS began turning up Friday around 1PM and is still strong.
That gap provieded a good scalp for SSO & Company.
George, didn’t you expect an up day today?
I don’t think the S&P will exceed 1061 much on the downside. Time to start getting bullish.
Yerk;
Yes, Bummer…
Obviously, I have ZERO predictive abilities. I’ll leave that to Matt & Co.
We have to be close to a bounce. Dow is nearing 10,000 and the vix is above 50.
Yerk – FYI, I didn’t put any $ where my mouth is. I’m luvin’ being wrong though, so far today.
No way this market can sustain this parabolic move too much longer intraday before a correction.
Then again, if this is truly panic… it can do anything.
Matt,
given you exited all of your shorts on Friday (I believe based on a posting you made), what are your strategies going forward? If we are indeed on the death march now, would it be too late to enter a short position now? The market seems to be in a bit of a panic given the bailout has done nothing to shore up confidence. Emerging markets were slammed today. Russia, Middleeast, Brazil all down 10%..
In the future when our kids read about this time in history.. do we call it the Bush Depression? We are reminded of the Great Drepression via images of men in trenchcoats lining up for soup/work. What images will our children use to remind us of this Depression be remembered by?
I missed the gap, but I’m not missing the move up.
The DOW 9869 is the 61.8 Fib. Market screwing with all at the 10,000 mark.
Will wait for the fib to hit, then maybe take a short term long with a 50 point stop.
One of my easy calls last week was that we would see the DOW below 10,000 this week. I wasn’t sure it will be fulfilled on Monday because earnings season hasn’t officially been started. So there was a chance the DOW could recover after the sell-off late last Friday.
My more ambitious call is still standing: below 8,000 points in the DOW at the end of the month.
don’t get too cocky now cause i will destroy your prediction haha you just watch
This is great action.
Meanwhile, I’m watching the SSO 1 minute. To prevent a false stochastic move up on that time frame, I’m waiting until the 5 minute clears the 9MA on its time frame. The power/expected length of the move can be determined by the 15 minute’s stochastic position and to lesser degree the MACD.
It will take time to build a 1 minute base with several cycles to start moving the 5 minute up.
Is it just me, or does it look like the spy is leveling off?
not yet… uh-oh
There’s some serious trading going on for sure. Panic?
Been sitting mostly in cash but don’t worry, the small positions I did have are down 50%, a 15K loss in a few weeks, unbelievable carnage going on. Is this the bottom, do we test 9,600 or do we go straight to 8000. I think scenario 3 is looking more likely.
@George: Of course this is panic. But it doesn’t mean the markets can’t go lower. Bottom callers mainly shut up. (I am not watching CNBC. So maybe Maria is calling another bottom. Maybe her own.)
I don’t know Randall, but I backed a small truck up to SSO at that bottom.
Scary shtuff.
There’s NO WAY this market will end in the green. If it does, Halloween came early! Trick-n-Treat.
or should you say the current bottom George.
BTW.. with the VIX above 55, we probably will get a bit of a bounce here.
The bottom has to be in!!!
http://www.msnbc.msn.com/id/27045699/
Sold SKF @ 124…..thinking market bounced off
Fib 9800-9780
re enter on any rally
Yeah, current bottom. I want more like it.
SDS attempting to get support off of 9MA, 15 minute time frame. That shows how far and fast it went up.
Paul F,
I have deleted your rambling explanation about why you are not rambling about the evil bankers. Don’t make me hit the spam button on you.
I’ve completely missed out on QID…. completely. Got DUG though but after it made a good chunk of its move.
George
What was your bottom point for SSO? When the 5 min passed up past the 9MA?
Thanks
anyone watching CEF
Jim
thanks 4 link
StockCharts is not updating as it should. I’m getting some blank screens. And have to refresh.
Dear Helicopter Bennie,
I want to thank you, Bush, and Hanky Panky for the huge deficit you are building.
My advice is you trade in your helicopter for a jumbo cargo airplane.
And there is no need to worry about the US debt getting dowgraded as I am quite certain GW already threatened the ratings agencies.
David
so far we’ve had the dead cat bounce. That’s no very bullish…
Where is support after 1060? Thanks
George, thanks for the link you send around earlier. Passed it to a couple of people who don’t understand why some mortgages can wreck the whole thing.
If you got into SSO when the 5 minute verified, the 15 minute is nearing its 9MA as resistance. But the stochastic on the 15 minute is positive.
So, 1 minute may cycle down here a bit.
eli
i also joined BPT…good work being done there
Wish they`d do alittle more hand holding…I`m
new
See, although the lower time frames are in control, they are affected by the higher time frame support and resistance.
Cramer urging everyone to get out of stocks, fear everywhere, market in a waterfall decline. IMO a good probability scenario would be a poor close with SPY move well below 100, panicky bearish newscasts again tonight, selling carryover into Tuesday morning and then at least a tradeable bottom.
BBT 1 minute looks like a slinky going UP stairs.
You bet I got some of it.
The volume on the SPY went over 200M shares in less than 2 hours today, huge! Will most likely exceed any of last weeks daily volumes, either up or down. Not capitulation vol, but getting close.
Duke,
I think you mean a close below 1000. The guys on the tube tend to create panic for the everyday trader hence it might be a bit premature to say a bottom is in right now. It is looking more and more like the lows will be retested. A double bottom bounce would be much more convincing than a single touch.
SDS gaining support on the 15 minute 9MA.
There is the “classis” stochastic pattern I was describing. 1 minute bottomed out before 11:30 and so did the 5 minute. Both started going up together. Makes for a good move.
Now that Cramer is saying to get out of the market no matter what, maybe it’s time to be on the long side again.
Btw, what is Kass doing, the other contrarian indicator? 
Just listened to Cramer’s video posted by Jim earlier. His recommendation is that any money you need in the next 5 years.. take it out of the stock market this week.. like now.. regardless if you will take a big loss.
Wow.. haven’t seen him so doom and gloom for a while.
Cramer shouldn’t do that. I noticed his promo says “entertain”. I don’t know which drives me nutzier – his voice or buzzers. He has a lot of followers though.
My gal SSO needs to show me some luv soon or I’m going to have to drop ‘er.
Cramer has panic. I’m going long tomorrow if SPX stabilizes above 1,040.
This market won’t stabilize until MOS hits $20.
Yikes Dressguard,
I haven’t been watching the fertilizers at all. I see the punishment is continuing. Also, take a look at solars. They are being crushed!
BTW.. Does anyone have a price projection for RIMM?
My boss keeps on telling me he is going to go all in when it hits $50, but I think he is nuts!
Volume diminishing right now… maybe a sign that selling volume is letting up.. Could be a noon push. I might take a small position in SSO soon once thet tape turns.
@Charlie: “My boss keeps on telling me he is going to go all in when it hits $50, but I think he is nuts!”
Of course he is. Otherwise he wouldn’t be your boss.
Larry, if you do that use stops…
Lunch time could explain the vol decrease.
Advance declines on the NYSE : 3% to 97% decliners. Hard to see any sustainable bounce with that fundamental
SDS working on a double top 15 minute.
George
Ya out of the SSO for now? Maybe a dbl bottom coming up?
Hey Dressguard,
I still want to have a job and can’t afford my Boss to be sulking around the office cause he lost his life savings on RIMM so I’m doing everything I can to make him not do it
I’d rather him hate me later!
Hey Eli,
I’m watching the same thing.. but for it to be a bullish sign.. I want to see the low of the day broken first and then volume buying to validate that it is a double bottom.
The turn higher right now is on light volume.. looks like the flag continues to be drawn IMO.
Eli;
I sold half on the break of the 5 minute stochastic. If 5 minute MACD goes negative, I’ll sell the other half.
Those that hold up well during this carnage may be good ones to buy during an uptrend. BBT, ICE, are two.
Eli;
I haven’t been idle. I have been in SDS during this time scalping. So, I’m always covered. I just had too much SSO, thought I’d lighten up since it takes the same amount to scalp.
George, the worst performance bounce the most – exceptions prove the rule.
replace performers with performance – sorry doing too much at the same time
If SDS clears that 15 minute double top, then I’ll get out of the SSO position and add to my SDS position.
If not, I’ll close my SDS and add to the SSO.
Didn’t form an exact double bottom, but the SSO is starting to trend higher now.
Charlie;
Are you watching ICE?
Yes Teeder Todder Time. Play the 1 minute stochastic for great scalps.
Hey George,
I actually haven’t, but will start now. It is showing a lot of strength today!
starting to average into CEF
SSO 5 minute MACD hanging on by a frog hair.
George or anyone out there..
can someone point me to some info regarding ICE and what it reflects?
Thanks!
does IB supply charts that can do George style trading?
Charlie;
Yes, it is up 3 bucks or so from the low and had a great, lazy 1 minute move up for a couple of bucks. Not violent, either.
Nice.
Dang! ICE moves like a scalded dog