-300k Cometh
Bloomberg’s survey of economists shows that expectations for Friday’s jobs report is for 320,000 jobs lost in November.
If you look at the historical data, you will see that the worst report of the last recession was -330k in October of 2001. The stock market bottomed one full year later!
So, even if this is as bad as it gets, there is a good chance that we will see another year of bear-market action. And of course it can get worse. We topped -400k in May 1980.
no doubt the jobs number will be atrocious but will the mkt continue to go higher regardless of the news. i’m trying to figure out how much steam is left in this bear rally.
i’m not trying to argue but i think the steam should be gone by monday
Meredith Whitney, Nov. 30, 2008 (link courtesy of Mohan at Stocktock).
http://www.ft.com/cms/s/0/11344d06-befb-11dd-ae63-0000779fd18c.html?nclick_check=1
Oslo down 4% since Friday morning.
I think it’s time get oil established below $50 this week. Why should any buyers pay more than $20 now?
40% of S&P500 Q3 earnings were from energy companies.
http://blogs.moneycentral.msn.com/topstocks/archive/2008/11/18/energy-sector-propping-up-s-amp-p-500.aspx
2. This is supposedly the start of the strong season for oil, but when I take a look at XLE 50-day MA it doesn’t look very strong. Charlie & Co, what you think?
3. Oil down 4.5% already today.
Larry, good catch! Link this to Q4 08 earnings estimates for energy companies down 10%.
source: http://tickersense.typepad.com/ticker_sense/2008/11/2008-eps-estimates-nobody-knows.html
I’ll buy long-term oil calls as soon I see a bottom. Too many alt energy investments and exploration activities are halted.
On the topic of unemployment figures: Citi has signaled it’s firing 50,000 people — that’s a single employer. If GM is reorganized in a half-rational manner in a bankruptcy, that’s hundreds of thousands. It’s unlikely this month’s numbers are the worst we’ll see.
On oil: in the short term, a lower price will pull the market lower, even though cheaper energy is a huge plus for most of the economy. If we really got back to $20 oil, even I would start believing in a recovery.
Recovery of the oil price?
Kailash, didn’t you mention you are in LA? Yesterday I read an article some weeks old about the harbor getting clogged with import cars and recycling paper not needed in China for paperboards anymore. Are there any signs of improvement? So far I have not found any site with current information on global harbor utilization.
Baltic Dry -2.1% to 700. Down 94% from ATH in May.
Just another 50% to go on the downside, unless CB’s starts to buy coal.
Yerk, the Long Beach Harbor in LA is the major entry point for Asian imports into the US. I haven’t tracked the news on this, but last I heard as you say they were having to store imported cars in warehouses on the harbor, as dealers didn’t want them. The LA economy will be taking a big hit as activity slows.
Did anyone catch El-Erian from PIMCO on TV. Wow, this guy sincerely believes that policymakers can remote-control 6 billion people and their daily commercial actions.
Dollar up Last trade 87.077 Change +0.460 (+0.59%)
Futures down S&P 500 DEC08 871.90 B -2340
Nikkei -1.35%, DAX -3%
lookly look.
http://www.forexfactory.com/calendar.php
I see no green yet.
Of all the buffoons that you see on CNBC, I would rate El-Erian at #1. Don’t even bother trying to read his book.
Morning guys… nice day for us that are holding SRS… Hey K.. you must be making a killing today since you’re so heavily short
Hey Larry.. I’ll do some study on the XLE chart and let you know what I think. On a very short term basis.. it’s rising on very very low volume. It almost touched it’s 50-day moving average, but then retreated on Friday. Given market was up and XLE was indecisive, it might be a sign of uncertainty that a rally can be maintained in this thing.
Personal view and non-technical is that it is in big trouble.
And look at the open..
wedge break? I think so?
http://i35.tinypic.com/15h05xf.png
charlie why’d you make me look? am up $200 but i better not jinx myself
Hi-five to tape-painting!
support at 86.10 and 83.73 right now. and of course 85.00 is a psychological roundup. we will fight till the manufacturing survey comes out
JG and Matt – way to go with your shorts from last week, you held thru a grim rally, now it looks like you will be rewarded.
i like this barrons headline
After The Holiday Party, The Inevitable Hangover
first 30 mins look like big selling volume to me.
before i head to school i gotta say helicopter ben speaks at 1:45PM. will he change the mood or will he have a hangover as well we shall see.
how low do you guys think that the SPX can go to today? 840? BTW.. that was a super call there Matt
Matt, congratulations on a great call last week.
Exit TZA @ $80.63 — I was sooo short I need to take something off the table, and 15% in half an hour of trading is unusual. If we have a nice bounce I’ll reenter — this is my small liquid account where I’m more risk averse.
US 10y Treasury CDS spread up to 68 from 60 on Friday is Ben’s hangover.
Looks like they should come with something better than AAA to differentiate secure investments from the current AAA stuff.
Thanks everybody.
i gotta say vix is playing within my zig zag pattern inside a triangle. nicee.
Brent Crude went below 50 for a few minutes. Nymex down more than 6% today and so is XLE. Time for a break before panic starts or will they manage to keep it above 50?
Randall: They’re not alone, but group support is important. It was very lonely for a few days. Let’s see how this thing turns out.
Matt.. is that a bear flag we see forming on most of the major indexes in your opinion?
I am closing my small short.
We should set a new low (oil and financials were leading the market last week, duh, so it should break hard) but this market is nuts.
I wish I had more courage.
Baltic Dry at its lowest level since 1987.
anyone thinks we can close the gap today?
Hey K, don’t you think the chart will follow the same as the last wedge? It went from 100 to 95 the 5th of november and then 95 to 90 on the 6th then bounced up on the 7th which was wednesday. Just curious, the hourly macd and sto suggest it may follow this same action
rally may have topped. VIX points to some sort of triangle. If SPX makes a wave (4) triangle, this pullback is going to be nasty
Well done Matt. I am having a record day. This maybe black Monday for me, I already recouped 60% of all my losses from this year!
Nicely done newbie!
i just solf FAZ 3x finansials cause i already have skf. just trying to limit a bit.
30% short 70% cash. in the next hr or 2 things should turn but as 1-2pm hits i dont think is a bad bet i’m making
Well done Newbie and K.
Charlie,
Yes, it looks like a lazy bear flag where it hasn’t had the strength to retrace upward hardly at all.
Matt
Matt can you clarify what a bear flag is?
I have not taken any profits so I should not count my chickens yet.
Matt, thanks — this really was a perfect setup. It’s hard to catch the peaks even in this choppy market, and the moves are brutal.
DAX down 5.5% in sympathy.
It’s starting to look like we might hit 840 already today. I still think we have excellent chances of making new lows in this round.
Oslo down 6.8% in sympathy. Brent Crude moving down towards 50.0 again. Let’s see if it holds.
Great trading all around guys.. I especially am impressed that though so many chartists were saying the charts have higher to go.. the talking heads on TV saying holiday shopping was ‘great’ and ‘better than expected’ etc.. Matt.. you stuck with your simple points… Market is overbought.. rising wedge, time to go down..
Thanks Matt.. lets see how far down we can go.
It’s been a good day for me (so far). Holding over the weekend was tough, but it has been fruitful. Thanks Matt and thanks to everyone for all of your input.
Scott,
A bear flag is chart pattern. Read this, and then imagine the pattern turned upside down.
Matt
Way to go Missy. You get good returns by staying at this blog.
Kailash, rough day at Oslo Bourse: -7.8%
Exxon holding XLE of the cliff-diving.
30 short
70 cash/gold
This is some serious action in oil.
Brent Crude -9.5%
Nymex -7%
XLE -6.5%
Exxon -3.5%
Larry, it won’t hurt the Norwegians to become poorer (I speak as one)!
I’m still 93% short, and in a 2x Rydex, so technically 186% short, but this is in accounts where I can survive very large losses.
We might get a pause in the fall here, draw in some hopeful bargain hunters, even stay here all day tomorrow and form a shoulder. There was in my mind no doubt we’d go down after last week, but it’s much more open how far, and that uncertainty can be strategically exploited by the big funds.
How about that? On Tuesday everyone saying we’re headed up again?
And then we’ll plunge.
Crude under $50. At this level, it is actually quite unprofitable for companies such as suncor or syncrude (located up in Canada) to extract oil out of the tar sands. Some more speculative exploration operations in the artic etc.. are probably quite in the red now. Those methods of drilling for oil only work and viable when oil is above $60.
Yes Charlie. Unfortunately for them it is the buyer and not the seller that decides the price now. DOWN.
Having said that: There might be a limit to how much oil can fall in day
Another rough day for BKX
I believe there is.. the indecision by OPEC over the weekend was also bad news. I think that oil was rising as this is a seasonal time for higher consumption as some of us that live north need more gas to run our cars when we crank up the heat.
However, if people are hiding in their homes and not going out to shop, there isn’t much need for gas. Also, with less goods being shipped due to a weakening consumer market, those trucks can also stay off the roads.
On top of that.. the farmer’s almanac is predicting that it will be a mild winter this year so there will even be less snow plows on the road.. Gee.. even mother nature is against the price of oil it seems.
Funny headline on Marketwatch..
U.S. economy entered recession in December 2007: NBER
duh…
And no more oil used to build factories in China.
Looks like we may get an intra day bounce on SP now that we have come close to 840… looks like this week will be a downer..in a big way..oil i think has room to hit 45 and has string support at 40 or so.
JO
Markets approaching 840 on the SPX.. that might serve as support.
Ok, JO. I keep that support for oil in mind. Thanks.
lol.. JO.. posted before I refreshed
Volume is looking a bit light so far for SPY, QQQQ, IWM, and XLF. However, volume was also light the first Monday after Thanksgiving last year, so I would say that today’s volume is normal so far. If the selling continues through tomorrow, then I would want to see a pick-up in volume.
Also, we had the big gap down this morning. As well as being bearish in itself, it also obviates the need for volume to push prices down. Bids were pulled this morning, and then there was additional selling, so I’m not going to cover any shorts at this point.
Oil is an intriguing play because it has come down so much. The 40 figure is an area that a couple of technical methods appear to justify as ultimate support. EW calls for 40-45 because it is the bottom of the 4th wave correction that occured prior to to the record setting run in mid 07-mid 08. I am looking at adding some exposure if and when it comes to 45..but i would not be buying and holding oil as i think the major bounce coming after we hit the 40-45 range is only a bear market correction and not teh final low.
I have a few bucks on an intra day bounce so keeping my fingers crossed on 840 holding…seems like it is sticking for now..but i prefer to be out before helicopter ben speaks around 1:45PM..hanky and bernanke are reliable sell signals..lol. No big deal if i close out at small loss but gains are always better of course !
JO
seeing a nice little bounce off resistance
JO .. when a talking head talks on the tube, that is what we call the LB (Lizard Brain) SELL SELL SELL signal. It has so far not failed as none of these guys can say anything to inspire confidence in this market.
I agree Charlie, they have to continue to defend the bail outs. That means telling the public all over again how bad the economy is.
The fact the market has in almost all cases dropped hard when they speak tells me the market has no confidence in the Fed and Treasury leaders..if Ben or Hank were to resign, i think it is likley to contribute to a major rally on the day of and after..many on Main Street already know the economy is bad…these guys in charge just make things worse. SP looking sticky but it would not surprise me to see it dip below 840 to hit stops before coming up for a short but spikey bounce.
I don’t know about you guys, but I can’t think of many “rallies” that have -6% down days. In short since market open this morning.
dang, post got lost twice together with the internet connection. therefore brief and oilers read for yourself: http://www.energytribune.com/live_images/Bryce_1208.pdf
Price will go lower in a severe recession and volatility to the upside will be higher. We’ve seen decoupling from the cost base earlier this year and it was quite a spike.
Toyota’s actions show they are way ahead of the curve. Too bad for the competition.
I think you’re right towlie..i rely on a combo of fundamentals / technical indicators like MACD H / EMA /Force index and sentiment readings..i also reference EW and another method and almost all signs point to bear market continuation. Matt’s site and work has been good and so i like to follow it and he has been spot on. There is good support for this being the start of wave B down in the next 10-15 days before a final wave C up that will mark a powerful rally into the new year before we get real ugly again into Q1 and hit new lows…this day is yet more proof we are in a secular bear market.
JO
is the market going to rally in 25 mins when the helicopter speaks? It seems that way. I hope is a headfake for low lunchtime volume.
a 62% pullback on SPY is around the gap from the 21st and 24th. if so, this is the halfway mark. VIX triangle is about halfway to the upper barrier line today too.
1st Obama, 2nd Bernanke, 3rd Alfred E. Newman
4th
http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/recession
LOL i know charlie mentioned it earlier i think but wow really we finally are? =D
on the 60min chart SPY seems to keep bouncing off MA36. if it breaks below i would see 84 and after that well not even the devil himself knows now.
I got out at 1:39PM and took a pocket change in loss as mr helicopter started talking a few minutes after that and apparently Hank is also going to talk. They will say the same crap – we are in a recession, inflation risk is fading, deflation is a growing risk which is why they are now implmenting “quantitative” easing aka print like mad..gold doesn’t seem to be concerned because the amount of debt being paid down and or defaulted on is simply too massive compared to the printing currently going on..and velocity last i checked to trending downward..these clowns have no clue on how to deal with intense deflation…we may re-test november lows before dec 15 or so..i am not going to enter any more day trades for now..not really my style..more for fun. Anyone else have some thoughts on where a possible low comes in before another sucker rally?
The TNX just went over a cliff. Down 9% !
yet the MA36 in 60 min still acting as support. BREAK DAMN YOU
i think people coming back from lunch might now realize they are screwed. i see more selling than last hour. still weak volume as you pointed out matt
ok i think that’s taken out now just 84.00 psychological and strong support zone to go. still 8 mins for this hr to close but i think 36MA has …..ah crap nvm is recovering
FXP today is not bullish, TNX not, USO not, XLF no way, VIX not. Where will support come from? Sentiment is still bullish, if this changes, volume should come in.
Did Bernanke say anything that would cause the 10-year yield to plunge?
We’re right on the 38.2 Fib retracement of the recent up move.
Did Bernanke say anything that would cause the 10-year yield to plunge?
I’m not listening to him. But he must have. Never seen such a move before.
i dont know but i’m a weak schoolboy. sold all shorts except SDS
gains are gains. might miss the big moves but oh well not liking the low volume while going down.
Hi Matt
Yes he did. He said the Fed has started to print in order to buy agency bonds and may include T Bills with the goal of lowering yields even more and try to stimulate the economy. What nonsense, these Monetarist / Keynesian guys have it all wrong. So I am guessing the yield on the 10 year dropped a lot because the market is anticipating some major buying from the Fed…this will do little to help the economy..in fact, by dropping yields, the Fed is trying to drop the cost of its product – money and engaging in deflationary behaviour for now. Japan has been doing this quantitative easing for years and the Nikkei still hit multi decade lows..the economy will not get into a sustainable and healthy recovery until debt levels are brought down through pay down or default..large segments of the economy have no willingess or ability to carry more debt regardless of what the rates are…why do bloggers and private traders understand this yet these PHD economy types don’t ? If we had an Austrian at the helm, thing would be ugly right now but well on their way to flushing the system and allowing for a good recovery.
JO
10% short 90% cash. probably not the best way but that’s all the heat i want for the rest of the day. 30% was too much for my account size.
@Jo: This has been rumoured before. I think it’s the beginning of the end of America as we know it. But so what. Let’s make some money before we go to the funeral.
Bernanke: “I am a Depression Scholar.”
Is that why you were so worried about inflation when a million people were saying a huge deflation is coming?
Ok, gotcha Beanie Benny
Exited my SRS position myself. Nice gain today. Anticipating some volatility going into the close where I can hopefully buy my shares back at a cheaper price.
Thanks JO. I heard most of the speech, but I didn’t catch that part.
100% cash.
i have no doubt that SPY will plunge below 84.00 but like you charlie i want to see a little recovery so i can get in for tomorrow. maybe 5% at 3x is almost as 15%
sorry for spamming i see selling pressure increasing
i wont get greedy. am good for the day. whichever way it goes we’ll make $$ on
These markets look almost ready to dive off a cliff, but so far, the SPX is holding 840 quite well. One thing to note is that the more times the market tests this level, the more likely it will break through.
Charlie, it will
Just broke through 837. Probably headed to the 50% retracement point now.
volume is increasing further. and yes charlie i hope it breaks down even though am out. make that well deserved dough matt! 77 here we come
Now lets see if 840 acts as resistance on this bounce back up.
or better yet.. if the market even gets back up to 840.