The Panic is Over!
That’s the good news. Now the bad news: the Depression has begun. The explosion on Capital Hill today was the political version of Dick Fuld’s suicide bombing of Wall Street a couple weeks ago. Confidence in both our financial system and political system has been lost. And in case you are wondering, none of this is “healthy” – this is a total disaster. Some traders are looking for a giant rally after today’s panic selling. Not me. I’m sticking a fork in America.
McCain Knows He’s Toast
John McCain spoke briefly after the market closed. He sounded like he was delivering a eulogy at a funeral – and he was – his own. I wonder how many decades the Republican Party, a.k.a. The Depression Party, will be consigned to opposition status in Washington?
It’s Time for Congress to Abdicate
It’s pretty obvious that the USA’s experiment with democracy has been a failure. As Congress’s last act before abdicating, they should hire a management team from Singapore to take over. It is no longer acceptable for the world’s largest economy to be managed by rubes.
America is Stupid
Stop and think about what just happened. Ben Bernanke is an acclaimed scholar who has distinguished himself by doing groundbreaking work on the causes of the Great Depression. And here in this new Depression, the American people have told him to pound sand!
Hank Paulson is no scholar, but he is a top practitioner, and is the perfect compliment for the egghead scholar. Even if you don’t like Ben and Hank, you have to admit that you couldn’t find a team with better resumes for this job. But now they are pounding sand. Well, I’m sure that the masses will come up with a better solution…
Stomach Turning
Watching my country commit suicide has interfered with my concentration. But now that I am cheering the rubes onto their new Depression, I am back to enjoying life and should be posting more comments.
Watch the comments for updates throughout the day.
SDS has big support ~71 area.
Ha! That 71 area is also the SDS 30 minute 36MA support.
K – very carefully. I’m still learning it and it needs to be watched w/MACD, SlowSto, whatever else you use. Tricked me yesterday into a slight loosing trade on SDS as it’s quick and early. That said I treat it as an indicator of flows and momentum – rather like cash flow or Chaiken’s but more sensitive.
George – good lord, I bet he does ! 1 min swing trading. How many trades do you do in a day anyway ? Sounds like 20-30 ? And do you always use a “straddle” (offsetting pair trade) like that ? Interesting.
Ironically, that is not the resistance area for SSO – it still has a long way to go on the 30 minute to hit 36MA.
I think the secret to skewed charts is just to go by the one that actually has the event next. So, I will judge it by the SDS 36MA.
Sounds like a plan.
Nice FASB rally going here. I got in just before it began using George Method. One day, I will be a scalping ninja just like George. Hey George, if we were younger, we could start a hedge fund and tear it up!
Expect a 1 minute cycle here.
Matt;
hehe. I REALLY wish I had started this in my 20s. I wouldn’t be here right now – LOL.
ROC test coming up. It just tipped over on 5 and 15 min. Would suggest SSO goes with it with a lag.
Dblwyo,
I know a guy who does over a thousand scalps a day. He’s a mathematical genius, and aced the math part of the SAT. Got a perfect score. That’s what you’re up against!
Matt
Every time frame will cycle. Key is recognizing that and take advantage like SDS right now.
The 1 minute seems miniscule, but it is what makes the trends and upper time frames move.
Who knows, this could be the beginning of a major reversal. If not, get some coins and get out. If it is, stay in a enjoy the ride.
Thing is, We don’t know and we don’t care. We just ride the waves.
i got 660
close enough.
Freewheeler,
I completely agree that excessive credit was the culprit, and until house prices fall below their trend lines (as comapred to GDP, income levels, and rental prices), we are in trouble.
There are two ways to bring house prices in line: let prices drop, or let incomes and GDP rise (inflation). The most fair method is to let prices drop, but then you can have panics and other problems. Inflation is a cushion in the system. Unfortunately, inflation is a hidden transfer of buying power from the poor to the rich, since the poor can’t afford to invest in assets (houses, stocks) that appreciate, while still having to pay more for goods.
Anything we do to prop prices will just pushes the problem further out, and moves the losses from the banks and homeowners to the general population (inflation).
In case you missed the news, there is talk of changing a FASB accounting rule dealing with “marking to market.” That’s what triggered this move up.
anybody like a long term gamble? HTOG in 31k at 0.0042 LOL
ICE ain’t what it used to be. Back in the day, it would be up $18 by now.
It’s just not the chip off the ol’ block it used to be. I need to find another bronco to ride.
Bless it’s heart, ICE got offended and moved up within .75 of my target.
Anybosy notice that XLV (healthcare) and XRT(retail) are not participating in this rally at all? They are both negative. XLE (energy) is the sector leader, followed by XLF (which is pricing in legislation). This doesn’t seem to be a sustainable rally under these conditions.
Double bottom on SDS 1 minute…
@Paul: Are you making any money in the stock market or are you just posting:?:
YES!!!!
ICE – $10.00 for a moment.
K – thanks, ICE and I needed it.
anybody going long or short overnight? WTF down 777 up 777
just kidding
looks like the market doesn;t need a bailout. it self corrects
That SDS 36MA support is and often will create ranging which leads to whipsaws. Get rid of the noise by going to a higher time frame. If the 1 minute is too busy, go to 5 minute, etc.
It will smooth the direction.
K; lol…
Look at the daily SPX. That green candle looks smallish next to the red candle.
we’re losing 50 pts tomorro on spx and gaining 50 the next day
Thanks, Matt. That is really ironic. It’s not like Mark-to-Fantasy actually changes the value of the assets, although I did read someone’s (Dblwyo?) link on how unreasonable some assets are priced at.
Still, more transparency, not less is what is needed.
On the other hand, Mark-to-Fantasy solves the liquidity issue, since it makes banks solvent by the new accounting standards. So we will see in a year or two’s time when housing stops dropping if solvency or liquidity was the bigger issue
Does anyone actually get it?
Our economy is doomed based on two simple principles:
1.) our assets are over-valued (i.e. a house that was valued at 400Kis worth only 200K)
2.) our debt service costs are greater than what our income can cover.
The Paulson plan addressed neither of those indisputable facts. All the plan did was to recap the banks – essentially giving them the payoff on mortgages that reflected the inflated/untrue valuation of housing. This would, of course, free up the credit markets, but who could actually borrow? the consumer who now owes 400K on a house that will be valued at 200K in the near future? the company that sees its inventory levels rise and demand slacken due to the debt-strapped consumer? Nope.
Also – just to show that this 700B would be similar to shredding money, losing it in a blackhole or, to quote Denninger – piss it into a tornado – Bernanke injected 630B into the markets BEFORE the vote even started. A lot of good that did…
FYI – look into the NY FED meeting on AIG – note that there was a non gov’t official involved in the discussions and they were from GS – THEY WERE THE ONLY ONE. Look into it and you’ll see Paulson’s true motivations.
also the volume today…anyone have any real stats? seems reallyyy low
Dressguard,
Making money today, but as I wrote, I was too long healthcare yesterday, so I’m still down about 2% the last two days.
questioning,
Here’s the issue: there are plenty of methods that the government can use to prop up asset prices. I agree that in the long run, they won’t work. What do you suggest an investor do?
If you stay out of the markets completely, inflation (caused by govenrment intervention) will reduce your buying power.
If you short the market long-term, you run the risk of the PPT screwing you over, or the market ignoring fundmentals, so by time you are proven right, your funds are gone.
Sorry to hear that. I just admire how you are trading and posting at the same time. Are you more a long-term speculator/investor. I normally don’t daytrade. Except today. But that was only because I wanted to get out. Gut feeling wasn’t too good after all. I hold my FXP babies just two days or so but would have hold longer. But yesterday they exploded and I sold them (prematurely).
unlike mccain who plays the blame game …
Obama calls on Americans to support rescue plan
http://news.yahoo.com/s/ap/20080930/ap_on_el_pr/obama
questionning,can you post a link to thatAIGmeeting? Thanks
The market is starting to look wedge-y to me. If I were long at the moment, I would be taking profits here.
I think I’ll clean out. Just scalp remainder of day.
I am proud of ICE today, still moving, too. Hope you all got some of that action.
i got none but it’s ok i don’t want to stay awake all night. so today i won;t even take an overnight trade.
I expect sellers to pour it on the last half hour, but you never know. I’m not sure how much fear there is. I guess not much since most of the population didn’t want the bailout.
Hey, my fault for relying on Congress for my investments.
I don’t daytrade, so that gives me more time to post. Also, I’d prefer holding my investments for a few weeks to 2-months, but there is so much unpredictable (intervention) volatility, that is getting risky. I’ve been holding for shorter and shorter periods. I’m defintely a beginner when it comes to daytrading.
SKF can;t seem to break MA am in at 105.9 screw it her we go!!!
5 min MA is 105.99 so i was betting on it to break. that’s all.
K;
Which chart are you watching? Time frame?
Okay
ok i i am estupido once more haha
not a prob hold it overnight and go bankrupt tomorrow.
Matt – wedgy ? Tech term
Take your point, had similar conclusion but based on indicators + looked up an up-channel getting broken just eye-balling it. You eye and education is better than mine.
p.s. – 1K/day. Wow and ouch. Not my game. Ambition is to get in, ride and trend and get out. Preferably on a multi-month/multi-week basis. In this chaos no feasible so daily.
George – climate of opinion is evolving rapidly. All the ideologues won Mon but all the silent majorities who though the bill would pass are speaking up in the last 24 hrs going WTF – get your damm acts together or we’ll brand you (that’s a euphemism and you need to know what else happens during branding season)
All the corp execs are speaking up, David Brooks just wrote one of his angrier WTF columns and Barry stood up and said we damm well have to pass this as ugly as it is. Did a better job explaining than anybody else so far. Keeps it up and elections over. That’s an assessment btw not a positional statement of preference before the electronic letter bombs arrive.
Sentiment will change therefore IMHO. Should have heard the callers-in on CSpan yesterday… they were breaking down.
The market is moving up on another FASB news story saying that an accounting rule change could come as early as today.
am watching 1, 5, 10, 15
shoot – right after I sold my position the market jumped up. Next ppt/sec nonsense I suppose.
Use the 1 minute with confirmation of the 5, or 5 and 15.
Any time below the 36MA, don’t expect a big move = fighting the trend. Can’t expect the 15 minute to confirm a 5 minute under that condition unless the 15 minute candle clears the 9 MA.
at least you made profit. hehe i can;t seem to pass one day without losing my brain and making stupid moves
the best thing would be to get out now.. but i somehow smell another dead fish tomorrow.
It has been down all day on the 15 minute but has made some good 1-5 minute moves. The 15 minute is like a big boat, takes a while to turn around.
Do you have a stop?
it’s not a big position so no stop on this one. just 10 shares..
so the market jumped because the SEC gives companies more leeway in guessing the value of illequid assets. Rally fueled by denial. Could they please start implementing rules which will bring transparency and not obfuscation.
is anyone going to establish a short position today? Huge rally today means.. no bailout required? or that it is a done deal?
oh tyey wull do the “bailout” don;t know when. they still have to save their asses and throw more on us. these fake rallies are great for us though
Yerk –
Hope this link works… 5th paragraph in….
http://www.bloomberg.com/apps/news?pid=20601203&sid=aTzTYtlNHSG8
As an investor – since fundamentals are no longer believable – I guess you have to go with the charts. 1160 here is no-man’s land… Make no mistake we are in a bear market – and will be for some time – like Matt said “Bear Market Growls Until January 2010″. COF looks juicy – might take a bite on some way OTM puts – Mar 09… Especially since both AXP and DSC have stated negative views, coupled with the fact that both AXP and DSC have higher standards on their apps.
As a citizen, I have to do what I feel is right – trying to stop Paulson from robbing us blind to help his buddies. Do you realize that the 5 positions on the supervisory board that was proposed on yesterday’s revised bill would have consisted of the 1.) Fed Chairman, 2.) SEC chariman, 3.) the Housing Secretary, the 4.) head of the Federal Home Finance Agency and – believe it or not – 5.) Paulson himself (Tres Sec.) – WHAT A JOKE. Do you think that these individuals want the true housing prices to establish themselves in the marketplace? Maybe – but only after all the banks are made whole…
1 min SKF looking ok. might hold overnight. we shall see in 5 mins
Charlie;
I’m flat at the end today. I’m clueless what will happen. If I had to guess, the SSO uptrend will continue until the 30 minute hits the 36MA. The 60 minute is moving up showing strength, but it is still in a down trend.
If I had to stick with something over night, it would be SSO.
hahaahh i love it how the second i say something it plunges!
Man, BBT just popped $2.00 to the upside.
ok so I’m long ovrnight on SKF
SKF had a popup, too. Go figure.
I know what that was, employee shares. It won’t hold.
This is a beautiful quote from that article…
“Paulson said Sept. 16 that he talked with lawmakers about AIG and on Sept. 17 endorsed the AIG financing package. The Fed appointed a member of Goldman’s board, Edward Liddy, to run AIG, replacing Robert Willumstad. Liddy resigned Sept. 26 from Goldman’s board.”
Cronyism at its best…
http://www.bloomberg.com/apps/news?pid=20601203&sid=aTzTYtlNHSG8
WOW MOMA!!! GOOG 200 today LOW lol and now back to 400. someone made some money there
4 million shares of google dunked in 3 mins and all the volume today was 12 million total. WOW what an unloading
scottrade shows Today’s low at $0.01 lol
Hate I missed GOOG. For sure. And I thought ICE was something.
I sold my SSO at 49.5 today.
Broke even on my purchase yesterday.
The next big drop will not occur until AFTER the bailout bill is passed IMHO.
Hopefully it will be better than the original.
damn so i guess sometimes we should put buy orders at 100% lower than the stock price at the end of the day and hope it gets filled?
my core is in TIP, USAGX(gdx)
SKF is a swing trade i am in denial
over …thinking should trade out
& start doing small daytrades until
i develope discipline
thanks to all
Thanks for the link… The second sentence below goes right in the face of those who proclaim that prices are too low, the market does not work and only govt can identify the right price. The stuff is overvalued and has to be written down. If overpaid by the govt the taxpayer pays to protect the bad and to hurt the good banks.
“S&P estimated that AIG had market-value losses of more than $37 billion as of Sept. 15. While it is possible that those CDOs are undervalued, S&P said “it is unlikely that any gains will be recorded before late 2009 or 2010.”
George – once we were past the gap up at the open it looked like the markets moved in an up-channel until the end of the day and closed above it and weigh away from the bottom. Perhaps so Big Mo going into tomorrow. IRX doubled – people are very complacent about a) bill approval and b) results. We get thru this mess and there’s still a real recession waiting in the wings. But I’ll take a) anyway ’cause the alternatives are really ugly.
PS – inflation won’t be an issue. Here’s a great link that will explain it all.
http://benbittrolff.blogspot.com/2008/09/inflation-deflation-money-velocity-and.html
“Forget about inflation. There has never been in the history of the world an inflationary run while land prices were declining. The amount of debt being destroyed as the monster of all debt bubbles implodes will suck down all asset prices and just absolutely collapse the velocity of money.”
Banks know that deflation is in the cards – that’s why they’re screaming so loud for this to pass now. Imagine the revolt if they were to ask for this after housing prices fell another 10%…
I know Matt and others mentioned End of Quarter and EoM markups. This rally seemed a bit overdone without a bill passed of yet. I’m
Yerk,
Not that I like defending banks, but I think that S&P quote is understood. The CDOs are priced in anticipation of certain loss levels. The banks’ default estimates are lower than the market’s. This is why the banks are claiming a liquidity problem: they say that over time. the true value of CDOs will be higher than the current market rates.
If the US paid market-value rates on all the securities, then the plan would be GREAT for taxpayers. However, Paulson and Bernanke want to pay higher than market rates, but how much higher is the question.
questioning,
Inflation is an interesting term – because everybody (I’m including myself) talks about it without defining it. Even during Japan’s well-known deflation, prices increased on many goods.
Let’s observe:
1) Gas prices have been rising (will never drop below $3/gal)
2) Grocery food has been rising
3) Houses have been dropping
4) Restaurant prices have been dropping
5) Electronics have been falling
6) Clothing has been falling
7) Rents have been rising
I think all of these trends will continue, which hurts low-income workers the most.
RE: StockConsultant.com. Forgot to caution that this site also has “bullish/bearish” analysis that I’ve found to be about 50% correct, so I don’t use that aspect; however, it has tremendous resources that quickly gives you relevant news, support/resistant levels, etc., all in one place.
Paul F,
no need to defend banks
I still think s&p has a valid argument (omg, me defending s&p). The reason that there is no market is that house prices are still dropping like a stone and banks cannot afford to write down the credit and derivative exposure on their books. Some have jumped in way to early and a part of the hedge fund problem stems from this mess.
The 630 bln liquity last week infusion should have helped all these problems (if we were to have a liquidity problem) – the 700 bln bailout over years will not save the day.
I get it questioning.
Hi George Nubert,
you here again
I thought you must have had enough after Matt slapped you left and right. Remember: “Not only are you a shithead, but you are a stupid shithead.” 
thinking QID , SDS overnit
hehehehe
Nasdaq probing possibly “erroneous” Google trades
http://www.reuters.com/article/businessNews/idUSTRE48T8C220080930?feedType=RSS&feedName=businessNews
hi guys, congrats to whoever made $ today, i’m still on the sidelines for now, i admire whoever is handling the volatility…the mkt seems like a nutty freak show..
Dblwyo: Re: up channel.
I like seeing those charts where there are channels, flags, and things like that. They seem simple to follow.
I have two problems with them. First, I don’t know where to begin drawing the lines from point-to-point; secondly, I haven’t found out how to use those on real-time charts and which packages facilitate that function.
I’m taking some online tutorials right now that includes those. I’m in a “stochastic rut” right now, I suppose because it works for me. Nothing wrong with that, but I would like to get a broader scope with advanced tools.
George – it’s magic ! And Matt is the master for sure. That said I just started drawing (my timeframe worked better) using Powerpoint on clips. However Stockcharts lets you annotate a chart and with the topend membership will apparently keep them current as well.
Been doing it for a couple of years now and, seriously, the eye begins to see things. I like to draw mine at the open/close not the H/L of candlesticks because to me that’s the central tendency. But I’ve used line charts for longer timeframes as well.
I could upload today’s and let you take a look if you like.
i’d like to see it
buy QID , if market moves or gaps up ……
skf enough exposure overnit
I was sooo close to buying some SPY calls this morning but just couldn’t pull the trigger. Hell, VIX in the upper 30′s last week was preventing me from going short. This markets a bit to crazy right now.
questioning: I agree that the bailout doesn’t address the bigger picture, but we have come incredibly close to a complete systematic failure twice in the last two weeks. Do we really want to keep calling Wall Street’s bluff? The general public acts as if this isn’t their problem when in fact it is entirely their problem (though they may have played a minor role in causing it).
The public is too ignorant of the fact that lending (in moderation, of course) keeps the economy running. They all want to hang these banks out to dry but they assume there will be no consequences. We are arguing about who started the fire while we’re still in the burning house. Is it worth risking a depression just so we can say that our principles are intact?
I’ve looked at Karl Denniger’s plan briefly and it came off as incredibly unrealistic. He must think his readers are fools if he actually believes his plan would cost the taxpayer “nothing”. Direct cost and indirect cost appear to be two different things to him.
1. He wants the banks to mark to market. Don’t we all.
2. He wants CDS traded on a regulated OTC exchange. If they can’t get their act together, the contracts are void.
3. He want’s a limit on leverage of 12:1.
If it’s only 5% of the banks that have issues, I could see this working….What if they’re ALL insolvent? What if they all have major exposure to CDS’s? How do you instantly de-lever a bank from 30:1 to 12:1?
His plan is a great read of what we should have done or what we should do when we get out of this mess. I would support it fully as future regulation, but it appears suicidal right now. Sorta like self-amputation by shotgun.
Sure, half of us are unemployed, but it cost the other half “nothing.”
K/George: http://llinlithgow.com/bizzX/MktCharts/MktQ308/SP30Sept08.jpg
FWIW.
Towlie for a tour of the sausage factory: http://tinyurl.com/539ajb
Either we fix this or it fixes us (the same way we used to fix the yearlings into steers).
Everybody’s lost sight of the recent economic news but the 2nd most important economic stat, personal consumption, went into the tank. GDP is likely to be negative this quarter as a result…welcome to the tipping point.
WASHINGTON – In a surprise move to resurrect President Bush’s $700 billion Wall Street rescue plan, Senate leaders slated a vote on the measure for Wednesday — but added a tax cut plan already rejected by the House.
http://news.yahoo.com/s/ap/20081001/ap_on_bi_ge/financial_meltdown
Well my SKF might be dead but if the bill fails again…then BUEHAHAHAHAA