Fasten Seatbelts: End of the Beginning

[Glenn Black]

Has the crisis passed yet? Is it safe to come out now? Here is one more datapoint:

Return of Stock Bulls Signals Time to Sell: Technical Analysis
http://www.bloomberg.com/apps/news?p...B6M&refer=home Based on survey results of individual investor's sentiments

Stochastic analysis says major drop is imminent sometime around April 9th to 15th.

Long wave theory says drop starts again now.

Bear rally is over. Over the cliff we go.

Good-bye cruel world...

[GRG55]

Re: Fasten Seatbelts: End of the Beginning

Has the crisis passed yet? Is it safe to come out now? Here is one more datapoint:

Return of Stock Bulls Signals Time to Sell: Technical Analysis
http://www.bloomberg.com/apps/news?p...B6M&refer=home Based on survey results of individual investor's sentiments

Stochastic analysis says major drop is imminent sometime around April 9th to 15th.

Long wave theory says drop starts again now.

Bear rally is over. Over the cliff we go.

Good-bye cruel world...

Just what the market needs to fool the most people most of the time...a wall of worry to climb...

The banks want to get out from under TARP, the yield curve is steep, the earnings will look better, and this is their chance to do another round of capital raising - something the Treasury & Fed would dearly love to support. It would seem in "everyone's" interest [everyone being those that count in Washington and on Wall Street] to keep the euphoria over "the bottom is in" going long enough to accomplish this.

The first bounce of the ball is always the biggest. The rally is more likely to end when J6P is fearful about missing out, and then jumps in, not when he's still just plain fearful.

[vanvaley1]

Re: Fasten Seatbelts: End of the Beginning

The month of May would be better. The NFL draft will be over then.

How can folks predict days like that? Reading entails of the poor unfortunates that happen to get caught? Math models? Give me a math model that's gonna tell me I and the rest of humanity is gonna be pissed off enough to pull all the money out of the banks and bury it in the backyard. How bout Dec. 21, 2012? Why not? A bunch of dead Mayan priest probably have better insights than most live economists and soothsayers.

I'll take a bet on those days. Anybody want a side wager?

[Guest]

Re: Fasten Seatbelts: End of the Beginning

Glenn - There is indeed a very big turn window right in the next two weeks, but I'm betting it is not the end of this complex bear market rally. I'll make a different call than you - this will be just another sharp correction in a complex rally move, which has at least a couple more months to run to the upside. Then we get the second "big barf", but by then the DOW should be at or above 9K so the climb off the recent bear market lows in early March will have providetd those who bought at the November or March lows a nice cushion of gains to act as a shock absorber for the next big leg down. Yes of course, in the next big barf move down, those recent gains will likely be wiped out, but is that a strategic or a tactical insight for what comes thereafter? Market's second "big barf" may exceed the former low for a brief while, but IMO 6800 or maybe 6500 on the DOW is all you permabears are ever gonna squeeze out of it, on the downside. That may contain a hint about what may well happen thereafter, BTW. We'll see soon enough.

Think of EJ's bouncing ball analogy. Golf ball drops from a high place, and executes a series of bounces.

Has the crisis passed yet? Is it safe to come out now? Here is one more datapoint:

Return of Stock Bulls Signals Time to Sell: Technical Analysis
http://www.bloomberg.com/apps/news?p...B6M&refer=home Based on survey results of individual investor's sentiments

Stochastic analysis says major drop is imminent sometime around April 9th to 15th.

Long wave theory says drop starts again now.

Bear rally is over. Over the cliff we go.

Good-bye cruel world...

[ThePythonicCow]

Re: Fasten Seatbelts: End of the Beginning

Think of EJ's bouncing ball analogy. Golf ball drops from a high place, and executes a series of bounces.

Each bounce is smaller. Lower highs, flat bottom. Each time the ball hits the bottom, a force not in place until then suddenly comes into play, causing a V shaped bounce. Each lower top fades out.

Is that what you had in mind with your reference to EJ's bouncing ball?

This sounds like the worlds largest triangle or wedge pattern to me.

Step 1 might be at year 2000, Step 2 at year 2002, Step 3 at year 2007, Step 4 just passed, likely another bounce or three before she pops up, big time. The above image has a symmetrical triangle; I couldn't find an image quickly (other than EJ's ball image) of a flat-bottomed triangle, with V shaped bottoms and rolling over tops. Dollar denominated assets (stocks, gold, real estate) to Infinity and Beyond! (Buzz Lightyear) when it breaks out. In other words, FIRE created currency fries :eek:.

[The above is neither an endorsement nor a dissent -- just a description of what I took from your timely reminder to consider EJ's bouncing ball.]

[thousandmilemargin]

Re: Fasten Seatbelts: End of the Beginning

IMO 6800 or maybe 6500 on the DOW is all you permabears are ever gonna squeeze out of it, on the downside.

Could be. It depends on when the inflationary expectations kick in. I think this will be prompted by the expectation of massive money printing, so we need to see the Fed bring out a few more trillion before this happens. To to print additional trillions, they need an excuse. Such as dramatically worsening economic conditions.

Since the social mood has to get a whole lot worse - bad enough to justify massive monetarization - I would expect each leg down in the market to go lower, until one of the downlegs provokes Fed action extreme enough to shift the market into inflationary expectations.

But you could be right. Maybe the market will retest the 6700 low early in Q4 based on horrid employment figures, and the Fed will jump in with trillions to head off the anticipated plunge, and that will be all she wrote.

Personally, if was to trying to engineer a recovery, I'd wait till the Dow broke down to near 5000, tell my pals at GS to load up on options, then jump in with $5 trillion. Wouldn't be anyone short after that.

[Supercilious]

Re: Fasten Seatbelts: End of the Beginning

but IMO 6800 or maybe 6500 on the DOW is all you permabears are ever gonna squeeze out of it, on the downside. That may contain a hint about what may well happen thereafter, BTW. We'll see soon enough.

I think you are right here Luke, although honestly I wouldn't be very surprised to see a dip below 6000 .

Personally, if was to trying to engineer a recovery, I'd wait till the Dow broke down to near 5000, tell my pals at GS to load up on options, then jump in with $5 trillion. Wouldn't be anyone short after that.

Ha ha ha! Correct!

[c1ue]

Re: Fasten Seatbelts: End of the Beginning

We'll see if the line in the sand holds

I've been saying all along - as has iTulip/EJ - that the true low will come only when the realization strikes that the government cannot fix the problem this time via printing.

The wall of worry going up is no different than the steps of hope going down...

[jk]

Re: Fasten Seatbelts: End of the Beginning

We'll see if the line in the sand holds

I've been saying all along - as has iTulip/EJ - that the true low will come only when the realization strikes that the government cannot fix the problem this time via printing.

The wall of worry going up is no different than the steps of hope going down...

please. it's "up a wall of worry," but "down a slope of hope." let's keep our cliches straight. no steps.;)

[LargoWinch]

Re: Fasten Seatbelts: End of the Beginning

please. it's "up a wall of worry," but "down a slope of hope." let's keep our cliches straight. no steps.;)

Perhaps there will be a time to short at the peak of the first bounce?

I will leave that one for others to do; I need to sleep at night.

[Glenn Black]

Re: Fasten Seatbelts: End of the Beginning

... The rally is more likely to end when J6P is fearful about missing out, and then jumps in, not when he's still just plain fearful.

I agree with all you say, including the above part captioned as one possible scenario, but I offer an alternative view of the world to the last part captioned above.

J6P (Joe Six Pack) is still scared, no doubt. Is J6P the ones with all the money parked in Money Markets and Treasuries right now? Whoever they are, Wall St. is doing their best to suck them back into the market.

These wary investors hope the fix is in for all his worries. Government is going to do what they're going to do, with or without his agreement. He hopes, but does not believe. So he sits back and waits, rather than losing the last little bit he has.

The Wall Street promoters have done an excellent job hyping this as the far side of the bottom, but they're running out of steam and convincing proof that the worst is over.

Wall Street's "Little Engine That Could" almost does, but the dead weight of FIRE is too much, it goes slower and slower, stops, then starts the slide back down the hill.

The bear rally is over, and ever so slowly, excruciatingly slowly, we slide to Dow 1000 or 500.

Comments on my theory?

[Sharky]

Re: Fasten Seatbelts: End of the Beginning

Perhaps there will be a time to short at the peak of the first bounce?

I will leave that one for others to do; I need to sleep at night.

Buying puts is another way to play it.

[vanvaley1]

Re: Fasten Seatbelts: End of the Beginning

I agree with all you say, including the above part captioned as one possible scenario, but I offer an alternative view of the world to the last part captioned above.

J6P (Joe Six Pack) is still scared, no doubt. Is J6P the ones with all the money parked in Money Markets and Treasuries right now? Whoever they are, Wall St. is doing their best to suck them back into the market.

These wary investors hope the fix is in for all his worries. Government is going to do what they're going to do, with or without his agreement. He hopes, but does not believe. So he sits back and waits, rather than losing the last little bit he has.

The Wall Street promoters have done an excellent job hyping this as the far side of the bottom, but they're running out of steam and convincing proof that the worst is over.

Wall Street's "Little Engine That Could" almost does, but the dead weight of FIRE is too much, it goes slower and slower, stops, then starts the slide back down the hill.

The bear rally is over, and ever so slowly, excruciatingly slowly, we slide to Dow 1000 or 500.

Comments on my theory?

Who knows. The banking industry has the full support of the Fed/Treasury, Congress, and the prez...in deeds...if not words. With the unlimited access to the taxpayers the banksters can gamble to their heart's delight. They stared Congress in the eyes and congress pissed its pants.

A major gambling mistake, a new war, some domestic untranquility, a disasterous international setback (Pakistan falls to the Taliban/fundamentalist), continued malaise of the economy, etc. could jump it below 6,000. But lord help us all if it even gets close to 1000. Doesn't that mean the whole system has collapsed? If adjusted for inflation...isn't the market about 4000 or so?

[Starving Steve]

Re: Fasten Seatbelts: End of the Beginning

I think the stock market is in a bear market rally but that this rally will go on well into summer--- rather than the "sell in May and go-away," thingy.

I think the second drop or second barf begins when inflation is going like crazy, the economy is barely-steady, and Bernanke is predictably slow about withdrawing liquidity. That crisis of confidence should be coming-up this summer.

I don't think oil stox would drop, but they could. A harder prediction is GE-- which has so far barely even recovered from its $8.50 low. GE is now in a dead-cat bounce--- or not even that.

[skyson]

Re: Fasten Seatbelts: End of the Beginning

How bout Dec. 21, 2012?

i can tell ya, when that day is here, money is the least of you worries. better get drunk then has sex all day long....