10962.54: Lowest Dow Close Since July 2006
Well, that was interesting.
Today had something for everyone -- or perhaps nothing for anyone is more accurate?
• Volatility returned in force (Finally!) today, with the VIX climbing over 30.
• Fannie (FNM) and Freddie (FRE) fell more than 25% each, as the bailout plan makes it clear that shareholders are not going to be rewarded for showing such bad judgment as to own this crap. They closed at $7.07 and $5.26 respectively -- possibly on the way to zero.
So, what happens next? Where does this market take us on its wild ride?
What say ye?
~~~
Dow
Nasdaq
SPX
Tuesday, July 15, 2008 | 09:00 PM | Permalink
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Wouldn't agree. It looked to me like another failed rally attempt and if it isn't an old adage on Wall St. then it should be that failed rallies are the mother's milk of bear markets.
Posted by: fred | Jul 15, 2008 9:20:27 PM
the bailout plan makes it clear that shareholders are not going to be rewarded for showing such bad judgement as to own this crap.
Paging Tom Sawyer's Fence !!!!
Posted by: Douglas Watts | Jul 15, 2008 9:21:53 PM
I think Barry smells a sharp rally - be careful out there...!!
Today rocked: DUG, TSO and USO puts. But it's been a tough trade to get started - this is all in the timing - bear market success means being short the right stock or sector at the right time. It's much harder than anyone imagines.
Who knows what tomorrow will bring? More panic by the energy longs, I hope !!! A nice big build in inventories and a bit of strength in the $ might just send them scuttling to an increasingly narrow exit.... we haven't seen a good commodity panic in a while, eh??
Posted by: leftback | Jul 15, 2008 9:33:32 PM
The gov't got a free shot when it saved some equity for Bear Stern's shareholders. If it does it again, this time with the GSEs, there may be rioting in the streets.
Posted by: johnnyvee | Jul 15, 2008 9:37:45 PM
"this is all in the timing - bear market success means being short the right stock or sector at the right time. It's much harder than anyone imagines."
Trust you me leftback, I know, and I don't need to imagine, because in 2008 I had puts for all these stupid financials, FNM, BAC, JPM, LEH, BSC (this one was in late 2007) and I never make significant, if any, money on them. Always bought early, always sold early, even though I kept some for weeks...It pisses me of seeing FNM for the last few days, because only a few weeks ago I had them..
Then again, I am also grateful that at least I was on the right side of the market and didn't suffer huge losses.. I just have to accept that options are probably not for me, I should stick to my "fundamental story" theme through etfs and select-stocks.
Kudos to those who get the timing right, I sure am not one of those.
Posted by: Mich(^IXIC1881) | Jul 15, 2008 9:45:57 PM
Has Jerry Springer been booked to MC tomorrow's duel with the House Republicans?
Last chance to grandstand before the fall elections.
Posted by: Chief Tomahawk | Jul 15, 2008 9:48:24 PM
Odds of a rally would be higher if intraday VIX gets to at least 35 and closing VIX at least 31.
Posted by: DL | Jul 15, 2008 9:49:52 PM
As a strict market technician, a cooky elliotician at that, I had been wondering what events would catalyze the big waves lower which the models were predicting. Since early March I was calling for a big countertrend rally into May with a subsequent huge collapse. I just couldn't see what the new "news" would be that would trigger the moves....
I have to be honest here. I had NO IDEA what kind of off balance sheet program the U.S. was running in Fannie and Freddie. I've been a commodity trader for a long time and I have some advanced degrees, not that they count for much. And, I had no idea about the magnitude of this socialized debacle.
I'm not a dummy. However, I feel stupid for missing this one.
The point is....if some of the people who actually read newspapers daily and trade markets regularly had no idea about this growing debacle in FNM/FRE, which now seems obvious in retrospect, how are the rest of the Americans going to feel about the fact that they've ALL contributed to a huge socialized program that induced people to buy homes?
Things have become much clearer to me in the last few weeks about the extent of the socialistic programs that run through this country. We make fun of the French for being "a bunch of Socialists." C'mon. This is sickening. At least they're practicing a truer form of Socialism
We'll see some urban unrest in the next few years.
- AT
Posted by: Andy Tabbo | Jul 15, 2008 9:57:46 PM
I say look at TropicalBear here :
http://tropicalbear.over-blog.com/article-21244986.html
And DB analysts here :
http://ftalphaville.ft.com/blog/2008/07/15/14504/a-trillion-dollar-mean-reversion/
And MemyselfandI here :
http://lacrisepourlesnuls.blogspot.com/
And Meagain here (just for the fun of it):
http://www.lacrisepourlesnuls.com/
Conclusion : gimme just one of the heads of RBS, WM, C, WB, or LEH this week and I'm going long goddam recession!
Posted by: michange | Jul 15, 2008 9:57:56 PM
Very simple technicals here...
We'll probably see 1172 (50% retrace of entire 'bull move'), before a decent counter trend rally. The subsequent 10%-15% rally in stocks will be the last gift given to short sellers....
- AT
Posted by: Andy Tabbo | Jul 15, 2008 10:03:01 PM
capitulation chatter hear we come. Esp if the commodities/oil fall while counter-sectors don't offset
Posted by: gregh | Jul 15, 2008 10:13:18 PM
michange,
good information...err, well I am really assuming they're, since I don't belong to the 0.01% of the TBP population that speaks French
Posted by: Mich(^IXIC1881) | Jul 15, 2008 10:13:30 PM
My vote is a couple hundred more down on the DJ before the rally. VIX did jump during BB's testimony, but fell back to 28.5
Posted by: Mike in NOLa | Jul 15, 2008 10:19:18 PM
I expect Dow 9999 by election day.
Posted by: Paul Griffith | Jul 15, 2008 10:22:17 PM
At Dow 10578 Bush will have had zero change since his inauguration (less the usual caveats of inflation, dividends, and the sheer joy of investing.)
Posted by: VennData | Jul 15, 2008 10:33:25 PM
How do we create a bull market? Make sure the supply of stock is less than the demand. So get ready for many of the financial stocks to undergo reverse splits. Better yet, bankrupt them and then all the new convertible debt holders will convert to new common with a new cusip and bam, let the pumps begin. Where have we seen this game before? The airlines. Standard operating procedure. The writing is on the wall if you read between the lines. What did Paulson say? Bankrupt the failing banks. Spoken like a true Investment Banker.....or just a guy who knows how the market really works.
Posted by: marc priest | Jul 15, 2008 10:35:44 PM
The rally starts this week or early next. Question is whether it lasts more than a few days. Where will the good news come from to sustain it?
Posted by: Larry | Jul 15, 2008 10:39:14 PM
How do FRE and FNM get bailed out and the shareholder's get $0 without a bankruptcy? Anybody...
Posted by: Rich Shinnick | Jul 15, 2008 10:54:57 PM
Paul Kedrosky posted a comment that we are now down 7 straight weeks and asked if we cared to guess when the other 2 occaissions were when it went to 8. After some looking it appears it was Sept - Oct 1929 right before the '29 Crash and again in Sept - Oct '87 right before the '87 crash.
Can anyone confirm??
Posted by: Scott | Jul 15, 2008 11:06:02 PM
Damn it! I really hate being so pessimistic about the market and economy. I know when so many people think that way, it's generally a great time to buy. However, this time I think it's different. We're screwed, and it's going to be worse than most of us imagined.
Selling stocks short at this stage, is like kicking a tiger ... a dead one. In fact, I actually feel sorry for people that speak bullish on the market.
Posted by: Donny | Jul 15, 2008 11:10:40 PM
Few oddities in theses markets (European),lack of volume,lack of volatility,the workforce is consistent ie every morning since one month equities markets are down 1 Pct on no volume,and April May have recorded steady inflows of money to be deployed in US mutual funds.
Equities markets downfall have been well broadcasted to produce an all in aseptised Bear market, good enough to scare the genuine stocks holders and leave some room for the brillant institutional investors.
It is a a tragic
When are supervision bodies going to fulfill their mandates?
Posted by: Scafarelo | Jul 15, 2008 11:18:58 PM
US markets are priced above their intrinsic value because investors don't know how much capital the federal government is going to pump in. If the feds can hold the market up for the time required to digest bad mortgages and redistribute the resources of non-viable concerns, the coming expansion will lift the market's value and carry its price back up. That's a big "If"!
Posted by: Tom Starke | Jul 15, 2008 11:40:55 PM
It's always different. The choices are the same the reasons are never the same.
This time the answers lie with energy and information. Energy and information are everything.
The worlds population has doubled since the last energy crisis. Information is now highly democratic. Anyone who wants it can get it. Anyone anywhere.
America used to have all the money. Not any more. America has used up all its easy energy.
Find the point where the Dow Jones diverged from its historic uptrend, extend that line.
I'm picking Dow Jones still about 9000 in 2011
Posted by: Simon | Jul 15, 2008 11:42:11 PM
http://online.wsj.com/article/SB121614248005255151.html?
Apparently the markets are in this mess because of the short sellers. How ridiculous is that? So much for a laissez-faire system.
Posted by: OmegaShogun | Jul 15, 2008 11:49:08 PM
11700, then we retest.
Your Site Stats Spiked,
and it's been Very Manic over here.
Posted by: Eric Davis | Jul 15, 2008 11:56:27 PM
