Retest !
Dow is under 8,700 -- is this the expected retest of the prior lows?
The news is certainly as grim as ever:
Wachovia writes down $23.9. billion
Grim Earnings Weigh on Stocks
First Birthday for the Recession?
Kerkorian’s Ford Exit Sparks Fear of Failures at Big Three
California Home Sales Revive With Intense Pain
CDO Cuts Show $1 Trillion Corporate-Debt Bets Toxic
Mervyn King warns of Britain's 'long march' out of recession
I noticed that last night, there were many cogent arguments against the bull trade right here. Note that Mark Hulbert is also in the "No Capitulation" camp
Wednesday, October 22, 2008 | 10:15 AM | Permalink
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Pretty grim out there. I filled a bid this morning that would have been a joke on Leno's show not too long ago, and no I didnt buy stock in John McCain.
Posted by: catman | Oct 22, 2008 10:22:39 AM
BR -
I agree with your assessment of a re-test. If it breaks below recent support, where is your feeling of the next floor? I took a quick look the other day and my interpretation is that the next major support is the 2002 low. Should be a fun ride!
HCF
Posted by: HCF | Oct 22, 2008 10:24:50 AM
Retest for sure. But will it succeed? - that is the question. Liesman on CNBC right now talking about defaults and ongoing corporate bond weakness. Short JNK.
Posted by: leftback | Oct 22, 2008 10:27:06 AM
I was just thinking of the "Bullish Bears" thread of yesterday. There is no hurry to pick a bottom in this ongoing train wreck; even the shortest term traders must be having a devil of a time with this market.
Also recall Roubini on 101708:
"So beware of those who tell you that we reached a bottom for risky financial assets. The same optimists told you that we reached a bottom and the worst was behind us after the rescue of the creditors of Bear Stearns in March, after the announcement of the possible bailout of Fannie and Freddie in July, after the actual bailout of Fannie and Freddie in September, after the bailout of AIG in mid September, after the TARP legislation was presented, after the latest G7 and EU action. In each case the optimists argued that the latest crisis and rescue policy response was “THE CATHARTIC” event that signaled the bottom of the crisis and the recovery of markets. They were wrong literally at least six times in a row as the crisis- as I consistently predicted here over the last year – became worse and worse."
Posted by: Dan | Oct 22, 2008 10:32:49 AM
I've had one of my retirement accounts in cash since March of last year, finally sent the transfer paper work to my, err, "Global Wealth Management" firm, which like their peers have been not doing so will with most of my "wealth"...
Putting 1/5 in now, then dollar costing 1/5 starting Dec 1, monthly.
For the long run, seems like a good time to do this?
Posted by: wnsrfr | Oct 22, 2008 10:36:41 AM
Look, when Wal-Mart says that baby formula is now for the first time being sold by paycheck related spikes...
http://paul.kedrosky.com/archives/2008/10/21/walmart_scenes.html
Posted by: Bruce in Tennessee | Oct 22, 2008 10:37:52 AM
Your selection of headlines reminded me of something I've noticed lately: I would not want to be a writer/editor for the web-based news sources. With the market bouncing as it has been, the headlines on these sites are often jarringly out of sync with the live ticker numbers. Maybe they should just avoid all attempts at analysis (even "Stocks up" or "Stocks down") until after the market close each night.
Posted by: Ken | Oct 22, 2008 10:38:30 AM
Barry,
Do you have anything to post on the latest run the US Dollar Index? At this time right now, the EURUSD is at 1.29, down 4c since yesterday, and the dollar is on a rampage.
Dan
Posted by: Dan | Oct 22, 2008 10:41:43 AM
Hmmm....
I'd say a true retest would be closer to the 85 handle wouldnt it (91 handle on SPX)?
Dont get me wrong, I'm all about the retest, but I'd say that we came closer to a true retest on 10/16...
Today will have much greater significance for me, and for a bottom carve, if we can reverse and close higher after todays touch of the 8700 area.
This would further confirm the new shallow uptrend off of the 10/10 closing low.
Posted by: I-Man | Oct 22, 2008 10:42:34 AM
I was just reading the 'Headlines' @ bloomberg.com--thinking to myself, yep, looks like a great time to be getting Long, as in, hardly..
we have some major problems, hopefully, we can tamp them down, but, for sure, it'l be a lot of Work, and that takes Time..
Posted by: Mark E Hoffer | Oct 22, 2008 10:44:48 AM
Will we be introduced to new lows soon? I expect a successful retest with renewed capitulation and new lows by Friday 24th. Am not sure where the next support line would be once new lows set in! anyone?
Posted by: RGN | Oct 22, 2008 10:49:25 AM
The "stock markets turn up six months before fundamentals" meme is based on history, but doesn't make any sense if you think about it as looking into an unknown future.
What does make sense is one time a run up is attempted it works (a stopped clock sort of view.)
It is all random - one works, the other run ups don't - and is the same in reverse for retests of lows.
Posted by: VennData | Oct 22, 2008 10:54:56 AM
also, ya know, a lot of the dead-enders, the 'buy n' die'-crowd are still Longed out in their "Retirement" delusions, if we catch some 'new lows'(for the move), there will be much bailing to be seen..
non-linearity is, still, the new volatility.
v-o-l-A... thanks for the tip 'ol ...37
http://www.cmegroup.com/market-data/datamine-historical-data/market-reports/historical-volatility/corn-volatility.html
Posted by: Mark E Hoffer | Oct 22, 2008 10:56:39 AM
'long march on coals' .. hmm who said that. someone farming the comments here for ideas?
Posted by: Bob A | Oct 22, 2008 10:57:19 AM
Almost all companies have investments that will have to be significantly written down in 4Q. That should have a big impact on profits.
With commodities lower final good price can't be top dollar either because everyone knows how much the commodities went down.
S&P500 <750 is in order.
Posted by: John Borchers | Oct 22, 2008 11:02:43 AM
Barry,
I will go long when the word "defenestrate" comes back in vogue. Hasn't had much currency since the 1929-30 era.
Cheers,
Rod
Posted by: Rod Roth | Oct 22, 2008 11:10:54 AM
Barry,
Ya boy, Ben Stein, is bullish here..this man expects the government to rescue us ...and shrewd investment guru that he is..how can we keep from pulling the trigger?
http://finance.yahoo.com/expert/article/yourlife/115733
Of course, this is headlined "Expert Opinion"...I think he and Ken Fisher are going to give a seminar next week on how good it feels to be a permabull...
Want me to buy you a ducat's worth of tickets?
Posted by: Bruce in Tennessee | Oct 22, 2008 11:16:54 AM
Wachovia writes down $23.9. billion
"Wachovia’s deal to buy Golden West Financial was a textbook case of terrible timing: That much was already clear even before Wachovia reported a third-quarter loss of nearly of nearly $24 billion on Wednesday morning."
It wasn't bad timing. It was abysmal judgement. World Savings was institutionalized slime. Too effing bad.
Posted by: Bob A | Oct 22, 2008 11:17:42 AM
on s&p500 hourly chart you can see a continuation triangle forming , which is usually the last pattern you see before a low is put in. the triangle projects to a bottom in the 700-750 area.
let's see if it happens. not sure.
Posted by: Sam Jacob | Oct 22, 2008 11:17:47 AM
Anyone notice what Dr. Copper has been saying? Yikes!
Remember all those newsletters for the Gold Bugs, on how --right now-- your gold investment would be zooming?
That didn't work so good. Bizarre. I wonder how Oceanside Real Estate in Nicaragua is doing, too?
Posted by: wnsrfr | Oct 22, 2008 11:19:38 AM
It won't happen. The government will buy my stocks, my house, my car, my baseball cards and my toilet paper.
Posted by: sue | Oct 22, 2008 11:21:58 AM
Even the cheerleaders (The Treasury) sees our recovery as a year away..
http://www.cnbc.com/id/27316652
Retest? If the baby Paulsons say next Novemeber before we get out of this mess...WHY WOULD YOU WANT TO JUMP IN HERE WITH REAL MONEY?
Thank your lucky stars you've been paying attention and avoided most of the carnage..
..just wondering...
Posted by: Bruce in Tennessee | Oct 22, 2008 11:25:34 AM
My gold and silver is getting killed here...when is the world going to finally realize that there is no world currency worth anything???
Posted by: ConcernedCitizen | Oct 22, 2008 11:29:22 AM
Although we may (or may not) be near the bottom, I certainly can't see how anyone could be bullish. Given the % of GDP that was contributed by mortgage equity withdraws over the past year, where will demand come from now that home prices are not going up? Giving the banks money may help stabilize them, but I don't know who will be able to borrow it.
Posted by: Duke | Oct 22, 2008 11:32:09 AM
Bruce -
I'm glad you brought up the Ben Stein article. I saw it on Yahoo Finance yesterday and saw the headline "Why I’m Still Buying" and thought to myself: Because you're a hackanomics practicing, right wing shilling, douchebag!
At least I got a good chuckle out of that article =) I can't believe he's paid to be an "expert".
HCF
Posted by: HCF | Oct 22, 2008 11:36:01 AM
