Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.

J. P. Morgan

"Sell down to your sleeping point"

Saturday, April 5, 2008

Bottoms, recessions.

I know that I've said that, I'd be super suprised if we didn't confirm the Bear, with a 20% decline in the SPX... we were only 20 points off, and only 300 pts off it in the Dow.

Problem is .... That down trend ended. now we are finishing the uptrend "Relief rally", as I was pointing to we may still have a Macro Move down for the next 2 days... or so, then another bounce back up... which should top this move out.......

The bottom of most recessions are 4 months before the recession ends.... so if your thesis is that the bottom is then... that means the bottom is October-Jan.... if you believe in a year long recession.

Basicly from now till then we will trade around from this 10% haircut in the Dow, where we are now. to a 40% for a Deep Serious, Recession.

Let me just plant some alternative ideas, I don't believe in "Decoupling" but what I do believe is that the rest of the world, and the stregth created by Inflation, and by materials.... These things should keep a bid in the market for a while..

what I'm sugjesting.... as just an idea or something to watch for, is that from here to october, we could just have some nice 1 week sell offs of 5%, then 4% buy ups... and slowly decline over the next 7 months.

It's the decrease in volitility that puts this idea in my head.... maybe we sell off bank earnings week... then get a bounce.... but I realy think that the decrease in volitility is an indicator of things to come.

all of this goes out the window if we keep having Credit crunches.

There is a bear raid on Washington mutual..... you would think they would keep me in the loop as I buy a terrible stock to catch a bounce in the market.... since it is a big short seller bear conspiracy.

3 comments:

new comer said...

Morning,

Dow Futures are up by 80 points. Personnally i think the market is being over-bought however the sentiment is pretty good today.

Eric said...

Good morning,

The Futures are stumping me... They may be up to be sold. To get me on a conspiricy theory. But it sounds like the financials are poised to get a pop, that could take the market with it.

Seems to me the market has to pull back to generate any more up momentum.

Eric said...

I've said I'm expecting that top tick any time... the safe entry is to see a good "Lower low" then Lower High... and make an entry.

The volitility has eased... and it wouldn't be unpresedented to just sort of pause for a week or 2 and see how earnings are...

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