FAIL! Fought 1000, cannot break and closed significantly below 1000. At this point downward risk is greater than the upside reward. I closed the whole position out, taking a loss.
What Paulson said triggered huge dumping across the board on all financials and high flying techs after he was done. A very rare event. We've seen some panic yesterday, but today the very last 1/2 hr is real panic. Last week, many fund managers who have not seen 87 style crash hesitated to sell at market to unload stocks to raise cash so far because there is no bid there - and that they cannot unload without taking bigger hits. At this point, they are finally forced to unload. The real bottoming process has just started. Edit: To those who are eager to pick bottom but inexperienced - be prepared with proper money management, with the correct size for your account to take on such position. Before you know it, it can swing 100-150 pts ES within the day. Margin requirement may change even during the day. And worse yet, computer failures almost always happens on these kind of days. Good luck to all!
i still think we will bottom in oct, but the question is how low will it go before that happens. With 1000 broken, it's just too uncertain to do anything but intraday with tight stop. I am going to look for some delta neutral plays to short the vega/volatility instead.
if u look at the daily chart going back 20 years.. u will see that the 960 zone has some support to it.. next level would be 770.. 770 x 2 = 1540 almost a 50% fib off the highs. The market is significantly weighted short given the fundamental perspective on the global economic environment. sharp rallies of 200 to 150 points in the spooz would be common given the volatility and positional weightings of funds. 960-1160 range bound if the lows hold. I remember a few posts back I remarked that the VIX fractal was indicating very higher levels, and 30 year bonds would breach 4%. The actual pain inflicted is something desired behind the scenes, since inflation is a much worse monster to governments then deflation. With deflation, governments can print as much debt as they want since other asset classes pose too much risk and a fixed rate of return is desired by money pools. 'Conservatization' of the american public where savings are valued more then debt is what is being engineered. As money supplies spike globally, the most frugal domestic populations will see their currency gain in value. If you look at who was gaining in the inflationary evironment, it was our competitors on the global scene. Something had to be done to abate the transfer of wealth that was going on. Guns and weapons and spheres of influence are much more important then money ultimately.
The real issue is WHAT ARE THE FAIR VALUES OF STOCKS? In the final analysis, this determines the value of the indices. I don't doubt the markets will overshoot on the downside but the markets will resturn to fair value. In this volatile, emotional, and excitable environment there will be wide variations in values but eventually there will be consensus. I believe we are at, or near, fair value. Or, even below. Of course, time will tell.
its suicidal to play positional short plays at the lows of the ATR, to make a note, everytime I went long today, I made bank. That in itself is telling you significant support has been engineered.
heres a weekly chart, notice how the price has a potential to wedge out on the weekly.. if it doesn't wedge out, it implies a test of 770, and breach, where we oscillate in 500-770 zone for a decade or more.
i'm not pickin a bottom but ,spec, didn't you have a rule of thumb about so many down days in a row,statistically a bounce was at high odds?
bounces happen when the environment is conducive, keep an eye on 'stress' measures in the system, such as the boob tube libor rates. the system is soo broken that I think we see 550-770 trading range, money that makes money controls the market, so far the money that has been made has been on the short side. those money pools will seek to technically break the system at 960 to spill us down to 770, so that the deflationary decade range bound trade is realized. It guarantees sub 4% yields on the 30 year. That decade long period, trade flows will diminish, and usd/jpy will break 100 and stay sub 100 .. mortgage rates will be so low that, the housing market will eventually resurrect itself.