Wednesday, March 12, 2008

Reflections on a Superific Day

From the Wall Street Journal:

From Yahoo Finance:



I'm proud of myself that I'm not feeling 'left behind' in this rally. MarkM appears to have jump this galloping horse of a market mid-stride, and his comments have been spot on.

Maintaining perspective in all things is key. If one doesn't ride the loss down (which I've not--I've only been quaking that my money market accounts will all of a sudden be down 20% one day!), then missing out on a one-day missile launch is not a problem.

On another blog, a reader took the writer to task in not forecasting this move. Such reactions reflect either a poor understanding of the market or a mistaken belief that market pros have a crystal ball. We were certainly due for a rally--many were expecting one. When you are down 1000 point in 8 days or so,at some point in time, market physics requires there being some relief! In fact, I went back to Saturday's post. I think that I summarized it pretty well:

Regarding a multi-week rally. Oh to have a crystal ball! I'll hazard a
guess that (1) in the absence of bad news we can have a rally or at the
very least stabilize; (2) in the absence of bad news and coupled with
even modest GOOD news we could have a good rally; and (3) absent bad
news and coupled with some superific good news we will have a terrific
rally. I tried to think of examples of what 'modes good news' would be
v. 'superific good news' but I've not way to calibrate that. Perhaps
just absence of bad news and the market stabilizing in and of itself
would be modest good news. Anything beyond that would be 'superific.'
I think that we can agree that the highlighted phrase represented yesterday's action!

I think that GaryK noted some facts on other large moves on Fed news. He notes the dates of Fed action and the resulting moves:


08.16.07 Dow was 12500; it moved to 12900; and closed the next day at 13100
09.18.07 Dow +336; S&P +43
11.28.07 Dow +304 ; S&P +40
01.23.08 Dow +630
03.11.08 Dow +416

Other comments, Gary made:

"Day 1 of attempted 1000 over 8 days 5th month of bear market. No leadership. NO new leadership to lead the market. Oils/commodities had been topping got a jolt today. Looking for a rally in the 4th day--Friday--need big volume day with 1.5 - 2% and look to IBD for confirmation. If it is to be something of import you'll have plenty of time to get in.Nasdaq's biggest 10 days ever were in a bear market."
Friday, then, will be the follow through day that we'll be looking for. That will be the return of "real buyers" as opposed to "short covering buyers".


11 comments:

Anonymous said...

I am aboard but don't trust it. No deep loving relationship with this b*tch.

Where is the relief in the bond markets? Have you seen the yawns out of the overseas traders? TIGHT STOPS.

Leisa♠ said...

Tight stops indeed. I always have such a distrust of this market that I no longer "trust" my feelings about it. If it rallies, I'll distrust it. If it sinks, I'll think that I'm right.

I'm going to be patient and follow Gary K's good discipline of waiting for a follow through day. I really think that his show gives the best outlook on the market as well as dogs to avoid and ponies to ride. He also give good advice to just sit on ones hands!

Anonymous said...

This is nightmare action. A large pop up to 12300 then a slow fade. If this closes at 1310 on the SP500 or slightly below that will scare the bejeezus out of all the ST traders. Let's watch.

MarkM

Anonymous said...

That action was EXACTLY what the bulls did not want. Couldn't have written a worse script. REITS and financials faded hard into the close.Sheesh.

MarkM

Leisa♠ said...

I'm not quite sure what to make of it. It could be said that after such a strong run, some consolidation and pullback would be healthy. Tomorrow's action will be telling.

Leisa♠ said...

Oh,...and there's going to be some pressure for quarter end--so I would not be surprised to see some strength moving into EOM.

Anonymous said...

Maybe so. Just not the script I wanted to see. Better to sell off early then build from there. Get the retest of 1310 done and held and move on.

Anyway I sold the AM pop fully expecting a fade and bought the position back near the close. I didn't get the highs nor the lows though, but who does? So I have yesterday's gains booked and my position is not under water from today. I should not complain.

MarkM

Anonymous said...

Exactly so. I am up early. The futes are off 140 as I type. So today I give it all back at the open. That was my gut (and yesterday's action) and I didn't listen to it. Greed, Leisa.

MarkM

Anonymous said...

Out. A big zero for all my angst. Hope your readers enjoyed looking in on what a trader goes through.

Now let's see if they can rally it.

MarkM

Anonymous said...

So S&P ignites a massive short squeeze in the financials with their comments that "the worst is behind us". Right at 11:15am. Are you kidding me? Like they have credibility!

Anyway, it is what it is and I am NOT aboard.

MarkM

Leisa♠ said...

I agree with your point about S&P credibility. I think that whatever must be going on behind the scenes is very bad. Some speculation that the banks have the HF's over a barrel. Call the loan; get there Trip A paper and go to the Fed window.

Lots of blood in the water. I'm not sure what to make of it. I did buy a 100 share lot of URE.