Friday, October 24, 2008

Cardinal Moons

I heard this mentioned on CNBC. I thought I had referenced it here, but I could not find the post. I think that I posted it on RM. But you can check it out here.


Glenn_in_MA said...

Hi you capitulated I see! That's I know the trick to get the discounted RM subscription rate and at the same time get the satisfaction of making the call to cancel!! Unfortunately, I have to wait until next May.

Sometimes, though not too often, I find that JJC pens an article that is constructive (i.e., that I couldn't agree with more). This is one of them:

Needless to say, I look at today as a lost opportunity.

nice said...

Let's review:

US market down near 10% last 4 days..

Nikkei gunning for a new 20 year low

Everyone still calling a bottom

Blogs are mostly talking about buying stocks into a declining market.

Mutual Fund advisors telling everyone to hold during the past 3000 point decline ("you never know when it will go back up and you may miss out" mantra)

Ken Fisher who's been bullish from the peak now admits he was wrong.

Gold bugs being decimated.

Insiders (who are supposedly smart money) bought at the top and averaged down - and averaged down - and averaged down....

-->I guess everyone wants to be right rather than make money??



The whole world (especially Japan) was long - so quite simply - if the whole world was already long and they decide to sell.... well???

I guess this is to be expected after a near 25 years of Bull markets.

So now there are only sellers.

The resulf of this selling is:
A 'rush' back into the USD and Yen - as all the money comes back 'home' (to the detriment of other currencies).

Was this a plan to save the US dollar?

The Fed's can't save the USD, the bond market, the stock market and the derivative market.

National interest says 'Save the US dollar' - otherwise there is no 'Nation'

Hence all market activity lately can be interpreted and traded as : trade 'whatever makes the USD go up' or at least not go down.



The main players in the stock market the past 5 years were Hedge Funds - who leveraged the money lent to them by banks ..
But Banks are desparate for money now - so loans pulled, margin called .. causes selling - causes others to incur losses - which begets more losses - and more selling... and so on and so on and so on.

Back in early Sep - All the technical analysts were saying buy after the 28% decline - but what followed has been a rare 'waterfall decline' AFTER the market having already been down 28% - very rare

When something out of the ordinary happens - respect it - STEP ASIDE

Psychology has been odd:
Almost all Newletter writers, I have followed for a long time - failed to predict any of this.

Even those that did predict it (like Bill Cara) turned bullish at exactly the wrong time (just before the waterfall).

Bulls having bought from the top have remained stubornly bullish.

One by one long term bears are turning bullish.



If Wall Street got it wrong - and the insiders got it wrong - and the smart money got it wrong -and the newsletter writers got it wrong - and all the blog wizards got it wrong - what can one conclude?

Is there a conclusion that one can draw, based upon the failure of nearly everyone to have correctly predicted what was to transpire this Sep/Oct?

Perhaps it is this:
When everyone is wrong - the resulting market movement will be far larger than most people expect - hence GET OUT OF THE WAY


It'll be 'nice' when OCT is over.

Hope everyone is 'keeping safe' and still avoiding leverage...

Good weekend to ya all....


Leisa said...

Glenn---Cramer is too little too late! You're good to read him. I only get pissed off. I did go back and look at some of the stuff that he wrote back in August and so...pitiful. His radio show was so good; then ego took over, and he became a circus barker.

Nice: The inflationistas (gold bugs and peak oilers) have been brutally treated by this market. I closed out my AIT puts (NOV) on a double. Thin trade, wide spreads. I'm sure I left money on the table. I have two more positions and a little DUG. I also have some SSO and UPW. Overall, decent enough exposure for either a downdraft or short covering rally.

I'm of the opinion that it makes sense to understand currency movements and what happens when 'money comes home'. I find all of this frightening at best. I'm grateful that I fathomed a small bit of it. The wealth destruction that I fear will not be easily repaired is tragic.

It really does come down to every man/woman for his/herself. The guidance from the financial community (except for a few) has been abysmal and reminds me that the financial services community as a whole is larcenous.