Thursday, November 13, 2008

Market Close

As you can see from the charts, I unleashed my proprietary algorithms and was able to trigger an orgy of buying! Some our billing today as a successful retest of the lows---the fullness of time. And perhaps the fullness of the moon has contributed to such mischief!

But the market will always surprise the most number of people! There was a treasury auction and that was not terribly successful. Perhaps the bubble in bonds is conflating a bit, and money is moving into a a very oversold market.

At any rate, these moves appear to trigger stop losses (for both the longs and the shorts), and the result is: mayhem.

I did a little "Custer" trade. WCG, a stock that I've been watching, had a major meltdown. I almost bought it at $19 or so. Well, I thought that it was a real bargain an 11.12, and when it went down to six and change I thought....well, left unsaid! But it recovered, and my position was small. I'm still holding.


nice said...

Well the bear market behavior continues:
Sharp fast rallies out of nowhere -
Rallies on Monday
Selling on Tues&Wed
Short covering Thurs aft or Fri

And a lot of B.S moves up when some Fedhead is speaking.

Lots of 'hope'
Best to trade what is happening - not what one 'hopes'

Unfortunately markets don't move up on hope.

For the bulls, no follow through - VIX did not make a new low today either.

Another papa bear ( buying in
So one by one the dips are bought.


On the plus side: it is the middle of the month - and liquidation could slow as the Hedge Funds already know how much cash they need for redemptions.

Also options week is coming..
Do we have the usual play again - ie: UP?
(Another bear market manipulative phenomenon is where we only have contrived rallies at either the end of month or on options week - rather than 'Real' buying.)

Also to the bull case is that the USD is looking a little wobbly (though it did not help today)


Based on cycles - I see the DOW going to 5000 by 2010

There should be a good rally between Dec 15th and the summer of next year.

Unfortunately so far all the trading cycles have been able to muster up are consolidations rather than rallies - followed by a move lower.

However I am more confident now - given the growing pessimism and the fact that so much of what is happening now is getting out into the open.

The Fed has injected 2-3 trillion into the market and we are down 40-50%. Without the injection we would have probably been down 70-85% (ie: akin to 1929)...

Given this it seems probable (and probably profitable) to play the coming cycle low Dec 15th - for a rally into next summer.
(and it will be a rally that no one will believe in - which is the kind of stuff rallies are made of)

good weekend all


Leisa said...

I suspect that you are correct. I was listening to Tim Wood a couple of weekends ago, and he was expecting a retracement (50-75%) of the Dow from 1974 - 2007.

Messy all the way around--And the average investor gets screwed.