Thursday, October 9, 2008

Feels Like Capitulation to Me

Not that it cannot get worse, just the I think we stop here for now...

18 comments:

Jughead said...

Can we call it capitulation without seeing what happens tomorrow? We are going to close near the lows of the day for the major indexes.

Jeff Pietsch CFA, Esq said...

Holy smack Batman, we'd better be "approximately" right. I'm now offically all in at about SPY $92. Got some staying power and willing to wait it out -- but MAN. Hey, gotta talk my book somewhere! Now for the closing cross...

Dag said...

So light on the volume today. I'm scared and are hurting..

Anonymous said...

if it makes you feel any better, i'm all in at $92 as well.

Sebi said...

Some pictures from the german exchange:
http://www.terminmarktwelt.de/cgi-bin/forum-bild.pl?ID=8354
http://www.terminmarktwelt.de/cgi-bin/forum-bild.pl?ID=8355
http://www.terminmarktwelt.de/cgi-bin/forum-bild.pl?ID=8359

Mikkel said...

Am I the only one that thinks maybe something leaked out about how the Lehman CDS thing will go tomorrow?

I mean the market would now need a 45% rally just to get back up to the 200 day MA!

I got about a third in with the notion that if we make it through the next couple weeks then we are setup for a historical rally, and if it don't...well money might be the least of our problems.

gaius marius said...

stop-loss orders, folks. put them in the system before you go home.

having broken under 9000, the next big support level for the dow could be 7400. that's 1200 points away, and we could conceivably get there in less than a week. this monster is tracking the 1929/1987 fractal pattern fairly well so far, which implies a bottom in the s&p of about 750 -- around the 2002 lows. that's another 18% lower.

Marc said...
This comment has been removed by the author.
Marc said...

I've heard the phrase "we're ready to bounce now" for the past couple weeks.

We will bounce when we do and by that time it will be too late to buy in.

I would remind everyone that when oil hit $150/bb, everyone said "it's different, the fundamentals support the price". I see oil is almost half that price now.

The longer term fundamentals more than support current prices for most stocks. ie. they are cheap.

bengt said...

Hey, I´m ready to bounce anyway...been for a while now.

And Marc what "long term fundamentals" are you talking about? The funda is gone only the mentals are left...

Anonymous said...

This is not capitulation.Why - There is still more supply than demand in this market. (lowry Reports)

You will see a rally and the shorts will cover but the longs will definitely sell into this market on any rise. We are getting close. I am looking for a retest of the 2003 low and crazy as it may sound a possible over shoot below. If I see a huge volume down day followed by a huge volume up day then it will be game time. Why take any chances. When this beast finally does hit bottom there will be plenty of evidence and time to make money. I will stay in touch.

Jeff Pietsch CFA, Esq said...

Anon, can't disagree as much as I'd like to.

Dave Stewart said...

In these times it might be best to take an extreme long term view of where the market has been and where it should be. This 1929-2008 chart on the Dow shows we are still overbought, especially if you look at the trendlines from 1985-1995 and extend it to present day, which indicates a Dow of 7000-7500 as the expected level. Funny how things average out over time.

Dave Stewart said...

Forgot the URL:

http://finance.yahoo.com/q/bc?s=%5EDJI&t=my&l=off&z=m&q=l&c

Anonymous said...

Well is getting worst now... future are trading way below 900

Vorlon said...

Many people think this feels like capitulation. On the internet forums that I frequent, I still see quite a number of "bargain-hunters". Not enough fear and despair... yet.

The best article I've found so far on real capitulation is by Mr Bob Hoye above.

http://www.321gold.com/editorials/hoye/hoye100808.html

I think a true capitulation will happen when the daily RSI-7 of SPX falls below 10.

Jeff Pietsch CFA, Esq said...

Something to think about: is this really the "contained event" we are used to that can be cured by a capitulative/fear-based washout? Institutions are using the stockmarket as their cash account for lack of lending.

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