A Strange Feeling Pt 2

This is a normal correction. Normal corrections are characterized by lots of fear, put/call ratios through the roof, volatility jumps, and everyone running around thinking its 1987 all over again, etc. Now thats a correction.

An abnormal correction is one in which there is no fear and people believe its just another dip buying opportunity. In 2000, we all kept hearing to buy the dips and everyone was buying calls not puts.

I have placed up all the charts I can possibly put up. This correction is similiar to the ones in 2005 and 2006 with only a few twists. Everyone is buying puts once again, volatility is at the same levels, the a/d line had meandered before the big dip, etc.

In fact, look at the a/d line chart I have posted up. There is a retreat of exactly 14 on each summer correction. There is a double bottom on each summer correction. There is a jump in the vix right up to 20 or so. There is a jump in the put/call ratio to the same levels.

Of course, your concerns are justified, but there were big problems in 2005 and 2006 just as there are big problems in 2007. In 2006, the North Korean President was yelling on television that they have a nuclear bomb.

You should only fear when there is no fear like in 2000.

I see a double bottom ahead and then an advance.
 
Michael you know no one worships at your dark throne more than me, don't think i haven't figured that moniker out! The roll of hedge funds here is really interesting they are so many 70/30 startups out there meaning 30% of all their portfolios are now short all the time that props up our market. Equally the roll of ETF's I think must be studded here to you can go against the market easily and with two times leverage = more support are we in an era of no more big corrections?> I think so. But what of crashes?

I'm taking this violent affair as a shot across my bow all along I have been steadfast that I don't buy into the sub prime spreading argument for panic or that housing will single handedly drag us into recession. But lets remember that come Sept when we start adding up the COST of this war in both lives and dollars... A giant malaise is going to descend upon us and if this " rolling " credit situation really hits then & corporate bonds hard and people make sells in equities to cover other losses if all of this strikes just as a large attack goes off in IRAQ against our troops.... I'm seeing the possibilities for a down 20% sort of day unfortunately. Add to that the strange habit of the floor computers tacking on an additional hundred points to the downside when it wants to and we have an explosive stocktail on our hands.

This was MORE than a correction especially in small cap you just don't dive 7% in a week and not have it mean something bigger...
 
Well, I think we are going to sell down now to 1454 and its not going to feel good on the second dump. If the strange feeling comes true, then it will sell down to 1387 without blinking an eye. If the strange feeling is not to be then the mighty index will stop at 1454 and bounce bounce bounce.
 
Quote from wee man:

Stoned guy'

Can you please elaborate on the 'Jay Leno boned my wifey' story please?
More...

Ay Geez! NOT MY WIFE! That snarky sub prime pimp in Miami with the Giant yacht. He had Jay preform for his wife at a party for probably half a million and when the jokes obviously weren't very funny Jay had to resort to using his chin in a vibrating manner. Mavis was not amused.
 
There is one thing about the small caps. You have several different indexes of small-caps. The IWN bounced off of the 200 day moving average while the IWO went right through it. The growth 2000 is the place to be.

In March of 2000, the value 2000 was the place to be where as the growth 2000 was a giant sell.

History does repeat itself (but with a twist) and this time the growth plays will be the place to be.
 
Quote from stonedinvestor:

Ay Geez! NOT MY WIFE! That snarky sub prime pimp in Miami with the Giant yacht. He had Jay preform for his wife at a party for probably half a million and when the jokes obviously weren't very funny Jay had to resort to using his chin in a vibrating manner. Mavis was not amused.
More...

Yes, but how do you know this for fact?

Tell the whole story and not some gossip the is directed at someone you dislike. Lets here it all!
 
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