I know i've been hogging things today, but I want to just give you one more post. I compute a "ratio" every night. It is usually quite acurate in predicting the next trading day(it's been wrong 2 days in the last 6 weeks). It's been negative this week (with the exception of thursday), but for monday I have one of the 5 most negative readings I have ever seen. Im hoping for green futs so I can short everything in sight. Also, if you have the ability, overlay 1987 with what we have now. The 87 crash occurred the day after tripple witch as well. History has a way of definately repeating. I just want to alert/warn people, be nimble tomorrow. Gut tells me that it's the day we really start something ugly. Finally, does anyone know the exact points on the dow (or is it sp) where they halt trading on the nyse (kinda like a limit down). I know that program trading is at 210 +/- 5 dow pts usually.
Armageddon
- Thread starter praetorian2
- Start date
I for one certainly won't be trading much of anything tomorrow, not so much because I'm worried about an out and out crash, but because everyone will be staying on the sidelines waiting for Greenspan on Tuesday. For that same reason, I tend to disagree that tomorrow would be a major move in either direction for the markets. Too many participants will also be sitting on the sidelines waiting for the Fed. But I do agree that over the near term (1 to 2 months) the threat is very real of a cataclysmic crash in the Dow and S&P.
I think that because so many are looking for this capitulation that we may NOT see it at all, or anytime soon, and that there are three options that may result of this.
1. Markets continue to steadily bleed, and once people can't take the pain anymore we DO see a catastrophic failure and it bounces economy in and out of recession for many years (regardless of "economic potential"). To an extent that the markets do not recover (Kind of like what has happened over the last year!) Mainly due to no confidence in large-scale investment.
2. Markets bleed and bounce around; talking heads call bottoms, some cave-in and bearishness runs ramped, but before you know it NAS is sitting at 3100+. Most don't even realize it is over until NAS is above 3300 for two months...(what I tend to believe, no definate blow off, at least nothing that hasn't happened in the last year. I might be willing to place a bet this tues. afternoon, or wed.)
3. Before you know it NAS is semi-stable and above 3100.
The only thing that scares me is option 1. I am not sure about the rest of you, but my trading accounts are smaller than my investment accounts. If you would had told me, at NAS 3300ish, that we would see NAS 1900ish I would have thought... NOPE.
BUT... I am not sure where I heard it, but someone said that if beaten down companies continue to trade like they are they will be at zero with in a year... I just can't see CSCO, INTC or even JNPR at zero in a year. I guess this view is the answer to all the questions; or is it.
1. Markets continue to steadily bleed, and once people can't take the pain anymore we DO see a catastrophic failure and it bounces economy in and out of recession for many years (regardless of "economic potential"). To an extent that the markets do not recover (Kind of like what has happened over the last year!) Mainly due to no confidence in large-scale investment.
2. Markets bleed and bounce around; talking heads call bottoms, some cave-in and bearishness runs ramped, but before you know it NAS is sitting at 3100+. Most don't even realize it is over until NAS is above 3300 for two months...(what I tend to believe, no definate blow off, at least nothing that hasn't happened in the last year. I might be willing to place a bet this tues. afternoon, or wed.)
3. Before you know it NAS is semi-stable and above 3100.
The only thing that scares me is option 1. I am not sure about the rest of you, but my trading accounts are smaller than my investment accounts. If you would had told me, at NAS 3300ish, that we would see NAS 1900ish I would have thought... NOPE.
BUT... I am not sure where I heard it, but someone said that if beaten down companies continue to trade like they are they will be at zero with in a year... I just can't see CSCO, INTC or even JNPR at zero in a year. I guess this view is the answer to all the questions; or is it.
I can't see those at 0 either. But I can realistically see csco at 9. The only thing keeping the market up honestly, is the hope for greenspan. And that will most likely lead to the final crash as there is little rally after his bp cut. I think a lot of people have been holding out and hoping to sell into his speech. The lack of interest could really exaggerate any action tomorrow, as liquidity will probably be nil. I intend to get short early tomorrow, and remain short, unless I decide to profit take. The ratio says that there is no chance of a rally. And it has been too hot lately to get something like this wrong. I think that the event of tripple witching has given something of an upside bias to the market in the past week, and we'll see the true market acting in the next few days.
As I said, history normally repeats, and the 87 crash was the day after tripple witching.
Im using this not as a trading call, but rather a warning, to be nimble on the long side in the next few days.
As I said, history normally repeats, and the 87 crash was the day after tripple witching.
Im using this not as a trading call, but rather a warning, to be nimble on the long side in the next few days.
mgregor,
I think what praetorian means is for the futures to be positive causing the market to gap up. After the gap up, it should provide a fairly good shorting opportunity. Then, the market should continue to sell off into the negative territory through the day.
If the futures are down at the start and the market gaps down, it would be more difficult to trade. You are expecting it to go down and it's already down.
Joe
I think what praetorian means is for the futures to be positive causing the market to gap up. After the gap up, it should provide a fairly good shorting opportunity. Then, the market should continue to sell off into the negative territory through the day.
If the futures are down at the start and the market gaps down, it would be more difficult to trade. You are expecting it to go down and it's already down.
Joe
Exactly jsmith. When I say green futs, im talking about at 8am. Right now 01:52, the sp's are up 4. I'd like it to stay that way, or get greener, just because I have such a strong signal. That way I can hope for a quick move up in the first few minutes, so I can average up. Otherwise, I'll probably have to fade a gap down, and then start shorting after a move up. I really don't want to have to do that. Red would just tell me something I already know. Im also willing to hold these shorts until after greenie does his thing, just b/c my raio is so decidedly negative.
praetorian,
I wish you much luck and success with your position, but I must say that it sounds to me like you're doing nothing more than placing a bet on what you think the market will do, rather than trading what the market actually gives you and does. To my thinking, that's a dangerous proposition (i.e. trying to time the market). Even if the market did proceed to crash, there would still be plenty of time to get short once it begins and the downside movement has been confirmed, rather than take an added risk of guessing when it will happen. In any case, good luck, and be careful.
I wish you much luck and success with your position, but I must say that it sounds to me like you're doing nothing more than placing a bet on what you think the market will do, rather than trading what the market actually gives you and does. To my thinking, that's a dangerous proposition (i.e. trying to time the market). Even if the market did proceed to crash, there would still be plenty of time to get short once it begins and the downside movement has been confirmed, rather than take an added risk of guessing when it will happen. In any case, good luck, and be careful.
Praetorian2 - what kind of "ratio" are you computing every night ? TIA.