Black Monday

[plugger]

The internals were quite terrible on Friday. New lows really outstripped new highs by 10 to 1 and the decliners swamped advancing stocks.

As for the fundamentals, lots of problems out there depending on your perspective. However, it would seem to me that the market has bought into the idea of very strong global economic growth. Has anything changed with that backdrop? Not at this point. Depending on your views of inflation (demand pull or a monetary phenomenon), some say the current rise in commodities is strictly a result of that strong growth. Others would counter it is a product of too much liquidity. I personally think it is a combination of the two at this point.

Even so, the underlying strength worldwide should keep corp profits strong for now. Add in the effect of a lower U.S. dollar, some of the larger U.S. companies may finally show some profit growth greater than their typical growth rate which simply matches GDP growth at this point.

Long story made short, i think we muddle along at this point. Valuations are rich but the amount of liquidity out there right now will keep the distortions in all asset classes alive and well for the time being.

 

[plugger]

Nice post Pabst. I wholeheartedly agree that there are a lot of parallels with 1987. I'm underlying bearish on the market but hell, i've been that way since 2004 (doh!). I recall all the commentary about the death of the U.S. consumer for the last 2 decades and they just keep chugging along. Same as this market. It just keeps chugging along but as you point out, hasn't really gone anywhere in the last 6 years.

I forgot about the Iran situation back in 1987. A lot of similarities to today.

 

[Bitstream]

Quote from der_kommissar:

bro, stop drinkin da kool-aid, get a clue. In case you hadnt noticed, interest rates been upticking for a few years now, dollar is cratering again and the tech leaders have all dumped hard. Besides, you and everyone else are long and doubting the sell off at the end of the week. You'll probably get bailed out again, but why press your luck when the world has lost confidence in the US dollar and its leaders.

first of all u ain't me bro, i wudnt like to have u as neighbor nevermind a relative, 2nd u da 1 drinkin' piss if u think institutions will panic like u girlpants just cuz they see da $ weakenin', 3rd am not exactly long but have long term holdings in da primary mkt, 4th, u'll get crushed once again when mkt will rebound from da lows'n'takes out all u ladybabies lookin' to revenge trade this monster that has raped u for so long.

i think that' all i have to say for now

enjoy

 

[der_kommissar]

Quote from Bitstream:

first of all u ain't me bro, i wudnt like to have u as neighbor nevermind a relative, 2nd u da 1 drinkin' piss if u think institution will panic like u girlpants just cuz they see da $ weakenin', 3rd am not exactly long but have long term holdings in da primary mkt, 4th, u'll get crushed once again when mkt will rebound from da lows'n'takes out all u ladybabies lookin' to revenge trade this monster that has raped u for so long.

i think that' all i have to say for now

enjoy

ya nitwit. I know your type. A perma bull who will be left holding the bag. Ya sit there acting like you understand fundamentals, thats laughable BRO. I'm guessing you havent even traded more than 2-3 years, just some guy who chases momentum stocks and gets his a** handed to him regularaly already.

Enough said.

 

[toc]

I reverse on the earlier post................There is a gap need to be faded on 10/28/05 which translates to 1220 area. If 1290 is broken then 1260 is very likely. Important indicators are far from oversold area on my charts.

Monday will indeed be a crucial day for market direction.

 

[Bitstream]

Quote from der_kommissar:

ya nitwit. I know your type. A perma bull who will be left holding the bag. Ya sit there acting like you understand fundamentals, thats laughable BRO. I'm guessing you havent even traded more than 2-3 years, just some guy who chases momentum stocks and gets his a** handed to him regularaly already.

Enough said.

again, u know fuck creep'o; u prolly unable to distinguish a trans from a woman... u guesses 'bout me are as orrible as u mkt predictions so far; earnings have dictated mkt direction since day 1 in case u havent noticed 'n'for u info have been holdin' stocks since ipos when u were still suckin' u grandmother tits, am not long in me tradin' acct.

 

[originalskunk]

Quote from Pabst:

The October 19, 1987 crash of 21% is the Joe DiMaggio hit streak of one day declines. We'll NEVER break that hard in a single trading day again.

I agree with you but for none of the reasons you stated. The real reason that we'll NEVER break that hard in a single trading day again is that Reagan's administration changed the exchange rules. Program trading in the direction of the trend is now banned as soon as the price moves more than 2% from the previous day's close. Also, the 10/20/30% circuit breakers give everybody enough time to make the phone calls and twist the arms.

 

[duard]

Quote from originalskunk:

I agree with you but for none of the reasons you stated. The real reason that we'll NEVER break that hard in a single trading day again is that Reagan's administration changed the exchange rules. Program trading in the direction of the trend is now banned as soon as the price moves more than 2% from the previous day's close. Also, the 10/20/30% circuit breakers give everybody enough time to make the phone calls and twist the arms.

And that my friend is a shame...

 

[der_kommissar]

Quote from Bitstream:

again, u know fuck creep'o; u prolly unable to distinguish a trans from a woman... u guesses 'bout me are as orrible as u mkt predictions so far; earnings have dictated mkt direction since day 1 in case u havent noticed 'n'for u info have been holdin' stocks since ipos when u were still suckin' u grandmother tits, am not long in me tradin' acct.

a bit unhinged dimwit? yeah, like i said, you'll be holding the bag BRO. Get over it or get a clue, its your choice.

 

[Bitstream]

Quote from der_kommissar:

a bit unhinged dimwit? yeah, like i said, you'll be holding the bag BRO. Get over it or get a clue, its your choice.

u not only borin' to death u also stuuupiiiid...i repeat for u since u have serious comprehension issues: am not long, i repeat am not long, i already said countless times we might go down some more but mkt ain't gonna tumble...nothin' is pointin' at a crash scenario'n'mkt ain't doomed.