Dow Drops to 13042 at week’s end. Let’s make bets and discuss at next meet up…

[LA_Renter]

“It was exactly a month ago yesterday that we hit the all time high of 14,164, now we’re 1000pts down.”

That high of 14,164 occurred after the summer credit crunch sent the Dow to about 12,500 in mid August. Some reasons we saw the rally to over 14k is that the Fed began easing starting with a 50 bps cut and the street made the assumption that the Financials threw the kitchen sink into third quarter earnings thus the worst of the credit crunch had passed (and we all lived happily ever after). The true reality of the credit crisis is beginning to set in and it is far from over. The Royal Bank of Scotland chief credit strategist Bob Janjuah in London has one of the most bearish views and IMO probably the most accurate.

“This credit crisis, when all is out, will see $250bn to $500bn of losses. The heat is on and it is inevitable that more players will have to revalue at least a decent portion” of assets they currently value “using ‘mark-to-make believe'”.

So far there have been about $50B in losses reported. The market has not priced in Mr. Janjuah’s assumptions. Of course there is also the global growth story that clouds how the markets will react among a myriad of other factors. In other words I have no idea where the market is heading IMHO but this credit crisis thing ain’t over.

[LA_Renter]

“It was exactly a month ago yesterday that we hit the all time high of 14,164, now we’re 1000pts down.”

That high of 14,164 occurred after the summer credit crunch sent the Dow to about 12,500 in mid August. Some reasons we saw the rally to over 14k is that the Fed began easing starting with a 50 bps cut and the street made the assumption that the Financials threw the kitchen sink into third quarter earnings thus the worst of the credit crunch had passed (and we all lived happily ever after). The true reality of the credit crisis is beginning to set in and it is far from over. The Royal Bank of Scotland chief credit strategist Bob Janjuah in London has one of the most bearish views and IMO probably the most accurate.

“This credit crisis, when all is out, will see $250bn to $500bn of losses. The heat is on and it is inevitable that more players will have to revalue at least a decent portion” of assets they currently value “using ‘mark-to-make believe'”.

So far there have been about $50B in losses reported. The market has not priced in Mr. Janjuah’s assumptions. Of course there is also the global growth story that clouds how the markets will react among a myriad of other factors. In other words I have no idea where the market is heading IMHO but this credit crisis thing ain’t over.

[cashman]

My thoughts exactly, LA renter. I am an active trader, and was scared as hell to be in the market last week. All the technicals have broke down. I think there is a good chance either this monday or the monday after black friday will be a crash in the markets. The market has acted irrational for so long, we are way overdue for a significant drop.

[cashman]

My thoughts exactly, LA renter. I am an active trader, and was scared as hell to be in the market last week. All the technicals have broke down. I think there is a good chance either this monday or the monday after black friday will be a crash in the markets. The market has acted irrational for so long, we are way overdue for a significant drop.

[cashman]

My thoughts exactly, LA renter. I am an active trader, and was scared as hell to be in the market last week. All the technicals have broke down. I think there is a good chance either this monday or the monday after black friday will be a crash in the markets. The market has acted irrational for so long, we are way overdue for a significant drop.

[cashman]

My thoughts exactly, LA renter. I am an active trader, and was scared as hell to be in the market last week. All the technicals have broke down. I think there is a good chance either this monday or the monday after black friday will be a crash in the markets. The market has acted irrational for so long, we are way overdue for a significant drop.

[Coronita]

My observation is that it seems like the markets are directionless. It will be bouncing +-500 points on every news of credit crunch, credit ok, gas crunch, gas etc.

Some of the stocks are all over the place. In Oct/Nov. Retail for example is extremely volatile these days. One stock that I move in and out of, Gymboree, was swinging all over the map. It started out around $34…Then all the bad news came out at retail, it went as low as $28..Then same stores numbers came out which were fine, and it's back to $34ish. There's no direction. The only thing I've been trying to do is move in and out of certain things on the volatility.

Like gymboree…20 trades this year and counting….

But for every one that I'm up at an instance in time, there a corresponding one that's down. Tech for example was hammered last week. Oh well, I still think we have and overreaction in the markets, but my opinions don't really count. We'll see what happens next week. I'm not foolish enough to say that the markets going to hit all time highs or come crashing down. 

[Coronita]

My observation is that it seems like the markets are directionless. It will be bouncing +-500 points on every news of credit crunch, credit ok, gas crunch, gas etc.

Some of the stocks are all over the place. In Oct/Nov. Retail for example is extremely volatile these days. One stock that I move in and out of, Gymboree, was swinging all over the map. It started out around $34…Then all the bad news came out at retail, it went as low as $28..Then same stores numbers came out which were fine, and it's back to $34ish. There's no direction. The only thing I've been trying to do is move in and out of certain things on the volatility.

Like gymboree…20 trades this year and counting….

But for every one that I'm up at an instance in time, there a corresponding one that's down. Tech for example was hammered last week. Oh well, I still think we have and overreaction in the markets, but my opinions don't really count. We'll see what happens next week. I'm not foolish enough to say that the markets going to hit all time highs or come crashing down. 

[Coronita]

My observation is that it seems like the markets are directionless. It will be bouncing +-500 points on every news of credit crunch, credit ok, gas crunch, gas etc.

Some of the stocks are all over the place. In Oct/Nov. Retail for example is extremely volatile these days. One stock that I move in and out of, Gymboree, was swinging all over the map. It started out around $34…Then all the bad news came out at retail, it went as low as $28..Then same stores numbers came out which were fine, and it's back to $34ish. There's no direction. The only thing I've been trying to do is move in and out of certain things on the volatility.

Like gymboree…20 trades this year and counting….

But for every one that I'm up at an instance in time, there a corresponding one that's down. Tech for example was hammered last week. Oh well, I still think we have and overreaction in the markets, but my opinions don't really count. We'll see what happens next week. I'm not foolish enough to say that the markets going to hit all time highs or come crashing down. 

[Coronita]

My observation is that it seems like the markets are directionless. It will be bouncing +-500 points on every news of credit crunch, credit ok, gas crunch, gas etc.

Some of the stocks are all over the place. In Oct/Nov. Retail for example is extremely volatile these days. One stock that I move in and out of, Gymboree, was swinging all over the map. It started out around $34…Then all the bad news came out at retail, it went as low as $28..Then same stores numbers came out which were fine, and it's back to $34ish. There's no direction. The only thing I've been trying to do is move in and out of certain things on the volatility.

Like gymboree…20 trades this year and counting….

But for every one that I'm up at an instance in time, there a corresponding one that's down. Tech for example was hammered last week. Oh well, I still think we have and overreaction in the markets, but my opinions don't really count. We'll see what happens next week. I'm not foolish enough to say that the markets going to hit all time highs or come crashing down. 

[Chris Scoreboard Johnston]

Chris Johnston

A low will be made sometime in the next 30 days either here or slightly lower, then a rally into years end to allow fund markups and bragging to fundholders of a good year.I doubt that rally will make new highs. Then a dip starting Mid Jan to Mid Feb probably back to about where we are here or slightly lower, into a significant low in March, and a big rally from there upwards in the election year. Even if we do not dip into March, that should be a major low point time wise to launch a nice advance so even if we have strength going into that date, it will still be a buy point. This current dip is a great buying opportunity, but I think a significant top will happen in 09.

I am looking for a signicant shorting opportunity for Bonds at the beginning of the year, but I will have to see if the fundamentals are lined up when we get there. I am sure this is not exactly correct, but it is what my analysis tells me to look for, I will make adjustments as necessary.

[Chris Scoreboard Johnston]

Chris Johnston

A low will be made sometime in the next 30 days either here or slightly lower, then a rally into years end to allow fund markups and bragging to fundholders of a good year.I doubt that rally will make new highs. Then a dip starting Mid Jan to Mid Feb probably back to about where we are here or slightly lower, into a significant low in March, and a big rally from there upwards in the election year. Even if we do not dip into March, that should be a major low point time wise to launch a nice advance so even if we have strength going into that date, it will still be a buy point. This current dip is a great buying opportunity, but I think a significant top will happen in 09.

I am looking for a signicant shorting opportunity for Bonds at the beginning of the year, but I will have to see if the fundamentals are lined up when we get there. I am sure this is not exactly correct, but it is what my analysis tells me to look for, I will make adjustments as necessary.

[Chris Scoreboard Johnston]

Chris Johnston

A low will be made sometime in the next 30 days either here or slightly lower, then a rally into years end to allow fund markups and bragging to fundholders of a good year.I doubt that rally will make new highs. Then a dip starting Mid Jan to Mid Feb probably back to about where we are here or slightly lower, into a significant low in March, and a big rally from there upwards in the election year. Even if we do not dip into March, that should be a major low point time wise to launch a nice advance so even if we have strength going into that date, it will still be a buy point. This current dip is a great buying opportunity, but I think a significant top will happen in 09.

I am looking for a signicant shorting opportunity for Bonds at the beginning of the year, but I will have to see if the fundamentals are lined up when we get there. I am sure this is not exactly correct, but it is what my analysis tells me to look for, I will make adjustments as necessary.

[Chris Scoreboard Johnston]

Chris Johnston

A low will be made sometime in the next 30 days either here or slightly lower, then a rally into years end to allow fund markups and bragging to fundholders of a good year.I doubt that rally will make new highs. Then a dip starting Mid Jan to Mid Feb probably back to about where we are here or slightly lower, into a significant low in March, and a big rally from there upwards in the election year. Even if we do not dip into March, that should be a major low point time wise to launch a nice advance so even if we have strength going into that date, it will still be a buy point. This current dip is a great buying opportunity, but I think a significant top will happen in 09.

I am looking for a signicant shorting opportunity for Bonds at the beginning of the year, but I will have to see if the fundamentals are lined up when we get there. I am sure this is not exactly correct, but it is what my analysis tells me to look for, I will make adjustments as necessary.

[cr]

As of early morning it’s back up 1% and over 13,000 again because Wal-Mart’s “better-than-expected earnings hinted that consumer spending might be stronger than anticipated this holiday shopping season.”

Don’t get me wrong I’m glad to gain back a little ground that even my internationals lost, but you have to put this in perspective.

Wal-Mart starting slashing prices 2 months ago, where most retailers (WM included) usually wait until Thanksgiving weekend. You could argue all they did was move 4th quarter sales to the 3rd quarter.

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