I can’t help but wonder why a day with news like this:
– JPMorgan second-quarter profit fell, hurt by $1.1 billion in write-downs
– Coca-Cola Co. 2Q Profit Drops 23 Percent
– Wachovia Securities Raided in Auction Rate Probe
– UBS to Stop Offshore Banking for U.S. Residents
– Single-family Construction Rate Falls to 17-Year Low
– Continental Slides to 2Q Loss on Fuel Costs
Still sends the Dow soaring.
nostradamus
July 17, 2008 @
10:46 AM
Ouch. It’s days like this I Ouch. It’s days like this I shouldn’t look at my portfolio. I’m in all short positions.
nostradamus
July 17, 2008 @
10:58 AM
Well the good news is Wamu is Well the good news is Wamu is over $5.00 now. My broker doesn’t let me short anything under $5.00 so I just shorted wamu. Go bears!
ucodegen
July 18, 2008 @
7:41 AM
Ouch. It’s days like this I Ouch. It’s days like this I shouldn’t look at my portfolio. I’m in all short positions.
I think it is day traders closing their short positions. Usually they don’t like to go over 1 day, but sometimes will. There is a breed of ‘day traders’ that will hold for 1 day or so, but doesn’t like to carry over the weekend, in particular a long weekend.
I also wonder what the effect of those programs like WiseTrade etc that use those data feeds from those organizations. I wonder about some stock manipulation there. You can normally get the ‘green light’ ‘red light’ info from the moving averages plus volume.. I wouldn’t expect those tools to be much more sophisticated than that..
barnaby33
July 18, 2008 @
8:04 AM
My green light says buy! My green light says buy! Seriously though Davelj makes a very good point. This appears to be an indiscriminate bear market rally though if you look at the builders instead of the banks some of the worst performers shot up the most. This hints at a short covering rally.
Per ticker forum:
M I HOMES INC [mho] +21.00%
WCI COMMUNITIES INC [wci] +19.53%
BEAZER HOMES USA INC [bzh] +18.31%
PULTE HOMES, INC. [phm] +17.32%
MERITAGE HOMES CORP [mth] +16.15%
D R HORTON INC [dhi] +14.95%
HOVNANIAN ENT INC [hov] +14.55%
KB HOME [kbh] +13.82%
LENNAR CP CL A [len] +11.21%
RYLAND GROUP INC [ryl] +10.26%
davelj
July 17, 2008 @
5:11 PM
I would say that 30% of that I would say that 30% of that last two days’ rally was driven by “a change in thinking about the fundamentals of the economy” (that is, that things are going to get better). The other 70% can be split between aggressive short covering and portfolio managers in deep fear of missing a rally and underperforming. Given the destruction that we’ve witnessed (and extreme oversold readings), some sort of big rally should come as no surprise, although it’s timing is always hard to predict. I think oil’s decline and not horrific news out of a few banks got things moving and then the shorts and pm’s got scared and here we are. This may go on for a bit, but longer term I think we head down again and blow through the lows of earlier this week…
Why do I think this? Simple. Even the banks that have a 95% likelihood of failing have absolutely screamed the last two days. Think DSL,CORS, BKUNA, VNBC, etc. etc. In a rational market, perhaps WFC, BAC and some other “relatively safer” names go up, but the terminally ill remain depressed. When DSL can go up over 100% in two days then you know that we’re in an alternate trading universe where pigs can fly. This ain’t about fundamentals for now – it’s about market action. This too shall pass.
cr
July 17, 2008 @
9:34 PM
I believe I recently heard I believe I recently heard there is a 20% rally before a bear market. We’ve already seen bear territory, but given that no one in MSM really publicly admits we’re in a depression that are not apt to admit we’re in a bear market either.
You could also look back at the rapid rise to 14,100 last Oct and say that was the rally, but I think the question is where does that 20% reside?
It looks to me that it’s in the very stocks that should have been going down the last 2 days.
We’ll see where we are in August.
kewp
July 17, 2008 @
11:51 PM
My take is the recent SEC My take is the recent SEC ruling on naked shorts caused a massive cover rally.
CA renter
July 18, 2008 @
1:40 AM
I’m with kewp. It’s naked I’m with kewp. It’s naked shorts buying & covering, IMHO. Look at SKF (after happily day-trading that over the past few months, my ask didn’t get hit and I got caught long…a lot…ouch!!). I’m guessing they were big-time naked shorts, and this is the aftermath of the ban.
Just wait ’til the ban is lifted and we might see some serious moves to the downside. Even if they keep the ban, the trajectory is probably down from after the shorts are washed out.
Interesting times! 🙂
Anonymous
July 18, 2008 @
10:55 AM
This is nothing more than a This is nothing more than a dead cat/bear market bounce/rally. This bear has many years to go as nothing fundamental has changed. Until the banks are flushed of this mess; ARM’s will still be resetting until late 2011, I don’t see an end, anytime soon. The completion of the flushing won’t be finished until these arms are reset, the homes are forclosed and re-sold and many many banks go under. There is no other way of dealing with this mess than completely cleaning out the system.
So with a year backlog of foreclosures on the market and more to come until 2011, it will take another few years to clear this out, expect 2014-2015 before we can get back to good fundamentals, a reduction of RE salespersons of 50-60%, a reduction in mortgage lending to match and de-globalization and return to US manufacturing.
And that’s if oil does not go out of reach of the general populace, which might happen. If this occurs (prices above $5/gal, shortages) then we will return to pre 1950’s economy localization. there are other dangers if the Govt actually tries to do something, massive inflation, that could make matters much much worse.
So if you have a safe job in a recession proof industry and a fixed mortgage or better, hang on and wish for the best but prepare for the worst. Dial down and pay off as many debts as possible, convert some of your savings to silver/gold that cannot be devalued, downsize the lifestyle and pray!
Sincerely,
Steveno
cr
September 17, 2008 @
9:10 AM
SEPTEMBER 17 – STOCKS DOWN SEPTEMBER 17 – STOCKS DOWN MORE THAN 300 AS OF NOON EST.
Looks like it was a suckers rally, and though we may not end up below 10,000 in the next two weeks, we’re certainly closer now than ever.
Worst week for stocks in how long?
peterb
September 17, 2008 @
9:34 AM
LOOK OUT BELOW.. Gold is LOOK OUT BELOW.. Gold is soaring. And the good news just keeps pouring in.
cr
October 6, 2008 @
12:30 PM
Interesting to look back. I Interesting to look back. I wish I had followed my own beliefs better.
Is this the bottom now?
desmond
October 6, 2008 @
1:13 PM
I just voted today and I was I just voted today and I was right.
peterb
October 6, 2008 @
1:19 PM
Shorts and puts have been Shorts and puts have been getting good for me lately. And I think they will get better. Granted there will be bounces, but they cannot withstand the growing uneployment numbers. The markets never like unemloyment. And more is coming soon.
I live in an area where the average home is over $1M and most people are professionals. I am starting to hear more and more people talking about lossing their jobs and some homes are starting to sell for under $1M. I was in this area in 2002, and it was not like this. This is worse. Maybe a lot worse!
July 17, 2008 @ 10:31 AM
Here’s an article on it:
Here’s an article on it: http://www.cnbc.com/id/25719500
I can’t help but wonder why a day with news like this:
– JPMorgan second-quarter profit fell, hurt by $1.1 billion in write-downs
– Coca-Cola Co. 2Q Profit Drops 23 Percent
– Wachovia Securities Raided in Auction Rate Probe
– UBS to Stop Offshore Banking for U.S. Residents
– Single-family Construction Rate Falls to 17-Year Low
– Continental Slides to 2Q Loss on Fuel Costs
Still sends the Dow soaring.
July 17, 2008 @ 10:46 AM
Ouch. It’s days like this I
Ouch. It’s days like this I shouldn’t look at my portfolio. I’m in all short positions.
July 17, 2008 @ 10:58 AM
Well the good news is Wamu is
Well the good news is Wamu is over $5.00 now. My broker doesn’t let me short anything under $5.00 so I just shorted wamu. Go bears!
July 18, 2008 @ 7:41 AM
Ouch. It’s days like this I
Ouch. It’s days like this I shouldn’t look at my portfolio. I’m in all short positions.
I think it is day traders closing their short positions. Usually they don’t like to go over 1 day, but sometimes will. There is a breed of ‘day traders’ that will hold for 1 day or so, but doesn’t like to carry over the weekend, in particular a long weekend.
I also wonder what the effect of those programs like WiseTrade etc that use those data feeds from those organizations. I wonder about some stock manipulation there. You can normally get the ‘green light’ ‘red light’ info from the moving averages plus volume.. I wouldn’t expect those tools to be much more sophisticated than that..
July 18, 2008 @ 8:04 AM
My green light says buy!
My green light says buy! Seriously though Davelj makes a very good point. This appears to be an indiscriminate bear market rally though if you look at the builders instead of the banks some of the worst performers shot up the most. This hints at a short covering rally.
Per ticker forum:
M I HOMES INC [mho] +21.00%
WCI COMMUNITIES INC [wci] +19.53%
BEAZER HOMES USA INC [bzh] +18.31%
PULTE HOMES, INC. [phm] +17.32%
MERITAGE HOMES CORP [mth] +16.15%
D R HORTON INC [dhi] +14.95%
HOVNANIAN ENT INC [hov] +14.55%
KB HOME [kbh] +13.82%
LENNAR CP CL A [len] +11.21%
RYLAND GROUP INC [ryl] +10.26%
July 17, 2008 @ 5:11 PM
I would say that 30% of that
I would say that 30% of that last two days’ rally was driven by “a change in thinking about the fundamentals of the economy” (that is, that things are going to get better). The other 70% can be split between aggressive short covering and portfolio managers in deep fear of missing a rally and underperforming. Given the destruction that we’ve witnessed (and extreme oversold readings), some sort of big rally should come as no surprise, although it’s timing is always hard to predict. I think oil’s decline and not horrific news out of a few banks got things moving and then the shorts and pm’s got scared and here we are. This may go on for a bit, but longer term I think we head down again and blow through the lows of earlier this week…
Why do I think this? Simple. Even the banks that have a 95% likelihood of failing have absolutely screamed the last two days. Think DSL,CORS, BKUNA, VNBC, etc. etc. In a rational market, perhaps WFC, BAC and some other “relatively safer” names go up, but the terminally ill remain depressed. When DSL can go up over 100% in two days then you know that we’re in an alternate trading universe where pigs can fly. This ain’t about fundamentals for now – it’s about market action. This too shall pass.
July 17, 2008 @ 9:34 PM
I believe I recently heard
I believe I recently heard there is a 20% rally before a bear market. We’ve already seen bear territory, but given that no one in MSM really publicly admits we’re in a depression that are not apt to admit we’re in a bear market either.
You could also look back at the rapid rise to 14,100 last Oct and say that was the rally, but I think the question is where does that 20% reside?
It looks to me that it’s in the very stocks that should have been going down the last 2 days.
We’ll see where we are in August.
July 17, 2008 @ 11:51 PM
My take is the recent SEC
My take is the recent SEC ruling on naked shorts caused a massive cover rally.
July 18, 2008 @ 1:40 AM
I’m with kewp. It’s naked
I’m with kewp. It’s naked shorts buying & covering, IMHO. Look at SKF (after happily day-trading that over the past few months, my ask didn’t get hit and I got caught long…a lot…ouch!!). I’m guessing they were big-time naked shorts, and this is the aftermath of the ban.
Just wait ’til the ban is lifted and we might see some serious moves to the downside. Even if they keep the ban, the trajectory is probably down from after the shorts are washed out.
Interesting times! 🙂
July 18, 2008 @ 10:55 AM
This is nothing more than a
This is nothing more than a dead cat/bear market bounce/rally. This bear has many years to go as nothing fundamental has changed. Until the banks are flushed of this mess; ARM’s will still be resetting until late 2011, I don’t see an end, anytime soon. The completion of the flushing won’t be finished until these arms are reset, the homes are forclosed and re-sold and many many banks go under. There is no other way of dealing with this mess than completely cleaning out the system.
So with a year backlog of foreclosures on the market and more to come until 2011, it will take another few years to clear this out, expect 2014-2015 before we can get back to good fundamentals, a reduction of RE salespersons of 50-60%, a reduction in mortgage lending to match and de-globalization and return to US manufacturing.
And that’s if oil does not go out of reach of the general populace, which might happen. If this occurs (prices above $5/gal, shortages) then we will return to pre 1950’s economy localization. there are other dangers if the Govt actually tries to do something, massive inflation, that could make matters much much worse.
So if you have a safe job in a recession proof industry and a fixed mortgage or better, hang on and wish for the best but prepare for the worst. Dial down and pay off as many debts as possible, convert some of your savings to silver/gold that cannot be devalued, downsize the lifestyle and pray!
Sincerely,
Steveno
September 17, 2008 @ 9:10 AM
SEPTEMBER 17 – STOCKS DOWN
SEPTEMBER 17 – STOCKS DOWN MORE THAN 300 AS OF NOON EST.
Looks like it was a suckers rally, and though we may not end up below 10,000 in the next two weeks, we’re certainly closer now than ever.
Worst week for stocks in how long?
September 17, 2008 @ 9:34 AM
LOOK OUT BELOW.. Gold is
LOOK OUT BELOW.. Gold is soaring. And the good news just keeps pouring in.
October 6, 2008 @ 12:30 PM
Interesting to look back. I
Interesting to look back. I wish I had followed my own beliefs better.
Is this the bottom now?
October 6, 2008 @ 1:13 PM
I just voted today and I was
I just voted today and I was right.
October 6, 2008 @ 1:19 PM
Shorts and puts have been
Shorts and puts have been getting good for me lately. And I think they will get better. Granted there will be bounces, but they cannot withstand the growing uneployment numbers. The markets never like unemloyment. And more is coming soon.
I live in an area where the average home is over $1M and most people are professionals. I am starting to hear more and more people talking about lossing their jobs and some homes are starting to sell for under $1M. I was in this area in 2002, and it was not like this. This is worse. Maybe a lot worse!