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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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Did anyone notice that the Senate passed the bailout package last night and the market celebrated with a 350 point decline? What exactly does this mean? Could it be that the market doesn't feel that this bailout will help? Does this mean that if the House passes and the President signs that we won't have a relief rally or does it mean that the rally will be a short one for one or two days? How many questions can I ask in a row without providing any answers? The answer, my friends is in the wind and it is up to you to interpret in which direction the winds blow. My opinion leans toward a hurricane that blows the market lower and I hope I am wrong.
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Rank: Newbie
Joined: 10/1/2008
Posts: 4
Location: CA USA
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Good questions STOCKMAN. I found a good (unbiased) analysis of the current uncertain state of the market, which itemizes these difficult questions. It is one of the better articles I have read in a while. Please see the link provided FYI: http://www.ciovaccocapital.com/sys-tmpl/oct22008/Deon
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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Deon:
Thanks for the link to an excellent analysis that comes to the same conclusion that cash is the operative and down is the direction.
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Rank: Member
Joined: 7/16/2008
Posts: 11
Location: belgium
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to me the picture is clear: i was short,i i am short, i will stay short.
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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Congress passed the bailout and then we waited for the rally to begin, but it didn't. What happened was that he DOW drops 450 points from 300 up to close 150 down. For the week the Dow slides 7%, Nasdaq loses 10%, S&P tumbles 9%. If you are still long in the market, then you deserve to lose all your money and work until the last day of your life because you can't retire. I told you one month ago this would happen and the decline is getting steeper. Save yourself misery and come back in at Dow 8000 or lower because we might be heading into a worldwide depression. I dare someone to disagree with me, but so far eveyone agrees we are going lower.
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Rank: Advanced Member
Joined: 8/14/2008
Posts: 232
Location: Memphis
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Chart Analysis of the DOW:
EVERY Technical Indicator on the daily chart is pointing DOWN...
As the DOW continues in Falling Knife mode.
The weekly chart still looks VERY Bearish:
It's obvious that the Market didn't like the "Bailout Plan". Many think it won't be enough to fix all of the problems in the credit and housing markets. The DOW dropped 350 points the day the Senate approved it, and today the market dropped 450 points right after the House approved it. I expect more unexpected news from the FED next week that might give a temporary boost to the Market, but the Fundamentals are still in bad shape.
Reporting Season starts again next week. I think we will not see many companies beat analyst expectations this time around. In fact, I think we'll see a number of weaker than expected reports for the 3rd Quarter which will make the market head lower in the short term.
Read the news article "Q3 Earnings: Not So Pretty":
http://www.cnbc.com/id/27012865
Happy Trading,
zz
 www.market-master.net
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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I am excited because it feels like the direction of the market is now firmly biased to the downside. The last few months have been up and down, bear rallies and a few down periods. No consistency where you can put your money without getting your head handed to you. The average investor in the world has now seen the President of the United States say on world television that we are in trouble. We've been told it will take weeks to months to get the bailout organized and implemented. A gift from the Fed now of lowering interest would set up the perfect scenario of a relief rally that would allow us to short the market. Remember that rallies lately have been shortened to only a few hours, but we may get one on this news that lasts a little longer.
About a month ago when I started this thread I suggested to you to consider bear market etf's. If you need help on locating these on Finviz, go to the beginning of the thread. You can short individual stocks and make money, but with these etf's, you can make substantial money riding the market lower. If you had followed my suggestion, here are the top etf results for the last month::
smn +60%
sdk +43%
sij +40%
ssg +36%
There are twenty four bear etf's at 20% of higher. I told all of you the market was going lower on September 5, I explained how to research them and I suggested there was an opportunity here to get money faster. We had the opportunity to get an average return of 30% in the last month on substantial dollars invested while the whole world was screaming headlines of the markets being in trouble. I believe I have made my case to all of you that the market is going lower and events have proven me to be right. I say to all of you again that we are going
lower
and we have a major opportunity here. I am excited because if this proves to be the earnings announcements period where results are below expectations, it will be hammered on every newspaper and evening news and will reinforce the impression that the market is in trouble and it will go lower. I am excited because if the affluent clients of hedge funds keep wanting their money, the funds will continue to have to sell their stocks to get cash. I am excited and if I am right, you will be excited because I tell you, my fellow Finviz investors, we have an unbelievable opportunity to make money faster. If you agree, please join me because I have been invested in these etfs for the last 30 days.
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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Today is Tuesday, October 7 and the Dow went down 508 and my bear etf's went up an average of 11% today. Had the numbers been reversed, I obviously would've lost that amount. I say this because I don't want to give the impression I am a genius. All I'm saying is that while the market is on a downward bear trend, there's money to be made. Be aware that if the Fed announces a rate cut, I will get crushed, but it would be a good time to buy some of these on that news when the rally starts weakening which lately has been within hours because of all the selling into rallies.
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Rank: Member
Joined: 9/10/2008
Posts: 12
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Is it still relatively safe to enter the short side? I see the Fed making a full point move that would result a lot of short covering.
Also, what do you think will happen when all stocks are shortable?
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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On your question of risk on the short side, a week ago Monday before the market opened, we were at Dow 11,143 and now we are at 9447 which is 1700 points lower in 7 trading days. The Fed comes out with a new program every day and every day we go lower. The world is selling into every rally right now and that is why we were 180 points up in the morning and ended 500 points down which is a 700 point swing. We could rally tomorrow or interest rates may go down and as I said in my last comments, I would get crushed. To emphasize my point again, the market is and in my opinion will continue to go lower for the foreseeable future so it appears that I will make more money than I lose which makes me feel good.
On the end of shorting, it appeared to me that people on the long side of financials were selling today, big time. There were other factors like Bank Of America bad earnings and cutting dividend, but all financials were being crushed so unless someone out there corrects me, I think a lot of investors that were upset about the short ban will be back and unless there is good market news, trading in financials is very risky.
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