Does the market feel like Homer looks?At SPX 1351 we are down 13.6% from the closing high in October.
If a normal bear market bottom is down 25-30% we are about half way there in magnitude but I would be surprised if we are halfway there in terms of time.
15 comments:
The market fluctuates. It is times like these when a worldwide diversified portfolio that throws off dividends eases the pain. Along with a few large gulps of "Jack".
Could this be considered the capitulation stage?
i think we are far from capitulation.
we broke very significant levels on the S&P today.
i posted several months ago that I believe we will retrace 50% of the move from spring to 2003 to fall to 2007. That would put us at around 1200 on the S&P.
I said at the time that this level also corresponds with about 25% drop from the high, which as Roger often says, marks a normal bear market drop.
However, the chart does not show real support till around 1100 on the S&P, so we may fall a bit further than i initially thought.
Today's break of support probably sucked in a lot of new shorts.
My guess is that we rally from here where the new shorts lose money and some of the buy-and-hope crowed feels better and then we drop to around 1250 marking another lower low.
I did some buying today. Hey, it's just money.
sami - how about that 200ma on the weekly chart? I look for a bounce there (or somewhere!).
HOMER'S DOING BETTER THAN THE MARKET... HE' GOT A PRETTY GOOD BUZZ GOIN' OR IS NUMB, AT LEAST!
I would say that we have all officially left the 'denial' stage of market grief and are now firmly in the 'anger' stage.
http://tinyurl.com/2p4bqv
Or maybe we went straight to 'depression' since there's little that helicopter Ben can do now other than give us another short opportunity to sell what's left after the next Fed induced dead cat bounce.
Or you could buy stock in this hot small cap holding:
http://tinyurl.com/2dpl3j
on the weekly chart you will need to use the 40-period MA which is way above where we are now.
the 200-period MA on the weekly chart does not mean anything, at least not to me.
as a side note, looking for support on the weekly chart can be very dangerous in a fast market. Especially for individual stocks that could drop 50% in a week and not recover for years.
This is wonderful news. Soon enough, given the trend in 2008, I'll have the opportunity to buy significantly more equities at a reasonable price. People should rejoice when prices come down from record highs.
Looking for a options created
volume spike in the VIX, tuesday or wednesday,,if lucky, the 31/32 area will be breached and most of this will calm down for a while...
Mac
Sell everything guy is having a glass of wine and smiling.
I expected a bounce already so yes I still see one comming, but I think Roger has this one well pegged. I think he is saying we are still in the middle of this.
It will not be fun but don't we really all love to buy things at a discount? Well that discount is coming.
thank you
I think I disagreed plenty with you in July and August so it only makes sense I acknowledge your insight now.
the 200-day moving average of the s&p 500 peaked on january 3 (at 1490.66) but has only declined to 1489.04 so far. assuming the market stayed flat at the close on the s&p from today (january 17) implies that the moving average will move down to 1480 by february 7 (the decline will become noticeable on a chart) and accelerate down to 1467 by the end of february. just another confirmation of the weakness in the market--the moving average itself is rolling over.
we can use the the rate of change in the moving average itself to measure the direction of the moving average. the five day rate of change (that is, the moving average from today versus five trading days ago) has occasionally turned slightly negative over the past few years; however, today the five day rate of change of the 200 day moving average dropped below negative one for the first time since april 29 of 2003. a declining moving average will only serve to reinforce the poor sentiment.
Roger
This has been a great blog for me. Choosing between index only and aggressive picking, the notion of trying to be down less than a lot is very appealing and I think the most we can hope for. The notion that down less than a lot also means up less than a lot is the implicit trade off.
lbj90068
The Russian economist Nikolai Kondratiev (1892-1938) believed in grand-supercycles
[ http://en.wikipedia.org/wiki/Kondratiev_wave
]
It might take 25 years to recover from a "Kondratiev Wave" :(
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