IT'S VOLUME, STUPID

Market:

My very first mentor in the business told me that one must never---like in never ever---ignore volume in the market; volume is the MAIN indicator. Every market that is real has huge volume with people either buying or selling, an occurrence that validates every move. The volume in this week's down market was positively huge and that means everybody, the dopes like us AND the huge institutions, were sellers and not buyers. Nobody was taking the "other side" of the sells. So is this over?

Again, nobody knows. All kinds of talking heads act like they know because if they don't, their jobs will be taken by new "experts" who say they do know. The charts offer no real assurance about anything. The only thing I ever look at is the market; I never ever pay attention to "news." As you can see from the S&P chart in the post below, the bottom may not be in yet. The only people buying will be the bottom feeders, and they are taking huge risks if they are "buying on this so-called dip."

Are there still good stocks? You're dam right there are. Simply look at the entire market and see who has survived in tact. I haven't done that homework yet but an example is LANCE INC a stock that is actually up and their volume has jumped from 100,000 plus to 900,000 plus. Meaning?? Institutions are buying it. It is UP three fucking dollars. The best performing FUND? Looks like SDS, Proshares Ultrshrt Sp500 (a hedge fund), "ultrshrt" is an abbreviation that stands for Ultra-short. Very dangerous and I don't recommend any hedge fund for anybody who isn't an expert.

In short, if you are doing your homework you have made money while the market has been hammered.

Big Q is what does this mean on main street, and it means absolutely nothing. People with 501Ks and so on will see this market bounce back eventually, because the entire world economy is very strong. And don't forget that 90% of the sub-prime borrowers ARE paying and not defaulting.

Many of my customers were buying housing stocks yesterday, but don't take that as a signal for anything other than that some crazy people are buying housing stocks thinking that their bottoms are in.