10/13/2008

Nine Hundred F*****g Points???

There ain't no such thing as a nine hundred point day. Fucking period, end of story. I don't look for a big pull back tomorrow or near term because there is still the "guarantee of all trades made by banks" to happen which will also lift the market. But, I have taken enough courses in Technical Analysis to see even sex as a chart; everything is a chart and everything makes sense when charted. Having said this, if technical analysis worked there wouldn't be any market because we'd all be right all the time. However, there is a rule that has been very true over time and that is the "too much too soon" rule. Then there is the "oversold" rule, the lack of volume rule, the lower close lower high rule, and so on and so forth. One rule that is almost always true is the one that says once a bottom is made it will be tested again; to hold off buying because you will always get a second chance on the test of the bottom. So this market will "test" (not penetrate) the low set last Friday of 7800 more or less. The test will happen within the next month or so. Then buy what you like for whatever reason you like but it should be a trade and not an investment; I think that Obama means socialism and the Dems hate capitalism, stock holders and the entire system, which means our entrepreneurial class will be in Africa by Valentines Day. There is a brand new band playing brand new music and there will be some brand new wealth redistribution dances for us all to learn. The Dubai Stomp and the UAE Wiggle will be capitalism's new moves. Meanwhile there are enough toxic business loans out there to bankrupt six countries together with loan promises at very disadvantageous conditions for the banks that must be honored. The only way to avoid the loans is bankruptcies so they don't have to honor the commitments. This is still a dangerous situtation.

Oh, the guarantee of trades made by banks will be the last of the good news for a long long time, so be prepared.

Capitalism, at least the pre Last Week kind, is dead which has been the purpose of the left for fifty years.

1 comment:

Doug_S said...

For a thousand years there have been financial panics and businesses going out of business. They never discovered the govt guarantees everything. Obligations of one bank to the next. Mortagages, swapd, derivitives, everything. There is no cost - just a proculation. Then perple/institutions start to call on the guarantee. The govt borrows or prints money. Ny guess inflation, on fire. The debt was worthless but the govt buys backs it with borrowed or printed money. Borowwing slows printing gets large. Gold spikes, oil and commodities reinflate, bubble regrows then there will be the moment of the next liquidity chrises.