Stock Market for March 2009

[MetalMeister]

SW,

Thanks for the circuit breaker levels.  I did not know those were listed somewhere.  For the last 7-8 months, I have been expecting a day with a huge drop that would close the market for a trading period of a day or half day.  This would be reality setting in and total loss of confidence once the realization that we are not coming back for a decade or more.

Croaker,

Absolutely agree on silver and gold.  The manipulation continues and that is why we are seeing this pullback/correction.  Some say oversold but I think it is that right now more people know about JP Morgan's manipulation than ever.  I have wondered what JP Morgan would do if their stock gets really low and how that would affect their short positions on gold and especially silver.

I suspect more people are trading/playing the manipulation of gold and silver in the ETFs but have not looked at or read anything about the numbers.

I have been watching CNBC a little to see what the talking heads are saying and they are so elated to see a small up in the pre-open futures.  Amazing their exuberance just to see a positive number even if it is small.

One thing they were talking about, and I am hearing this in most articles I read and now on CNBC is "where are the investors going to come from to make a rally in the market?".  Many think that older investors (with the most cash on the sidelines will not get back in for a long time.  The question is about the younger generation as they have less in 401Ks and cash to sit on and will have more confidence in the future.

I have also heard, more and more in widespread media,  the recognition on the fact that the market took 25 years to rebound from the 1929 crash.  This means the usually more optimistic media that under reports the truth is now starting to mention past events like this because since everything is so bad they feel their listeners are more desensitized to bad news whether present or historical.

Just the thought that there will be far fewer investors because of fear will create tremendous downward pressure and more and more people get out because they cannot predict where the bottom is going to be found.

[Bottomfeeder]

This is quite unbelievable....Geithner comes out talking about the budgets relative to health care, energy, and now tax laws and fiscal responsibility.  Nothing yet about banks, which should be his primary objective.  Worst first!

The results?  The markets begin to retest inter-day lows, led by what else, the banks.

Really quite amazing.   I don't know how many more times it will take for me to no longer be shocked.

[jjj000]

hey bf... problem solved - Obama says that "buying stocks is a potentially good deal"....!!!
http://news.yahoo.com/s/ap/20090304/ap_on_go_pr_wh/obama_economy

What a bunch of dickheads.  Potentially.   

[Croaker]

BF,

  Easy explanation.  The boys are supporting the Man to push his Budget up the ever increasing steep mountain of resistance.

Or

He is just a dickhead. 

[jjj000]

Tomorrow is crazy.  The number of reports and testimonies and speeches and quarterlies and company news and whatnot are just silly.  Just a sampling:

- General Motors' Saab brand has received interest from several potential bidders
- Costco, Big Lots, Liz Clairborne earnings
- Palm, Amazon making news
- Geithner testifies before the Senate Finance Committee
- House Financial Institutions Subcommittee holds a hearing at 2:30 p.m. EST on the TARP
-  Obama's foreclosure mitigation plan goes into action with the announcement of more details
- Institute for Supply Management's non-manufacturing index for February, due out at 10:00 a.m. EST,
- The ADP National Employment survey of private sector employers due out at 8:15 a.m. EST


Good luck digesting all that!

[Bottomfeeder]

Yeah...his quotes say it all...

"What I'm looking for is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing," Obama said after meeting in the Oval Office with British Prime Minister Gordon Brown.

"You know, it bobs up and down," he said, comparing stock market movements to daily tracking polls during political campaigns. "The banking system has been dealt a heavy blow," he added. "There are a lot of losses that are working their way through the system. And it's not surprising that the market is hurting as a consequence."

Sounding ever more like an analyst, he said that "profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."

"Day to day gyrations"?  Dude, we are at 1996 levels!  That is not a day to day gyration that is a 4380 day gyration, down.  "Profit earnings ratios"?  You mean Price/Earnings ratios.  Even giving this guy the benefit of the doubt for a tongue slippage here, it doesn't appear that he gets it.   That markets are forward looking,  not backward.  Maybe he means we should be shorting.

The market is clearly reacting to the budget proposal, (which hopefully gets beaten to death) and our govenments continued inability to deal with the banking issues.  So either the economic/investment community is wrong or Obama is wrong, simple as that. 

The frightening thing is that Obama either doesnt trust (lack of trust is usually a by-product of a lack of understanding) the markets or worse hyperneeds to be right, and lacks the objectivity to know that if it isn't good for Wall Street it probably isn't good for Main Street.

I mean seriously the demand and housing bubble didn't start as a result of Wall Street activities, and the housing bubble didn't burst because of what Wall Street did with CDO's, CDS's, and the like.  Main street housing crashed because it became a "crowded trade".  Wall Street crashed because of how it handled that same housing demand, and the deritivies that came from it. 

I like the pic in the article though.  That is what the market is responding to.  His right arm is getting too high.

Too bad we cant have a government full of positionless thinkers who seek the truth and develop policy accordingly.  What a country we would have.

[jjj000]

I like the pic in the article though.  That is what the market is responding to.  His right arm is getting too high.

Hah, nice... that didn't strike me until you pointed it out   Mein Führer, the markets were up 2.5% on your fabulous oratory!!  No wait... that was China, sorry.

Clearly the guy doesn't "get" much of anything.  I'm sure he just flubbed trying to regurgitate something that old Buffet told him at one of his cocktail parties.  P/E ratio is not something you say mistakenly if you have even a 101 level understanding of stock market basics.

In any case....

Interesting looks today at how the oil price uptick trickled down into the markets.  By my read:

- gold was negative or non-reactive
- copper was strongly positive
- energy/oil stocks were strong
- Uranium stocks were solid
- water transport stocks blew up like crazy
- and obviously S&P did well

Getting way ahead of things here, but if oil starts a sustained rally, based on today's action, personally I would want to be in the shipping stocks.  That seems to be the sector with the biggest gains to be had, and the movement with the most magnitude.  Some of their "Profit to Earnings" ratios are under 1  .  That's pretty good, isn't it Mr. President???

Anyway, let's see if we get above $50 on oil first... since we're still well within the flag formation, which usually is predictive of the prior move - which in this case was obviously down as we all know.

S&P needs to clear above 740 before I start to care...

By my TA read, Gold is headed down to $800 before turning back up...

GLTA

[sunseeker]

Perhaps the TA's amongst us would like to venture an opinion?

http://news.goldseek.com/RickAckerman/1236236340.php

ATB

[MetalMeister]

I love that quote!!!!!!!!!        

Obama sounds more like James Dines everyday, don't you think?

"good deal if you've got a long-term perspective on it."

I would say someone definitely reads The Dines Letter as Dines is a buy and hold guy.  Just chuckling myself to death here...

Yeah...his quotes say it all...

Sounding ever more like an analyst, he said that "profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."

"Day to day gyrations"?  Dude, we are at 1996 levels!  That is not a day to day gyration that is a 4380 day gyration, down.  "Profit earnings ratios"?  You mean Price/Earnings ratios.  Even giving this guy the benefit of the doubt for a tongue slippage here, it doesn't appear that he gets it.   That markets are forward looking,  not backward.  Maybe he means we should be shorting.

Who was it that got all over me about my views on Obama last year? 

[MetalMeister]

Hah, nice... that didn't strike me until you pointed it out   Mein Führer, the markets were up 2.5% on your fabulous oratory!!  No wait... that was China, sorry.

Clearly the guy doesn't "get" much of anything.  I'm sure he just flubbed trying to regurgitate something that old Buffet told him at one of his cocktail parties.  P/E ratio is not something you say mistakenly if you have even a 101 level understanding of stock market basics.

Who was it that got all over me about my views on Obama last year? 

I just can't remember who...

[richmanch]

Well, I think that was me, and still feel pretty happy voting for Obama.

This board is actually starting to become pathetic/useless, all this whining about politics and policy. I think it's ironic that all the small government/no government advocates sure spend a lot of time monitoring the government.

[dananini]

rich, i hear you about the political griping.
I am dumbfounded,however,that a member of a message board called " Buy high Sell Higher" is "happy about his chioce for Obama"
Did you get into the ultra-short etfs or something?

[MetalMeister]

Is there anybody here with cash that followed my guidance back on February 12th?  

Oil is up 33.5% since I made that prediction!  From a close on Feb 12 of $33.98 a barrel to a close of $45.38 a barrel, yesterday

Anybody go for it?

Getting way ahead of things here, but if oil starts a sustained rally, based on today's action, personally I would want to be in the shipping stocks.  That seems to be the sector with the biggest gains to be had, and the movement with the most magnitude.  Some of their "Profit to Earnings" ratios are under 1  .  That's pretty good, isn't it Mr. President???

Anyway, let's see if we get above $50 on oil first... since we're still well within the flag formation, which usually is predictive of the prior move - which in this case was obviously down as we all know.

If I were going to "play" the markets with some cash (which I don't have at the moment) I would go long oil, gold, silver and go short everything else.  I have gone long by holding physical PMs and uranium, but I never foresaw oil taking the dive it has done.  I totally missed that play.  Oil price HAS to go back up.  Check out this article from today.

http://uk.biz.yahoo.com/12022009/399/50-000-offshore-workers-jobs-jeopardy.html

Many oil fields will go broke at these prices, older field's equipment is aging and needs to be replaced, world demand has to grow even if slowly, if price does not go back up then supply will come drammatically down and countries will have to prioritize where their meager oil reserves will be targeted.

I really am the contrarian after watching the DOW go solidly into the 7000 territory.

[davidslane]

I think you can take all politics out of this.


Simply stating, we will not see a bull market again until the P/E on the S&P is down to 10.

Right now, forward earning estimates on the S&P is $50.  At 12 times earnings, that's 600 on the S&P.


Personally, I think forward earnings could drop way below $50 making the goal for the S&P more like 400.


Meaning stocks are overvalued and will go down.


If you want to blame someone, blame those who let assets get way too far ahead of the mean. And since it was because of the human nature of greed, we can blame all humans.

They ran up too high and now they must come back down below the mean for a while to reset prices.


It's pretty simple.




As for the politics of it, nothing is going to change the reversion to the mean. All Obama can do is make the landing more smooth or more rough. The right expects more rough, the left expects more smooth.

Personally, I think nations with strong middle classes make the wealthiest in those countries, more wealthy. So, for me, I want a strong, consumer buying middle class. That means higher wages for the middle class and yes, universal health care.


So, as we all know, I think Obama is doing a great job and love his forward thinking of 10 years ahead and not basing his reactions on next quarters earnings in the stock market.

I want a President who has a 10 year plan and is not moved by the swings of the markets. And let's remember, he's been in office like 40 days and his departments are still hiring people to get work done.

[MetalMeister]

I did not mean anything by that post, Rich.  Just some good natured kidding.  I have no intentions of starting any political posts on here again.

I don't think, however, you can blame folks on here for getting upset about current policy changes as they relate to the markets as all you have to do is turn on the TV these days and have the commentators talk about how anti-business job creation, anti-growth these policies are.  I'm sure everyone on here hope Obama succeeds.

Well, I think that was me, and still feel pretty happy voting for Obama.

This board is actually starting to become pathetic/useless, all this whining about politics and policy. I think it's ironic that all the small government/no government advocates sure spend a lot of time monitoring the government.