Stock Market Oct 20-24

[jjj000]

Just for kicks, some predictions (based on nothing other than charts):

DOW
- drop to 8500 this week
- rise up to 10,000 next 3-4 weeks
- retest 7800 by Dec

OIL
- rise back to 90
- then slump down to 50

[richmanch]

I don't think the DOW drops at all from here. We've seen the retest IMO. I think continued fear and pessimism will quickly subdue any serious rallies--instead we'll just see a trading range between 9 and 10,5k for a while. I'm betting a bit on this, but am not going crazy, and keeping 50+% in cash, if only to sleep at night.

Oil not as sure. In July, I predicted a drop to 85, and that it would be a good time to buy, even though the momentum would make people predict 50 or 60 dollar oil. But the more I am reading about this, the more I am inclined to consider 50 a possibility. Five years ago oil was trading at 30 bucks a barrel. In the face of a severe global recession, anyone have a reason why it can't go back to 30? I don't necessarily think it WILL happen, but it's possible. I say 62 would be a possible bottom for oil.

Good luck to everyone this week.

[MetalMeister]

I'll make aprediction this week.

Surprise, surprise.  We're going way down on Tuesday.

Derivatives start unwinding with Lehman Brothers.

Cheers!

[Depleted]

jjj000 you got my vote...nice avatar      ....You look how we all feel 

[jjj000]

heh, thanks depleted... I couldn't resist... gotta love the go-to trader reaction pic


just for kicks, current DOW channel for computer trading (just my opinion):

9100 | 8850

A break above 9100 should cause a jump to 9700.  A break below 8850 should cause a drop to 8200.

I suspect one of these to happen soon... maybe today, based on Bernanke's speech...

[Depleted]

Bernanke was just asked point blank if we are in a recession, and he flattly refused to use the 'R" word, saying it was a definition used by other references, terms and definitons. It seems he has learned some good speaking spin skills from Allan Greenspan. Bernanke should talk straight to the people, and give advice to Main street on how to help everyone going forward, and stop evading answering questions. If you can't handle the truth, get the hell out, and let someone else in there who can gain the trust of the people. Bloomberg is good...

[MetalMeister]

Three cheers, Depleted...!!!

[MetalMeister]

Latest Data Shows U.S. Housing Sector is Still Far From Bottoming Out: Single-Family Starts at 26-Year Low

Stabilization in the U.S. housing sector is not yet in sight:  inventories and vacancies are still at a record high and continue to put downward pressure on home prices which continue to fall translating into trillions of real wealth losses for the engine of the economy: the U.S. consumer

# Sep 2008: starts at a SAAR of 817K, this is 6.3% below August and 64% below the peak of January 2006 (2.292 million);  permits at a SAAR of 786K (lowest since Nov 1981), 8,3% below the rate of August and 65% below the peak of September 2005 (2.263 million);  completions at a SAAR of 1,097 million, this is 11.7% above August estimate and 51% below the peak of March 2006 (2.229 million). Construction of single-family homes dropped 12% to a 544K rate, the fewest since February 1982

# New Home Sales (August 2008): at 469K, 17 year low and down 67% from the peak the  July 2005 (1.389 million). This is 11.5% below the revised July rate of 520k and is 34.5% below the August 2007 estimate of 702K

# Mortgage applications in the U.S. declined last week to the lowest level since December 2000 as fewer homeowners sought to refinance their loans

# MBA: New foreclosures increased to 1.19% in Q2 2008, rising above 1% for the first time in the survey's 29 years. The total inventory of homes in foreclosure reached 2.75%.

# RealtyTrack: Nationwide home foreclosures rose by 26.7% y/y in August to 304k units, building on a strong 55.1% y/y increase in July

# Existing home sales fell by 2.2% m/m to an annual rate of 4.91mn units in August. On a y/y basis, existing home sales were still contracting by around 16% in August, but their pace of decline has slowed significantly in recent months, after peaking at -24% y/y last February. Median home prices fell 3.4% last month after a downwardly revised 2.2% drop during July(5.02mn units in July, the median price dropped 7.1% from July 2007. Two-thirds of the July sales gain took place on the West Coast (mostly California).  Merrill Lynch (not available online): at least 40% of the sales in California are forced foreclosure activity as the banks moved to unload their jingle-mailed properties to investors at fire-sale prices)

# NAR: The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4

# Toll Brothers cancellation rate running around 24.9% (CEPR)

[whatsupdoc]

Here is an interesting article posted today at uraniumseek.com and also goldseek.com:
"When is the Uranium Price Going Up?"
http://www.uraniumseek.com/news/UraniumSeek/1224522019.php

Here are the couple of paragraphs that perked my interest.

And Other Facts About the Physical Uranium Market You Didn’t Know…

Retail investors made hundreds of millions of dollars on junior uranium stocks from 2005 up until
this past summer. Many of our readers have taken profits and are now holding shares for long
term growth. But with the recent market meltdown, what does the future hold? Is the uranium bull
market finished or will these beaten down stocks come back?

I recently interviewed people in the physical uranium market to find out what is happening behind
the scenes – and try to get a handle on where the uranium price might be going over the next
year or two.

What I found out is that the uranium market is very complex. The uranium price is not set from
what I call a free market. There are few buyers and even fewer sellers. Both sides will tell you a
much different story of what’s happening in the marketplace. Each side has their story and they
try to sell you on their position. As a result, most analysts, newsletter gurus, and even uranium
exploration companies are not clear on the market dynamics.

Many mining analysts see uranium as one of the best metals going forward, but there is little
consensus as to where the spot price will be or what the growth potential might be for the
uranium stocks. I therefore interviewed a number of insiders to conduct my own research.

The industry players are very guarded, and only one group of our three industry roundtable
participants agreed to have their names used – Gene Clark and Treva Klingbiel of Tradetech,
one of the two groups who publish the uranium price. Our second interviewee is a senior
executive with a near term uranium producer – we’ll him Mr. Producer - and our third person
is a uranium price expert in the U.S. – we’ll call him Mr. Expert. No utilities would speak to us,
even not-for-attribution.

Some of the information we uncovered startled me. Did you know that western utilities generally
only have one year’s inventory? European utilities have two years, Asians generally want three.
But nobody has five years, despite what many uranium promoters will tell you. I was stunned to
hear how the producers and consumers of uranium have completely different interpretations of
supply/demand data.

Could India affect a big increase in demand in uranium? Will the US government release a
swath of uranium on March 29, as they are then allowed to? Our panel weighs in:

Q: What is the psychology of uranium buyers right now? How does that compare to a year ago?
What are the two most important factors in buyers’ psychology?

[punter]

Because I have no freaking idea where or when it's going to land I will carry on with my assumption that eventually fundamentals will reassert themselves. This does not mean that we are out of the woods yet. There are as you know four types of bottoms, V, W, L and U. I did double my positions in HTE.UN, DML, OIL and BIM this am. Call me Krazy.
GLTA

[jjj000]

just for kicks, current DOW channel for computer trading (just my opinion):

9100 | 8850

A break above 9100 should cause a jump to 9700.  A break below 8850 should cause a drop to 8200.

I'm telling you guys... there is something to this

9100 broke to the upside after 3 attempts and then shot up like a rocket to end the day. 

Clear sailing to 9700 now, methinks.

[Bottomfeeder]

jjj...technicals work well on the major indicies, nice to be able to actually see patterns, that tend to hold up!

YC....thanks for the article....I have heard, and kind of bought into, a repeating real estate trend (historical) that says "existing home prices bottom two years after new housing starts bottom". 

I keep looking for that new housing start bottom for my baseline.  Sorry BTW I cannot quote a source I heard it on CNBC by a "housing expert", not that chickie, but an old veteran, who has seen and studied cycles. For what its worth, he seemed centered on the subject, and hey thats about all you can ask for these days!

Anyway I am looking for that number, relative to the California marketplace and of course the international credit marketplace.

[pinetree]

So what does this mean?  That these hedge funds are all subscribing to channellingstocks.com?

I just saw an ad for that on CNBC.

[richmanch]

Good call on the DOW jjj000,
better call on that avatar. sweeeet. Yellowcake's new one is also strong. Looks like I've got some work to do on that.

so jj what are we looking for at 9700?

Punter I also took a chomp at dml today. 1.80 ? Give me a break. How come no one cares about the excelon buyout?

I predicted housing would bottom this fall...maybe premature. History is pretty clear on this. Maudlin says that when bubbles burst, they always return to trend (paraphrase). Everyone agrees that when it turns, it takes a while. Blood in the streets where I live, I'll tell you that.

[pinetree]

By the way, where do you get that 8850-9100 channel from?  I don't see it at all.

Hope I'm not asking for proprietary information or anything.