The bottom, and luck

[jjj000]

JDH - just a note - DOW hit ~7800 intraday on 10/10 for the current low.  Only pointing this out for those who called it on the nose as the current bottom [ahem pat pat].

And so far has rallied back to ~9750 (on 10/14), for a 25% rally.  FWIW, I think the current rally may goes as high as 10300, which would be about a 33% rally.

However my chart reading tells me we see 8200 again before we push up that high.  We'll see what the election brings.  If it brings another month-long challenge/recount mess... I expect to see 8200 sooner rather than later.

COTs reports update showed a pretty significant unravelling of short gold contracts by the banks.  Still heavily weighted to the short side, but getting more even...

[pinetree]

Unemployment and jobs numbers are due Friday.  They won't be good.

For reference, in Sept we lost 159k jobs and unemp was 6.1%: http://www.bls.gov/news.release/pdf/empsit.pdf

The only question is whether or not this bad news is already priced in.  If not, or if it is and the numbers are worse than expected, then things could get interesting.

[davidslane]

We had some of the most awful economic news in the US on Monday and yet, the US markets didn't tank.  Actually, they were quite decent.


I think we see 10,900 on the DOW which is around a fibinocci 50% retracement.
In fact, it wouldn't surprise me if the bounce took us all the way to the 200 day MA near 11,500.


We have a perfect storm hitting the US which will raise the markets which I have stated before.
1) End of elections
2) LIBOR coming down
3) TARP getting its legs going
4) World interest rates going down (this week Australia, ECB and UK)
5) US Fed lending directly to non-banks


Remember, Nov. to Apr. are the good months and US markets like to rally after elections.
There's still too much pessimism and the market will rally against the shorts.


Not even bad Oct. jobs numbers on Friday will put a dent in.


The markets are predictive.  Right now they over predicted a deep recession.
The markets will now price in a rebound for a while.
As reality hits more later, we'll come back down again.


I think the bear market low is now in.
The bear market may not be over until 2012, but the low is in.
We may test it one or two more times, but the low is in.

We'll be between 7,800 and 11,000 for the next few years.
Enjoy the up legs and be prepared for the down legs.


The next 6 months will be an up leg.



Now, for those in the US, go VOTE.

(Ironically, I'm flying to Canada today.  I'll be watching the results from a hotel room in Montreal.  I voted two weeks ago in Colorado.)

[jjj000]

...
I think we see 10,900 on the DOW which is around a fibinocci 50% retracement.
In fact, it wouldn't surprise me if the bounce took us all the way to the 200 day MA near 11,500.
...
The next 6 months will be an up leg.

6 months!??  If we keep this kind of rally up we'll be at 10,300 by next week.  If your prediction is right we'll be at 11,500 within one month, not 6 (though I don't think we go up that high).

6 months I think is way too long to predict in the market now.

In any case, if we do rally between 11000 and 8000 for the next few years - something I do agree with - it may be the biggest swing trade opportunity of our lifetimes.  Long/calls on the way up, short/puts on the way back down.  Rinse and repeat for a couple years.  It would be a beautiful thing!!!

Agree on economic news, though... the market reaction is haywire.  Economic reports actually put a big dent in the USD, but stocks went up regardless - probably is election euphoria.  Oil jumped as a result or weakening dollar even.  But stocks still went up.  ECB will be cutting rates this week too, which should pump up the dollar, to counteract bad econ reports..  If oil doesn't drop back down after that... then I give up thinking entirely

Voter fraud, lawsuits already started.  If this drags out, I think any rally will be squashed.

[MetalMeister]

I'm sure it is going to drag out.

Did you hear about the situation with 10's of thousands of US troops not getting their absentee ballots on time?

Between that and the Supreme Court lawsuit over Obama's birth certificate could be January before this election is over!

At least it will give us something to talk about...  I was just trying to be funny!

[punter]

JDH I guess we're reading off the same page. It would appear that this is going to be a long one. I have reserved judgement and am holding off all new purchases until I see something/anything that looks like a rational market. The recession is starting to cut in Asia, the number of tourists is down noticabely and natives are grumbling. Here in Indonesia it seems that  there hasn't been much saving going on and the downturn is savage and direct. Big projects like the the 4 casinos by the Sands group are getting shelved and tens of thousands are being layed off. Finance, manufacturing and shipping industries are reporting big slowdowns, especially in China. There have also been protests over the plumetting real estate values, welcome to capitalism comrades. They only knew one side of the equation in China, boom boom and now the bust is shocking to them. In Indonesia it's also commodities related enterprises that have tanked. It's quick and dirty but at least it's sunny here in Bali.

GLTA and pass the tanning butter. I may stay in the third world for a while because the lower cost of living

[sunseeker]

No need to worry Jim Cramer will sort it all out:

http://tbm.thebigmoney.com/articles/judgments/2008/11/06/hey-barack-hire-me

On the issues concerning the US auto industry, I have heard only today that there would be massive opposition from other nations on the grounds of protectionism. A representative of the Indian government said on UK television that China, India, and Japan are in the driving seat. “To say otherwise would be like a debtor dictating terms to his bank.”

It has not been the best of weeks, but didn’t we pull it together with some excellent posts? I think that I can safely say that there isn’t a better run Forum on the web, and that is down to two things:

The Wisdom of Solomon displayed by JDH. He keeps a tight rein on everything without restricting freedom of expression, and provokes discussions with his weekly commentary, and on occasion steps in with meaningful comments on the forum itself.

The wealth of knowledge, and the willingness to share that knowledge with one another. To discuss differences of opinion, and to keep things civil in the process.

On a less than serious note I thought that I would post these two excellent animations so that you can all wind down for the weekend, in the knowledge that everything will sort itself out in the end.

http://alanbecker.deviantart.com/art/Animator-vs-Animation-34244097
http://alanbecker.deviantart.com/art/Animator-vs-Animation-II-50891749

[sunseeker]

JDH

I am thinking like you that there will be a few false dawns before we finally see the light. Still I am not complaining gold is going up very nicely especially in terms of the British pound.

I was listening to debate on the BBC this week, on the report about the USAs weakening influence in the world. During that debate I noted that one of the economists dropped in a statement amongst the facts that he reeled off which either wasn’t picked up by, or was ignored by the other contributors. In a round about way he said that it was likely that the dollar would be replaced as the world’s benchmark currency. If not the dollar then what will we use as the benchmark then (gold)?

On the benefits system: There is little incentive for a growing number of people to go out to work anymore. Why go out to work when you can claim as much or more in benefits from the state? Of course government statistics cover the real facts that anyone in the real world can see for themselves. After you have been claiming unemployment benefit for six months you are taken off the register (and taken out of the statistics in the process). You then have to apply for other benefits. But you are still unemployed, but now you are not necessarily seeking employment. Motivation and ambition make for a better society for everyone. Things are going to have to come to a head at some point, especially since shortly there will be no oil revenue coming in to pay for it. Another good reason to hold gold (the British government under Gordon Browns chancellorship sold most of ours).

http://www.timesonline.co.uk/tol/news/politics/article1655001.ece

How can you hope build the fabric of a decent society on shaky foundations?