September 17, 2008

Market Capitulation

Gun to head, this is the bottom.

They didn't cut rates, but they did issue new Treasuries because the Fed needs money.  And no, there's no inflation, because banks are deflating hard.  We may come out of this alive, who knows.  (Though for current retirees who had money in "buy and hold" safe financials-- or anything else, for that matter-- well... there's always Social Security.  I know, I know, I know.)

They also stopped naked short selling, which is huge.  I thought that was already illegal?

For you technical traders:

djia 9-17.JPG

If we hold 10827, then that's a double bottom and we go to 12500, maybe even 13000.  By January.  Not sure how that's possible, but there it is.


You're relying on chart ana... (Below threshold)

September 17, 2008 1:43 PM | Posted by k: | Reply

You're relying on chart analysis now? Seriously?

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All the pros use charts, so... (Below threshold)

September 17, 2008 7:38 PM | Posted by Joseph Bergevin: | Reply

All the pros use charts, so there must be something to it. If nothing else, the fact that the market is the sum of individual actors who do use charts means that at some level it's a self fulfilling prophecy. There's a gas run going on in my town, and though I knew that the numbers didn't support a shortage, pure panic made it real, and thus I have no gas. Gotta follow the crowd sometimes.

The market will come back, probably in line with what our host has suggested. P/E ratios are at their lowest levels in a good while, and rational money will address this.

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Except in the market, it's ... (Below threshold)

September 18, 2008 2:15 PM | Posted by k: | Reply

Except in the market, it's a self-defeating prophecy. Oh, it's going to bottom out at 11827 and bounce up to 12500? I'll buy just before the bottom, which means it won't hit the bottom, or it will hit a different bottom. These are all heuristics that alter the very system they measure. They can only work if they're used on the small scale, because their very use will make them useless.

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Weird. The level held, ... (Below threshold)

September 18, 2008 3:58 PM | Posted by Alone: | Reply

Weird. The level held, and here we are. I'm not a technical trader, but at this moment in time fundamentals don't matter. Whether the price of WB is 10 or 15 is completely meaningless, so all that is left are technicals.

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