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Thursday, October 9, 2008

Too Far Too Fast, Its That Simple

“Valuations look attractive. It's time for a rebound, the stock market has just fallen too rapidly. IBM's numbers show that it's not all doom and gloom out there.” -Espen Furnes, Storebrand Asset Management

Yesterday I said, That’s the Bottom, For Now. On Tuesday I said, Oversold Bounce Time, Going Long. I am now long across the board.

Too far too fast. Its that simple. Equities will have an elastic bounce before heading back into the abyss.

Global Stocks, U.S. Futures Advance; IBM, Dexia, ICBC Rally: “Stocks rebounded in Europe and Asia and U.S. index futures rose after International Business Machines Corp. reaffirmed its profit forecast and investors speculated the worst five-day rout since 1987 was overdone.

IBM, the world's biggest computer-services company, jumped 6.3 percent in Germany after earnings topped analysts' estimates. Cap Gemini SA rallied 7.4 percent in Paris. BHP Billiton Ltd. led mining shares higher, jumping 10 percent as metals gained in London. Dexia SA surged 24 percent after Belgium, France and Luxembourg agreed to provide guarantees on borrowings of the world's largest lender to local governments.

The MSCI World Index added 0.6 percent to 1,009.35 at 11:34 a.m. in London. The index lost 15 percent in the previous five days, the biggest drop since October 1987. The sell-off left shares in the index at their cheapest relative to earnings in more than a decade.”


Vorlon said...

Mr Ben,

Bob Hoye recently noted that if the SPX closes below 1100 this week then a this would trigger a Weekly Capitulation Alert.

And to expect a relief rally to retrace 40-50% of the decline from the Aug highs.

Assuming the Aug high was 1300, and the lows at 970 in SPX. Then the retracement could reach up to 1130-1135.

Anonymous said...

went even shorter today...went to cash and am now sitting waiting to see what happens with this little bounce. too far too fast applies for normal situations but when ever financial instrument has been pumped up to massively over rated proportions i think we can fall hard for quite awhile. still looking for that short rally to really get short again...................

Truth08 said...

I don't think we're at a real bottom, because despite the panic and selling levels, a lot of people are still looking for and calling a bottom. I think this will get a lot worse before it gets better. There will certainly be short-term bear market rallies, but the true bottom still seems far off.
The Truth Shall Set You Free - Sign of the Times

Brant said...

Heard on the news that today is the 1 year since the market closing highs. Looked at my 401K and old 401Ks to IRA and found them to be down about -2.3 and -2 percent respectively from about this time last year. Of course thanks to Ben, Karl, and others (anyone ever hear of Phil Grande?) thats when I got about $100K into money market. Not many choices for true safety in 401Ks, esp. for me with low knowledge. Anyway, I think that -2.5% beats a good many portfolios.

I'm itching to jump back in with some of this cash and trully realize some of these "winnins", I'm just wondering which way the first several weeks/couple months of this holiday season are going to gol. Would it be wrong to think that everyone will be looking on a daily or nearly hourly/minute basis to see how sales go and the first hint of weakness.....yikes?

Brant, Atlanta, GA

Mista B said...

Okay, on some crazy level, this is almost getting funny. It's almost as if all of the shorts got squeezed out of their positions two weeks ago so that now there's no bid. I have a hard time believing any big money has been getting short over the past week, not at these levels, so unless they have tight stops that'll get taken out with a market rise, maybe we'll just melt right on down to the 2002 lows.

Anonymous said...

This ain't Kansas, kiddies..

Scott said...

Its as if the market is saying "CAPITULATE OR DIE"!!!

Anonymous said...

enjoy this weekend, folks....last one like it for the rest of your lives


TulsaTime said...

Way to go with the Ninja jinx dude! I'm just surfin away, market was -125 last look, no cares. Look back in, and OMFG, Cramer was right! -670 and we can crank up Steely Dan, Black Friday.

Hell of a bounce there benny!!

SPX770 said...

Ben, your bullish call came a bit earlier. Would you agree? Admit it!


Anonymous said...

Ben, check out your 50 day moving average premise for the early 1930's...this ain't your Daddy's stock market

Mista B said...

Gotta wonder also if too many people were calling for the bottom. Seven straight days of bombs away. I think it needs to open down big for a change. It keeps opening a measly 1% then getting slammed.

Scott. said...

Regarding 1929:
It took many months for the market to find its bottom in the great depression, and, being a believer that the US is headed that way, expected the plunge to be similar, with plenty opportunities to make money.

Were looking at a MAJOR paradigm shift. Whatever system you use, throw it out the window for now.

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