2 days ago

2 days ago we talked about when the market made large percentage moves...where was the market at the time? High or low or midrange on a technical basis? It turns out that 23/30 times, when the S&P made its largest percentage move, the market on a technical basis was at a very low risk level but on a sell signal. So 75% of the time what has occurred in history, has occurred now.

In my opinion, this could be the start of a major bottoming process for the market. Remember, bottoms aren't made in a day or a week, but is a process that occurs over time and needs to be retested. That also may have just occurred.

We will talk about that next...and also the bullish percent

Liar, Liar, Pants On Fire

The Dow, S&P, RUT, and the Financial sectors in the markets took it on the chin today. Why? Because Bear Stearns, the 5th largest brokerage firm was bailed out by the NY Federal Reserve Bank and JP Morgan. After a week of denying the rumors that they were short of cash, this morning came the news that they were short of cash. So much so, that they would have had to shut down. That would have caused a disaster in the markets, and possibly a mini-crash. It would have left thousands of investors with their accounts frozen for weeks.

So like usual, the Federal government comes in with our tax money and makes everything OK again. Wall street does what they want, makes millions, then investors lose the millions and the government comes in and bails them out. Sounds like a familiar story.

Do Not Despair

There is always hope on the horizon. A few days ago we saw that tremendous 400 point move by the Dow. Remember, I told you that usually most of the biggest up moves in the market occurs in bear markets. Well, I did a little history to find out how accurate I was.

I used the S&P. I took the 30 largest percentage moves over the last 25 years, and looked to find where the market was technically when the move occurred.

And what I found out was very interesting...and it may really give us insight to where the market may be going......tomorrow we shall we......

How The Might Has Fallen

As most of you are probably aware by now, Eliot Spitzer has stepped down as Governor of N.Y. He made his name years ago as Attorney General of N.Y., when he brought down the crooks, the liars, the cheats and the greed of wall street. Yup---brought them down to their knees. Now that same man is taken down down by his own hubris. Thought he was above the law.

And what is really sad about the whole thing...when he made resignation statement...there were cheers from the floor of the NY Stock Exchange. What a sick bunch of assholes...the whole bunch of them....from top to bottom....may they choke on their greed...

Up and Away--maybe

The market just had its biggest up move in almost 5 years. The dow was up 400 points, the S&P was up 3.7%. Everyone is happy, get ready for the next bull market. Whoa! Not so fast! Hold on a minute. First of all, most of the biggest one day up moves in the market occurs in down markets. Second of all, one day doesn't make a market. Third of all, the technicals still are bearish.

This doesn't mean that in a week or two of continued up markets, that the market can reverse up and we can become bullish. What it means is that don't become overly bullish now and start buying randomly, because if you do, there is a good chance you will get caught in a bear trap. And the market will hand your head to you on a platter.

It Has Been a While

It has been a while since my last post, and has the market changed. The technicals turned up on January 25, and just has reversed down 2 days ago. We are on defense people. You need to go through your portfolio and weed out the weak performing stocks and ETF's.

This has been the biggest market downturn since the 2000-2002 bear market. The market in down 20% on average. If you were doing as I have taught you at first, you would have had some oil stocks, steel stocks and commodity stocks to offset your other equities.