The social fabric is starting to tear. It's shocking and sad to start to read about the suicides, murder/suicides, and other violence that's starting to take place prompted by the nationwide meltdown. I imagine it's going to get worse over the years. Indeed, I think the social rage is going to reach a point where one or more of the super-rich execs (Richard Fuld or someone like that) will get shot down or otherwise killed. I'm not suggesting or condoning it; I am simply speculating that things are going to get so out of hand, that's how bad it's going to get. If I were one of these folks that had made hundreds of millions, I would probably leave the country and never go back. They're going to be hated. The little "shame, shame!" sessions we've seen in Congress the past couple of days are just the beginning.
I've reached the point where I've stopped listening to the bottom-pickers, including myself. I went long the market yesterday in a big way. I made out very well on my index calls, which I got out of this morning. Those calls would be huge losers (obviously) if I had simply hung on. As profitable as it has been, I'm starting to kind of hate this market. I feel like I'm a person who wants to catch fish, and there just happen to be bombers overhead dropping explosives into the pond. I'm able to get the fish, but the way I'm doing so is causing huge, horrible damage, plus it's terrifying.
You've probably seen, as I have, how economic cycles inflate different asset classes, and the last one to inflate is commodities. That's certainly what has happened recently. Remember all the hoo-ha this summer over expensive oil, expensive wheat, expensive gold, and expensive everything else? The air has come out of that really fast. I think we're heading for $50-$55 crude oil within a matter of months, if not weeks.
What about wheat? Can you say "head and shoulders"?
The collapse that is taking place in equity prices is obviously shocking. For goodness sake, Ford is at 1986 prices, and there's almost nothing in the way of support between here and the bottom in 1982.
General Motors is even worse; Richard Nixon was in office when prices were at these levels.
Some charts almost defy belief. Just look at the collapse here once support was taken out.
I have found technical analysis to be more helpful than ever during the collapse. Notice how BA is obediently staying beneath its broken channel.
Some folks have asked about GOOG (down over 25 points today, and down nearly 60% from its high). It is at a major resistance level here. Break it, and down we go.
IBM is likewise at a pretty major resistance point (a fan line).
XRX is sort of like AIG in the respect that it penetrated a really obvious support level and has been sailing downward ever since.
Speaking of (thin) support – check out $CZH. It is right at the lowest fan line. It's either bounce or break at this point.
Looking at the DIA, here again we have strong support and very little beneath. The case for a bounce is strong. The case for a crash, if this is broken, is just as strong.
Here's a different view of the same market. A crash, I think, would take us to between 7,750 and 8,400, depending on what line provided support.
Don't even get me started on the SDP ($UTIL) trade. Talk about money left on the table. It has fully realized its H&S potential.
Commodities look like they've entered a major bear market; I would short any major bounce here like nobody's business.
The charts just keep coming! The NASDAQ Composite has the same story as the Dow 30. We're at support. There's nothing but air underneath. If we don't bounce (pretty much immediately), it's crash time.
I'm very short OIH. I have ambitious target.
The Russell looks like it has very strong support at the tinted area shown.
OK, that's enough .Off to bed. Tomorrow we either bounce big or head into a free-fall. I'm as nervous as ever, but comforted at least by the guidance the charts provide.
