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QID will go DOWN
$42.00 on 4/25/09
$21.37 (-74.60% from time of market call)
OK, the LOWS are holding:
DOW: 7885
SP500: 840
XLF: 12.79
The QQQQ, Russell 2000 have broken thru;
but recovered to above lower levels:
QQQQ: $29.50
IWM: $47.00
So what's in store for next week after a 317 dive
in the DOW on Friday, 10/24/2008:
Look for an ECB rate cut on Monday or Tuesday; during a
re-test of the DOW and SP500 LOWS. We may even breach them;
DOW 7600-7700 and SP500 800-820.
That's fine, it hopefully finally flush the system out and a
tradeable and sustainable rally will be in place.
The US FED meets on Wednessday, 1/4 rate cut baked in, will bring
FED funds rate down from 1.5% to 1.25%; I'd like to see 1/2 cut myself.
Thursday bring the 3rd Quarter GDP report; which will be finally NEGATIVE!!!
What a SURPRISE; since we've been in a RECESSION for the past 6-9 MONTHS already!!!
Duhhhhhhhhhhhhhhhhhhhhhhhhhhh!!! Gotta love Government numbers; Always a day late and
a Dollar short; but HEY....you get in Life what you pay for, RIGHT???!!!
The Stock Market will have discounted the negative GDP number already; and we'll
"MYSTERIOUSLY" rally big time. Remember; the Stock Market is a FORWARD looking
Barometer aka: Indicator. Always have been, always will be.
Then, Comes 2 WILD Cards on Friday: Japan closes it's BOOKS; it's year end for
them on 10/31/2008. I imagine all those who have sold; will have done so and the NIKKEI
being down at the 7650 level, will "Miraciously" rise back up to 9000.
Card number 2 is the largest Mutual Funds in the US also close their Books on Friday.
So, selling should abate, majorly!!!
Then after Halloween will come the US 2008 November ELECTION: How does the market factor
in the change at the TOP no-matter what party wins, quite well actually. They don't
get sworn in until January 20th, 2009 anyway,,,,consider this Wall Street's FREE KICK
in November; here are the returns I've found for the SP500 in November post-Election
when an incumbent is not re-elected or the party at the TOP changes:
1952 +4.6%
1960 +4.0%
1968 +4.8%
1976 -0.8%
1980 +10.2%
1992 +3.0%
2000 -8.0% Gore v. Bush; Florida, Hanging chads; Electoral Votes, Supreme Court Challenge.
Bottom line, the Stock market hates UNCERTAINTY!!! Elections, except 2000, clarifies situation.
I stand by the market LOWS of 10/10/2008...and when they are re-tested, they should Hold.
INDEX: SP500 (SPY) DOW30 (DIA) NASDAQ 100 (QQQQ) Russell 2000 (IWM) SP Financials (XLF):
BUY: SSO, DDM, QLD, UWM, UYG
SHORT: SDS, DXD, QID, TWM, SKF
Guess we'll see what happens MONDAY!!!
Don't know what your talking about Ski-Daddy, the Bottom is in.
Ain't been
violated in; in fact it's a Double bottom and should hold.
Now for the rest of the SADIST-shorts out there; what you're
trying to tell me
is the market ie: SP500 is going down to 700. The free-fall; go as
low as it can go
in a "Risk free zone"? That's completely INSANE.
Little maket lesson: The Market broke of the TOP on Sept 3rd 1929 @
DOW 381.17 and in 2 months
and 10 days bottomed on November 13th, 1929 @ DOW 198.69.
It then had a MAJOR VIOLENT REVERSAL back up from November 13th,
1929 @ DOW 198.69 and
rallied all the way up to lower HIGH market top on April 17th 1930
@ DOW 294.07.
That's a 48% gain in 6 months after a FALL of 47.9% in 2
months.
The REASON: None really, just technical reflex rally. Nothing
really changed
in the Economy; as a matter of Fact it was just the start of the
Great Depression
that would last thru 1932.
You willing to RISK; and I mean RISK being short here?
You know if Sec. Paulson or FED Chair Bernanke announces anything
positive at all
here about the that TARP program is working; we'll GAP up 1000
Points.
In the Blink of an eye; many Short Futures and Put Options players
will be wiped out....GONE, BROKE!!!
Then, being a short; you'll add to the major buying MELT-UP
that follows the huge
GAP up.
Do you really want to be part of that, especially on the WRONG
Side? S&P 910 is showing to be very, very strong Support on the
SP500.
Still too high to reverse and short the ultrashort, unless you want
to loose all your gains... The S&P 500 is the index I am using
to benchmark the economy, all US indexes WILL fall with the S&P
500 for the duration on the depression. I believe that looking at
historical prices, the S&P 500 index will fall to a price of
around 400-700. I would not advise shorting the ultrashort until
more of the depression shakes out or you could easily loose all
your gains from going long on this index stock.
I personally am leverage shorting the S&P 500 down to 700. (and
perhaps more) I believe 700 to be a risk free number, as no one
knows how far it will really go. My reason is the financial crises
is mostly over and factored into the stock prices, but not the
effects of the credit crunch and consumer spending since they all
lost their 401K values and all their other investments for the most
part. There will be no forward looking economy for a period of
months, where the prices will get even better. Hang on till then,
you can do it :D
JMED2
