Tuesday, March 3, 2009

Will 700 Hold? Maybe For a Bit

We closed yesterday at 700.82 on the S&P yesterday, talk about a line in the sand. This is the spot where the bulls MUST take a stand if they want to prevent another massive slide to lower levels. At this point investors are punch drunk and shell shocked and many Pollyanna's have emotionally capitulated. No Mas, they've had it. You could make a bullish case from what I just said because that's when bottoms happen, but in my opinion, the only thing this will set up is a possible oversold rally in bear market. More pain to come, unless the brain trust in Washington fixed housing and unemployment while I was sleeping.

The chatter is that Volcker has been thrown out of the inner circle because he is making too much sense and it is politics as usual. Economically our country looks like the first day of shock and awe in Iraq, but without the bombs. Taxing entrepreneurs and the only people that actually can pay taxes seems like a nifty idea right now, don't you think?

I'm tired of being bearish, I have been for maybe 14-16 months now. It's taxing on my psyche and quite frankly a bit depressing, but I have to call it like I see it. Stay alert for a rally but remember that this will end badly, probably worse than most people think. I still believe we will see 5 handles on the DOW and S&P, and I hope I'm wrong, but I don't rule out the possibility of 3 handles on both. Developing.................................

3 comments:

WH said...

Hi,
I should begin by saying 'Thank you' for your insightful and candid commentary on your blog, and twitter. I have been a product of institutional investment management for quite some time and am always trying to get a handle on what is 'really' going on. Your 'tell it like it is' approach is very refreshing, although my time frame is not as quick as yours, it certainly has shortened up in the last year or so. I digress.....

Question is, trying not to seem too ignorant, are your referring to 5000 and 3000 when talking of 'handles'?

It seems to me, with 62% fib retracements from 74 lows and 32 lows to 07 highs both falling in the 5300-5700 range and corresponding with the 96 stumble that makes for a good target. Below that, yikes, if your 'handles' are thousands, then the 94 base is it in the 3500 area, also corresponds to the uptrend line drawn from 32 lows through 82 lows. Wow!

Also Note: Your gmail email that "Email the author" uses on your blog does not work. I think it is upsidetrader@gmail.com.

Thanks again,
W

Ceschiatti said...

What do you mean by a handle?

Maximo said...

I love your commentaries, man. Sometimes I don't like a few things you say but that's because sometimes the truths hurts. But I read your blog every day!

About Me

My photo
I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.