Signs of a Double-Dip Have Emerged

The double dip started in April. Everyone is just figuring that out now?

Going to get worse, too: much to my chagrin (and wrong prediction!) the House just passed the debt ceiling bill. Cutting government spending right now is the worst possible thing to do.

Jobs report comes out on Friday. Negative?

and manhanattan re?

Manhattan : ) so sorry for misspelling

Things are not good for banks, and not getting better. The stock market should have rallied today; it did, then collapsed, then was driven centimeters above the 200-day moving average in the last hour of trading (by buying blue-chips, I might add, as the Dow recovered much better than the S&P).

A fateful head-and-shoulders or triple-top (depending on which index you look at) is forming. If the S&P breaks under the 200-day moving average (which it did intraday) and stays there, the next leg down is to about 1035. The question is, what economic news is there to drive up markets?

None. Today's manufacturing report was dismal, China's was worse. Further Fed action unlikely because the current Fed action (QEII) is what caused this mess. Krugman is right today ... cutting the deficit right now will likely make the deficit worse. (It should have been done during the reign of George II, but it wasn't.)

Trading volume was dismal on the 35% way up in the markets; it will likely be much heavier on the way down. Not good for banks, or hedge funds. Margin gets called on the way down, and margin is what drove stocks up.

Housing is not good and getting worse. Inflation in a) gas; b) food; and c) rents are causing people not to spend. Manufacturing was the only bright spot, caused by an artificially low dollar; but that artificially low dollar raised the price of everything at precisely the point when unemployment was at its highest.

Hunker down - this ain't gonna be pretty.

didn't you short Gold 3 years ago stevie???

how's that working out for ya..

how's your rental website doing ..still scarin everything outta buying so they can rent$$$$$$??

must be makin a killin of ur rental comi$$$hhhhhhh?

pimp on playa ;)

steve: You failed to mention that Italy was down 4% today!!!!! Even the Dax was down big. Italy will need bailout and so will Spain. But that is not possible because the Euro banks are not solvent due to too much sovereign debt. The ECB can't carry any more and the IMF can't come up with enough to do it. Uh Oh. Europe is toast. The Europeans probably will not be buying any NYC pied a terres any time soon. Plus China is slowing down. Emerging Markets aren't looking too good especially if rates rise. The only country with great growth was Turkey -- right up until the military stepped down over the actions of the Islam-leaning leader. No. Not pretty at all.

Replying to the original post. They sure have but realistically we will have very slow growth and really low rates which will keep the prices from falling. Banks will keep on making money but nothing crazy. Hedge funds are making money again. Nothing catastrophic for the myopic world of manhattan real estate.

"didn't you short Gold 3 years ago stevie"

Never owned gold in my life, not to short it, not to long it. Not something I'm interested in.

"must be makin a killin of ur rental"

Saving a fortune as home prices continue to fall. HOWEVER, I might buy a few rentals in Ft. Lauderdale later this year. Foreclosures / short sales. All cash. Of course I have the cash because I didn't buy at the peak. You remember, "BUY NOW OR BE PRICED OUT FOREVER!"

I forgive the Irish Carpenter for his errant ways. Playa.

"didn't you short Gold 3 years ago stevie"

Nah, he shorted stocks before they took off...

Don't know about you, swe, but I've been doing pretty well in the stock market recently. About to do much better, won't take a single loss, and am making oodles of dough....

You really don't know how the process works, do you?

"Hunker down - this ain't gonna be pretty."

Agreed. Add to your list that this country lacks a viable growth vehicle or a shiny new financial instrument to hide all of these sins.

JuiceMan agrees with me?

WHAT DID I DO WRONG?

hahahahaha!

"Cutting government spending right now is the worst possible thing to do"

I guess the fact that the vast majority of the cuts don't even take effect until 2014 is irrelevant, right?

BTW, the economy was supposed to have died permanently in mid-2009. Then it was supposed to have died in mid-2010. Now it's supposed to die (yet again) in mid-2011. Same BS gets repeated over and over and over and over...

stevieee -- "Not something I'm interested in."

don't really care if you don't play gold, as IAU makes up less than 2% of my port..

but not interested? remember this?

http://streeteasy.com/nyc/talk/discussion/5195-cramer-says-to-buy-gold

"Cramer Says to Buy Gold...So it must be time to short it."

..not a cramer fan myself...

but had I taken your "advice..."

IAU 8/2/11 ...$16.04
IAU 8/2/09 ...$9.38

are your fees 2/20? where do i sign up for your services? i have cash burning a a hole in my pocket and am clueless, playa.

******but had I taken your "advice..." ***2 years ago from your post***

http://streeteasy.com/nyc/talk/discussion/5195-cramer-says-to-buy-gold

IAU 8/2/11 ...$16.04
IAU 8/2/09 ...$9.38

heheh

I say buy gold. Buy all of it. Anything you want.

Just not me.

buy prpfx permanent portfolio. Yeah, you could replicate that on your own, but it has had a damn good run for a decade, and I don't have to watch the individual components go up and down, just the net result.

"I guess the fact that the vast majority of the cuts don't even take effect until 2014 is irrelevant, right?"

Actually they begin in FY 2013, which begins in October 2012. SO next year we start seeing huge cuts.

"I say buy gold. Buy all of it. Anything you want."

actually you suggested/implied to short gold...

2 years ago...

http://streeteasy.com/nyc/talk/discussion/5195-cramer-says-to-buy-gold

IAU 8/2/11 ...$16.04
IAU 8/2/09 ...$9.38

and im not a fan of gold myself, but damn what a call on your part, hehe

"Actually they begin in FY 2013, which begins in October 2012. SO next year we start seeing huge cuts."

Meh. They're cutting $25b from the 2012 budget and $47b from the 2013 budget. When your discretionary spending exceeds $1t, that's not much at all.

How about we don't cut any spending and close the carried interest loophole instead? That is the single most offensive loophole in the tax code.

Socialist = guy/girl who can't get his facts correct. Buh-bye Socialist.

Earth to IDIOTS - at least TRY to get your facts SOMEWHAT correct before you pop off, K?

Deal would have little impact on economy till '14
Aug 1 06:20 PM US/Eastern
By CHRISTOPHER S. RUGABER
AP Business Writer
WASHINGTON (AP) - The deal reached by Congress to raise the debt ceiling and cut more than $2 trillion in public spending should have only a minor impact on the economy for the next two years.
Almost all the cuts would be made in 2014 or beyond. The approach heeds a warning by Federal Reserve Chairman Ben Bernanke and many private economists: Cutting too much too soon could harm the weak economic recovery.

Yet the deal won't do much to help the economy, either, at least in the short term, economists said.

Under the debt deal, discretionary spending, which excludes Social Security, Medicare and Medicaid, would be cut $21 billion in 2012 and $42 billion in 2013, according to an analysis by the Congressional Budget Office.

Combined, those cuts come to less than 1 percent of the nation's $14 trillion economy. The impact "should be relatively minor," says Brian Gardner, senior vice president at Keefe, Bruyette and Wood, an investment bank.

The spending cuts would increase to $75 billion in 2015 and $156 billion in 2021, the CBO estimates.

That assumes we don't lose our AAA rating. Otherwise all bets are off.

I never implied shorting gold. I said I would never own it, & I stick by that. It is a lousy investment. Maybe a good trade, but a lousy investment.

stevie 2 years ago...

"Cramer Says to Buy Gold So it must be time to sell."
So it must be time to sell.

IAU 8/2/09 ... $9.38
IAU 8/2/11 ...$16.04

of course you were just joshin and speaking hypothetically..lulzie ..

i'll pretend cramer's an actual investor vs a trader for shts n giggles

oopsies http://streeteasy.com/nyc/talk/discussion/5195-cramer-says-to-buy-gold?page=1

Is it time to buy equities or $1mm studios on west 42? Man my 0% rate on my savings Acct is kicking.

The croissants are excellent. My trip to Europe, $30k maybe $40k if we extend another week. But who the fk cares, I'm taking 10x that from the cpw c7 about to be unemployed banker.

Flmaozzzzz. Bdffettsexer, I wanted to go all in at Dow 150 down, but I got the cheapie att euro plan and couldn't get ETRADE connection. Damn my fat thumbs saved me another 100 pts. Should I go all in tomorrow? Or wait? So fking confused. ;(

Not really. I don't lick Buffett jizz off the floor for a living.

"I don't lick Buffett jizz off the floor for a living. "

just your dad's jizz after he kicked you outta the family Real Estate practice?? lmfazooozzz

look pops i izz posting the real eztatez on the interwebzz.. do you love me now? please love mezz.

"So it must be time to sell" <> "short"

I have made many comments that whatever Cramer says to do, do the opposite. It usually works.

Since I don't own any gold & never did - beyond whatever my mother gives me as jewelry for Christmas, which I told her to stop doing - so I could not actually have sold any.

w67 is still angry he missed the bottom in March 2009. He's a very angry individual. No doubt he'll miss this bottom as well (cuz he's just that DUMB).

W67 just loves boasting about money he's pi**ing away on all the LITTLE luxuries he can afford, because he just cannot bear to think about the BIG luxury he CAN'T afford - you know, that classic 7 on CPW. (And let's face it, if anyone on a coop board ever connected his SE posts with a purchase application, he'd be toast. -- oh that's right, he'll just have to go to a condo so he won't have to go through the approval process. Oh wait, the high end condos have gotten much snootier lately as well. Oh well, guess he'll never be able to buy).

You think that was the bottom. I don't and anyone who really knows RE knows that you don't need to buy at the absolute bottom. Better to take a wait and see approach. It's not going to fly like it did from 2005-07. No reason to rush. Too many things can go wrong. Of course if you are wealthy this makes no difference.

"You think that was the bottom"

I have no clue whether it will be today, tomorrow, next week, next month or in March 2012. Whenever it occurs, morons like w67 will miss it, rest assured. I could've tried to time things and "get out" when prices were higher, but then when do you get back in??? That's the conundrum that idiots like w67 face - they go to 100% cash waiting for the "next leg down" [see, e.g., early 2009], it never arrives, the market jumps much higher, they get angry and refuse to get in on pullbacks, the market subsequently zooms ahead, they get even more stubborn and angry, the cycle repeats, etc etc etc.

Listen to Buffett - not buffoons like w67 - be greedy when people are fearful - that's it, it's relatively simple (unless you are a dolt like w67 and you don't "get" simple).

"I have made many comments that whatever Cramer says to do, do the opposite. It usually works."

can't stomach Cramer as much as the next dude, but it apparently didn't work...

steivieee 2 years ago - "Cramer Says to Buy Gold So it must be time to sell."

IAU 8/2/09 ... $9.38

IAU 8/2/11 ...$16.04

since the numbers aren't clear enough for you on your call..

IAU 8/2/09 ... $9.38 (around the date of your prediction)

IAU 8/2/11 ...$16.04 today

the sweet irony in all this is how you actually sound like Cramer right now when he tried to defend his BSC call, hehe.

FYI, I'm talking about stocks, not real estate.

hol, if you must know, from the time Cramer made that call gold DID fall. It went back up again, but it did fall.

Nonetheless, I never had any, never borrowed any, never sold any.

I would be careful about boasting, however: just a few short years ago people were boasting about how much money they had made on their properties. Not so much now. Ditto stocks. Double-ditto gold.

Interesting to note, the S&P is actually still slightly up on the year after today, if you include dividends received thus far this year. One would think reading all the doom-and-gloom headlines that the market is already down 15-20% on the year or something - but it's just not the case.

Interesting to note, the S&P is actually still slightly up on the year after today, if you include dividends received thus far this year. One would think reading all the doom-and-gloom headlines that the market is already down 15-20% on the year or something - but it's just not the case.

"Interesting to note, the S&P is actually still slightly up on the year after today"

True enough, bsex, but the problem with today is that all of the technical support levels have been broken, and on heavy(ish) volume. The 21- and 50-day moving averages were broken long ago; the 200-day average was broken today, and decisively. It happens that the 200-day average is the same as the neckline support of a prominent (and usually very reliable) head-and-shoulders pattern.

That being said, the target price for technical traders will be the distance between the neckline support and the peak, which is 1370 - 1270 = 100 points. The downward target for the s&p then becomes 1175, which is also a major support from the Japanese earthquake.

If you draw a trendline from the March 2009 low through the interim bottoms in May and July 2010, you will see that any further downward move on the s&p will violate that trendline (an approximate 80% increase since March 2009). On a purely technical basis once that trendline is violated, there is nothing to stop a 100% retracement to the March 2009 lows.

Will that happen? I don't know. But that's how a lot of traders are going to look at the scenario. There seems to be very little good economic news coming down the pike for the next 6 months. I've been saying (and a lot of other people, too) that these charts look eerily similar to 2008. The rise up in the markets has not been on volume; it has been on margin. Margin gets called, which is why stocks tend to fall faster than they rise.

"the problem with today is that all of the technical support levels have been broken"

Do you realize that technical analysis doesn't work? Do you care that it doesn't work? Why do you waste your time studying financial voodoo?

"There seems to be very little good economic news coming down the pike for the next 6 months"

That's what everyone was saying in March 2009. Turned out "everyone" was wrong.

"The rise up in the markets has not been on volume; it has been on margin"

That's hilarious. You can only use 50% margin. If you are going to make a wildly broad statement, at least back it up with some actual proof.

FWIW, I use zero margin. And I've bought a lot of stock since early 2009. I guess I used monopoly money, right?

Or did Vanguard and every other index fund use only margin loans to buy stocks since 2009 and not actual investor inflows? I mean, your "margin" claim is laughable on its face.

so...you timed it perfectly?

"so...you timed it perfectly?"

Listen to stevejhx - only "chartists" can time things perfectly - by studying their amazing charts and bollinger bands n stuff. That's why they're all billionaires.

"Do you realize that technical analysis doesn't work?"

I'll tell you what: go to bigcharts.com, bring up a stock chart, have the software draw the 200-day average and watch where stocks have bounced. Technical analysis is not 100% accurate; nothing is. Certain patterns are more accurate than other patterns. Head-and-shoulders is one of the most reliable patterns there is.

"That's hilarious. You can only use 50% margin."

Partially right. First it depends on the market, and on the instrument. Second, that is just for the average investor, not for hedge funds, banks, etc., which use a lot more margin. At one point, in 2008, margin was up to 35x.

Here's the problem, from ehow: "The investor buys 200 shares of a $60 stock on margin. The investor puts in 50 percent, or $6,000, and has a margin loan for the other $6,000. The share price falls to $35. The equity is now the $7,000 value of the stock minus the $6,000 loan: $1,000. A 25 percent margin requirement of $7,000 is $1,750. The investor would receive a margin call to deposit money or securities."

The problem happens because once there is a margin call, no one wants to add more money into a falling stock, so they sell it. When they sell it it causes a vicious cycle.

It is also a well-known fact that stocks fall in price faster than they rise. This because everybody wants to be the first ones out, to save their profit. This is elementary finance, bsex - if you think it's "hilarious" you shouldn't be invested in the stock market. It's not YOU who drives prices down - it's the big fish.

Just when you say "Or did Vanguard and every other index fund use only margin loans to buy stocks since 2009" - it's not Vanguard or the index funds that use margin to buy the stock. They're not allowed to if they're index funds. It's the people (and companies) that buy the funds that use margin. When they sell their index funds they get cash back - it forces Vanguard to sell the underlying assets that they must hold to replicate the index.

I think you're way out of your league in investing, bsex. These are basic principles, well documented, and in every finance textbook in the world.

"I'll tell you what: go to bigcharts.com, bring up a stock chart, have the software draw the 200-day average and watch where stocks have bounced. Technical analysis is not 100% accurate; nothing is. Certain patterns are more accurate than other patterns. Head-and-shoulders is one of the most reliable patterns there is"

So reliable, that Steve was shorting at 10,300 and before.

SO reliable, I tell you!

"so...you timed it perfectly?"

No - I made a lot of fundamental mistakes by not following the rules, which is why I went back and reviewed them. I lost my discipline; I have now recovered it.

Which is why I didn't make any investments in the stock market today. Not long, not short. I'm waiting for the pattern to be confirmed. We're not there yet.

That said, analysis of any type was hard after QEII, because the markets were reacting to excess liquidity, and not to fundamentals, which is usually what moves the market.

"I think you're way out of your league in investing, bsex"

Of course I am. You look at a chart and think you can predict the future of a stock. I look at the fundamentals of the company to determine where the stock price will go. Obviously your way is much better(!!!) - good one. IF YOU BELIEVE THAT, I HAVE A LARGE BRIDGE TO SELL YOU STEVEJHX.

"I lost my discipline; I have now recovered it"

That's why every "chart guy" says - "it's not the chart, I just didn't read it correctly" - same nonsense gets repeated ad nauseum.

"Technical analysis is not 100% accurate; nothing is."

You're right - 50% of the time it works and 50% of the time it doesn't work (sorta like throwing darts at a board or flipping coins to pick your investments). So basically it's a recipe for...not working.

Fundamental analysis ACTUALLY WORKS (but requires a lot more effort - that's why most people don't bother, b/c it requires actual effort).

"I think you're way out of your league in investing, bsex. These are basic principles, well documented, and in every finance textbook in the world."

BSex, this is Steve's MO. If you dare question him on anything he posts about, he will tell you you're way out of his league. He happens to be an expert on everything. What were you even thinking?

Don’t bet the rent on technical analysis

In times of great disaster and stress, we like to think of great ship commanders and generals heading toward their goals with cool calculation while the guns are blazing. Rather than succumb to the temptation to join in the general angst when the market plummets, we try to stay calm in order to figure out how to survive and make our next buck.

On such an occasion recently, we were thinking about a post that came across our monitors from a hedge fund manager whom we call Miss X. "The technical action in the S&P since the big-cap rally last week is being threatened by a massive head-and-shoulders going back to January 1998," she wrote. Thereafter, the S&P took out the January 1998 low and headed straight down to April 1997 levels.

Our correspondents pointed out at the time that if one used the classic Edwards-Magee head-and-shoulders method to project the "downside target" for S&P futures, 540 or so would have been the likely next stop. As for the Nasdaq 100, it was headed for negative 2,690 under the same method of reckoning.

In any event, the question was raised: Does trading based on head-and-shoulders patterns work?

Worthless nostrums and superstitions
It always helps to know what works and what doesn't. In times of plague, worthless nostrums and superstitions flourish. It's important to keep a clear head and take the long view.

As to whether head-and-shoulders patterns work well enough in the stock market to be profitable -- they don't, as we'll show.

Head-and-shoulders trading has been around since before 1930. The pattern consists of three peaks, the highest being in the middle. A horizontal line -- the "neckline" -- is drawn to connect the troughs between the shoulders and the heads. The crossing of the neckline is supposed to signal that prices will continue down away from the head. An inverted pattern is read as bullish.

45 years of testing
We'll start by saying that we avoid all vaguely defined "technical" indicators requiring visual evaluation by a gifted interpreter. Moreover, in 45 years of trading, Vic and his staff members have tested every indicator to which value is ascribed. If it works, he would be using it. Head-and-shoulders trading is a trend-following strategy. We believe that any wealth that accrued to Miss X as a result of trading this pattern -- and we do congratulate her for it -- was a lucky event, not a sure indicator of future success.

However, any important question deserves to be tested, and the results made public. Haphazard anecdotes, confident assertions and appeals to authority -- even, or especially, our own authority -- will not do.

As Steve Stigler writes in his magisterial "Statistics on the Table:"

If a serious question has been raised, whether it be in science or society, then it is not enough merely to assert an answer. Evidence must be provided, and that evidence should be accompanied by an assessment of its own reliability.

We have tested the head and shoulders strategy on S&P 500 futures and will report the results below. But we also will take the opportunity of passing along to our readers the results of a remarkable study by Carol Osler of the New York Federal Reserve that concluded head-and-shoulders trading in individual equities is, on balance, unprofitable.

Osler's tests were rigorous, and she presented her conclusions with great clarity in a study called "Identifying Noise Traders: The Head-and-Shoulders Patterns in U.S. Equities."

Osler wrote a computer program to identify head-and-shoulders patterns, based on the descriptions in eight technical manuals. She applied it to 100 companies with price data spanning July 2, 1962, to Dec. 31, 1993, selected at random from the Center for Research on Securities Prices at the University of Chicago.

All of the manuals were ambiguous about the criteria for exit, but they agreed that a head-and-shoulders pattern signified a major change of trend. Osler therefore wrote her program to require that a position be held until the price stops moving in the predicted direction, with a stop loss of 1%.

Irrational speculation
Her conclusion: Head-and-shoulders trading is unprofitable and "does not qualify as rational speculation."

Amazingly, head-and-shoulders trading is quite popular. Osler estimates that such trades account for as much as one-quarter of an average day's volume around the time of the "neckline crossing," the signal to put on a trade.

How to account for the popularity of an unprofitable trading strategy? Certain peculiarities of the human mind may account for its acceptance, Osler says. People are prone to see nonexistent connections between groups of things. They tend to be overconfident in their own judgment. And they remember pleasant or successful experiences (e.g., profitable head-and-shoulders trades) with far greater clarity than they do unpleasant experiences.

A few successes may bring the head and shoulders trader fame and funds, encouraging new entrants. As Osler notes, cognitive psychologists have shown through experiments that beliefs and behaviors are difficult to "extinguish" when they are randomly reinforced.

Osler's data ends in 1993, and we wondered whether the picture might since have changed. Fortunately, we were able to interview her. She told us that she is updating the database.

We have heard many market players say they don't believe in head-and-shoulders trading or any other technical analysis patterns, but like to know what such traders are doing so they can eat their lunch. Not likely, says Osler. Even before transactions costs, trading against head and shoulders traders is just not profitable in individual stocks.

After our conversation, Osler left the Fed to take a professorship in the international economics and finance department at Brandeis, where she planned to research the role of stop-loss and take-profit orders in the currency market. One area of interest is the possible clustering of orders at round numbers. She didn't have any plans to extend her head-and-shoulders work to S&P futures. "Technical analysis is just not a hot topic," she explained. "It's not the sort of thing you can make a big splash with."

Follow the algorithms
Always ready to jump into the breach, we tested the head and shoulders strategy on S&P futures prices beginning in 1996. Shi Zhang, Vic's computation assistant, wrote a program based on Osler's description of her head-and-shoulders algorithm.

Zhang's program looked for six points on a bearish head and shoulders pattern -- the right shoulder, the right trough, the head, the left trough, the left shoulder and "neckline" crossing. The time between points had to be at least five days and no longer than 180 days. Various distances were used to make sure that no patterns were missed.

After running his computer nonstop for 10 hours, Zhang came up with seven patterns, which he then evaluated for profitability 1, 2, 3, 4, 5, 10, 20, 30 and 60 days out. The results appear

Number of days after neckline crossing

1
2
3
4
5
10
20
30
60

Average profit/loss
0.30%
1.60%
1.20%
1.10%
1.30%
-0.70%
0.70%
-0.20%
-2.60%

Standard Deviation
0.01
0.03
0.01
0.02
0.02
0.02
0.02
0.04
0.1

We conclude that head-and-shoulders trading does not work either as a signal of a trend change or as a profitable strategy.

We will therefore go back to picking up good stocks at good prices, and we'll try to restrain ourselves from using the rent money.

http://articles.moneycentral.msn.com/Investing/PowerTools/DontBetTheRentOnTechnicalAnalysis.aspx

Who cares? Ugh.

"If you dare question him on anything he posts about, he will tell you you're way out of his league. He happens to be an expert on everything"

It's hilarious that a guy can look at a chart of the S&P 500 [the exact same chart that thousands of other people are looking at every day] and think he can predict stock prices from it - and then tell me that I'm "out of my league" b/c I'm analyzing ACTUAL BUSINESS FUNDAMENTALS like profits, cash flow, balance sheets, etc., in order to make real-life investment decisions.

I really hope he's not actually this dumb.

Keeping looking at those charts Stevejhx - they should have told you that GOLD was going to skyrocket this year, shouldn't they???????????????? Um, guess not.

"I really hope he's not actually this dumb."

he tried to backpedal on his gold call of selling it 2 years ago when it was at $9, and today it's at $16...

yes stevie may seem dumb, but he operates a rental website so he has an agenda..

he's making a killing off the ri$$$$ing rent$$$$ off the people he tries to scare off purchasing..

how's your rental commis$$h this month steve-o, such a pimp.. up top!

hol, I don't operate a "rental website." I have a translation company. What ARE you saying?

I haven't backpedaled on my gold call either - I don't own it, never have, never will. It could to go $2,000, or $200, I don't care. I've never even looked at a gold chart.

I haven't backpedaled on my call that Manhattan real estate would fall in price, either - and I took a lot of heat on that one. A big nanny-nanny-boo-boo on you!

Bsex, you obviously don't understand what I'm talking about because you think Vanguard takes out margin loans to operate its funds.

All technical analysis is is a tool. Apple could be the greatest company in the world - and it is a very good company. All technical analysis does is say, "Should I buy it at $400 a share, or maybe - if it looks like the market is going down, taking Apple with it, should I wait?"

That's it.

Business fundamentals are more important than technical analysis in the long-term. In the short- to medium-term, however, they're not.

By the way, I don't know of a single professional investor or trader who disregards technical analysis. Not even Warren Buffett.

"Buy when there's blood in the streets" is pure technical analysis talk, from Baron Rothschild. “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful," from Warren Buffett, is the exact same concept.

Not the best company in the world will be saved in a falling market, and even LinkedIn is puffed up to $9 billion in a bubble.

"I've never even looked at a gold chart."

considering you started a thread 2 years ago saying it must be time to sell gold...
http://streeteasy.com/nyc/talk/discussion/5195-cramer-says-to-buy-gold

as well as just 8 months ago
http://streeteasy.com/nyc/talk/discussion/23710-why-gold-is-a-bad-investment

when they've shot up since then..

could care less if you don't own gold.. just makes your infatuation with it more odd..in this particular instance it's apparent you're incapable of making a basic prediction, so why even write on a subject you know little about?

hmm i haven't had sex with a woman since '03 in college.. let me now go create threads about how to please a woman appropriately..

I worry that we're seeing a replay of what occurred after 1929 crash where the market went back down big after an initial recovery. That said, I'm suspicious of govt intervention and think the cure worse than the disease.

aha!

?

*%$#!!!

I thought NYC real estate would have taken more of a hit in 2008-2009, and it didn't. So i'm not at all sure what will result from the coming economic challenges. But I am fairly sure we are in for a bumpy 18 months.

Oh, hol! You're such a silly-billy!

RS - methinks we're in a long-term bear market.

"I'm spending 1/10 of your entire 3 stock portfolio on a 4 week trip to paris and thereabouts"

That's great - good to see you are helping out the Euro economy. Not a very smart use of $$$ by you, by that's not surprising.

"I wonder what 250pts down in DJIA after a debt ceiling agreement can mean?"

I guess it means people are fearful - and you know what that means (oh wait, you can't figure it out, can you). Buh-bye.

"methinks we're in a long-term bear market"

Did the chart tell you that? Turn it upside down and look again.

ISM at 52...that means our economy is growing... why is DOW down buffettsexer? why why why?

I'll tell ya, we had an incredible credit bubble that misallocated capital to irish carpenters.... .we are righting the ship by forcing all the carpentars back to bartendars.....

It's a slow process and painful, but necessary.

Hey Bsex, do margin calls sound so ridiculous now? Dow down 400 points in one day, oil down, gold down?

The reason is that once margin is called, assets must be sold to cover the margin. For large traders there is an interday margin call that must be answered immediately. That's why stocks fall so suddenly.

This is not the end of the deleveraging. Europe is falling apart, and the US is falling into Great Recession Part Dieux. China is hard landing.

IMHO we will certainly be retracing 100% of the advance since the announcement of QEII (which is what caused the asset bubble to begin with), and may even test the 2008 lows. Too early to tell on that latter one, but we'll see how this plays out in the next few weeks.

Unfortunately, monetary policy is at the limit of what it can do, and the Republicans have cut off all possibility of fiscal policy doing what it's supposed to do. There seems little, then, that will be done at this point: everyone is hoarding cash. (Me included!)

What cracks me up is Fast Money:

http://www.cnbc.com/id/44004155/

Joe Terranova, especially.

"and the US is falling into Great Recession Part Dieux"

Leave your gods out of this.

:)

duhhhh Joey Teee and Dimmy

Why is WB grayed out? BJW is selectively (and thankfully) grayed out, but WB adds color and intelligence to this site!

BTW - gold does NOT do well in deflationary environments.

"may even test the 2008 lows"

Do you mean the 2009 lows? The market bottomed in 2009, not 2008.

"Hey Bsex, do margin calls sound so ridiculous now? Dow down 400 points in one day, oil down, gold down?"

I never said margin doesn't exist or that margin calls don't happen. I disagreed with your incorrect statement that "the entire run up" in stocks was due to margin. That's ridiculous.

BTW, you have a very bad habit of taking something another person has said, twisting it into a completely different statement and then telling the person that their statement (which they never said in the first place) was wrong. Why do you do this??? What's the point?

"What cracks me up is Fast Money"

Don't you realize that this is absolute proof of how useless technical analysis is:

"Trader Joe Terranova thinks the reversal was meaningful and thinks the trade is now long. As a point of reference he's using 1227 the high point of November 2010. “What was once resistance becomes support and that was resistance throughout December 2010,” he says. Terranova now thinks it should be support and suggests playing stocks for a bounce – using 1227 as a stop.

Karen Finerman also finds Wednesday’s market action constructive. “When the market is down a lot and bounces – that’s good price action,” she says."

"Trader Guy Adami also thinks the next big move is to the upside. “The bounce should feed off itself,” he says. Adami believes the market has effectively made a double bottom off the March lows"

Guy Adummy strikes again.

"BTW, you have a very bad habit of taking something another person has said, twisting it into a completely different statement and then telling the person that their statement (which they never said in the first place) was wrong. Why do you do this??? What's the point?"

Amen, BSex, amen. It helps him sleep better or something, knowing that he's never wrong this way.

"but WB adds color and intelligence to this site!"

Love the sarcasm, Steve! Well done!

"Do you mean the 2009 lows?"

Yes.

"Don't you realize that this is absolute proof of how useless technical analysis is?"

No.

http://www.marketwatch.com/story/dont-fall-for-wednesdays-token-advance-2011-08-04?link=home_carousel

Terranova is usually wrong on everything.

Tech. analysis is not the be-all-end-all: it's just one tool in an arsenal of tools. You dismiss it outright; I say that it has its uses in certain cases. This is one of them.

Knowing what happens when margin is called is another.

And - in case anybody cares - I think that this is as much about the end of QEII as anything else: the free money party (which caused the sinking economy) is over.

whoaa down 470 on huuuuge vol--employment better be good or we could have a flash crash

oh shit, broker's on line 3, guess what he wants??

"This is one of them"

Well, I guessed I missed your post from yesterday telling everyone that today the market would be down over 4%. B/c surely your charts told you that this was going to happen, right?

kramerica--bullish all week

down 500 points give or take...and not a flash crash...just huge volume selling

what's a margin call?

Powerful volume today.

"B/c surely your charts told you that this was going to happen, right?"

Did I say that charts predict moves from one day to the next? No. They can be very helpful in identifying trends, however, and I clearly said from the very beginning what the direction would be, to what point, and that when margin is called it accelerates selling.

I've been saying for a long time that I was keeping my short positions even though I was losing money (on paper) because I said a crash was coming, I just didn't know when. All the stars - and yes, the charts - were lined up for one.

"employment better be good or we could have a flash crash"

WB - you can be sure that the Fed is on the horn with everybody today to make sure that that doesn't happen again.

Yay Cramerica!

"I've been saying for a long time that I was keeping my short positions even though I was losing money (on paper) because I said a crash was coming, I just didn't know when. All the stars - and yes, the charts - were lined up for one."

What's it like to be genius, Stevejhx?

impossible to time these things perfectly. Im doing well on gold, well on some dxd/s&p shorts, getting my a$$ handed to me short treasuries in TBT.

I lost $81,000 today. It was an interesting day. Maybe tomorrow will be even more interesting. Can't wait to find out!

Plus whatever my 401K went down (another few thousand) - but whose counting?

Sorry - "who's" counting (lose $80K and grammar goes right out the window)

"What's it like to be genius,"

I wouldn't know, b/c I misjudged how high the market could go; I thought it would peak at 11.500. Nonetheless, I also keep a huge amount in cash - over 50% - because I don't trust the next leg down.

Judging by the ferocity of today's sell-off, it looks like it ain't gonna be pretty.

On a long-term TECHNICAL basis, there is nothing to stop the market from retesting its 2009 lows. In the medium-term, resistance should be around S&P 1180, but I don't think that's going to hold if the employment figures are bad. I say we see full retracement of the QEII bubble to 1035ish, and then have a second look.

Our fiscal and monetary policies are bass-ackward right now - unemployment benefits are running out just when we need to be spending money. Pumping money in through monetary policy only caused a bubble. It must be spent in a targeted fashion.

Yup. Good old Keynesian economics.

"On a long-term TECHNICAL basis..."

I agree with everything you said...except everything that was based on TA (cuz TA don't work). Cheers.

BTW, you are clearly wasting your talents on this msg bd. You should be Treasury Secretary or Chairman of the Fed. It's pretty obvious that you could clear this whole economic mess-thing we got going in about a week.

But BS, your portfolio comprises 3 stocks. Why say any more??

BS, nobody listens to me. They all laughed when I said that property prices would fall. The same arseholes now posting on the gold thread are the same ones who thought that real estate was impervious to downfalls (or Dow-falls, maybe - HAHAHAHA!).

What's going to happen to gold is one night you go to bed at it costs $20,000 an ounce, and you wake up the next morning and it costs $30. It's happened many times before.