3SOF

without words............. 

Knobias Sector Commentary
Thursday , October 09, 2008 16:00ET

Energy

The Energy sector was the hardest hit today as oil prices plunged below $87 per barrel. Oil & Gas Producers were sharply to the downside while the Oil Equipment & Services sector was mixed with a majority of the stocks ending to the upside. As with the overall market, the sector began the morning by moving higher before sellers came back in and took it lower through morning trading. Midday the sector stayed within a tight range, but again moved lower during the afternoon. Ratings action for the sector included a downgrade for DYN.

- MRO: Completes Sale of 50% Ownership Interest in Pilot Travel Centers
- Upgrades: none
- Downgrades: DYN

Materials

The Materials sector was one of the final sectors to move into negative territory. For much of the day it battled to stay in the green but late day selling pressure took it down. Metals were mixed today as Gold moved lower again while Silver, Platinum and Copper were all to the upside. ArcelorMittal got the sector going this morning when the company reaffirmed its Q3 view despite the global financial crises. The Chemical segment was mixed but outpaced the Industrial Metals and Mining segments. Ratings action for the sector included upgrades for CMC and KWR while AA, AKS, STLD, TX and X were downgraded.

- RPM: Q1 EPS 54c vs 53c Beats 53c Est; Guidance In-Line with Consensus
- MT: Reaffirms Q3 View Despite Financial Crisis
- MSC: Q2 EPS (9c) vs (12c) Misses (5c) Est
- Upgrades: CMC, KWR
- Downgrades: AA, AKS, STLD, TX, X

Industrials

The Industrials sector ended the day competing to end the day with the lowest percentage point loss. Five of the ten sectors were battling to end the day less than 7% lower in the session. GE was one of the underperforming stocks in the sector and is a big reason for today's downward move. Most of the Aerospace & Defense stocks were lower but Industrial Engineering showed relative strength throughout the day. Industrial Transportation stocks were helped today by falling oil and gas prices. As with the overall market the stock opened higher but the morning selloff led the sector lower before moving in a tight range for much of the remainder of the day. The final two house of trading saw the sector move to new session lows. Ratings action for the sector included upgrades for CHRW, EXPD, FIS, GWW, PTV, and VMI while CX was downgraded.

- DGLY: Resolves Patent Litigation with L-3 Communications Mobile-Vision Inc
- Upgrades: CHRW, EXPD, FIS, GWW, PTV, VMI
- Downgrades: CX

Consumer Discretionary

The Consumer Discretionary sector was hurt by retail sales numbers from BEBE, GPS, ANF, TJX, ROST and CHS for the month of September. The sector was unable to hold on to early gains and moved lower for much of the morning. Through midday trading the sector moved in a tight range before another late day selloff that took the sector and the market down to new lows for the session. The Retail segment was one of the biggest laggards in the sector during the session. Ratings action for the sector included upgrades for AEO, ALV and GNTX while ANF, RT, LAMR and CBS were all downgraded.

- Retail Stores Report September Sales: BEBE, GPS, ANF, TJX, ROST, CHS
- ISCA: Q3 Adj EPS 73c vs 53c Beats 71c Est; Guidance Below Consensus
- Upgrades: AEO, ALV, GNTX
- Downgrades: ANF, RT, LAMR, CBS

Consumer Staples

The Consumer Staples sector was one of six sectors that were locked in a battle to close less than 7% lower during the session. After the early morning gains, a broad selloff took the sector along with the overall market lower. The final hour of trading saw a sharp selloff that took the market to its lowest levels of the session. Earnings news for the sector included numbers from RMCF and LWAY reported a 15% rise in Q3 consolidated sales. Ratings action for the sector included CPO while CAG was downgraded.

- RMCF: Q2 EPS 14c vs 20c EPS -30% Y/Y
- LWAY: Consolidated Sales for Q3 Rise 15% to $11.27M
- Upgrades: CPO
- Downgrades: CAG

Health Care

The Healthcare sector was one of the hardest hit in the market today and ended over 7% lower. The Pharma & Biotech segment was sharply lower with only a couple of companies ending in positive territory. The Healthcare Equipment & Services segment was hit even harder as more companies ended more sharply to the downside. As with the overall market a late day selloff took the sector lower to new lows for the session. One of the worst performing stocks in the sector was EYE after the company lowered its revenue and EPS guidance for 2008. OMRI was also lower after the company reported that it had suspended the Fibrin Pad US Phase II clinical trial in mild to moderate bleeding. Ratings action for the sector included upgrades for KG, LLY, SIRO, XRAY and SEPR while LLY was also downgraded.

- EYE: Lowers 2008 Revenue Guidance to a Range of $1.17B - $1.20B & Adjusted EPS to a range of 70c - 80c
- OMRI: Suspends Fibrin Pad US Phase II Clinical Trial in Mild to Moderate Bleeding
- Upgrades: KG, LLY, SIRO, XRAY, SEPR
- Downgrades: LLY

Financials

The Financial sector was one of the leaders to the downside as the market continued to fall in the final hour of trading. The financials have been hardest hit in the market's recent downturn and continue to be a focus as the global financial crisis continues to grow. The Treasury was out early in the morning indicating that it may buy direct stakes in banks in order to provide more liquidity. The ban on short sales also ended today but is not being blamed for the large selloff in the market or the financial sector. Ratings action for the sector included upgrades for NTRS, NFS, ALL, BAC and CPT while AMG was downgraded.

- NCC: WSJ Reports that Company is in Talks About Possible Sale
- MET: Prices Secondary Offering of 75M Shares at $26.50/Share
- Upgrades: NTRS, NFS, ALL, BAC, CPT
- Downgrades: AMG

Information Technology

Despite closing to the downside, the Technology sector was the best performing sector in the market today. Helped by IBM reporting better than expected results for Q3 the sector stayed in positive territory for most of the day. The late day selloff took the sector sharply lower to close at new session lows. The Technology Hardware & Equipment segment was mixed with INTC leading to the upside. The Software & Computer Services segment was mostly lower with IBM leading but ending relatively flat. Ratings action for the sector included upgrades for HRS, TOMO, and ORCL while CAI and GOOG were both downgraded.

- IBM: Reports Better-Than-Expected Earnings in Preliminary Release
- Upgrades: HRS, TOMO, ORCL
- Downgrades: CAI, GOOG

Telecommunication Services

The Telecom sector followed the market down to end the session over 3% lower. The Fixed Line segment was moderately lower and the Mobile segment was also lower. The sector had started the day higher but the overall market selloff was broadbased and the Telecom sector could not hide. The final hour of trading saw the sector move to its session lows. There was no ratings action for the sector.

- Upgrades: none
- Downgrades: none

Utilities

The Utilities sector was one of seven sectors that battled during late day trading to keep today's loss under 4%. As with the overall market the sector began a short trip into positive territory at the open before sliding lower for the remainder of the day. Natural gas continued to move lower during the session and seemed to be the principal driver behind the fall in the Gas, Water & Multiutilities segment. The Electricity segment was lower with only a handful of companies ending in positive territory. Ratings action for the sector included an upgrade for FPL and a downgrade for RRI.

- Upgrades: FPL
- Downgrades: RRI

charts by Tim Knight

Quote from: Terliso on October 08, 2008, 01:07:59 AM
This is the monthly chart of INDU, one candlestick represents a whole trading month. As you can see, INDU is trading below 9ema for 10 consecutive months... still bearish. The next strong support would be at $7000 area and it looks like we are heading that way (I hope not), this is going to be a slow process...little ups & big downs through 2009. T2T

ooohh man!!! INDU is nearing $7000....way to fast....
INDU is lose -42% since its peak a year ago at $14,198.

fyi the elliot wave lives on.....:

11 Oktober
weekend update
REVIEW
In a week in which the market tumbled, the heads of the FED and Treasury were unusually quiet. The FED did manage to coordinate an unprecented worldwide rate cut, and is now supporting the commercial paper market. The Treasury is now sitting on $700 bln in "bailout funds", and announced friday evening that it was going to take equity stakes in many of the financials to boost their capital. Next we need the Credit Default Swap market to be regulated, so that counter party exposure will be made known to the marketplace, to reduce the fear that has arisen in recent weeks.       
LONG TERM: bear market
For the past six years we have maintained the opinion that a Supercycle wave ended between 1932-2000. Then the bear market between 2000-2002 appeared to have corrected that entire bull market. One of the comparisons we made were between the 1920's DOW and the 1990's NDX/NAZ. Both dropped over 80% in a period of less than three years. When the bull market kicked off in 2002 we expected it to last five years, and take the form of five Primary waves with an extended fifth wave. This was exactly what the bull market between 1932-1937 did, and it is exactly what transpired. After the 2007 bull market top was confirmed we projected a five year bear market consisting of Primary waves ABC. The first wave was to find support between SPX 1060-1140 in the fall of 2008. Then a multi-month rally for the second wave, and finally a long drawn out third wave into a 2012 low. A five year bear market. In mid-September, when Paulson proposed the "bailout plan" the market rallied 130 points in 24 hours. This rally was bigger than the entire gain of three of four downtrends during this bear market. In the midst of that rally we expected that Primary wave B was underway. In the second week after the rally the SPX broke through an important support level at 1179. Clearly there was more downside ahead. But we maintained that Primary wave IV at SPX 1061 should provide support, just like Primary wave IV did during the 1937-1942 bear market. On monday of this week that support failed, and we posted a special update tuesday morning. After reviewing the historical charts we reported that the maximum downside for a multi-year bull market was 68%, and that DOW 9438 represented that level. If it broke, then a full retracement plus some overshoot is likely. The DOW tested that support that very day, and then broke through it wednesday.
In the same report we offered an alternate count that suggested the triangle betwween 1973 and 1982 was not a triangle afterall. But Primary waves 1 and 2 of a Cycle wave from 1974-2007. Primary wave 3 would have then completed in 2000, Primary wave 4 in 2002, and Primary wave 5 in 2007. We received some emails about a 2007 irregular top, and that wave C was now underway. We can't completely rule that out, but there has never been an irregular top in the DOW since 1921. And, no B wave rallies have ever lasted more than two years. And 2002-2007 was a clear five wave bull market, with five Primary waves.
After the collapse in the market this week. It was down a record 19.2%. There are two scenarios to consider within the alternate count. First, is the one that seems to be getting all the attention again, like it did in 2001. A Supercycle wave completed and we now in a supercycle bear market. We can count five cycle waves: 1937-1942-1973-1974-2007 into the recent highs. The second scenario is that we just completed the strongest Cycle wave (1974-2007) since 1932, and we are only in a Cycle wave bear market. Therefore we should give equal weight to both alternate scenarios: Supercycle 1932-2007, and Cycle 1974-2007.
Historically, only two multi-year bull markets have ever been fully retraced: 1921-1929 and 1970-1973. In the worse case, the full retracement exceeded the entire bull market by 13%. This would project a maximum downside for the current bear market of DOW 6350. The next support levels to consider regard the cycle waves, and the supercycle. The 1932-1937 bull market retraced a bit over 61.8%, and the 1942-1973 bull market retraced about 50%. Therefore if we apply these two retracement percentages to the cycle wave bull market between 1974-2007 we arrive at some interesting support levels. A 50% retracement of the cycle wave equals DOW 7380 (SPX 789), and a 50% retracement of the supercycle equals DOW 7120 (SPX 769). These two levels exactly match up with the next lower SPX support pivots. And close to, or a full retracement, of the entire 2002-2007 bull market. With all these historical and recent relationships converging we should see an end to this downtrend at one of the two next lower pivots: SPX 789 or SPX 769. If they fail to hold, the next major support is at the 13% overshoot level, DOW 6350. And if that fails to hold, we're looking at a 61.8% retracement of both the 1974-2007 cycle wave and 1932-2007 supercycle between DOW 5450 and 5780.
To summarize, one of the next two support pivots 789 and 769 should end this downtrend, if SPX 848 fails to hold. After that is DOW 6350, and then 5450-5780.
MEDIUM TERM: downtrend continues
From the SPX 1313 high in August the market downtrended into a SPX 1134 low. The market then rallied 130 points in a matter of 24 hours, exceeding three of the four downtrends during this bear market. Yet suddenly, and without notice, the character of the market changed from an organized bear to a disorganized rout. From that SPX 1265 high, the market has plummeted 34% in only three weeks. Up until that point in time the bear market had declined a reasonable 28% in 11 months! Certainly only the ultrabears could have anticipated this sort of disaster. Not being in that camp, we did not. There are numerous reasons why this could have happened. Naturally the credit markets come first, then the unregulated Credit Default Swap market, the collapse in the commodity market, and of course fear of a total economic collapse. Certainly the ultrabears would claim victory if that were to occur. But when does a collapse of an economic system become a victory, of any measure? Most lose, and a very few gain. There is no victory in that! That is the exact reason we are are in this mess: the few wanted more at the expense of the many. For the past 25 years the government has gradually deregulated the financial markets. And as a result we've had the 1987 market crash, thousands of S&L failures, a housing recession, major hedge funds failures, a dotcom bubble, another recession with the likes of Enron/Worldcom, a housing bubble, a credit bubble, and now the apparent collapse of both, thanks to an unregulated securitized mortgage market and unregulated bond insurance market. When unregulated, markets do not regulate themselves, they eventually self-destruct.
SHORT TERM
Support for the SPX is at 789 and then 848, with resistance at 912 and 961. Short term momentum was extremely oversold at fridays lows and finished the day at neutral. The near term indicators are still extremely oversold. The VIX hit 77 this week, the highest reading I can remember. Many of the market internal indicators are now worse than they were at the 2002 lows. This has certainly been a selloff of historic proportions.
FOREIGN MARKETS
The Asian markets were down 17.1% on the week, as all were caught in the equity liquidation.
The European markets were down 19.8% on the week, as the FTSE broke through its 2004 low as well.
The Commodity markets were down 18.1%, no longer providing any support to counter the deflationary spiral.
COMMODITIES
Bonds yields gained 22 bps on the week, and are close to confirming an uptrend. Bonds are already downtrending.
Crude broke down this week, overlapping the 2006 high. Looks like five waves up from the 1998 low.
Gold is the only commodity that has not broke down. With all the public buying I'd certainly be careful here.
The USD continues its flight to safety uptrend while the Euro continues to slide. The Yen is uptrending as well.
NEXT WEEK
On wednesday retail sales, the PPI and the Empire state index. On thursday the weeky unemployment numbers, the CPI, Philly FED, industrial production and the home builders index. Then on friday, options expiration, housing starts and consumer sentiment. As for the FED, on wednesday a speech by chairman Bernanke at 12:15, then the beige book at 2:00, and vice chairman Kohn gives a speech later that night. Often, the beginning of an options expiration week creates some sort of reversal. This usually occurs on monday/tuesday and then continues until thursday/friday. Should the market make a low we could get quite a rally into expiration. Best to your week.
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

12 Oktober
weekend update 2.0
After posting the weekend update on saturday, we reviewed all the charts. Those posted on stockcharts, those not, and historical charts. Certainly it would be anyone's guess where this market bottoms, as it is not being driven by stocks but by bond insurance, the CDS market. The tail is wagging the dog like stock portfolio insurance did in the 1980's, which led to the 1987 crash.
We knew after the 2007 bull market top that it was the end of a cycle wave, and this would be a cycle wave bear market. What we didn't estimate correctly was the severity of the decline. Now that the market has effectively crashed 34% in three weeks it's more important to review the other cycle wave bear markets: 1929-1932, 1937-1942 and 1973-1974. One could argue that 2007 was a supercycle top, or 2000 with an irregular B into 2007, or whatever. What's important is that most EWers recognized that a cycle wave completed at the 2007 highs, and at least a cycle wave bear market has been underway. In reviewing the previous cycle bear bear markets we observed the following:
1929: started with a 50% crash drop, retraced 50%, and then eroded for months on end to much lower levels, took 34 months.
1937: started with a 50% drop over 12 months, with a 40% crash in the middle, retraced 62%, and then eroded for months on end to a double bottom, took 61 months.
1973: started quitely, had a 62% retracement after the first drop, then crashed 33% near the end, and the market lost a total of 47%, took 23 months.
2007: started quietly, is near a 50% drop, with a 34% crash near the end, and this has taken 12 months.
Notice the three previous cycle wave bear markets either dropped 50%, or dropped then rallied 50%-62%, and then bottomed months later. Near DOW 7100 this market would haver dropped 50% from the 2007 highs. There is technical support between DOW 7100 and DOW 7400, these levels equate to SPX 769 and 789. There is also great support for the DOW at the 1998 and 2002 lows, which is also around these levels. Should the market hold there, a 50% - 62% rally over the next 8 months is possible, then a retest of the lows in 2010 at the four year cycle low. We may still get our ABC flat, but from lower levels. Lots of technicals going back to 1932 support this POTENTIAL scenario. Please review the chart...

Knobias Sector Commentary
Monday , October 13, 2008 15:59ET

Energy

The Energy sector has been one of four sectors that moved above the 12% mark this afternoon. As with the overall market, the sector rallied for much of the day. In afternoon trading, the sector pulled back slightly but has begun to move back toward its session highs. The sector has moved higher as oil recovered some of its losses from last week and has been able to move back above $80 per barrel. The Oil & Gas Producers segment is in positive territory begin helped by gains of over 5% from XOM, COP and CVX. The Oil Equipment & Services segment is also higher in the day as nearly all the companies are showing gains during the session. Ratings action in the sector was heavy today with eleven upgrades and nine downgrades.

- TSO: Expects Q3 Results Above Estimates
- NGLS: Announces $50M Buyback
- Upgrades: BHI, DVN, ECA, EP, EPD, HTE, KMP, MMP, NBL, TRP, XOM
- Downgrades: DO, LGCY, MRO, MUR, PCZ, RGNC, SLB, SU, VLO

Materials

The Materials sector has moved to the upside today as gold prices decline. The sector ended the day mid-pack, but still finished up over 9%. The sector moved sharply higher for the first part of the trading day and then leveled out in afternoon action. The final hour saw the sector move back toward its session highs. The Chemicals, Mining, and Industrial Metals segments all finished higher with only a few companies ending in negative territory. KMGB and TONS were among those in the sector that reported results today. Ratings action for the sector included upgrades for ARJ and MT while DOW was downgraded.

- KMGB: Q4 EPS 5c vs 19c EPS -74% Y/Y
- TONS: Q3 EPS (8c) vs 3c EPS -367% Y/Y
- Upgrades: ARJ, MT
- Downgrades: DOW

Industrials

The Industrials sector posted gains of over 9% during the session today as a broad market rally met traders this morning. The sector moved higher through most of the morning but retraced some of those gains in midday trading. The final hour of the session saw the sector bounce back to test the highs of the session. GE was one of the only major companies in the sector that was not able to post gains in the session. The gas dependent Industrial Transportation sector was not hurt by rising oil and gas prices. The other segments of the sector were also able to finish higher with only a handful of companies ending the session in negative territory. WMI, BEAV and FAST were among the earnings related news for the sector. Ratings action was heavy for the sector as ten companies were upgraded while five received downgrades.

- WMI: Preannounced Better-Than-Expected Q3 Earnings; Withdraws Offer for Republic Services
- BEAV: Comments on Expected Results for Q3 and Outlook for 08, 09 & 10
- FAST: Q3 Adj EPS 52c vs 41c Beats 51c Est
- Upgrades: CRDN, CW, GGG, HEW, MAN, RHI, ROK, ROP, SSD, WCN
- Downgrades: ADP, CVG, PAYX, RHI

Consumer Discretionary

The Consumer Discretionary sector was in positive territory for the day but was unable to keep pace with the overall market. The sector ended the day posting gains of over 4% and ended the day at new session highs. The action followed the overall market rally, but fears over inflation and consumer confidence didn't allow the sector to move at the same pace as other sectors. While the rally and news of possible thawing of the credit market is good news, traders will continue to look at retail numbers to gauge how consumers are reacting to the recent decline in the market. Ratings action for the sector was heavy on the ugrade side as sixteen companies recieved upgrades while ten were downgraded.

- Upgrades: ANN, BBBY, BBY, CBS, EAT, GME, JBX, LVS, MDC, MGM, MLHR, PNRA, POOL, THQI, TWC, URBN
- Downgrades: ARM, AXL, BKS, CBS, FOSL, JCG, RYL, SONC, TOL, WSM

Consumer Staples

The Consumer Staples sector was in positive territory for the day but was unable to keep pace with the overall market. The sector ended the day posting gains of over 4% and ended the day at new session highs. The action followed the overall market rally, but fears over inflation and consumer confidence didn't allow the sector to move at the same pace as other sectors. While the rally and news of possible thawing of the credit market is good news, traders will continue to look at retail numbers to gauge how consumers are reacting to the recent decline in the market. Ratings action for the sector included upgrades for BUD, CHD, K, MATK, SVU and WOOF.

- Upgrades: BUD, CHD, K, MATK, SVU, WOOF
- Downgrades: none

Health Care

The Healthcare sector was one of the better performing sectors today and was able to end the day with over a 10% increase. Both segments were sharply higher in trading today as the global rally continued throughout the day. The sector moved higher for most of the day before pausing in early afternoon action. This pause was short-lived as buyers came back in and pushed the sector back to set new session highs late in the afternoon. AFFX and GTXI were major news makers in the sector. Ratings action was also heavy in the sector as fifteen companies were upgraded in early action.

- AFFX: Expects Q3 Total Revenue to be Approximately $75M
- GTXI: Ph II Trial of Ostarine(TM) Meets Primary Endpoint
- Upgrades: CELG, ENDP, FMS, GTIV, ICLR, ISRG, NUVA, ODSY, PPDI, QDEL, RMD, SRZ, STJ, TECH, VPHM
- Downgrades: none

Financials

The Financials sector was slow to get going but moved solidly into positive territory by the end of the day. Positive news from around the world over the weekend not only helped the beaten down sector, but was also a rally point for rallies in the Asian, European and US markets. Banks were mixed as the liquidity threat remains. The General Financial and Life Insurance segments were in positive territory for the day and helped balance out some of the losses from the Banks segment. Morgan Stanley announced the closing of its $9B financing from Mitsubishi which helped the stock move back toward the $18 mark. Ratings action was heavy for the sector with most of the action coming in the form of upgrages.

- MS: Mitsubishi UFJ Closes Deal With Morgan Stanley
- PFG: Announces Preliminary Q3 Results; Declares Dividend
- Upgrades: AIB, BAC, BCS, COF, CS, FHN, FII, NYB, PBCT, PRU, STI, UDR
- Downgrades: AB, BLK, CPT

Information Technology

The Technology sector was able to end the day over 9% higher and closed near its session highs. Large software and hardware companies led the charge in the sector today as Microsoft, Google, Oracle, IBM and Cisco were all above to move to the upside by over 9%. Both segments that make up the sector were able to finish well in the green after a solid broad market rally. American Technology was out today and said that it believes "Software as a Service" offers a compelling value proposition to customers and initiated buy ratings on several companies. Single stock ratings action was busy in the sector today as more than ten companies were upgraded while five received downgrades.

- Upgrades: CHKP, CSC, CSCO, DY, IMN, LLTC, MXIM, NICE, NTES, SNPS
- Downgrades: AAPL, CDNS, MXIM, NOK, UIS

Telecommunication Services

The Telecom sector had the highest percentage gain today as the sector was able to move over 11% higher in today's broad market rally. The sector spent most of the day moving higher with only a couple of pauses during the day only to be followed my strong moves higher. Fixed Line & Mobile segments of the sector were both in positive territory for the day with AT&T posting a gain of over 12% during the session. Ratings action for the sector included upgrades for EQ, OTT, PAET. Morgan Stanley also came out today and raised Telecom Services to "attractive" from "in-line."

- Upgrades: EQ, OTT, PAET
- Downgrades: none

Utilities

The Utilities sector was one of the better performing sectors in the market today and posted gains over 9%. The sector was helped by reports of softer demands for gas and oil that could help lower the cost of heating oil for the upcoming winter. The Electricity segment along with the Gas, Water & Multiutilities segment were both able to close higher as most of the component companies were well into positive territory. Upgrades for the sector included PNY, NJR and NWN.

- Upgrades: PNY, NJR, NWN
- Downgrades: none

&
the elliot waves lives on...

13 Oktober
monday update
SHORT TERM: US and ECU inject capital directly into banks: market surges, DOW +936
On saturday the UK announced a massive capital infusion into its troubled banks. This followed friday's similar announcement by the Treasury. Then early this morning, it was reported that the capital infusion effort was expanded to many central banks worldwide. Recapitalizing the banks with government funds is certainly the best step, in the right direction for the markets, thus far. The impact, however, will not be known for weeks. Overnight the Asian markets surged, Europe opened higher and closed up 9.80%. US index futures gapped up in overnight trading, and remained substantially higher right into the open. At the open the SPX gapped up to 948, it closed at 899 friday. By 10:00 it pulled back to 932, near the 935 short term pivot. At 11:00 am the Treasury announced it would meet with the five major US banks at 3:00. The market continued to rally from the 10:00 low and hit 965 at 1:30, right at the important 961 pivot. A pullback followed to 2:30 and to SPX 951, then the market resumed its rally. By the 3:00 meeting the market broke through the 961 pivot and soared into the close, hitting SPX 1007. This rally, which started friday at 840, eclipsed the 131 point failed rally in September, and has now surged 167 points in 24 hours. At the close the SPX/DOW were up 11.30%, and the NDX/NAZ were up 12.20%. A record breaking day. Bonds lost over 1.5 points, Crude gained $4.35, Gold lost $23.50, and the Euro was higher. Support for the SPX shoots up to 990 and then 961, with resistance at 1018 and 1031. The important support pivot is now at SPX 912. As long as this pivot holds a new uptrend, and Primary ave B may be underway. At fridays lows the SPX hit 840, this was close to the SPX 833 Int. C equals 2.0 Int. A posted on the SPX daily chart. Let's hope this new government activity works. Best to your trading.
MEDIUM TERM: market spikes off SPX 840 low
LONG TERM: Primary wave B may finally be underway
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

&

Charts from Tim Knight

Knobias Sector Commentary
Tuesday , October 14, 2008 16:00ET

Energy

The Energy sector was unable to hold on to yesterday's rally as the overall market began to slide in afternoon trading. This slide also came as oil fell during the session to close below $79 after being up above $82 earlier in the session. Oil & Gas Producers were mixed but the major oil companies were all lower which caused the sector to end in negative territory. The Oil Equipment & Services segment was mixed as well with a majority of the companies ending to the downside. Oils decline for the day seems to be attributed to lower demand.

- Upgrade: none
- Downgrade: none

Materials

The Materials sector led the market to the downside today after yesterday's late day rally. While the entire market was down, the Materials sector has remained lower throughout the day. A steep decline at the bell was followed by trading in a tight range before the sector began selling off again late in the afternoon. The Chemicals segment played a large part in the decline as many companies ended the day to the downside. The Industrial Metals segment also played a role as many of the miners were sharply lower in today's session. Ratings action for the sector included Upgrades for APD and EGO while AVY and RGLD were downgraded.

- Upgrade: APD, EGO
- Downgrade: AVY, RGLD

Industrials

The Industrials sector ended the day as one of nine sectors in negative territory as the market took a slide in afternoon trading. As a whole the entire sector was hit today with all segments posting losses for the session. The General Industrials and Industrial Engineering were the hardest hit with only a handful of companies in these segments able to cross over into positive territory. Aerospace & Defense was the best performing segment but still ended to the downside. Earnings numbers will begin to be the focus of the sector and the overall market as reporting begins in earnest towards the end of this week. Ratings action for the sector was pretty active as eight companies were upgraded and six received downgrades.

- Upgrade: CNW, CP, CR, DOV, MMM, R, RX, SPWRA
- Downgrade: AG, BUCY, CSL, PNR, STP, UNP
- Earnings: JBHT, GWW

Consumer Discretionary

The Consumer Discretionary sector was very active in the session today. A large premarket rise gave way to a sharp selloff at the bell which took the sector back to the levels of yesterday's close. Trading was in a tight range through the middle of day before selling off and then bouncing back in an attempt to close in positive territory. Retail sales continue to be a focus for the overall market in what traders hope will give an indication of how the financial crisis is affecting mainstreet. Most retailers have adjusted guidance for the quarter and traders will look closely at forecasts for the upcoming holiday season. Many hope that the Christmas spirit will take over and consumers will hit the stores in record numbers.

- Upgrade: none
- Downgrade: none
- Earnings: PII

Consumer Staples

The Consumer Staples sector went through a wild swing during today's trading. After a premarket push to the upside, sellers took the sector below the closing levels of yesterday. The sector then continued to slide through midday trading before bouncing back in the final hour. This late rally was unable to help the sector close in positive territory. Traders will begin to focus on earnings data coming out in the coming weeks which could shed light on the consumer. Most recent sales numbers show that the consumer has not stopped shopping but are only spending on what is needed. Discretionary spending has declined due to higher fuel prices and the fear regarding the global credit crisis, but discounters have continued to report positive numbers.

- Upgrade: SMG
- Downgrade: none
- Earnings: PEP, SVU

Health Care

The Healthcare sector spent most of the day in positive territory but the general trend was lower. A very positive open was reversed almost immediately as the sector began to selloff back toward the levels of yesterday's close. Through most of the day the sector was above the previous close until a late day selloff took the sector lower before a final hour rally took it back into positive territory. The Pharma & Biotech sector was relatively lower as a whole but was balanced by some of the major names ending the day higher. The Equipment & Services sector was mixed and ended slightly lower. JNJ was the major news in the sector as the company reported positive numbers for Q3 which played a major roll in the early morning rise. Ratings action for the sector included upgrades for AHG, LH, LNCR, MBLX, SYK and WYE while AMSG and KND were both downgraded.

- Upgrade: AHG, LH, LNCR, MBLX, SYK, WYE
- Downgrade: AMSG, KND
- Earnings: JNJ

Financials

The Financial sector was the only one out of ten that did not flirt with negative territory today. The market received more details regarding the capital injection from the government before the bell and the markets reacted in a positive direction. Financials were the big beneficiary of the announcements as the sector began a climb that led it to close nearly 4% higher. The overall market action attempted to pull the sector lower, but Major banks were able to withstand the selloff and keep the positive momentum. Regional Banks were lower as a whole but the Banking segment still managed to close higher. General Financial and Insurance segments were mixed during the session but did not weigh on the sector enough to move it lower. The sector was one of the most upgraded sectors today as twenty-three companies received upgrades while only two were downgraded.

- Upgrade: AOC, BAC, BBT, CMA, CVA, EV, FHN, FITB, HBAN, HPT, KEY, MA, MI, MMC, MTB, PGR, RF, SNV, STI, TD, USB, WRI, ZION
- Downgrade: AMG, BEN

Information Technology

The Technology sector ended the day sharply lower as many of the tech stocks were hit during today's session. There didn't seem to be an obvious catalyst for the move. The sector followed the general market trend after selling off in early trading and then stayed in a tight range through most of the midday trading. The afternoon brought more sellers and a late day rally failed to carry the sector back toward positive territory. The Hardware and Software segments were both hit as only a handful of companies in each segment were able to end in positive territory. Ratings action for the sector included upgrades for four companies while two received downgrades.

- Upgrade: CCOI, CTXS, FSLR, RIMM
- Downgrade: IFX. SAP
Telecommunication Services

The Telecom sector was the lightest traded sector today and made a move in late trading to cross over into positive territory. Overall the sector was mixed with AT&T helping pull some of the downward movers higher to help the last hour push. The Mobile segment was mixed and ended the session near the flat line. The sector began selling of after the bell along with the overall market before leveling out during midday trading. The sector moved slightly lower in early afternoon action, but a late day rally helped reverse the early losses and end the day battling to make it back into the green. Ratings action in the sector included upgrades for CBEY, PAET, Q, RCNI and TU.

- Upgrade: CBEY, PAET, Q, RCNI, TU
- Downgrade: none

Utilities

The Utilities sector was lower on the session but was not the worst performer in the market. Natural gas prices have effected the sector as traders begin to forecast quarterly numbers for these companies. Speculation over lower prices for heating oil for this winter could cut into profits and cause some of the companies to miss estimates. This will be a focus for traders of the sector in coming weeks as winter approaches. Both segments of the sector were lower today with only a handful of companies being able to cross over and end in positive territory. Ratings action for the sector included upgrades for CMS and SRE while WR was downgraded.

- Upgrade: CMS, SRE

Tim Knight charts:
- Downgrade: WR

October 17 – Market Comment

Hi everyone,

First of all, I'm sorry for our lack of updates and market comments during the last few weeks. The markets have been completely insane, we've just watched one of the biggest sell-offs in history, mixed with incredible spikes of volatility. With this market environment it was almost impossible to trade with our current stock picking / position trading approach with pre-market instructions like we usually do. We've liquidated most of our positions (exposed only by 10% on the diversified portfolio) a few weeks before the «crash» and we've been just watching on the sidelines.

Now, about the market, and using the S&P500 as the benchmark, we've no way of predicting if this ugly downtrend is over, and we'll only find about that afterwards, not near the lows as we still are now. Last week's low was just 71 points above 2002's low, and few ticks above a long term support coming all the way from 1987's crash.



Even if the downtrend is not over, the declining was so massive, that a rebound (not just a 10% up day) could be near to happen, I mean, the oversold levels are so huge right now, that I personally don't believe that the market will have the strength to beat new lows with the same intensity it had during the fatidic past weeks. In other words, at least for now I believe the downside is very limited at this point, and therefore the risk of compiling a short strategy for mid-term is high on these levels. I would rather start short positions with a probable rebound to near the 50-ema or other upside reference, but not here and not with all this pessimism on the media and general market sentiment.

Looking for a more near term chart of the SPX:



Yesterday's session started with a sell-off which seemed almost obvious that would take the SPX to last week's lows once again, but it turned around and ended with another 4% rally and failed to test the lows. This is no solid buying signal, but I don't expect any strong signals as the markets just moves too quick and then moves back even quicker.
This volatility is just reflecting the sentiment of market participants, everybody is still too nervous to hold any direction for much more than a market session, shorts are scared of a big squeeze, longs are still felling the trauma of this big crash.

I'm looking at the current lows (840/860) as a support area, and 1050 as a short term resistance. A major rebound could take the SPX easily to its 50-ema (1150) or even further (1215), while another big sell-off could mean a test to 768 (the 2002's low).
Today I opened some long positions on my personal trading account for short term purposes, mainly in aggressive ETFs, but also in some stocks, I'm expecting a significant rebound at this point, the risk is big taking the current market environment... But even so, I see more potential on a rebound move now than on another sell-off which in that case I think it has limited potential.

Given this, and knowing the risk, I will give some exposure again to our portfolios, and will open some new positions today.

Best regards, 

Nasty Session!
Wednesday, October 22, 2008 18:01ET


A very nasty session, starting off with a sharp move down and then morning consolidation patterns that appeared very much to be bear-flag consolidations, and sure enough by mid-day when they started breaking the patterns the indices went quickly lower. They retested the lows, tried to bounce around that level, but was rather anemic, and in the afternoon they rolled over sharply. With about 15 minutes to go they were sharply lower at the lows for the day, down nearly 700 on the Dow, 78 on the SPX ,but a very sharp late snapback in the last 15-20 minutes, perhaps fueled by short covering, brought the Nasdaq 100 back about 35 points and the S&P 500 about 25 points, before they settled back a bit.

Net on the day the Dow was down 514 at 8519, the S&P 500 down more than 58 to just under 897, and the Nasdaq 100 down 46.34 at around 1237. The Philadelphia Semiconductor Index (SOXX) got under 220, down 14.39, a more than 6 percent loss today to multi-year lows.

The technicals were very negative by about 5 1/2 to 1 on advance-declines on New York and by about 6 to 1 on Nasdaq. Up/down volume was extremely negative, with 1 1/2 billion to the downside and just 51 million to the upside on New York. On Nasdaq it was almost as bad, with 2 1/4 billion to the downside and 328 million to the upside, about 7 to 1 negative.

TheTechTrader.com board was mostly lower. Only the short instruments had spectacular days today, led by the SDS up 2.60, DUG up 8.78, the QID up 4.15.

In the individual stocks Apple (AAPL) had a strong session after a terrific earnings report. Although it closed way off the high it was still up 5.38 on nearly 80 million shares traded Broadcom (BRCM) gained 90 cents but was about 1.20 off the high, on 30 million, also on strong earnings.

The airlines were strong, with Continental (CAL) at 18.50 up 1.05, and UAL (UAUA) at 14.65 up 85 cents, but that one was 1.60 off its earlier high over 16.

On the downside leading the way was Alpha Natural Resources (ANR) at 32.37 down 8.10. CF was down 6.05 at 49.88.

Other multiple-point losers included POT down 6.26, SPWR down 5.98, Mosaic (MOS) down 4.52, Energy Conversion Devices (ENER) down 6.59, Agrium (AGU) down 4.32, and EWZ down 5. The USO also dropped 3.91.

Stepping back and reviewing the hourly chart patterns, we got a very nasty slide in the afternoon. Despite the hard rollover and spike down into last week's lows, they ended up making higher lows and rallied sharply.

But obviously the jury is still out whether these lows can hold, and whether we've put any type of important bottom in. However, today was an important cycle low and turn date potentially, and we'll have to see over the next day or two if there's any upside follow-through at all.

But right now the slide of the last 2 days was indeed a nasty one, with the NDX having dropped from over 1350 to 1210, 140 points just since yesterday morning. The S&P dropped from 984 to 875, 109 points, so very quick, sharp declines over the last 2 days have taken the indices back to retest the lows.

We'll have to wait & see over day or so whether they can hold them, or whether they end up taking out the lows and spiking even more sharply lower.

&

Knobias Sector Commentary
Wednesday, October 22, 2008 16:00ET

Energy

The Energy sector was the worst performing sector in the market today, closing off by over 9%. The Oil & Gas Producer segment was lower in the session today as oil prices moved lower by over $5 per barrel. Inventory numbers came in higher than expected today ahead of the OPEC meeting on Friday where it is believed the Cartel will vote to cut production in the face of waning global demand. Several companies within the sector have released earnings since yesterday's close and all (BHI, COP, CXG, NFX) moved sharply lower in today's session. A continuation of the final hour of yesterday's session took the sector lower at the open and buyers never entered which allowed it to sell off and end near its session lows.

- EGY: Names Gregory R Hullinger as CFO
- Upgrade: n/a
- Downgrade: BHI
- Earnings BHI COP CXG NFX

Materials

The Materials sector was lower again today along with the overall market. The Chemicals, Mining and Industrial Metals segments were all sharply lower during the session today. Earnings within the sector were not greeted well as all (APD, ATI, CENX, FCL, ROH, SIAL) moved lower during the session today after reporting quarterly results. The global recession seems to be playing a role in the downturn within the sector as Gold and Copper have sold off which as exacerbated some of the moves within the sector. As the credit market begins to thaw, some of the money that previously took flight to gold has now begun to move out and has put increased pressure on many of the companies in the sector. Ratings action within the sector include upgrades from AKS, SHLM and STLD while ARG, CF, SWC and X were all downgraded today.

- SIAL: Q3 EPS 64c vs 54c Misses 65c Est; Guidance In-Line with Consensus
- CENX: Q3 Adj EPS $1.31 vs $1.23 Misses $1.49 Est
- Upgrade: AKS SHLM STLD
- Downgrade: ARG CF SWC X
- Earnings: APD ATI CENX FCL ROH SIAL

Industrials

The Industrials sector was not able to escape the selloff in the market today and moved lower by over 5%. General Industrial stocks were lower as companies within the sector continue to feel the squeeze of the possibility of a global recession. Aerospace & Defense was the best performing segment within in the sector, but it was still lower as only a handful of companies were able to end the session to the upside. Support Services and Industrial Engineering names were beaten down today as most of the companies in these two segments posted losses of over 4% during today's weak market. Lower oil and gas prices were not able to help the Industrial Transportation segment today as a economic slowdown could hit these names harder due to lower shipping demand. Ratings within the sector included an upgrade for CHRW and a downgrade for PCP.

- Upgrade: CHRW
- Downgrade: PCP
- Earnings: ARW BA CHRW DOV GD LECO LII NOC NSC R SLGN WAB WCN

Consumer Discretionary

The Consumer Discretionary sector continues to be one of the worst performing sectors in the market as concern of the global economic slowdown continues to grow. As the consumer holds on more tightly to their pocketbooks these names continue to suffer. Many traders continue to look at the decrease in gas prices across the US as a good signal for companies in the Consumer sectors, but as of yet this has not translated into any meaningful gains within the sector. The upcoming holiday season will continue to be a focus as a poor economy will hurt these names as they attempt to garner favor with consumers. Ratings action for the sector included an upgrade for CRI and a downgrade for NKE.

- GM: Plans To Explore Sale Of ACDelco Parts Business
- Upgrade: CRI
- Downgrade: NKE
- Earnings: CRI MCD PNRA TUP

Consumer Staples

The Consumer Staples sector was the best performer in the market today but was still over 5% off. Consumer spending continues to be a concern, but recent reports have shown that the consumer is still shopping for necessities. This has helped names like Walmart feel confident as the holiday shopping season approaches. Discount retailers may be the winners as the year rolls on and the economy continues to slow because they could gain market share as consumers watch what they spend more so than in recent years. Earnings action in the sector included quarterly results from PAS and SNAK since the close of yesterday's session.

- Upgrade: n/a
- Downgrade: n/a
- Earnings: PAS SNAK

Health Care

The Healthcare sector was one of the better performers in the market today but that still translated to almost a 5% loss during the session. The Pharma & Biotech segments were hit after several major names within the sector reported quarterly results. Almost all of the thirteen companies that have reported earnings since the close of yesterday's session have traded lower during today's session. A cautious view of upcoming quarters has plagued most of the recent earnings reports as traders look for a way to gauge the effects of the global economic slowdown. The Equipment & Services segment was much lower during the session as no buyers were ready to step in and buy up any of the names in today's down market. Ratings action for the sector included an upgrade for DNA and downgrades for AMMD, BIIB and CVH.

- ZGEN: Presents Interim IL-21 Phase 2 Results in Renal Cell Cancer
- Upgrade: DNA
- Downgrade: AMMD BIIB CVH
- Earnings: ABI AMLN BSX CVH GENZ ILMN IVGN KCI MDCO MRK TECH WLP WYE

Financials

The Financials sector was a middle of the pack performer today but still closed down by over 5%. An overall concern over the credit market continues to be a focus of traders and many names within the sector are getting hit. However, as the credit crisis begins to thaw, there should be a better outlook for some of the major banks and even as more consolidation takes place the storm clouds that have covered this sector in recent months should begin to dissipate. Overall earnings reports from names within the sector have continued to underperform expectations and have put pressure on the sector as a whole. The Insurance segments were mixed during the session and were by far the best performers within the sector. Earnings action has been heavy since yesterday's close as fifteen companies have reported quarterly results.

- Upgrade: TMK
- Downgrade: n/a
- Earnings: AMG BPOP CFR DSL ETFC FULT NTRS PTP RJF RYN SEIC TCB TCO TRV WB

Information Technology

The Technology sector was one of the better performers in the market today but even this did not allow it to end in positive territory. Earnings results from Apple, Yahoo and EMC were greeted positively today as those names all were able to close to the upside, but they were unable to pull the overall sector higher with them. Hardware & Equipment names were hit as the slowing economy could result in these companies facing slower sales growth than expected. There were several bright spots within the segment but they were not able to help as the broad based selloff pressured the sector lower. Software & Services segment was lower during the session as well with only a few companies having the ability to withstand the selloff and close in positive territory. This sector was the busiest on the earnings front as thirteen names have reported since the session close on yesterday. Ratings action for the sector included upgrades for AAPL, BRCM, CERN, CYMI, LXK, NUAN, TLAB and YHOO while MANH was downgraded.

- Upgrade: AAPL BRCM CERN CYMI LXK NUAN TLAB YHOO
- Downgrade: AAPL MANH
- Earnings: AAPL ATMI AVCT CERN CREE CSGS EMC IKN MANH MKSI QLGC WIT YHOO

Telecommunication Services

Telecom names were dragged lower during the session after a less than positive earnings report from AT&T. The company missed analysts expectations and the stock moved lower by over 6% during the session. The Fixed Line segment moved lower on these results and was not able to recover as the overall market continued to move to the downside throughout the day. The Mobile segment was lower on the session as well. Rimm and AT&T announced today that the new BlackBerry Bold would be available in the US on November 4.

- RIMM/T: BlackBerry Bold Available in US on November 4
- Upgrade: n/a
- Downgrade: n/a
- Earnings: IBAS T

Utilities

The Utilities sector was a middle of the pack performer in today's down market. The broad based selloff within the market took the sector down over 5% and did not allow it to trade in positive territory during the session. The sector did attempt a midmorning rally, but this was short lived and eventually gave way to selling pressure that took the sector to its session lows during the final hour of trading. The Electricity segment was hardest hit as only a couple of names were able to end the day in the green.

- NWN: Files Rate Case Settlement w/ the WUTC

Market Thoughts & Long Term Charts
quotation from IV board
After calling in sick today and rolling out bed in the early afternoon, I saw to my consternation another brutal gold and share beating.  To my surprise, the broad markets got slaughtered even after the TED spread and LIBOR have collapsed.  I thought that our savior was to unfreeze the credit markets?  Yet again we find that the Feds have no answer.  I had mentioned last week I thought LIBOR falling may be a false reading since financial entities were borrowing from the US Fed to the tune of $430 Billion per day.  What Pauly Shore Paulsen and Bungling Ben have done, IMO, have opened a major can of worms.  Now no one wants to borrow from each other or the commercial paper market.  Why?  There is risk.  Why borrow from any other market when you can borrow from the printing press direct?  Remember, Pauly and Ben have made available unlimited funds.

Falling gold and gold share prices don't scare me so much.  What does scare me is a quick and dramatic fall of US and world broad markets; bringing with it a complete and highly negative change to global economics.  I'm talking the variety of negative change that means mass unemployment and the accompanying negative social affects.  This is not the type of world I don't want my young son and daughter to experience.  Unfortunately, what is going on world wide is beyond my influence.  All I can do is turn the pages of the history books and identify investments that can preserve wealth or even make a little doing it.  I bring this up because of the following Dow chart.  I can't stress enough the importance of the Dow to hold the swing low of 7880 this week.  If we get the Dow to close below 7880 going into the weekend, the following Monday could become a really black day for all.


I've spent little time on the computer for the past week thanks to being under the weather.  For the few posts I have read, it seems people are trying to explain all of market action and give precious metals the finger.  IMO, no one can accurately explain what we are seeing today.  My best guess, which goes along with Don Coxe, is around July 15th Paulsen and Bernanke watching the financials melt down while commodities were roaring higher had to do something.  Essentially, funds were long commodities and short financials.  Pauly and Ben had to recapitalized the banking sector so they could raise capital via issuing equity.  Therefore, the Feds led a campaign to smash the commodity sector and force funds to cover their financial short positions.  They even put in special "anti-short" rules for a select bunch of financials.  As we all know, recapitalizing the banking sector failed with the Feds having to nationalize Fannie, Freddie, AIG, forcing a shotgun wedding of Citigroup/Merrill Lynch and watch Lehman go down in flames.

Now the problem, IMO.  The Feds over did it by squashing commodities.  Their interference has caused a repeat cycle of investor panic, liquidation, carry trade unwind, margin calls followed by doing all over again.  What I believe is that since mid-September we have witnessed broad market, whole sale liquidation in all market sectors.  The Feds, I believe, have started this avalanche as an unintended consequence to save the banking sector.  You can't go after one sector and not affect other sectors since funds are diversified.  As these funds get margin calls and redemption requests, they have to sell everything.  It appears to me that what we are witnessing today is PANIC selling in all areas.

It is quite apparent to myself and many others we have a two tiered precious metal market.  The paper market is telling the world there is no safe haven in precious metals.  The physical market is telling the world investors are flocking to precious metals for financial protection.  I should point out that I mean all precious metals have outrageous physical demand: Gold, Silver and Platinum.  For me, all three precious metals are suffering from Official Sector interference and forced selling by funds/frustrated speculators.  I don't know how many times we have seen in the past month where gold drops $20+ in under a few minutes out of the blue.  To me this is obvious shock and awe manipulative tactics to force the price down in an attempt to trigger stops to create further price erosion.  Slow grinding selling in gold like what we saw today looks like controlled long liquidation to get the best price.

I share the view of Embry, Hommel et al that the paper market may become irrelevant and soon.  We have in essence backwardation between the paper price of precious metals and the physical price.  I realize the Comex goons will change the rules and do everything possible to stop the withdraw of metal out of their warehouses.  However, there is a strong profit motivation to take delivery and sell into the physical market right now.  Only a few $Billion will completely wipe out Comex storage of all three metals.  Once that is accomplished, the paper futures market becomes irrelevant as a pricing mechanism.  Then, if an official entity wants to stifle the prices they must come up with finite metal and not infinite paper to do the job.  I say the jig will be up at that point and look out above for our precious metals investments.  Will this take place next week, next month or next year?  I don't know but the way the Feds are spending money with no effect (e.g. $830 Billion US Federal Debt has been created since September 15 of this year to now) and the accelerated pace of the broad market meltdown; the bullish case for precious metals could be sooner than later.  Perhaps I am a fool for believing precious metals will win the war but it is far harder for me to envision infinitely printed paper money and bonds being where I should have my money invested as stores of value.

The following are three long term charts with some commentary.  Those on this board declaring the gold bull dead are premature by the tune of $200 (if paper futures contracts even mean anything).  The HUI is just below very long term support, which may not mean much in terms of panic selling but at least it gives you an idea where this blood bath might end.  Lastly, I have a chart on the US dollar and its heroic rise during a time in which the US economy is accelerating into a deep recession.

A whiff Of Panic.....But...

Friday , October 24, 2008 17:27ET

Oct 24, 2008 (AdviceTrade via COMTEX) -- What an awful market. Yes, no question we saw a whiff of panic today with the strong move lower at the open and with the Vix going crazy reaching 89.53 intra day, closing on a breakout at 79.13. Well off the highs but still on breakout. International markets were annihilated overnight on earnings headaches and our futures collapsed on that news. We gapped down and slowly recovered all day although there was the usual 1500 points worth of movement on the Dow. After moving all over the place and with the Dow getting within 125 points of break even with about five minutes to go, major selling kicked in and knocked it down to a loss -312 points at the close. The Nas was crushed as well, down 52 points and the Sp was an equal opportunity loser, coming in at -31. Absolutely nothing positive can be said about today's action. There can be some arguments made in defense of the bulls but I don't think they hold any water. I'll discuss that in a moment. There just aren't any buyers. Just short covering. Once that goes away the bears come right back in while the bulls aren't acting very bullish. They refuse to be buyers here. They have stepped aside. A true buyers strike and who can blame them really!!! Smart money is waiting for the right type of hammer to get involved and today was another day in which that DID NOT take place. End of story. So what was that argument I just mentioned? It's the hollow candles that were printed across the board meaning we had a down day but on balance buyers after the gap open took place. Normally I would say that it is somewhat bullish no doubt and we can have a small rally here for a day or so. I don't think, however, that it was a bottoming hollow candle situation and here's why. When we truly bottom I think it will be clear hollow black candle meaning we will close up for the day. in addition, leaders will lead meaning stocks like Gs won't finish down 9$ for the day. In addition, we will see a huge positive on the advance decline line and once again we saw an absolutely terrible advance decline today. It was an average 3.5 losers to every 1 winner. Not going to be the way it needs to be at the end. Leaders will have huge up days after being down huge early on. You get the picture. Basically, everything we need to see was not there today. It doesn't mean those hollow candles won't offer up a little buying for a day or so but it doesn't even guarantee that. Should we go higher for a day or so, I'd be very careful about getting aggressively involved. I will not argue with anyone who tells me that some stocks seem to be on sale here. There are so many wonderful stocks out there that have virtually no debt. Some have none at all. Those are the stocks we'll want to own and we're making a long list of those companies for when the time comes, even if it's just for a short term but significant rally higher. You need to stay away from stocks that rely on their payrolls, etc being paid by using credit from places where credit is no longer available. Those stocks are being shown no mercy here. I know no one is it seems but those stocks are being treated the worse. If you have high debt you're in big trouble with this stock market. Folks, no one alive can understand with any reliability how low this market has to ultimately go before it reaches the bottom. It's pricing in the recession/depression. The environment is bad and seemingly getting worse as more and companies are forced to close their doors or lay people off. Unemployment is increasing rapidly and that will be felt in the months ahead. The market is trying to wrap itself around the concept of increasing unemployment and global demand destruction along with shrinking valuations for just about every corporation on planet earth due to a severe decrease in business. As things move along the market is taking it all in and pricing things out. Forget the nonsense you hear that everything is down too much. Yes, like I said, some stocks are clean and clear of debt but the majority are not and who knows what's fair value to the market. The market will tell us no matter how much those screaming heads tell us they know better than the market does. They tell us things are way over done. if they were, folks would have stepped in already. Smart money knows where to buy first and they aren't buying at this moment in time. That's all you need to know thus the market, in truth, IS ALWAYS FAIRLY VALUED. Whatever it's trading at is always fair value, regardless of what anyone else ever tells you to the contrary. If were to be totally honest, we've had more situations where capitulation clearly took place. from the bull bear percentage to the the arms index to the put call ratio to the vix, etc. Add in new lows and high volume and the list goes on and on. None of it has worked so it is different this time. It happens. There's always that one market that says not this time. Not so easy folks. We have adjusted to that. There is one element that has NOT occurred yet. We have yet to see the market make new lows with a positive divergence on the Macd on the daily charts along with the appropriate hammer situation i have talked about to death. That combination has not happened over the past thirteen months since the bear market began and thus it's not a shock to say we haven't seen the market try to bottom. The elements are just not in place. When we get that magical combination, you can't be long enough. May live for that day. It's out there. Will it happen next week? Next year? I have no idea. I know we'll see it when it does takes place. It'll happen in the markets time, not ours. Have a fun weekend. Play with a kid if you get the chance. Better yet, play with one and be a kid yourself. Peace Jack


Knobias Sector Commentary

Friday , October 24, 2008 16:00ET

Energy

The Energy sector was one of the hardest hit in the market today. Sellers controlled the direction of stocks and the price of oil. Despite OPECs attempt to stabilize the price of oil and possible catch a rebound, the commodity moved below $65 per barrel in the session after OPEC voted to cut production by 1.5 million barrels per day. Oil & Gas Producing names were sharply lower today led by major oil stocks. The Equipment & Services segment fared no better as an overwhelming majority of the names ended the day to the downside. Ratings action for the day included upgrades for DO, ME, PDS, RRC and WTI while NOV and REP were both downgraded.

- Upgrades: DO, ME, PDS, RRC, WTI
- Downgrades: NOV, REP
- Earnings (eps above est): CPX
- Earnings (eps below est): BOLT, GIFI

Materials

The Materials sector ended toward the middle of the pack as the entire market slumped. The sector was able to stay at a level above its opening level but the overnight selloff around the globe helped pull the sector lower and caused the sector and the market to basically gap much lower. The one bright spot in the Chemicals segment was Airgas Inc which was able to remain positive after reporting positive earnings results for Q2. Industrial Metals and Mining were off as Gold rallied through the session but did end up trading off its session highs. Ratings action for the sector included upgrades for CNX, IPHS, SYT and TGB while AKZOY was downgraded earlier in the day.

- Upgrades: CNX, IPHS, SYT, TGB
- Downgrades: AKZOY
- Earnings (eps above est): ARG, MTX
- Earnings (eps below est): EMN, OLN

Industrials

The Industrials sector was one of the worst performing sectors in the market today after gapping lower on increased selling pressure after sharp declines in the Asian and European markets. Recession fears were blamed for today US market selloff and the same could be said for the globally dependent Industrials sector. All segments, including the General Industrials, Aerospace & Defense, Industrial Transportation, and Industrial Engineering, within the sector were hit and moved much lower from yesterday's close. Despite the selloff within the sector, eight companies were upgraded while only four received downgrades.

- Upgrades: BDC, CLS, FLEX, GR, HUBG, RTN, TRMB, URI
- Downgrades: ABB, KMT, KYO, TRMB
- Earnings (eps above est): BNI, CLS, FO, ITT, PKI, SRCL, TKR, TRMB
- Earnings (eps below est): BUCY

Consumer Discretionary

The Consumer Discretionary sector could not shake off the global concerns of a recession and closed sharply lower. Earnings were not a major factor during the session for the sector as many of the names reported earlier this week or are expected to report next week. Oil and gas prices declined again today and could put more money into the consumers pocket which will help the companies within the sector heading into the holiday season.

- Upgrades: CHS, DHI, SJR
- Downgrades: CAKE, CJR, DISCA, RSH
- Earnings (eps above est): COLM
- Earnings (eps below est): AVID, CAKE, GCI

Consumer Staples

The Consumer Staples sector could not shake off the global concerns of a recession and closed sharply lower. Earnings were not a major factor during the session for the sector as many of the names reported earlier this week or are expected to report next week. Oil and gas prices declined again today and could put more money into the consumers pocket which will help the companies within the sector heading into the holiday season.

- Upgrades: BG, DF
- Downgrades: n/a
- Earnings (eps above est): CPO, DV
- Earnings (eps below est): WOOF

Health Care

The Healthcare sector was able to shed the downward move of the overall market and was one of the only sectors that touched positive territory during the session. Even though the sector closed lower it was able to move into the green during late afternoon action. Positive earnings reports from seven names and only one negative report within the sector helped it stay pretty close to flat during afternoon trading. Both the Pharma & Biotech and the Equipment & Services segments were both mixed in the session. Ratings action for the day included upgrades for AGP, AMGN, BIIB, GILD, KCI and ZMH while ACL, AFFX, ELN, and RSCR were downgraded.

- Upgrades: AGP, AMGN, BIIB, GILD, KCI, ZMH
- Downgrades: ACL, AFFX, ELN, RSCR, ZMH
- Earnings (eps above est): AMSG, HNSN, IDXX, OMCL, RDY, THRX, VAR
- Earnings (eps below est): AFFX

Financials

The possible thawing of the credit market as helped moved the Financial sector off the number one hit list. The sector was not the best performer in the market today, but neither was it the worst performer. Earnings reports from other sectors have allowed the names within the sector to breathe a little and not be the primary focus of traders. Despite not being the primary focus, Financials are still on the tip of everyone's tongue as the global financial crisis continues to be a concern. Insurance names in the sector got a boost today as the Treasury considers buying equity stakes in some of the companies if they are allowed to participate in the rescue plan. Banks were mixed while the General Financial segment was mostly lower on the session.

- Upgrades: CNB, CYN, IPCR, KEY, PUK
- Downgrades: BCS, CS, FHN, FITB, JNS, MFC
- Earnings (eps above est): AFL, CB, CYN, FII, IPCR
- Earnings (eps below est): ACGL, DDR, MRH

Information Technology

The Technology sector was not hit as hard as other sectors in the market after many companies within the group reported earnings since yesterday's closing bell including MicroSoft. Many of the earnings were positive with fourteen names reporting EPS results above estimates and only five reporting worse than expected EPS results. The main concern coming from the sector has been forward looking guidance, but that has been the concern for the overall market as well. Lowering of expectations within the sector for future earnings could end up being a boost in coming quarters, but for now the expectations from the company, analysts and traders will have to come closer together. The Software segment was lower while the Hardware segment was mixed with many of the names ending in positive territory.

- Upgrades: ASML, EFII, ELX, ERIC ,JNPR, WDC
- Downgrades: ALU, CCMP, JNPR, VRGY
- Earnings (eps above est): CPWR, ELX, HITT, IDTI, IM, JNPR, MCHP, MSFT, NTGR, RVBD, SCSC, SIMG, SYNA, WDC
- Earnings (eps below est): ARBA, EFII, FDRY, RMBS, WFR

Telecommunication Services

The Telecom sector closed lower during the session on the coattails of the overall market. The sector did however recover from its weak opening and attempted to make it back into positive territory during the afternoon, but volume was weak during this move. News was light within the sector and the broadbased move of the market served as a guide and is noticeable when looking at today's chart. Mobile names were also lower today. Ratings action for the sector included downgrades for FTE and LVLT.

- Upgrades: n/a
- Downgrades: FTE, LVLT
- Earnings (eps above est): n/a
- Earnings (eps below est): n/a

Utilities

The Utilities sector was another sector that took a tumble in today's down market, but it was one of the better performers despite ending in negative territory. The Electricity segment was lower but one bright spot was Calpine. This was one of the only stocks in the sector that was able to overcome the overall market trend and finish in positive territory. Ratings action was light within the sector as AES was downgraded earlier in the session.

- Upgrades: n/a
- Downgrades: AES
- Earnings (eps above est): n/a
- Earnings (eps below est): EDE, EXC

some chart quotations:

from IV board:

We just experienced another ugly week for the entire market.  One thing I find particularly interesting, is last Tuesday was Lehman's CDS settlement day.  The reports were that everything went smoothly and a paltry $8 Billion sum was paid out for $500 Billion ++ derivative portfolio.  However, Tuesday is when the markets went into a tail spin.  For some reason, I don't think this was just a coincidence.  Blood continues to flow on the streets despite the "easing" of the credit markets via the TED Spread and LIBOR contraction.  I am in unfamiliar territory here but reason tells me that things are much worse behind the scenes than the authorities are saying.  We have seen $Trillions injected into the world's financial system yet just about every equity market is experiencing bruising sell offs.  Here are a few broad market charts:

Dow Jones - Short Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=6&dy=0&id=p62919547414&a=135845786&listNum=3

Dow Jones - Medium Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=2&mn=4&dy=0&id=p27573491325&a=143726068&listNum=3

Dow Jones - Long Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=M&yr=8&mn=0&dy=0&id=p41456973357&a=128643446&listNum=3

Nasdaq - Short Term,
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=0&mn=6&dy=0&id=p55779717092&a=135846987&listNum=3

Nasdaq - Long Term,
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=M&yr=7&mn=0&dy=0&id=p44235340514&a=128643093&listNum=3

S&P 500 - Short Term,
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p70887214716&a=135847211&listNum=3

S&P 500 - Long Term,
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=9&mn=0&dy=0&id=p33307561124&a=128643678&listNum=3

The US Dollar and Japanese Yen continue their stellar surges against nearly all other currencies.  It seems to me that the rally in both is more attributed to carry trades unwinding than safe haven buying.  Borrowed money in both of these currencies found its way the world over thanks to favorable interest rate differentials.  The Yen in particular has been THE carry trade currency of choice and now the Japanese are scared to death of its strength hurting their exports.  One news source is saying emerging markets are getting absolutely ravaged due to the US Dollar's rally.  The US Dollar's rally may become under a coordinated intervention attack, which would be very supportive to the commodity sector.  I don't know how much weight one should give to that but we should be seeing another rate cut this week, which should take some wind out of the Dollar's sails.  Here's the USDX and Japanese Yen:

Japanese Yen,
http://stockcharts.com/h-sc/ui?s=$XJY&p=M&yr=10&mn=11&dy=30&id=p28882975452&a=153819117&listNum=3

US Dollar Index,
http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=0&mn=6&dy=0&id=p73681556446&a=112138636&listNum=3

The precious metals sector got whacked once again over the past week.  A surging dollar helped to put the hurt on Gold but the magnitude of the drop seemed disproportionate to me.  In years past, a significant drop occurring over a short period of time was indicative to a massive speculator flush.  Open interest in Gold futures is already very low and large day to day changes have been almost non-existent for several weeks.  Something caught my eye in Bill Murphy's (Lemetropolecafe.com) daily Midas report.  On Thursday, he said he received input from a foreign precious metal dealer that "someone was flooding the market with 100 ounce bars".  Friday's Midas report included that a major brokerage firm that the IMF was flooding the market with leased Gold.  Dennis Gartman on the same day commented that a "Fund" is leasing large amounts of Gold and was pushing it lower.  One comment by one source is pure speculation but three independent comments makes me think there may be significant merit to the story.  This would also explain why during the past week the drop in Gold appeared to be much more exaggerated than it should have.

What motivation does the IMF have to lease Gold?  Oddly enough it isn't what you would expect me to say concerning price management.  The motivation for the IMF is to raise funds to bailout bankrupt countries like Bulgaria, Iceland and the Ukraine.  The IMF does not have the authority to sell their gold but it can lease it out and still record it on their books.  The US has veto power for the sale of gold with the approval by the US Congress.  By leasing out their Gold, they get around their charter.  You would have to think that the IMF could just go to the Fed's begging bowl and get their fill of freshly digitized printed money.

One last thought for the evening.  I've been thinking of a new theme to write about for my November Market Update.  At this time, I think it will be focused on the solvency of the United States.  Most know that the US has been consuming 80% of the world's savings for several years.  The actual new borrowing the US has done each year has been in the neighborhood of $400 Billion.  On September 15, 2008, the US Federal debt was $9,634 Billion.  As of October 23, 2008, the US Federal debt is $10,524 Billion.  Folks, this is an increase of $890 Billion in a period of 6 weeks!  This total has very little of the $700 Billion bailout added to it.  I don't care what people think about this country's ability to attract lending, this rate of increase is unsustainable.  In the last 6 weeks, the US has effectively consumed the world's entire savings for a whole year.  Where are the funds going to come from for the $700 Billion bailout package and to make up for the steep fall off in US Federal revenues?  I think Europe, Russia and China have figured this out and is why they are making noises about a new Bretton Woods agreement and/or a new world reserve currency.  Personally, the recent spectacular rally the US dollar has had is going to pale in comparison to its fall when the US bond market fails to attract enough buyers and defaults.  Of course, we will never truly hear of a default as the US Treasury will probably monetize (pay with printed money) the purchase of bonds via the Caribbean banking sectors.  The deception will probably be short lived and then it's good bye dollar.

Here's a couple of miscellaneous charts:

Crude Oil,
http://stockcharts.com/h-sc/ui?s=$WTIC&p=M&yr=8&mn=0&dy=0&id=p87933400177&a=153675433&listNum=3

Gold Stock Index,
http://stockcharts.com/h-sc/ui?s=$HUI&p=M&yr=9&mn=0&dy=0&id=p19160974024&a=150759321&listNum=3

for all the members that are still there.....

cheers from Singapore


(from IV board):
Watch that 8200 level....
Some may wonder why I always show the Dow without always showing the other two broad indexes.  The reason is I have found over the years that a sick Dow takes the rest of the market with it.  The past several months are showcasing the influence the Dow has on investor psychology.  I see extreme risk right here, right now.  The Dow has challenged 8200 four times and it looks to me that the fifth time it won't hold.  My guess is if that level fails then the swing low in October of 7770 will fall.

Dow - Short Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=6&dy=0&id=p62919547414&a=135845786&listNum=3

Dow - Medium Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=2&mn=4&dy=0&id=p27573491325&a=143726068&listNum=3

Dow - Long Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=M&yr=8&mn=0&dy=0&id=p41456973357&a=128643446&listNum=3

The Nasdaq and S&P 500 are in real bad technical shape.  I see tonight Asian markets are down hard and I have the sneaking suspicion the US could open down tomorrow despite the Fed's buying up futures to paint a rosy picture.

Nasdaq (About to take a dirt nap?),
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=0&mn=6&dy=0&id=p55779717092&a=135846987&listNum=3

Nasdaq - Long Term,
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=M&yr=7&mn=0&dy=0&id=p44235340514&a=128643093&listNum=3

S&P 500 - Short Term,
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p70887214716&a=135847211&listNum=3

S&P 500 - Long Term,
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=9&mn=0&dy=0&id=p33307561124&a=128643678&listNum=3

As for the precious metals sector, get ready for it to get hammered along side with the Dow.  I think the Fed's are in a real pickle right now.  They'd probably like to have gold rising to lessen deflation talk but then a rising price equates to financial trouble that they have been so carefully trying to hide over the last year.  Rising gold also means inflation is picking up which would pressure bonds.  The Fed's simply do not want to make bonds less attractive at a time when they have to sell $2 Trillion of them over the coming year.

The market soap opera continues that we all know is going to end badly.  Meanwhile we wait for our time in the sun when the noose of western central banks on the gold bull's neck breaks for good.

fyi:
Our 2009 Predictions
By Roger Wiegand     
Dec 22 2008 1:23PM www.webeatthestreet.com

"We think we now have enough data from both the fundamentals and technicals to make some serious forecasts and predictions for 2009. While 2008 was a nasty year when lots of things imploded, they are far from being repaired. Treasury Secretary Paulson told us this week there are no more surprises, which tells me we haven't even discovered but a small portion of this monster derivative mess. His ripping-off of the taxpayers to the tune of $700 billion is only a warm-up.
However, the larger question for traders and investors is what could happen next and when.
In the following report we take the key global economic points and suggest the outcome for 2009."-Traderrog

The most important news for 2008 was the destruction of the big global banks' net worth and their badly wounded ability to conduct normal business and make market-moving loans. Ben & Hank's bailout only helped the bad-boy banks reliquify themselves to remain somewhat solvent and stay in business. They are doing nothing to extend credit to any business enhancing western or global economies. The 2009 result will be no significant banker lending, taking more bailout money and sweeping additional bad loans of all stripes under the banker's rug and hiding the rest in back rooms.
The largest surprise in our view was the massive disaster at insurance giant AIG. Despite numerous injections of bailout billions, AIG remains in very serious trouble hanging on by their proverbial fingernails. The 2009 result will be a surprise crash and failure of AIG frightening the world at large causing ripples of failures throughout western and Asian nations unable to conduct business without mandatory insurance policies. Most folks have no comprehension as to the monster fallout this will create. It is in our view literally immeasurable, and this is why Paulson handed them so much money.

Our new president is determined to hand out $860 Billion to One Trillion dollars in a Herculean effort to literally buy a new economic recovery. While some of his ideas are noble indeed the overall plan will have little effect and Great Depression II shall take hold in 2009 with crashing stock markets in May and September-October 2009. We think the worst of the worst hits in later September 2009.

During the spring of next year we see:
(1) A second larger wave of residential housing mortgage failures; (2) The first big wave of auto loan failures and repossessions; (3) Over $40 billion in credit card defaults, smashing the bank lenders; (4) The first wave of commercial mortgage failures and foreclosures on shopping malls, office buildings and other commercials; (5) And finally, the grand smashing finale of CDS Credit Default Swaps originated with No margin money or down payments! We heard today the total is 500 trillion! I cannot even fathom that number. These five converging train wrecks could take the Dow from a dead cat bounce of 10400-10800 back to 7250, or even 6600, or 5600.

Shares traders and investors have one more solid quarter, in our view to regain some stock market losses on the forthcoming Obama Trillion Dollar handouts. We think the rising share markets will help most all sectors gain some recovery and provide the illusion the bottoms are in and new bases found. The stark reality hits home after shares peak in April or early May taking an unprecedented selling high dive scaring the wits out of Americans and the watching world.
Even with these events and rising unemployment and social problems, economic observers and analysts could continue to plead the worst is over, the bottoms are in and a fine, new, shiny world of trading and investing in our bright economy lies just ahead for the fall of 2009.
Then, in later September and early October, the New York, London, Tokyo and Asian markets take a monster crash. How low is low and how bad can it get? We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. One guideline will be a falling overshoot of PE's on our largest, so-called international corporations posting lows of 4 to7. Today, many of them are near 18. What does this tell us about the severity of our projections? Unemployment nationally in the USA is now touching 16%. The officially posted
number is somewhere near half of that. By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALLTIME 1930'S DEPRESSION HIGH OF 25% UNEMPLOYED. SADLY, THAT IS NOT THE WORST AS IT GETS MORE DIRE. WE PREDICT REAL, USA UNEMPLOYMENT REACHES 30-40%. IN THE RUST BELT STATES OF MICHIGAN AND OHIO, WHILE 40% IS NOT UNREALISTIC.

Several European nations have larger, more established social safety nets for the unemployed. In the USA, local, regional and national authorities are not nearly as prepared. The American federal government departments for food stamps and the job of providing welfare provisions will be overwhelmed. This will be a Katrina event for the hungry citizens of the United States. Urban areas will see skyrocketing crime and in parts of some cities, life could become totally uninhabitable. The last report we've seen on those receiving food handouts and related welfare amounted to 11 million USA citizens with 700,000 children going hungry each day.
We suspect the true amount of those needing food help will rise to 35,000,000 with an untold tragic number of them being little, defenseless children.
Governments remain in denial and are not prepared for this national emergency whatsoever. As things worsen, food riots and others with violence aimed at the "haves' are common.
The number of bank failures over the next three years will be in the thousands. In addition, the US Dollar's valuation could break recent lows near 70.00 on the index, dropping to 46.00 by 2011 or 2012. Inflation or potentially hyperinflation is quite real as the Federal Reserve and US Treasury strain to print and circulate cash to prod our stalled economy. It is simply not working even with the dramatically lower interest rates of late.

Benny Bernanke is out of rate cut running room.
Consumers are broke and going broker. Households of interrelated families are doubling and tripling up even with several employed members being under one roof. Basic costs of rent, mortgage payments, health care, food, utilities and taxes are too much to bear on stagnant and in some cases falling wages. In some areas of America, there are entire subdivisions of homes totally abandoned or existing with only a hand full of occupants. The millions thrown at lenders for new mortgages are not getting through to buyers, as there are fewer of them. We are witnessing system breakdown.
Municipalities and states are sinking into a spending, debt-ridden morass. It was reported today that 22 of 50 USA states are in serious budgetary trouble.
California is one of those in terrible condition and Michigan is already technically broke as are many of her cities. Detroit will file bankruptcy in 2009 and there will many other surprises as well. There will be a cascade of bond defaults and the outcome will cap the ability of these cities, states and counties to borrow ever more.
The shining light through all of this is the faster we find the bottom the faster we can recover. Sadly, the recovery process will take years. Futures and commodities traders should continue to earn steady profits as the stock markets slide into oblivion for years. We see no recovery until 2015.


Roger Wiegand
Editor Trader Tracks Newsletter
& The Rog Blog at webeatthestreet.com

In the original spirit of 3SoF, I am putting 2 [will add few more later] for the Obama swing trade.

1. FSLR  @ 151.5
2. SPWRA  @ 41.4

The first glimpse of this scenario (outlined by La-Onda) playing out will occur over the next 6-8 weeks. Earnings reports are coming out reflecting business for the 4th quarter 2008. In addition, 1st quarter forecasts (as well as 2nd – futures) will reveal a lot. Combined with several government reports from the various sectors we should see if this Armageddon may in fact materialize. The mortgage sector is pretty beat up – I think this is the worst I've seen in my lifetime – I can't believe it can get worse. I sure hope not.

Nevertheless these are definitely minor stuff that come up with my family contented simply just, your changes that really found a major effect with a awareness about joy passed off strong inside myself. Simply because including That i mentioned, I'm always contented, while my well being has not yet appreciably transformed, though right now That i understand these individuals and additionally implement in the same manner it can be. Are we certainly not sorrow? goes on to my opinion. Are usually everyone not get exasperated? of course there're still matters and individuals who is able to bring in myself outside stabilize. Can you entirely stopped howling? basically no, not really stopped, quite possibly cried today any time as a consequence of disease, As i experienced unpleasant, similar to As i forced tractor. However, the key impact is based on what you need to dilemma when I will be happy? amazing many months, inspite of the mood, That i get to inside the core, coronary heart, possibly indoors all by yourself in order to find presently there huge: Yes, I will be serwisy randkowe delighted... the and you just aspire, very little lady luck short-term, short lived, however , some lasting express for awesome delight, that will pay in the heart.