Today's tank - bear market sign?

[robt]

yesterday, the New York Times carried an article about homebuilders and insider selling.

"Insiders at the 10 largest home builders by market value, including D. R. Horton, KB Home, Toll Brothers and M.D.C. Holdings, have sold nearly 11 million shares, worth $952 million, so far this year. That is a huge jump from the 6.8 million shares, worth $658 million, that insiders sold during all of last year, according to data compiled by Thomson Financial."

http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/20051004/ZNYT01/5100403%2003/1002/Business

What the article didn't say is that when housing sinks, our entire economy will go.

If the builders are doing badly, it means we have a housing surplus; a housing surplus means lower home values; lower home values means less equity in the hands of the American public...a great sucking sound as money is taken out of the stock market.

The bear market isn't here yet, but I believe smart money may be anticipating one, and exiting the market.

I am not panicking, but I am reducing my market investments as appropriate opportunities arise.


ps...David's new picks, all based on the idea of an end to the bull market, are doing quite welll.

pps...in today's pick, David declares the bear market as arrived. I am not entirely sure this is the case,, but it's safer to believe that it's here and be wrong, than it is to continue faith in the bull proposition.

[akclide]

I believe the action of the market is telling us it is oversold.Hold your cash and there will be some good opportunities coming your way.
Oil prices seems like they are coming down and hopefully will stabalize at some point in very near future.Home builders are going through the bottom of their corrective cycle.
Picture may have been bleak the past couple of days but it is all about to change. Major indices have lost everything they had gained whole year.Panic set in and market went into selling mode hence got oversold.Next couple of days should tell us a lot more.

[metro]

We have been in a broad bull market for 23 years with a normal 50% retracement a couple of years ago but then hit all time highs last month. The market now may pullback as bit as it is necessary to get some cash build up to move the market forward in the next move. Next year billions of $ in construction projects will stimulate the economy and as interest rates rise the money coming out of bonds will move into stocks.




In the shoter term you may want to keep an eye on the equal weight S&P as it may test its 3 1/2 year support. Keep some cash for buying ops ahead this month or next.



I do not thing the Dow any longer means to much but anyway it is still in a nice triangle and if it does drop below it briefly it has the 200-EMA and 10000 support

[robt]

Thanks for your analyses, guys. Reassuring. 

Though I think the economy is still floating on a bubble, bubbles are often surprisingly strong structures.

[SmartWrasse]

SNAFU 

Oil finally drops and so does the market like it is the end of the world 

[ehos]

Oil/Engergy has been on a tear (duh) and the drop is just people preserving capital or getting stopped out (personal experience).  I had a very TIGHT stop on ECA, got my profits and I'm looking to buy back in.

You can already see a small turn around today (late).  I'm still a bull, but time to switch from the really speculative stuff (ie .PK/.OB) to some more secular stocks.

Coke anyone?

[KCScott]

Just some random thoughts....

This may be out of the box thinking, but IMO, the market is looking for a catalyst to buy.
The fact energy is falling is good,yet the markets still dropped.
I think the next bit of Geo-political news, sepcifically the Iraqi constitutional vote (if it indeed does go off as planned) will provide a good bit of stimulus as we head into earnings season.
That vote is 9 days away.

I expect earnings season to be positive for most sectors except retail and transports (those are the only 2 that come to mind right away)

I also believe the positive earnings will lead into the "Santa Claus" rally.

They call it speculation for a reason