Timberrrrrrr

Today is shaping up to be one of those major ugly days I've been waiting for. Futures are down sizably at 7:30am meaning a lower open. I'll report back at the end of the day of the actual results.

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Wow, ugly was right when I posted my quick comment this morning. A friend emailed me at 10:30 this morning when the Dow was down 369 and his guess was that we’d end the day +5. I replied right back to him and said we’d close down 500. I was off by 15 ;-) Of course it was just a lucky guess but I didn’t think today was going to be one of those rebound days. However, we did rebound about 150 off the bottom that was hit in the final half hour. So that does give a little bit of hope for tomorrow. However (part deux), the Nasdaq and the S&P both hit new lows today below their previously low close on Oct 9. Lower lows is never a good thing. The Dow kept its head barely above that old low close. Amazon reported earnings after the bell and their forward guidance was bad, they’re down 15% in the after market.

What about volume Scott? Well I’m glad you asked… volume once again was average. What’s this mean? People still aren’t scared enough to bail out. Until we have one or two OH SHIT! Days, this downturn is not over.

Now there are articles and headlines all over the place about the recession, how long it’ll last, how deep it’ll be… It’s about time. The cheerleaders on the TV (CNBC in particular) have been in denial about a recession until the past couple of weeks. How many untold billions of dollars have people lost by listening to them? Drives me insane.

Where to from here? Well my target of 7000 is still looking viable. I read an article by someone saying we’d see 7200 within 6 weeks which was the 2003 low. Taking it all with a grain of salt and doing my own due diligence, but I do like hearing and reading what others are predicting.
One thing I do know (maybe, kinda) is that the Dow will go below 7773 intraday by the end of next week. Remember that theory I told you about that I was trying to get my brain wrapped around? Well it’s falling into place very nicely. It’s based on 9 week cycles and this is week 8. If the Dow dips below 7773 this week or next, the wheels will be in motion for a buy signal (13 weeks later). I’ll keep watching it and will report my findings.

In the meantime I’m afraid we’re not going up any time soon, at least not in a big way. It’s amazing how many solid company stocks are down 50% or more. Some tremendous long term opportunities will be out there once the bottom is finally found… even if the bottom doesn’t come until the first half of 2009 as some analysts are now predicting.