Now The Party Is Over...

With the S&P finally closing below the November lows and now sitting where it was in 1997, the next wave down should be swift. The question is where does it end up at? 650? 600? 550?... 400 eventually but I don't think that's happening this time around.

The Dow was able to stay above 7000, but not by much.

Citigroup lost about 40% today and sits at a buck and a half. Bank of America is less than four bucks. GM at two and a quarter. And what about GENERAL ELECTRIC?!?!?! Now below NINE BUCKS A SHARE and cut its dividend in a big way.

Folks, how ugly is this really going to get? We're on the brink of the big capitulation moment. We'll have the OH SHIT day I've been waiting for and I still think that 650 on the S&P is the target zone. I'll stick to that until I see evidence of something more perilous.

Every announcement by the gov't is met with skepticism now and we see stocks drop. The various plans and ideas don't have any meat to them. Announcements are made, but details are lacking. It's getting to a point where it doesn't matter what is said or planned, it simply isn't going to help.

I'm hoping for the best but planning for the worst. I'm getting afraid to put my retirement money back in. If I get in at 650 and we fall to 500 I'm down 30%... Maybe the fact that I'm getting worried is a good sign that we're near the bottom. Time will tell. I hope that within 30 days the picture is clearer and I'm invested again for the 50% rally that will ensue.

I'll put this out there... the bottom will occur between Mar 10 and Mar 18. This is from the service I'm subscribed to. We'll see how accurate they are.

At that time there will be the belief that we are 6-9 months away from the end of all this. Remember, the stock market looks that far ahead. We'll rally 50% over a few months and at that point it will be realized that we in fact are not at the end of this mess and the next leg down will be the ugliest of them all taking us into 2010 and a low of 400 on the S&P.

I Thought It Was Warm In Florida???

37 degrees? What?!?! Yep, Saturday morning in Orlando and it's like being back home. Going to hit 70 today though. We just have to wait it out. In the meantime I'm having my coffee and cinammon roll while Debra snoozes. I'm an early riser... every single day. Sometimes it's annoying.

Well the markets only drifted down a little yesterday, but the S&P is now within 1% of it's closing low in November. In the meantime the Dow continues to hit new lows, now matching lows it hasn't seen in a dozen years.

Bank of America and Citigroup can be had for less than $3 a share. Unbelievable. Their market capitalization is now lower than the amount the gov't has "loaned" them. Some scary stuff here folks. Chances are they'll be nationalized (taken over) by the gov't. Ummm, if the best minds in finance can't handle them do you really trust our gov't to be able to? Any idea how huge, massive, gargantuan these companies are??? Well they've lost over 90% of their value and if nationalization occurs it'll be closer to 99.9%. Imagine having worked for one of them for 25 years and having a huge chunk of your retirement tied to them and being wiped out in a year. But it's happening everywhere as stock prices decline 50% from their peaks. And it may get worse before it gets better.

Wall Street has no confidence in what's trying to be done so there can't be any type of a turnaround yet. I think I'll avoid the falling knife for now. I'm hoping for one giant Oh Shit day or days that will capitulate this market so I'll know it's time to get back in. If it simply continues to drift down I won't know exactly when the time is to get back in.

What's next? I don't have a clue any longer. Every attempt by the gov't is being met with skepticism and even anger. Rick Santilli of CNBC went on a rampage when the mortgage idea was presented the other day. I can't say that I blame him. I don't want to pay for my neighbors house just because he bought something he shouldn't have. It's a vicious circle though. As more defaults and foreclosures occur puts more houses on the market which brings down home prices and values. Sure, I'm getting hit by it too but I can weather it since I don't plan on going anywhere soon. Although we do want to move to the coast and it will be very appealing if prices keep coming down... even though it means my house won't make me as much either. OK, I'm dizzy now.

Today is Sea World day. Once it warms up.

Mickey and Goofy Say Hi

Hello from Orlando folks. Yep, I'm with the real Goofy, not all the ones that we elect. Disney lets you in free on your birthday this year if you sign up in advance, so yes, I've spent a grand to come to Orlando in order to save $75. :-) That's ok, February is mine and Debra's AnniValenBirth day/month.

Feb 1- Wedding Anniversary
Feb 14 - Valentines
Feb 16 - Debra's birthday
Feb 20 - My birthday

So we wrap it all up for one small trip or a big gift. This year we wanted to go somewhere warm and there's a Cuban restaurant down here that we just love.

Anyway... the Dow has broken below it's previous low from November. The S&P and NASDAQ are holding above. For now. Won't last much longer. We could see the swift down move today, Monday and Tuesday.

So far the throwing of trillions of dollars at this problem has been akin to peeing on a forest fire. It just doesn't do any good. Granted, it takes time for the money and fixes to flow through the system. But the problem is, even with time it would have fixed itself. Now we're saddled with trillions of debt that our children and grandchildren will be paying back throughout their lives.

I still have a target of around 650 on the S&P, around 15% from here. I want to see what happens today (the futures say we're opening down pretty big this morning) and I may go ahead and start scaling my retirement money back in. On the flip side it would be wiser and safer to wait for the real bottom to hit and get in when the move up starts rather than trying to guess on the way down (known as trying to catch a falling knife). But who said I was wise or safe??

Well it's almost time to head to Animal Kingdom. Have a good weekend everyone.

Is The New Bottom Coming?

Wow, I'm back amongst the working class again. After a bit of time on the bench I've been put back to work on a long term assignment. And I'm soooo glad.

So, where are we? Well the Dow is clinging to it's November low while the Nasdaq and S&P are still a decent amount above those levels.

Will we let the S&P get down there and test? We're getting closer. About another 50 points.

The low for this final leg should be around the 675 level on the S&P. We're hovering in the 785 area right now.

There doesn't seem to be anything that'll stop it from happening. No matter how much stimulus or bailouts that are announced, the markets aren't even bothering with fake rallies any more.

I'm watching closely. I'm ready to put my retirement money back in very soon for the 50% rally that will follow. If I'm off by 5-10% I'll be happy. Close enough as they say. I'm even thinking of scaling back in 25% at a time over the next few days or week or so.

There are just so many problems out there it's getting scarier. Desperate attempts at saving various areas such as banks, automakers, mortgages, etc simply don't have enough oomph.

I hate to even admit this but something I just heard Jim Cramer on CNBC say makes sense. I've been dead set against the 'cram down' idea of lowering the principle of homeowners that are in trouble. It just isn't fair that those in trouble get a lowered mortgage. But the idea Cramer just presented is to allow it in order to get the mortgage equal to the new appraisal value and then when the house is sold in the future, any amount above the new value is given to the bank. This way it doesn't benefit the homeowner in any way and the bank at least has a chance of making back the money it lost when the house was reappraised.

How long it takes for all of this to play out is a scary thought. Remember, this low we're about to see is just "a" low, not "the" low. We'll rally 50% but then the next leg down will be THE low. Sometime in 2011 or 2012 is my estimate.

I'll post as I can now that I'm a working stiff again.

Thanks For The $30 A Month

$13 a week, $15 twice a month, $30 a month... not sure exactly which news statement is correct, but the wonderful stimulus package that will be signed soon will give each of us $400 in our paychecks. Spread out over time. So, what are you going to do with your extra $13 a week that will stimulate the economy and help get us out of this recession? What an absolute joke.

The more I watch, listen and read what our gov't is doing the more I realize just how out of touch they are. (I am not pointing at the democrats or the republicans, I'm talking about the gov't as a whole) And it also worries me greatly what they aren't telling us. The desperation, the scare tactics and statements are getting heavier. The big banks are so overleveraged that they are basically bankrupt.

And their answer is an 800 billion dollar package that gives us $15 at a time and lets us write off sales tax if we buy a new car.

Total insanity.

The stock market was nosediving again today but in the final hour a news story came out that the latest rabbit out of a hat was a new plan to subsidize homeowners by letting those in distress have their loan amounts lowered based on current value. I could rant on this for a while, but I won't. It just irritates me that I bought a house I could afford and I get nothing, but people that overbought will get a discount on their house. I should have bought that $800,000 house I liked instead of the $250,000 I did buy.

Lets see how long Wall Street thinks that's good news.

The Dow went down below 7700 today... creeping back to the November lows. The S&P is holding up better by staying above 800.

The Puppet Masters Disappoint

Well the puppet masters couldn't make the dancing happen on Wall Street today. Tim Geithner our Treasury Secretary had built up the anticipation of his big event today for over a week and then he doesn't announce anything of substance. If you want to piss off or disappoint Wall Street, this is how you do it.

Unreal. Wall Street wants details, they want plans, they want action and all they got in essence was "We're prepared to do what it takes to fix things." Well that's what has been said for months.

Then we had Ben Bernanke getting grilled by the Senate and any time he opens his mouth the markets tank so that didn't help.

So, that led to a major down move today. The Dow lost almost 400 points to 7888.

Here's the situation... the last gasp of hope was for a grand plan from the Treasury. Now that we see nothing up their sleeve there's nothing left to hope for at this point. Earnings season is winding down and there isn't any good news anywhere to be found.

It still hasn't been confirmed with 100% certainty that we're in wave 5 down yet. But we're close to knowing for sure. If we are, the target area is around 6500 on the Dow.

If we have another bounce up coming it'll be rather weak. Personally I don't see anything that can push the markets up that much at this point.

Oh, the Senate passed the stimulus bill. Yippee. Now they have to work with the House to get a compromise bill together that both houses can pass and then get it to Obama. The hope is to do all of that this week.

Here's a bit of trivia... We keep hearing the term "a trillion dollars" being tossed around. We can grasp a million, a billion, but most people don't really grasp how much a trillion dollars is. So here's a way to put it into perspective.

If you go back to the beginning of our modern calendar, 2009 years ago (733,000 days ago) and you spend a million dollars a day, every day up to now, you still haven't spent a trillion dollars. A MILLION DOLLARS A DAY FOR 2009 YEARS AND YOU STILL HAVEN'T SPENT A TRILLION DOLLARS!

And our gov't has thrown approximately 8 trillion dollars at this economic nightmare so far.

Wow.

DC is the Puppet Master This Week

When is Wall Street not the financial center of the universe?

Answer: When Washington DC is trying to come up with hundreds of billions or trillions of dollars to try to fix what's broken.

This week will have all eyes on our nations capital as it works on the stimulus package and the announcement by the new Treasury Secretary of what he's got up his sleeve.

Seriously... what in the world are people actually expecting to come of all this once it's announced? Nothing. Sure it'll sound good, but so have many of the other attempts at putting out the fires out there.

In the meantime the markets have held up well and rallied a bit last week. Heck, the NASDAQ is actually up for the year having wiped out it's losses from January.

This is setting up to be the perfect "buy the rumor, sell the news" and once the announcements are made and the votes are in, we should see a selloff. But hey, the market has a mind of it's own so we'll have to see. But the rest of this week could be very interesting.

I just saw a headline saying that the Treasury has dropped the idea of creating a "bad bank" to take all of the toxic assets off of the balance sheets of the banks. I say that's a good thing. It would have just been more smoke and mirrors. Let's just get through this mess and be done with it. That'll never happen though.

Instead there will be incentives to buy houses and cars. Incentives to get people to spend more money. Brilliant idea.

Eerie

Check this out... the current stock market laid over the 1937 market...

Click on the chart to enlarge it (may have to click on it a second time)

http://social.stocktock.com/profiles/blogs/1937-vs-2008-updated-daily

Wearing me out...

If a bear market doesn't scare you out, it wears you out... Well it's working. I'm worn out. That crack, the snap, the final push down has been on the verge of coming for a month now. If it refuses to happen in the next couple of trading days we're just doing to rally from here. The end result will be the same as what I've been saying, we'll get to 10,000-11,000 on the Dow and then fall in a big way.

The expectation has been that there would be one final leg down first. The Dow is holding on to 8,000 as if it's life depends on it. The S&P is staying well above 800 and doesn't want to break below it. So, we'll just have to wait and see won't we?

I don't do patience very well... I prefer efficiency! Let's move on with it!

Can't wait to see what numbers the gov't releases for unemployment tomorrow.

Dum de dum dum....

The rubber is about to meet the road folks. Starting tomorrow and what should last a few days, we're going to see a sizable down move if it's actually meant to be. All of the major indices are hovering at major support and psychological levels. Dow at 8000 is a prime example along with the Dow transports at 3000 and many others. The weakness has been building and wave 5 began late last week as noted.

Unless there's a huge rabbit about to be pulled out of a hat, we're going to fade. The "stimulus" package (that has very little stimuli) is a dud and isn't getting anyone excited, the cap on salaries of executives is a joke and business as usual in Washington is continuing.

If it was simply accepted that there isn't anything that can be done and just let things happen that will happen anyway it would speed up the process.

Remember, don't get scared during this plummet if it comes to be. Hang on because it's the final shake out for a while. Just don't look.

And remember, if I'm right about this and things happen as I predict, be sure to listen to me in 2-5 months when I say it's time to get out. You'll thank me later. :-)

I'm so ready for the rally. I want back in!

Thursday and particularly Friday could be very interesting... it's quite exciting.