Hmmmm, next?

Wow, I said in my post last week that we'd hit 1025 Monday or Tuesday. Well we got down to 1030 Monday afternoon. I said in my last post that we'd then rally to 1070. Well we hit 1070 on Friday. I said in my last post that at that point that would be it, done, kaput.... I guess now we'll see if I'm 3 for 3 in my Halloween Prognostication...

BOO!

Well when the wife notices that the blog hasn't been updated and mentions it, I guess it's time to do an update. She already nags me enough about everything else.

:-)

So, last update I mentioned that we'd hit 10,000 and would we stay or just drop right back. We held for about a week and then we're in the midst of a pullback. Down about 6%. A real pullback or just another rest period before another move up???

Here's what's going to happen, bank on it. OK, well don't bank on it, but watch for it. S&P is at 1040 right now. We'll dip down to 1025 Monday, maybe into Tuesday morning, then a move to the 1070 range over the next few trading days. Then we're done. Finished. Kaput. The real move down hits.

GDP for Q3 came out and was a surprise to the upside. The markets rallied 200 points. ONLY 200 points. The reality is that while the GDP number appeared to be good, as soon as you dug into it and realized almost half of the "goodness" was due to cash for clunkers and that's dead and gone now.

The gov't has been trying to buy time until the real economy comes back to life. Problem is it's taking longer than they'd hoped.

Watch the headlines for the CIT bankruptcy. That will have major ripple effects out there.

How was this honey? Let me know when I need to do another post.

Took Long Enough

FINALLY! We saw the Dow touch 10,000 today. Now what? We'll see. I've had 10,000 as the goal. Now will we hold above it for a time in order to get everyone sucked back in that's been holding back? Or will we simply say "thanks... see ya" as we head back down.

Third quarter earnings are off to a good start and some more of the big boys report the rest of the week. Still a lot of smoke and mirrors going on. Q2 was all about cost cutting and Q3 is all about the weak dollar which helps multi-national companies.

The big question is, are consumers really spending again? What do you think? I don't see it, but what do I know. Seems to me that everyone is scared to death of losing their job so they're paying down debt and hoarding cash. With the real unemployment percentage hovering around 20% it's very ugly out there.

See what the rest of October has in store for us.

September 23 - Tidbit of the Day

Nothing much to say lately as I await the market to top out in the next couple of weeks. I expect one more week of flat or upward movement as the end of month and end of quarter window dressing keeps things held up. (Unless the Federal Reserve says something surprising today at 2:15)

But here's a good read.

http://www.realclearmarkets.com/articles/2009/09/21/an_interview_with_doug_kass_97416.html

September 13 - Tidbit of the Day

This one was sent to me by a buddy of mine. Very good stuff and a lot of the same things I've been worried about and bitching about.

And now we're starting a pissing match with China by adding a tariff to imported tires from China and they're now fighting back with tariffs of their own. If this continues it could become an issue.

http://www.huffingtonpost.com/les-leopold/one-year-after-lehman-and_b_285158.html

Creeping Up

As I mentioned in my last post I didn't think we'd hit the peak quite yet. We're getting closer... almost hit 1050 on the S&P. I still think Dow 10,000 is the ultimate goal. Get everyone excited again, then pull the rug out.

Here's a good article. Very well worth the time to read it.

http://seekingalpha.com/article/160619-the-coming-consequences-of-banking-fraud?source=article_sb_popular

Are We There Yet? Are We There Yet??

Calm down Timmy, we're almost there... Have we hit the peak of what I refer to as P2 (Primary wave 2)? The guru's are saying yes. I'm saying I don't think so. Who am I to argue with those that know better than me (in Elliott Wave Theory that is). Well nothing is cast in stone with Elliott Waves so I could very well be right. It'll all boil down to jobless claims tomorrow and unemployment numbers on Friday.

Have you noticed something the last week? Economic news has been "good" but the markets have been going down. For the past 6 months even when the economic news was bad they continued to move up. What we're seeing is exhaustion and a little bit of reality. What's been considered "good" has been a stretch at best.

Topping of a market is a process, it's not an event. We're going thru the process right now. Was 1039 on the S&P it? We'll know next week I believe. I'm looking for one more spike up towards 1044-1050.

There are so many warning signs and red flags out there it's scary. In the meantime the gov't is enticing people to spend money they don't have. Cash for Clunkers and the New Home Buyer tax credit are the two big ones.

Think about this... the gov't is trying to get people to buy a house with only 3.5% down and can use the $8,000 towards that down payment. So guess what... people don't have any "skin in the game". Why will people feel compelled to do everything they can to make payments if they get a little bit behind? Nothing. They have no money in the house, so they won't lose anything other than a big ding on their credit. I can ramble on this forever... It irks the hell out of me. The number of future foreclosures is going to be amazing for a long time to come. Home prices are continuing to decline and they'll really fall once this wonderful gov't program comes to an end and the fake inflated number of buyers dries up.

Speaking of which, if you're in the market for a car, wait about 2 months. After the Cash For Clunkers mad dash, dealers will be twiddling their thumbs for a while since everyone that was even thinking of buying a car within the next 6 months did in July and August. I have a feeling that in October and November dealers will be willing to do just about anything to sell a car.

Here's how I'm seeing things in the near term. S&P at 995 right now. Rally Thur and Fri and maybe into Tuesday (Monday is a holiday). And then the big P3 begins. Slowly or plunge... I don't know. I'm thinking a slow bleed for 2 years with the usual ups and downs. But we won't see S&P 1000 or Dow 10,000 again for a very long time.