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Market Analysis- wk 9-29-08


Hey gang, another fun wk coming up. Lets see,ticks on the nyse(daily closing) havent been over 800.(that would indicate a 'decent' decline within 2 trading days). So far , so good. Vix , however is bothering me. As you recall a spike above 30 is what we want for a significant bottom to be indicated. We got that the 16th when it shot up to 42!(last time it was that high was the bear low oct.02). What makes me nervous is, that was several days ago, and its still above 30! Im not sure what to make of that.Have to go back in history and see what that might mean. I do know that history says, that the massive number of new lows and volumne indicates a 80% or higher probability that the 1136 low will be retested at some point. Could be next week, oct. or even a few months from now. ... Summary: many indicators say an important(intermediate term) bottom might be in place. it should last for 13 to 50 days.It should be retested at some point or even pierced but likely not by much. The 200 day avg. should be tested at some point and strangely enough it hasnt been yet in this entire bear. These facts are simply based on historical truths. What actually happens is any bodies guess! I do think this week is going to be another 'fun' one, starting with sun. nite.Good trading all!
Exciting times indeed, as the list of rotting corpses on wall street continues.Bear Stearns, AIG,Merril Lynch, the monoline insurers, Indy Mac,Fannie and Freddie,WAMU, Morgan Stanley,Lehman, and Wachovia. Wish Jamie Diamon would absorb my bad debt!Will anyone on WallStreet whos not going broke please raise your hand.(perhaps i should have added the entire credit markets to the list). As far as traders are concerned, we need to be careful this week because once the bailout business is complete everyone will finally turn their attention back to the economy.Seems like weeks since that mattered.There is a lot to digest this week including Case-Schiller tues. and of course the all important unemployment stats. fri.Numbers i am watching this week include; 1240-43,1256,1300 give or take and 1324 on the upside.Watching 1180, 1172.50 or so, 1169,1154 area and of course 1136 down. Bothering me a lot is that my work was 'hinting' at a fri or mon top(on a short term basis) would seem to be at odds with expected relief after the bailout gets announced. we shall see!