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Forums like this are supposed to be all about sharing thoughts and ideas ...
And I'm curious as to how YOU will know when it's time to pull the trigger ...
Like most ... I watch things like the VIX ... and today's close of nearly 47 seems inviting ... but ... I was alive and breathing (just barely) the day that it closed over 150 ...
I look for climax bottoms ... particularly those that sell off hard into the first hour of trading ... and then reverse around 10:30 ... and seem to never look back ...
I like to make sure that the T2118 is in a position for a turn ...
I've heard many say that the Dow is sitting right at the bottom of it's channel ... and for that reason it will reverse form here ...
I think that might be a good excuse for a little bounce ... but not necessarily a full-fledged reversal ...
I guess I sort of figure that everything is going to happen about the same time ... so if I can just find one or two or three reliable patterns ... I can use them as a "guage" for the overall market ...
Just as a for instance ... look at the H&S top in the weekly chart of DJ-15 ... if it is nearing it's resolution ... I will be keenly looking for a reversal ...
I know that many may think today was devastating ... but take my word for it ... by comparison ... it hardly rates as a "bad day at the office" ...
So ... What do YOU look for ?
When will you place your finger inside the trigger guard ??
And when will you pull the trigger ??
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Registered User
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i don't care to pick bottoms in a bear markets. if you mean trend reversal and beginning of a new bull.
it will probalby consist of:
1. a confirmed classic reversal pattern visible on a weekly chart. it took seven months to form the reversal pattern in the 2000-2002 bear.
2. a price break above longterm downtrend lines.
3. a cross of the 40dma above the 200dma.
4. a bull move in the mcclellan breath summation index. not just a turn but a major move to 3000 or so.
5. a number of 90% breadth up days will also have occurred.
the vix lets you know when the market is oversold or overbought, not necessarily at a bottom or top longer term.
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Yeah ... I guess I should have clarified that funnymony ...
Cause I feel like longer term this thing is just toast ...
I was talking about a short term bottom .... just to run in and pick up a quick XX% from a deeply oversold condition ... lasting a couple of weeks to maybe a month ...
And ... I think another good indicator is the "It was the Larest Point Drop In the Dow in a Single Day ... Ever ..." .... which just about always indicates a short term bottom ... if not the next day ... then the next ...
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After hours trading went all positive. I guess some are assuming the bounce is here.
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QUOTE (realitycheck) Yeah ... I guess I should have clarified that funnymony ...
Cause I feel like longer term this thing is just toast ...
I was talking about a short term bottom .... just to run in and pick up a quick XX% from a deeply oversold condition ... lasting a couple of weeks to maybe a month ...
And ... I think another good indicator is the "It was the Larest Point Drop In the Dow in a Single Day ... Ever ..." .... which just about always indicates a short term bottom ... if not the next day ... then the next ...
for an "intermediate term" countertrend rally, we need capitulation, then some 90% up breadth days, a "confirmed" classic reversal patternon on the daily, the mcclellan summation to turn up through its 10 day ma. then after the breakout, buy the first pullback to or near "key" support. if your fast enough you can buy(partial position) the breakout near the end of the day if the risk:reward is still good.
lately we've been getting countertrend explosions off reversal patterns visible on the 10 min charts. better take partial profits by the end of the day, at least, with a market this wild.
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DJ30 yearly chart....bearish engulfing candle. Next stop on that chart is around 7200. If that is violated, next stop could be between 2600 to 1600.
Now that would be a buying opportunity.
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VIX has great support from the LR30 and has not extended itself above the UBB20. It looks ready to keep going....up.
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QUOTE (tobydad) VIX has great support from the LR30 and has not extended itself above the UBB20. It looks ready to keep going....up.
And interestingly enough ...
It seems that rather than get a follow-through today ... with capitulation ... it looks as if we're going to retrace to test that level that was support ... as resistance ... around 10,800 ....
Technicals aside ... one thing that really concerns me right now is the number of people that I'm encountering in my daily travels that are telling me that that they are going to get all of their money out of the bank. And these are people with deposits way below FDIC limits ...
I explain that the money is insured ... and that the Feds will make sure that they get every penny of it back ... even if there is a failure ... and they respond ... "Yeah ... But WHEN ??" ....
No bank can survive a "run" ...
Interesting times in which we live ...
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What a day !
I love markets like this ... it's like having sex in a plane crash ...
A very tradable rally ... all the back up the old support level ... in one fatal swoop ...
Does anyone have any renewed confidence after seeing today's action ?
I just had to play ... but per funnymony's great advice ... I was out with the bell ...
Technically ... I see nothing here except a "successful" test of what was support ... as resistance ... and a whole lot of inside days ...
Fundamentally ... Nothing has changed ... I expect Congress to start Thursday with a clean sheet of paper ... and argue and bitch ... and just genrally get nothing done ... as that is what they are famous for ...
So ... I don't feel like I've seen capitulation ... and have no reason to believe that we will go much higher from here ... and will very likely go lower ...
But ... that's just my very humble opinion ...
What are YOUR thoughts ??
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looked like a bit of a low volume wedge up today. breadth wasn't outstanding. i think 10,000 might be an interesting level, where we might get a tradeable rally. otherwise it looks like a market for daytraders.
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looks like a retest so far. maybe the market rallys back to resistance tomorrow on speculation the senate will vote on that "retarded" bailout bill. then maybe the house shoots it down again, and the market continues south.
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Joined: 2/21/2007
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maybe congress should take off a few more days. at least by doing nothing they couldn't screw up anything worse. they do have such an OUTSTANDING record of resolving problems that our country faces. every 4 years they'll tell you how much they have helped all of us.
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And if you believe that Congress has helped us, I've got some beautiful sea shore property just south Yuma I'd like to sell you.
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Joined: 11/1/2005
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the best way to pick a short term bottom, have a down side OBJ in mind, have all the trend/suppot lines with a over sold indicator in place. after you watch it for 1/2 hr or so, then some one or some thing takes you away from the computer for a short time, thats it right there while you are distracted.
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Joined: 11/1/2005
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QUOTE (johnlc) maybe congress should take off a few more days. at least by doing nothing they couldn't screw up anything worse. they do have such an OUTSTANDING record of resolving problems that our country faces. every 4 years they'll tell you how much they have helped all of us.
its ok to pass the bail out now, warren has a stake in ge. 
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QUOTE (jimstacy) QUOTE (johnlc) maybe congress should take off a few more days. at least by doing nothing they couldn't screw up anything worse. they do have such an OUTSTANDING record of resolving problems that our country faces. every 4 years they'll tell you how much they have helped all of us.
its ok to pass the bail out now, warren has a stake in ge.
first goldman, then ge, i guess warren obviously has no problem accepting welfare.
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can't loose, well at least not too much, GE is on the "no short list"
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Buffett got a special deal from GE.
His "special" preferred stock guarantees him a 10% dividend / yr
CNBC reported that today.
Not a bad deal if you can get it.
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Joined: 12/31/2005
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Buffet is also busy trying to push the 700 billion+ corporate welfare bill. Gee i wonder why?
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I haven't read much about the GE deal yet ...
But ... the Goldman deal is similar in that he is buying preferred with a 10% coupon ... and with each share comes a warrant to buy one share of common @ $115 ...
And ... from what I understand ... the Goldman deal is contingent upon the bailout bill going through ...
So ... Buffet isn't placing a bet ... he's ONLY in if it's a sure thing ...
In other words ... these companies ... through dilution ... are going to let the shareholders pay Buffet billions and billions of dollars ... for a big PR campaign ... i.e. lending his name to the company ...
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all the above is proably good to help give a sense of the short term bottom .. but ultimately you need to feel for it.. put the money out there and see. That is why for Livermore pyramiding was so important. IN feeling for a bottom or top you can expect to get it wrong up to 3-4 times.
but if you are consistant eventualy you'll hit it. if you are still liquid. it's bettr to feel for the higher low to form. IMO.
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Now how does that old saying go? Something like, "the market can stay irrational longer than you can stay solvent?"
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QUOTE (driger) Now how does that old saying go? Something like, "the market can stay irrational longer than you can stay solvent?"
Exactly ... a lot longer !
Well ... it's probably time to give this bailout bill a new name ...
How about the Buffet Bailout Bill ... or the "BBB" ... "when the US went a trillion dollars in debt to line the pockets of one of it's wealthiest citizens" ...
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If this is not true ... I would think that it is the kind of thing that you could get into serious trouble for ...
This from a friend in Atlanta with strong banking connections: “Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system, including access to checking accounts, savings accounts and credit cards. Reliable word has it that BofA bank branches received a shipment of signs last week, reading “WE'RE SORRY, BUT DUE TO CIRCUMSTANCES BEYOND OUR CONTROL, WE CANNOT BE OPEN AT THIS TIME.”
www dot kitco dot com/ind/willie/oct022008.html
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I'm a strong believer in using IBD's "Market follow through day rule" as a signal to start dipping toe into market waters on the long side. William O'Neil's 50+ year research for market bottom reversals yielded some concrete rules based on history. Paraphrasing, a follow through day is when one or more of the major indexes closes 1.7% or higher than the previous day coupled with higher volume vs. the previous day, but the volume can't simply be more than previous day; it also must be above average. This "follow through day" should come on day 4 to day 7 after a signifcant market bottom has happened. Up to 10 days or longer is possible but the signal is significantly weakened by then. For example, the market put in a bottom this Monday, then on Tuesday the next day it closed higher (volume and percentage does not matter for Tues.). Tuesday was day one on the count. Today, Thursday, is day three. If on Friday or later next week a close is made over the immediate previous day of 1.7%+ and on above avg. daily volume and higher in volume of the previous day, then an official follow through day has occured and so it's time to start dabbling slowly again on long side.
If you like rules that are tested on actual market bottoms for past 50+ years, then you may want to give the IBD method a try. O'Neil cautions that these IBD rules for signaling market bottom reversals are not always right of course, just that using the signal significantly improves odds for being right.
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QUOTE (realitycheck)
If this is not true ... I would think that it is the kind of thing that you could get into serious trouble for ...
This from a friend in Atlanta with strong banking connections: “Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system, including access to checking accounts, savings accounts and credit cards. Reliable word has it that BofA bank branches received a shipment of signs last week, reading “WE'RE SORRY, BUT DUE TO CIRCUMSTANCES BEYOND OUR CONTROL, WE CANNOT BE OPEN AT THIS TIME.”
www dot kitco dot com/ind/willie/oct022008.html
would the fed even have the authority to close b of a?
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QUOTE (funnymony) QUOTE (realitycheck)
If this is not true ... I would think that it is the kind of thing that you could get into serious trouble for ...
This from a friend in Atlanta with strong banking connections: “Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system, including access to checking accounts, savings accounts and credit cards. Reliable word has it that BofA bank branches received a shipment of signs last week, reading “WE'RE SORRY, BUT DUE TO CIRCUMSTANCES BEYOND OUR CONTROL, WE CANNOT BE OPEN AT THIS TIME.”
www dot kitco dot com/ind/willie/oct022008.html
would the fed even have the authority to close b of a?
Yeah ...
Between the Fed & the FDIC ... they can shut them all down ... those with national & state charters ...
"Until 1989, banks with national charters (national banks) were required to participate in the FDIC, while State Banks either were required to obtain FDIC insurance by state law or they could voluntarily join it (usually in an attempt to bolster their appearance of solvency). After enactment of the Federal Deposit Insurance Corporation Improvement Act of 1989 ("FDICIA"), all commercial banks that accepted deposits were required to obtain FDIC insurance and to have a primary federal regulator (the Fed for state banks that are members of the Federal Reserve System, the FDIC for "nonmember" state banks, and the Office of the Comptroller of the Currency for all National Banks)."
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reality: are you pulling your money out of the banks or do you think it's safe to leave it there? what if some accounts are worth more than $100,000, the feds insurance amount?
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Hi john ...
My personal funds right now are sitting in a US Treasury Money Market account ... although ... I plan to be fully invested back in the markets in just a day or two ...
Corporately ... I must maintain a balance of 2 to 3 times FDIC limits just for operating capital ... but since that account is with BofA ... I don't worry about it too much ...
For the funds in excess of what is needed for operation ... I'm stagering them in 13-week Treasuries using a "Treasury Direct" account ...
I'll feel a little better though when those FDIC limits are raised to $250K ... as I've said before ... NO bank can survive a "run" ...
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QUOTE (johnlc) reality: are you pulling your money out of the banks or do you think it's safe to leave it there? what if some accounts are worth more than $100,000, the feds insurance amount?
you can have multiple accounts each insured up to 100k.
not sure i'd want all my money at one bank anyway.
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i think i'll call my bank tomorrow just to find out exactly what to do to make it safe and that's a good idea to spread it around. probably call my brokers also, just to make sure about that money. i got an e-mail the other day from some stock newsletter, like everyone some how these guys seem to get your name and address like a chain letter. anyway it listed many of the major banks and gave them a rating. i'll look up that e-mail address and post it for what it's worth. i figure TC will allow that.
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QUOTE (funnymony)
you can have multiple accounts each insured up to 100k.
Right ... the insurance is "per depositor" ... so ... if it's a joint account you have $200K ...
And each IRA ... per depositor ... is $250K ...
And let's say that you have 3 kids ...
You could have an account that is ...
johnlc TOD "Kid A" ... and it gets $100K ...
johnlc TOD "Kid B" ... and it gets $100K ...
johnlc TOD "Kid C" ... and it gets $100K ...
TOD is Time of Death ...
And your wife could do the same thing ... for each of the 3 kids ...
QUOTE (funnymony)
not sure i'd want all my money at one bank anyway.
Me either ... corporately ... I keep accounts at 3 other banks to FDIC limits ...
But ... if the Fed fails ... it don't make a damn what any of the banks do ... cause none of the money is worth ANYTHING ...
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i found that web sight for bank ratings----www(dot)moneyandmarkets(dot)com/newsletter/103/StrongestandWeakestBanksandThrifts------ then scroll down to X-list report.
don't know how or who did the ratings, didn't bother to try to find out. take it for what's it worth.
i figure the House is going to pass this bail out tomorrow. they may not like everything about it ,but the ramifications this time if it doesn't pass, will be huge. instead of a massive collaspe all at once, they'll have to consider that given enough time and enough bandaids the economy will recover, GIVEN ENOUGH TIME. but there sure better be some tight policies so that some con game like this sub prime mortage stuff could never happen. i'm sure there were alot of fed policies made back in the 1930's. if one does not learn from history-------------
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But ... instead ... we're headed down exactly the same path that Japan endured in the 90s ...
And it suffered through a decade long recession with 0.5% central bank lending rates ...
You just can't change the inevitable ...
You can spread it out ... you can ease the transition ... you can shift the burden ... but the net long term effect is the same ...
We watched the Nikkei peak out at almost 40,000 ... then it fell back to the low 20,000s ... and ultimately fell to the mid 7000s ... before finally bottoming ... at less than one fifth the value of it's peak ...
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QUOTE (johnlc) i found that web sight for bank ratings----www(dot)moneyandmarkets(dot)com/newsletter/103/StrongestandWeakestBanksandThrifts------ then scroll down to X-list report.
don't know how or who did the ratings, didn't bother to try to find out. take it for what's it worth.
i figure the House is going to pass this bail out tomorrow. they may not like everything about it ,but the ramifications this time if it doesn't pass, will be huge. instead of a massive collaspe all at once, they'll have to consider that given enough time and enough bandaids the economy will recover, GIVEN ENOUGH TIME. but there sure better be some tight policies so that some con game like this sub prime mortage stuff could never happen. i'm sure there were alot of fed policies made back in the 1930's. if one does not learn from history-------------
i don't think the ramifications are any greater if the pig doesn't pass, its just that the party leaders and media have done a lot of arm twisting on the weak links. so i imagine they found 12 more votes.
as you can see even with expections of the pig passing, the market was still down 300+ today.
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QUOTE (realitycheck) Hi john ...
... although ... I plan to be fully invested back in the markets in just a day or two ...
can't say you aren't brave.
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if you go to the technitrader website they have a free emergency video asvising calm and caution .. they als talke about some of the sxpanded coverage rules the FDIC has put in place.. It's already more than 100K that is covered as I understand.
I also understand that the 100K insured is per account or per person so you could have a single account a joint account and a wifes account and get 300K coverage BUT that may not be necessary anymore.
I"m with you .. I think well see a bottom soon.. I've been saying that for months now but eventualy i'll be right.
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QUOTE (scottnlena) .. I think well see a bottom soon.. I've been saying that for months now but eventualy i'll be right.
I even agree with you this time ... 
But ... let's not confuse "a" bottom ... with "the" bottom ...
I'm just talking about a few month long rally .... to get naked and frolic around in a bit ...
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being rather dumb about all this worldly finance stuff, i don't understand, why the market took a dump in the afternoon if this bailout passed, and all was supposed to be somewhat better, at least for the short term immediate future. or did the bill pass late after closing? or with the passing of the bailout, is this what we get to look forward to? another bend over and grab your ankles,, here it comes.
granted we can all make money, shorting, but those dumbies like me who held onto all looooong term stuff, that will make a good write-off. might be nice for those who can afford it.
i forget who posted that it could be 5 to 10 years to recover, i thought well that's b.s.. how little do i know.
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john ...
I'm a long way from being the brightest bulb in the pack myself ...
But let me see if I can help ...
There's an old adage on Wall Street ... "Buy the Rumor ... Sell The News" ...
The reason is because "news" is seldom as good ... or as bad ... as people hope or fear that it may be ...
Before the Senate passed it ... they bought the market ... after they sold it ...
Before the House passed it ... they bought the market ... after they sold it ...
If you'll google "Grandfather Economic Report" ... you'll see some great representations of trends in this country over the last half a century ...
The entire Reagan Bull market ... was driven in a large part by debt ... and as long as collateral kept appreciating ... and money was easy to get ... there was more and more money available ... and so ... the economy kept growing ... the market kept going up ... and it was all just one big self-fulfilling prophecy ...
But then ... somebody stuck a pin in it ... and it is self accelerating on the way down to ...
You've probably noticed how much faster we have slipped into this bear market ... than the 2000 bear ...
And yes ... it can take a long time to see old highs ... like a quarter of a century ... in at least one case ...
Credit has been the fuel that powered this economy ... and the fuel is running real low ...
Take a look at these charts ...
On the weekly ... we can easily see the channel in which the DJIA has been oscillating ...
And on a daily ... we see that each time that it came down and hit the supporting trendline ... it got back up out of there in a big way .... and that tends to indicate that the support level is "healthy" ...
Until this time ...
Now we are building pressure up against the supporting trendline ...
What do you suppose that that means ?
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