DJIA in the crapper

[Plus One]

I haven't sold out anything, but I used to be a trader. If I was still actively trading I would be up about 30% in the past week. Thing is I know work a full time day job and I'm specifically banned from trading. I make less money than I can trading but it's a steady paycheck, easier and with much less stress. Actually no real stress.

But old habits die hard. I will probably buy more when I start seeing an upswing, I do not think this is the bottom.

I don't actually need any of the money I have in securities so it doesn't matter, but just purely psychologically I have not enjoyed the past few days. I'm a lot better today, decided I don't care until I get home and then I'll check. My day job pays me well enough and I have plenty of cash in reserve...just wanted to get enough through the market to pay off my student loans in one shot by next year. Was on a great pace to do it too (before taxes). Oh well...

I haven't enjoyed it either, it's brutal psychologically.

I've been an equity analyst, portfolio manager, and trader for over 20 years. I retired a couple of years ago and just trade for own account now. But, you never really get used to the swings.

I'm surprised, given your background, that you would have defined the VIX they way you did. And, that you wouldn't recognize that the VIX over 30 has historically been a buy signal. Go back and overlay a chart 20 year of the VIX on top of the S&P. You've always made money over the coming months if you bought the market when the VIX was over 30.

As I said, that's not to say that things can't get worse in the near term. Panic selling can beget more selling. The VIX could go to 40 or more next week. I'd actually like to see that, because it would mark a true capitulation. That's when I margin up and go all in.

Right now, I'm just buying some leveraged technology ETFs and some consumer stocks that I'm comfortable with. I put about $300,000 to work this morning, we'll see how that goes. They continue to drift lower this morning, and I wouldn't be surprised to see another sell off this afternoon. I'll likely put in a few MOC orders, then keep more dry powder for next week.

Don't worry about the student loans, they'll get paid off. You'll be fine.

[Plus One]

Here comes the squeeze.

[serphnx]

Here comes the squeeze.

I've been refraining from looking, but that'd be good news. I would rather have the squeeze right now and get back into positive...I am now negative on the year last I checked.

It doesn't look like financials are in this rally. There is no sustained rally without financials and tech.

[Plus One]

I've been refraining from looking, but that'd be good news. I would rather have the squeeze right now and get back into positive...I am now negative on the year last I checked.

It doesn't look like financials are in this rally. There is no sustained rally without financials and tech.

True.

Clear short squeeze going on here. We've had about a 250 point move in the Dow in the last hour or so.

But, it's gonna bounce around here for awhile.

It's a tug-o-war right now. Kind of fun to be a part of actually.

[Plus One]

ECB is going to buy up Italian debt. Financials rallying big.

LOL...they're calling it "QE Infinity".

This'll drive gold up to new highs. It'll lift stocks too, at least for the near term.

[serphnx]

ECB is going to buy up Italian debt. Financials rallying big.

LOL...they're calling it "QE Infinity".

This'll drive gold up to new highs. It'll lift stocks too, at least for the near term.

Good because....financials are my biggest holding right now.

I told myself I wouldn't look though. Yesterday a co-worker basically talked me off of the ledge. I just wish I had added to my positions. If financials rally, we are set. At worst I guess I can probably get back to even on my financial plays.

I still don't truly understand the big drop...corporate earnings have been great, and the bad economic news should have been factored in. The primary trend should have still been up, and you can't really change a primary trend with an intermediate/short move...in theory.

[Plus One]

In market parlance, I think our economy doesn't have the 'fundamentals' to come out of our current state. In any given decade, we've had a super-monopoly of some technology or industrial base...but that's gone.

China hurts us, but I don't think they can beat us long-term because they're beholden to raw material imports, and because their wages will rise over time.

But why did we send our middle class there in the first place? We need to stop seeing the 'middle class' as a political term, and start seeing it as the enormous customer base whose incomes created wealth for businesses all over the country. I hope to see us put a value on helping businesses in small towns compete again. I think we were all better off paying a few bucks more for shoes from Mr. Smith downtown, rather than Wal-Mart. Local wealth supported youth baseball leagues, sponsored community events and festivals, and most of that is gone now. It's all good capitalism, but I think we had it working better a couple decades ago.

You and bitoni are funny. It's like you guys just open up a dictionary of financial terms, randomly choose 10 words, and then mash them together into a sentence whether or not they make any sense.

[Plus One]

Well, exciting day.

I had a $54,000 profit at one point today, but I let it ride too long.

Once it was cut in half, I took my $27,000 profit for the day and and tucked it away in savings.

Still left my initial $300K investment in the market for Monday's opening. We'll see how that works out. Hopefully, I'll be OK.

[serphnx]

Well, exciting day.

I had a $54,000 profit at one point today, but I let it ride too long.

Once it was cut in half, I took my $27,000 profit for the day and and tucked it away in savings.

Still left my initial $300K investment in the market for Monday's opening. We'll see how that works out. Hopefully, I'll be OK.

lol I thought you said you weren't a trader?

I'll check when I get back home but I'm sure I took at least another 5% loss today. I don't mind as much today though, honestly with a full time job where you can't enter orders during the day it's not worth stressing over anything. My plan is to sell in December for the tax losses...I think I can carry them over or something anyway if necessary.

EDIT- I of course mean short term trading, since you mentioned not caring about the day to day anymore.

Personally I really don't see how any other form of trading is reliable.

[JerryK]

You and bitoni are funny. It's like you guys just open up a dictionary of financial terms, randomly choose 10 words, and then mash them together into a sentence whether or not they make any sense.

So I checked, and the only sin Bitonti and I seem to have committed against you is using the term 'fundamentals' while you extol technical analysis.

There's nothing wrong with being a technical person; one of my oldest friends quit his job as an engineer and makes a living at home doing it. Cycles are the only way to make a living when you're in and out on a daily basis -- he makes it a habit of going to sleep at night completely divested, although I think he works with about 2m in capital. He suggested I buy (and I did) Edwards & McGee's Technical Analysis of Stock Trends. While it's not everything someone should know..if you're for real you know the book.

My point was about the fundamentals of the economy, and it made perfect sense. But I'm getting a feeling you don't really care what Bitonti or I had to say and that you simply get a joy from being abusive to people. Glad I was able to provide you a thrill. I'll be offline for the weekend, perhaps you can kick a dog or trip elderly people until Monday.

[Plus One]

So I checked, and the only sin Bitonti and I seem to have committed against you is using the term 'fundamentals' while you extol technical analysis.

There's nothing wrong with being a technical person; one of my oldest friends quit his job as an engineer and makes a living at home doing it. Cycles are the only way to make a living when you're in and out on a daily basis -- he makes it a habit of going to sleep at night completely divested, although I think he works with about 2m in capital. He suggested I buy (and I did) Edwards & McGee's Technical Analysis of Stock Trends. While it's not everything someone should know..if you're for real you know the book.

My point was about the fundamentals of the economy, and it made perfect sense. But I'm getting a feeling you don't really care what Bitonti or I had to say and that you simply get a joy from being abusive to people. Glad I was able to provide you a thrill. I'll be offline for the weekend, perhaps you can kick a dog or trip elderly people until Monday.

LOL!

I see what you did there!

[JetsFanInDenver]

i dont get this logic. for several reasons

1st, governments don't really control the market. Even China, with full totalitarian gov't can't really control their economy. No one can predict the market, and no one can control it. That's capitalism. there are always booms and busts with capitalism, that's how it works.

2nd if a 1 day drop signals a lack of confidence what does 2 and half years of gains signal? you are cherry picking the data to back a political conclusion. why does this thread exist only on a sharp decline day, why doesn't anyone post when the market goes up (and it does go up, quite a bit).

end of the day gov't to the economy is like coaching to a football team. It can help and it can even make the difference in small situations but Bellichek never won jack without Brady and Parcells never won jack without Lawrence Taylor. Just as coaches need talent, the gov't needs fundamentals, and it's mostly out of their control. Like a head coach a President takes credit when the economy is great (and blame when it's bad) but let's be real was Bill Clinton an economic genius? or just a guy getting benefit from a good set of circumstances?

[Plus One]

lol I thought you said you weren't a trader?

I'll check when I get back home but I'm sure I took at least another 5% loss today. I don't mind as much today though, honestly with a full time job where you can't enter orders during the day it's not worth stressing over anything. My plan is to sell in December for the tax losses...I think I can carry them over or something anyway if necessary.

EDIT- I of course mean short term trading, since you mentioned not caring about the day to day anymore.

Personally I really don't see how any other form of trading is reliable.

You keep editing your posts. I'll keep making money.

[Bugg]

Got out Monday of everything except Apple. I don't have the answers, simply wasn't taking another beating. The market is back to where it was in 2000, so waiting for it to come back looks like a fools' errand.

One thing that cracks me up; all the supposed pros will tell you a down market is a "buying opportunity". But I have never heard anyone say any market is a "selling opportunity".

[Plus One]

Got out Monday of everything except Apple. I don't have the answers, simply wasn't taking another beating. The market is back to where it was in 2000, so waiting for it to come back looks like a fools' errand.

One thing that cracks me up; all the supposed pros will tell you a down market is a "buying opportunity". But I have never heard anyone say any market is a "selling opportunity".

You seem to have a handle on things.

[Jetlag]

I think of our economy and government these days and all I keep thinking is..Learn to Swim, Learn to swim, learn to swim, learn to swim...........

Wtf, the name of that song is Aenima not learn to swim.

[NYJets90]

Boy if you thought Thursday was fun, just wait until Monday. I'll bet trading gets suspended.

http://online.wsj.com/article/SB10001424053111903366504576490841235575386.html

[Plus One]

Boy if you thought Thursday was fun, just wait until Monday. I'll bet trading gets suspended.

http://online.wsj.com/article/SB10001424053111903366504576490841235575386.html

Yikes!

[serphnx]

Yikes!

I think it might already be priced in. The markets really tanked after the debt deal, I think a lot of people just didn't think it was enough. There might be a short drop on Monday, but then it will be way oversold and a great time to buy. This is more along the lines of what I was looking for. I think I might take Monday off so I can monitor and trade.

I'm looking at a few blue chips specifically.

[PatriotReign37]

You and bitoni are funny. It's like you guys just open up a dictionary of financial terms, randomly choose 10 words, and then mash them together into a sentence whether or not they make any sense.

What exactly did he say that wasnt true?

[Bugg]

When you borrow 40 cents of every dollar you spend for a decade-

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

[SouthernJet]

Got out Monday of everything except Apple. I don't have the answers, simply wasn't taking another beating. The market is back to where it was in 2000, so waiting for it to come back looks like a fools' errand.

One thing that cracks me up; all the supposed pros will tell you a down market is a "buying opportunity". But I have never heard anyone say any market is a "selling opportunity".

same here. I moved all of my 401 middle of last week to stable/fixed funds (I had bad vibe and was weary of Moodys downgrade). So I escaped all the losses. Only question, is when do I get back in?

[villain_the_foe]

American people have had enough.

My opinion, people are going to begin to jump out of the stock market and into the bond market which is a bad move long term.

U.S. credit was just downgraded today from AAA to AA.

http://www.foxnews.com/politics/2011/08/05/us-official-says-sp-reconsidering-us-credit-downgrade/

Not looking good ladies and gentlemen

[JerryK]

So villain, as an alternative to US bonds, are there foreign treasuries one might consider to ride this out? ..assuming one's 401k had such options, and mine does not.

Actually I've been thinking about a safe foreign bond or bond fund to have as a hedge for a for some time now.

[villain_the_foe]

funny how no one ever starts a thread when the market is up

and yes... it's been up, alot in the last couple years.

Mar 08 2009 the DJA low was 6626

right now it's trading at 11552

sure a 3% correction in a day sucks but cmon. that's what it does.

The market has been going down for the past 11 years. Stop being fooled by the numbers and look at the loss of purchasing power. I really cannot say this enough. The purpose of investments are to maintain and grow purchasing power right? If thats the case....

The Dow was at 12,000 11 years ago which would have purchased you 45 oz of Gold. Today the Dow will buy you less than 7 oz. Look at the purchasing power and not the numbers. Better yet, dont even use gold, use any other commodity and the numbers will show that you are buying less today than what it was back in 2000. Purchasing power is the name of the game, not the numbers. There were multi trillionaires in Zimbabwae that couldnt buy bread because the lack of purchasing power. That should tell you something.

There is no such thing as infinite growth. The markets have been crashing for the past decade dude. Look at the last 10 years from QE to Lehman Bros to Bear Sterns to the housing market to commodities to the "too big to fails" etc. The long term record shows that its crashing. The market hasnt been up regarding purchasing power (which is the only purpose of financial investments) since 2000.

[villain_the_foe]

the market is reality.

also... watch it recover some by the end of the day. there's alot of volatility

The market is a ponzi scheme.

[villain_the_foe]

Hope.

No worries, people have short memories. The masses will back next year voting for their new salesman with the best pitch.

Then a couple years into it they'll be pissed again.

[villain_the_foe]

Apparently selling out the American middle class eventually catches up to you.

Max seriously needs to bring back "Post of the week".

The truth is that simple.

[villain_the_foe]

That surplus was fairly recent. The problem is: America refuses to scarifice anymore. You can't fight two wars without raising taxes. In WWII they slowed manufacturing of anything not war related, sold bonds, encouraged victory gardens, horded steel, tin, aluminum, nylon, etc., and the public did without in order to support the war effort. Today we get pissed at paying tax and don't even see the war in our newspapers. It's a culture shift. Rome became decadent and fell. We will collapse while watching Real Housewives of Bimidji Minnesota. Sad.

The taxes were raised to fight these illegal wars. What do you think QE and stimulus was? Inflation is a hidden tax sir. Printing the money is much easier than asking the people, especially when congress was avoided in respects to declaring war in the first place.

Besides, Im not sacrificing to kill innocent people so my fat a$$ can maintain the bubble way of life in my H2 hummer.

[PatriotReign37]

The Dow was at 12,000 11 years ago which would have purchased you 45 oz of Gold. Today the Dow will buy you less than 7 oz. Look at the purchasing power and not the numbers. Better yet, dont even use gold, you any other commodity and the numbers will show that you are buying less today than what it was back in 2000. Purchasing power is the name of the game, not the numbers. There were multi trillionaires in Zimbabwae that couldnt buy bread because the lack of purchasing power. That should tell you something.

Inflation

Some items haven't adjusted but they will.

[villain_the_foe]

So villain, as an alternative to US bonds, are there foreign treasuries one might consider to ride this out? ..assuming one's 401k had such options, and mine does not.

Actually I've been thinking about a safe foreign bond or bond fund to have as a hedge for a for some time now.

Sorry JerryK I missed your question because you didnt quote me. My honest opinion bro, im not dealing in anything paper for the fact that we dont know how deep this ponzi scheme is. We must remember that all of these paper financial assest have been depending on one another. We dont know how the foreign bonds are going to react because we dont know how intertwined these markets are to one another. Its like a domino effect if you will.

Im all in on real physical assets in my possession. I have two speculative investments in a few miners but im not adding to the position. If it craps oh well, if it pops, it'll take care of any debts that I have.

Also think of this. Look at whats going on in Greece. Greece is having a "silent bank run" as we speak. The reason why im all in on hard assets in my possession is because of this "one reason" what happens if you have a paper investment that really pops during the crash, but the banks are all messed up? How are you going to access your money?

I dont want any third parties between me and my wealth. 2001 and 2008 are prime examples...and from what im thinking It'll make those two years look like pecan pie.

[villain_the_foe]

Inflation

Some items haven't adjusted but they will.

I believe you. Thats why im into gold and silver....because they will adjust.

[PatriotReign37]

I believe you. Thats why im into gold and silver....because they will adjust.

Real estate will adjust too.

Just watch.

[villain_the_foe]

Real estate will adjust too.

Just watch.

Farm land will adjust, I doubt real estate will. People have to eat. Real estate is dependent on what people can afford.

[villain_the_foe]

In market parlance, I think our economy doesn't have the 'fundamentals' to come out of our current state. In any given decade, we've had a super-monopoly of some technology or industrial base...but that's gone.

China hurts us, but I don't think they can beat us long-term because they're beholden to raw material imports, and because their wages will rise over time.

But why did we send our middle class there in the first place? We need to stop seeing the 'middle class' as a political term, and start seeing it as the enormous customer base whose incomes created wealth for businesses all over the country. I hope to see us put a value on helping businesses in small towns compete again. I think we were all better off paying a few bucks more for shoes from Mr. Smith downtown, rather than Wal-Mart. Local wealth supported youth baseball leagues, sponsored community events and festivals, and most of that is gone now. It's all good capitalism, but I think we had it working better a couple decades ago.

I agree with much of this. The middle class keeps a country healthy. Bush #1 opened up China to the world and Clinton sold the technology to them in the mid 90's. What we see today is the outcome. This is why I shake my head when people blame obama for what we see today.

Granted, this dude has done nothing to turn it around, but trust me....he didnt cause this.