Preliminary Q's outermost low estimate is
50.20-50.30N
QQQQ 50.69(50.50)(50.30,50.06) - 51.06
N
SPX 1455(1453,14500 - 1463)
N
QID10:07 ET, Q's continue hitting new lows of the day
Dear Readers, Because I cannot read and write English, I do not know why any of you even get close to my blog(: :). Seriously, while I know many languages and I am a wordly man, I know I could not have , possibly, said the following in the way the author Jim Kunstler from "ERUDITE ANALYSIS OF FINANCE" does it. So, without more BS from me here it is...Events are driving us now, not personalities or even policies. Ben
Bernanke, Hank
Paulson, and the other characters in the headlines might pretend that they are managing things, but the truth is that problems in the financial sector have spun wildly out of control. The wheels are coming off and we are in that long sickening moment of sideways sliding motion when no attempt at steering will avail to avoid the crash. That it is happening at the very height of the Christmas season, when events have previously been controllable -- the season of manufactured Santa Claus rallies and $50 million bonuses -- shows how perilous the situation is.
The reason the financial sector is crashing is really pretty simple: it created too many fraudulent securities. What has been conspicuously absent so far is any sense of accountability for what may go down as history's greatest swindle. It's really impossible to imagine that a bunch of low-ranking worker bees in the banking hives spun out all these bundles of collateralized debt obligations, mortgage-backed securities, and similar trash on their own without the say-so of their bosses -- a group that includes the current Secretary of the Treasury, Mr.
Paulson, formerly CEO of the Goldman Sachs organization. And, of course, the questions naturally follow: what about those in charge of the ratings agencies that awarded AAA status to high-risk junk investments; and where were the banking regulators when outfits like Countrywide Financial, Washington Mutual, and
Ditech were handing out miracle mortgages to borrowers without normal qualifications; and where was the Securities and Exchange Commission when the wholesale trade in creatively-engineered debt instruments ramped up to high volume, and what was the board of directors at Merrill Lynch thinking when it allowed disgraced CEO Stan
O'Neal to back a truck up to the company loading dock and fill it up with $160 million in bonus-and-termination payments after
O'Neal presided over at least $8 billion in losses?
What we're also seeing is a crisis of authority on top of a crisis of capital, and it will probably lead to a crisis of legitimacy -- by which I mean a catastrophic loss of faith that this society can govern itself at any level. Leadership across the board has failed, in government, in business, in what used to be called the press, and in education. Leadership in every sector went along with the program, marveling stupidly at their society's ability to get something for nothing.
The general public did not perform any more honorably -- due to whatever failure of civic norms they operate within -- and indeed the nation as a whole may deserve all the suffering it faces. But however bad the general
public's behavior, or dark their fate, a failure of civic norms is ultimately a failure of leadership, which is about clearly stating the boundaries and terms of behavior. When anything goes, nothing matters. Since that was our leaders' attitude, the public did what it naturally does: it follows the example set by leadership.
We haven't begun to see where all this will lead yet. Since what is happening is basically the evaporation of trillions of dollars in supposed wealth. At the very least we're likely to see an impoverished nation very soon short of money to buy necessities. Historically this is known as a ruinous deflation. The last time America went through such an experience was the Great Depression of the 1930s. Like this situation, it came at the end of an extraordinary expansion of credit -- loans largely made in that day for the purchase of stock "on margin."
One difference between then and now is that in 1929 a relative small minority of Americans were involved in stock purchases. Today, a relative large number of ordinary citizens own overpriced houses bought using extraordinarily risky loans, and a large number of institutions such as pension funds, banks, hedge funds, and money markets own fraudulent securities based on these house loans, worth a fraction of their face value. Some other differences this time around: in the background is a "real" economy of depleting natural resources (oil, soils, aquifers, etc) and the systematic
disassembly of an industrial manufacturing infrastructure. In the 1930s, many people could return to family farms and get by, even with little money. Today there are far fewer family farms.
The nation is acting just now like a crowd of bystanders watching a car wreck that has nothing to do with them -- as though they were just occupying the
Nascar grandstand on a particularly bad day. They'll discover soon that it's their own society that's hit the wall out there on the track. It raises the question, under the circumstances, as to whether the next presidential election will have any legitimacy.
AMEN!11:28 ET, Q's are approaching the RED DISTRICT outlined at the top11:35 ET, While I can not officially call for going crazy buying things, I suggest that INVESTORS, add to their 10% position up to 15% as the Q's approach the area 50.25 or so. I suggest you continue purchasing the Mostly kind of companies We suggested could be good to hold even if markets continue tanking ( Canadian banks, Development Companies, you know what you have - in short). Traders, Yeah, one can try luck with longs on Q's or SDS at that spot. VERY Small manageable positions should make you money ( fast or eventually) Remember we could be 1-3 day early. When do you know you are wrong? When Q's broke below 49.85, but as a trader you should have been out way before that. 12:41 ET, if you went long( trader) when/where I told you, put the stops just around break even and see what the market wants to do with you. Good Trading13:03 ET, Stops move to profit(or at worst breakeven). No ifs and buts here(: :) 13:12 ET, Nobody should be in the market if 50.27 breaks
13:45 ET, Just hit the 5
th Support on Q, Small positions if you take any
14:01 ET, We are getting the washout , especially in
Nasdaq, Are not we?
14:31 ET, Please understand that we could be early 1-3 or even 5 trading days that means that SMALL is perhaps 10-15% of what you would normally do
15:23 ET, Markets keep moving lower, You want to participate in expected bounce, but you do not want to be deep in possibly falling market. That is the reason for having 10% or so long position if you have any.
