ET Official Bottom Watch Thread

Discussion in 'Trading' started by Ivanovich, Oct 9, 2008.

  1. It's unfortunate there isn't a tradeable index for the number of friggen useless bottom calling and "Holy crap" type threads, because I'd go long that and retire. For the term of the crisis, please put all your bottom calls, market calls, mystical oracle predictions and any reasons why you think you're right (other than you think you just are) in this thread. Keep it all here with one nice parade of chatter.

    Everything else that is non-specific to trading, screaming, all-caps nonsense, insults about Cramer, declarations of how you've seen God and he told you the bottom, stories about mass suicides, made up news headlines, beatings on Stock_Trad3r (though I must admit to enjoying those), conspiracies about martial law, conspiracies about delayed elections, political riff-raff, how you know the market is going to be closed for 4.3 years or something, burning of Paulson or Bernanke in virtual effigy, any and all posts by any one of 100 different c-kid aliases and other type spam will be moved to chit chat or deleted on sight. This is an effort to keep the forums cleaner for much needed trading discussions during this time of crisis.

    Thank you for your attention.
  2. I'll just point out that the VIX hit 65+ today. Unbelievable just by itself.

    Do a scan for stocks with a P/E < 10. There are plenty of good companies making things people need and they're making money! These stocks' prices have been beat up in the market frenzy unfairly. They're boring companies in things like basic materials and consumer goods.

    This is where any recovery will start.
  3. lindq


    Personally, I've always been fond of bottom-watching.

    I've often wondered, in fact, over a lifetime how many bottoms most of us watch. Or at least glance at. When we can get away with it.
  4. Epistemic arrogance: Measure the difference between what someone actually knows and how much he thinks he knows. An excess will imply arrogance, a deficit humility. An epistemocrat is someone of epistemic humility, who holds his own knowledge in greatest suspicion.

  5. No one can call an exact bottom. That said, I've been buying this week.
    There is a constant battle between technical and fundamental analysis. And when one of those two strategies looks most pathetic, that often is the best time to switch to that strategy.

    There are traders, investors, and idiots.

    The only ones who lose are the idiots. They don't simply take a position. They take a position that they cannot reverse - and they expose themselves to more losses than they can tolerate.
  6. I fully realize that "crash" is a very strong word full of all kinds of very definite connotations, but I really can't think of any other way to articulate what is happening.

    Whenever the wizards at the Fed run the proverbial printing presses to create more dollars out of thin air, those inflationary dollars have to seek out a new home and a great deal of them begin bidding competitively on the already overvalued US equity markets. It is no coincidence that the S&P 500 bubble really ignited after the Fed began aggressively goosing US money supplies in 2002!

    Any way you slice it though, the fundamental and technical case for the S&P 500 is certainly for another serious downleg approaching, probably carrying us to the ultimate bottom. Once the mighty index trades below 1000 or so for a few weeks, the selling pressure will probably intensify immensely as fear increases and investors and traders decide discretion is the better part of valor for now.

    Bear markets typically evolve in three phases. First, the market declines 20% or so but everyone believes it is just a "correction" in a primary bullish trend and no one is concerned. Second, as the decline continues, investors on the periphery of the markets (ie, not mainstream long mutual fund holders) gradually grow fearful and selling pressure intensifies. Each successive major rally fails and new interim lows are carved out. Finally, in the horrific capitulation phase, mainstream investors have reached the outer limit of their pain tolerance and patience and clamber to sell at any price and vow to never, ever even think about owning those infernal stocks again.

    With the S&P 500's enormously-overvalued P/E ratio and immensely bearish technical breakdown, I can't help but think that the professionals are selling out like crazy leaving the folks the Wall Street crowd call "suckers," the mainstream working American middle-class with their precious retirement and college savings in the markets, left holding the bag, which is emptying fast. It is truly a tragic sight to behold, but this is the way these supercycle busts always work in history too yet virtually no one seems to heed their hard lessons.

    While us private investors can't save the world, we can zealously try to transcend the real-world of popular opinion on the markets. Rather than living in the confusing world of Wall Street lies and perpetual promises of "the bottom is in" or the profit recovery will roar forth "next quarter," investors can seek to understand the markets as they really are.

    The markets could not care less about you or me, they just exist. Only by understanding the markets in their actual strategic historical context, with mighty cyclical overvaluations giving way to gaping cyclical undervaluations over decades, can investors successfully beat the market year after year. The few investors outside the Matrix are the contrarians, who fervently strive to understand greed, fear, valuation, and history and do not buy into all the hype and obnoxious lies that mainstream investors eagerly lap up like famished kittens.
  7. When Stock_Trad3r sells all his longs and declares that he's going short.

    That should mark the bottom.

  8. Adobian


    What are you guys buying when the carnage is over?
  9. yes! But the problem is getting him to admit it.

  10. A bag of marshmallows to roast over the smoldering embers of the free market.
    #10     Oct 9, 2008