Markets Plummeting! Just The Beginning??

a529612 · Feb 27, 2007

Anyone trimming long positions here? We may be in for a ride to the downside...

wee man · Feb 27, 2007

Quote from a529612:

Anyone trimming long positions here? We may be in for a ride to the downside...
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A bit late for that hommie!

otcstockfund · Feb 27, 2007

this action today is AWESOME )))))

ElCubano · Feb 27, 2007

Quote from Arnie:

I am sick! I shorted this morning at 1435.50 and later at 1416.50 and covered both WAY too soon.
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I bought a penny at .0065 yesterday and sold at .012 today...its hitting .0165...on 2 mill...:eek:

CalScholar · Feb 27, 2007

Quote from Arnie:

I bought some IWM 79 calls just in case we bounce tomorrow.
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Probably a good idea. I wouldn't be surprised to see the market open toward the upside tomorrow (reflexive buying) only to close MUCH lower. But who knows, right?

krazykarl · Feb 27, 2007

The PPT is in play.... watch the spooz.

admit it - you ladies have missed me...

cashmoney69 · Feb 27, 2007

Quote from cashisking:

jesus christ
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Yes, my son?

CalScholar · Feb 27, 2007

Quote from cashmoney69:

Yes, my son?
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A trader and a savior ... Where do you find the time?

gunslinger · Feb 27, 2007

Quote from vhehn:

HES A PERMABEAR SO TAKE IT FOR WHAT ITS WORTH:

Kass: Short Side Never Looked So Good

By Doug Kass
Street Insight Contributor
2/27/2007 11:34 AM EST
Click here for more stories by Doug Kass
I am on the road traveling today, but I wanted to say that on Monday, for the first time since early 2000, I went all in on the short side. That is a reflection of how negative I am about this market.

Despite too often sounding like the boy who cried "wolf" in light of the continued market ascent, I have spent the past several weeks outlining my investment rationale and my major concerns: heightened debt loads among consumers, the government and hedge funds; rising mortgage credit losses, which will weigh on a spent-up, not pent-up consumer; nascent inflation, seen in rising raw materials spot prices and crude lately; the ever-present specter of geopolitical tensions; and corporate profit and profit margin vulnerability.

Above all, investors are not being paid for risk -- and excessive valuations are not being recognized. As Robert Marcin pointed out Monday, today's median P/E of 20.5 times trailing earnings of the Value Line composite of 3,000 leading companies compares to 14.5 times at the market's top in the fall of 2000; meanwhile, credit spreads and volatility --expressions of copious complacency -- remain at record low levels.

Here are some reasons we're at such a precarious point.

. Brokerages and money center banks are rolling over badly and remain a negative short-term market tell.
2. Hedge fund net-long invested levels (61%) are at the highest level and the AAII survey has bears at the lowest level since December 2004.

3. The daytrading in the Chinese market has begun to eerily resemble daytrading in the Nasdaq, which peaked seven years ago. (The more things change, the more they are the same, though the location changes.)

4. Virtually every hedge fund has the yen carry trade on its books, and recent signs in the currency markets indicate that the trade is getting less compelling. (If it does begin to unfold, the young hot money -- especially in the emerging markets like China -- could reverse in a nanosecond).

5. Further signs of speculation are the press mentions (and market reactions) of far-fetched takeovers. A classic example was Monday's item in England's Sunday Express that Dow Chemical (DOW - Cramer's Take - Stockpickr - Rating) might be acquired by a private-equity group. The shares briefly rose by 8% in response.

Two weeks ago, England's Times of London published a report that Countrywide Financial (CFC - Cramer's Take - Stockpickr - Rating) would be acquired by Bank of America (BAC - Cramer's Take - Stockpickr - Rating). Again, the shares rose by nearly 10%, though they have subsequently declined by nearly 15% as subprime problems have grown. The outsize reactions to less-than-legitimate sources is typical these days.

6. History shows that four-year extensions of bull markets, out of deep oversolds, often morph into disaster: 1932-36 (1937 crash); 1957-61 (1962 crash); and 1982-86 (1987 crash). We're well into four years in the current stretch.

7. Writing again on history (and technical voodoo), over the last century every decade has seen a market crash/deep correction in the sixth or seventh year of that decade.

Above all, the lifeblood of the bull market is the availability of credit, and the subprime issues (dismissed by most, not surprisingly) are putting a halt to lending that for years has disregarded creditworthiness and plain common sense. As night follows day, personal spending will plunge just at a time when most believe the consumer is invincible.

The opportunities on the short side have never been more attractive, just as the signs of a breakdown of the impressive bull market run have started to appear -- a potentially lethal combination.
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Kass came up to my office in march 94. I think the dow was @3500. He told all the brokers with much conviction that he was convinced the mkt was going to 2000. Obviously since then, I have very little respect for him. Not to mention I have seen him several times on Tv in the ensuing years making the same claims, only to have the Dow take off for the next 5 years.

IMO he is the epitome of the broken clock analogy.

Wayne Gibbous · Feb 27, 2007

Busted trades? I hope not!

Saw this on Real Money.

Don't have a sub for the rest.

George Moriarty
A Mechanical Dip?

3:49 PM EST

Art Cashin making the point that the dip to -545 looks potentially linked to an error, and that the