Daily Investment Interpretations

November 11, 2008

Caveat:  I want to emphasize that I absolutely don't know what the stock market is going to do next. I read what I can and after that, it's a judgment call. 

2008-11-11:  Today was a down day on Wall Street. The NASDAQ slid 35.54 points (-2.22%) to close at 1,581, the Dow doffed 176.58 (-1.99%) to 8,694, and the S&P skidded 20.26 (-2.2%) to 899. Oil hit a two-year low at $58.85, and gold gave up $13.70 to close at $732.80. The VIX jumped a little to 61.44.
    It's Tuesday, and Michael Ashbaugh has published his weekly technical analysis column: Ashbaugh sees S&P at critical juncture. Mr. Ashbaugh observes that last week saw the first two-day, 10% correction since 1987, "placing the near-term technical outlook back on dangerous footing". He adds that "the long-term backdrop's been horrible for some time". He sets short-term technical support at 900. He observes that a break below 900 would probably lead to an eventual retest of the 840 October 10th low. (Of course, the S&P closed at 899 tonight.) He sets the Dow's support level at 8,600 and the NASDAQ's support at 1,600. He states, " ...in this fast-changing backdrop, the trading rally evaporated almost immediately, with bearish implications for the U.S. markets." He more-or-less concludes, "Capital preservation remains the primary objective, followed by risk management, and the effort to find spots for near-term gains." In the meantime, we're looking for a retest of the October 10th lows which will either lead to a bounce or a breakdown.
    I'm stunned with the conclusions of my re-examination of super-bull markets and super-bear markets. I explored this topic of super-bull and super-bear markets in April, 2002, but I lacked the courage of my convictions. 

Later:  The Sandman just found Amber tonight at 10:45 p. m. I've run out of time and will have to finish this in the morning, but it seems to me that I had some topical information in 2002. But the bear market dragged on until the middle of 2003, and then it soared for four more years until last October, and I didn't listen to myself.
Mark Hulbert: Some advisers lose big despite anticipating financial panic

(To be continued)