My response to the action in the market

I am busy but once in a while my thoughts can be properly and expeditiously expressed from a blog response I already laid out, so I just copied and pasted it...
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-Did you hear the booo's when we went below 9000?

Who else thought this could happen... just not so soon?
Quote from anonymous source on Earth to Wallstreet Board
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My response

Robert Prechter of Elliott Wave Intl said this kind of correction was gooing to happen in the beginning of this century. He called it in 1979.

He thought the Dot com bubble was it but the credit expansion under Greenspan delayed it... making it even worse now.

Roubini is calling for Dow 7,000 and he has been right on for years now. I mean right on the money.

That is why I pointed out the 38% Fibonacci retracement on my blog. That fell through and the next likely retracement is 50% of the 20th century gains. Cut all the levels from October 07 in half to get there.

Edit- not on the blog response but added here.
The 2002 lows may also provide support but as I think we would have gone down further without Greenspan's policies and also they eventually deepen it I think the 2002 lows will probably provide short term support but I would not bank on them to be the bottom either... just my take.

I still think we see some kind of a bear market rally somewhere here. We have had it in the fertilizers until the market collapsed again.

I wish I had more time to day trade. The opportunities are enormous. I called a drop in commercial real estate a week ago and it has tanked. Same with Foreign Banks. Regional banks? Whose going to buy them out? The big 3 already have their hands full and capital is scarce and everyone wants to hold onto it.

I get the idea that there is fear and blood on the streets and that is a buying signal but this is like no market we have ever seen. We are likely to get a very very choppy and slow recovering bottom in my opinion. It may take a year to bottom. Until LIBOR spreads and trust returns how can we call a bottom?

If people want to day trade or layer into names like POT and DRYS and SDTH and FEED and many othersor years and years that can be a winning strategy. Otherwise I think it remains quite risky out there.

I dunno I could be wrong. I certainly have been so far in this market. So far I have been able to pick great companies at reasonable prices... however when the market re-values what the rules are... well that is something I did not have the experience to anticipate. IT's like a somebody selling a Porche for $10,000... super cheap right?

But only for those who have the cash, don't need that money to eat and clothe themselves and secure their job, and don't mind it going down to $5,000 first.

If nobody has money a $2,000 Porche is expensive.

Eventually people will have money again but to try to predict when without support from LIBOR rates, flattening out of home prices, etc. it just seems like a gamble to me to go long here except as mentioned with very small amounts and layered in.




"The Yellow Rose Street Beat" is for informational purposes only. It does not give investment advice.