TGIF
by
, 11-21-2008 at 09:50 AM (2325 Views)
Wow! Not much more to say. Just, wow! OK, see you Monday...
Still here? Alright, lets talk about the carnage. I'm guessing that if you are still reading these commentaries that you may have had some money in the G or F funds as anyone who has taken the full brunt of this market collapse in 2008, probably has something better to do on a Friday than talk about it.
Another 5.1% to 7.5% declines in the stock funds. The L2040-fund is now down about 43%. There haven't been too many strategies that have worked this year, except for cash and bonds (G and F-funds).
The S&P 500 is now firmly below the 840 support level, actually 10.5% below, and we are in a new leg down. That doesn't mean we will go straight down, but any hopes of 840 being tested, holding, and being the bottom, are now gone. A relief rally is almost certainly imminent, but how much we go up, and how long it lasts, is a big question mark.
Chart provided courtesy of www.decisionpoint.com
As you can imagine, the indicators are extremely oversold, and the sentiment surveys are very bearish. We still have that Rydex Cash Flow ratio indicator telling us that investors seem to be less bearish than the surveys suggest, but that indicator did tick down slightly in the past two days. It is no where near panic levels however. Far from it. That remains troublesome.
When the VIX reversed up after hitting the lower Bollinger Band earlier this month, we suggested that it may try to make it's way back to the upper band, near 80. Here we are.
Chart provided courtesy of www.decisionpoint.com
Is it possible that it will go higher than the record readings we had in October? Anything is possible. I guess - what would we expect in a market environment that is being described more and more with the word depression, rather than recession? The difference this time versus the 1930's is that those of us on the bread lines will have our iPhones and iPods to keep us busy.
Bonds, which I thought had run out of steam a week or so ago, have seen a new wave of buying from those looking for safety. I have never seen a rally quite like this in bonds before, and I suspect it is panic buying that will quickly pull back once sanity kicks in again. Why the F-fund is not skyrocketing is beyond me. Maybe I am missing something, but I think the F-fund should be up 5% to 10% this month, rather than the 2% that it is. If anyone can shed some light on this for us, I'd love to hear it.
Chart provided courtesy of www.decisionpoint.com
The dollar has picked up steam as well, as the pullback to the 20-day moving average may be all that we see. If it can make a new high above the recent double top, it should be off to the races again. Pretty amazing considering how much interest rates have come down recently. Is this all just smoke and mirrors, or is the rest of the world really that much worse off?
Chart provided courtesy of www.decisionpoint.com
Thankfully, I was out of the market yesterday after catching the big losses on Wednesday. I am out of transfers in November and am just hoping that the market doesn't take off without me. For anyone out of transfers, the soonest we can be buyers again is on Monday morning December 1, to be in stocks for Tuesday the 2nd. If I am still thinking about buying, that probably means the market has not bottomed yet.
Well, that's about as much fun as I can take in a week. Thanks for reading again, and have a great weekend!!