Are we headed for an epic bear market?

[TNJed]

I haven't seen a better year to day trade since '93. Volatility and blood in the streets are the best of conditions for a day trader.

hear hear!

I've got a handful of ultra-shorts waiting for the second blood letting.

 

[30ashopper]

I've been trading daily for about a year. I'm not new to math but was new to finance. I feel like I've just walked into a horror movie during the climax.

http://www.portfolio.com/news-marke...11/11/The-End-of-Wall-Streets-Boom?print=true

Here's a post by a friend of mine on a finance board who puts it...more eloquently?

"The bobble head dolls at CNBC, Bloomberg, etc. would have you believe we're on the cusp of a sustained bear run that will take the S&P north of 1100, and yet there's this enormous flight to treasuries (with negative returns in some instances), staggering unemployment numbers, constantly downward revised guidance and vastly reduced orders. WTF is going on here?

This is cognitive dissonance at its best, my friends. The MSM bull blitz/barrage is attempting to assuage investors, convincing them that despite the absolutely vicious nature of this downturn, there is a light at the end of 2009 and brother Obama will lessen the pain along the way. This is so much utter bullsh*t that one can barely fathom the depths of their depravity. If you think putting us deeper in debt to alleviate problems caused precisely by too much debt will be rectified so easily, I've got a bridge to sell you.

It would appear that the media outlets have successfully convinced us that "deficits don't matter", carpe diem and onward and upward. Irrationality is pulling this bull by the nose ring. The best thing that could happen to this country is a prolonged period of suffering. That we are trying to avoid anything resembling true repentance for our 25-year credit-based consumer rampage just proves to me that we are F'ing toast - whether now or later. That we'll make it through this latest predicament I have no doubt, but make no mistake - it will come at the price of our credit rating, our currency, our standing in the world, and much, much more. We have used our last get out of jail free card and the rest of the world has tired of us. When the IOUs come due and we debase our currency or outright default, don't expect the Arabs, Asians or even the Europeans to come riding to the rescue by propping up our sham of a tertiary/quaternary-based economy. People still want to consume things - problem is, we don't make anything of value. See GM, Ford & Chrysler. Yeah, deficits don't matter. Whatever."

While I agree with most of this sentiment, a couple comments -

Treasuries at zero yield aren't due entirely to American businesses and banks buying fed debt. The Arabs, Asians, Europeans, and everyone else for that matter are buying them too. So I wouldn't be as convinced as this guy is that the IOU's will ultimately get called.

On the sustained bear run comment, I wouldn't say "sustained" is a good call but even the big perma-bears I track are currently long for the short term. Both Ritzhold and Shedlock recently went long for a short term run. I take that to mean something. I'm not sure if that fits in with what your friend is talking about though. I'd welcome some discussion on the subject. Traderx, care to comment?

 

[traderx]

I guess day trading is relative. By definition I don't day trade, but I do make a handful of roundtrip trades each week.

By daily, I meant I have been studying and watching it intently on a daily basis for a year. That's still very newbie territory.

What prompted me was to get mine before the gettin' is done. I grew tired of swimming upstream. If that's where the money is, so be it.

Technically, day trading is trading the tick. Too fast and furious for me.

What tools do you use?

 

[traderx]

hear hear!

I've got a handful of ultra-shorts waiting for the second blood letting.

I don't know about day trading but 2001 and from the Nasdaq bottom in October 2002 until early 2004, you would have great difficulty finding a better time to swing trade.

 

[traderx]

While I agree with most of this sentiment, a couple comments -

Treasuries at zero yield aren't due entirely to American businesses and banks buying fed debt. The Arabs, Asians, Europeans, and everyone else for that matter are buying them too. So I wouldn't be as convinced as this guy is that the IOU's will ultimately get called.

On the sustained bear run comment, I wouldn't say "sustained" is a good call but even the big perma-bears I track are currently long for the short term. Both Ritzhold and Shedlock recently went long for a short term run. I take that to mean something. I'm not sure if that fits in with what your friend is talking about though. I'd welcome some discussion on the subject. Traderx, care to comment?

Well, I don't follow any gurus on either side of the ledger, but I went all cash in November 2007. Some of the move was pure dumb luck but I will take it. The current climate is too volatile for me so I have taken to trading hourly charts. The trick is finding the right securities to trade.

My personal belief is that we have not seen the bottom. That's based on my thoughts about the economy moreso than technical aspects of the market.

 

[TNJed]

While I agree with most of this sentiment, a couple comments -

Treasuries at zero yield aren't due entirely to American businesses and banks buying fed debt. The Arabs, Asians, Europeans, and everyone else for that matter are buying them too. So I wouldn't be as convinced as this guy is that the IOU's will ultimately get called.

On the sustained bear run comment, I wouldn't say "sustained" is a good call but even the big perma-bears I track are currently long for the short term. Both Ritzhold and Shedlock recently went long for a short term run. I take that to mean something. I'm not sure if that fits in with what your friend is talking about though. I'd welcome some discussion on the subject. Traderx, care to comment?

This free market is too manipulated for me to guess it's volatility. Just playing the far extremes on a bear slant and ETFs can be great for that. Trying to think of them as options with no expiration. Though there is a time decay this market's swings can more than overcome that.

As far as the quote, I don't really agree with countries calling in debt. That wold be an act of war practically. But wanted to quote in full. Though, with money flowing so fast into bonds they actually went negative, it seems no loss is the new gain for banks flooded with TARP money. Right now bonds are the only safe place to park it even at 0% which says everything about our current market.

Just concentrating on the macro view and trying to work my way in so my short term guesses are just that. Everything else is just gravity.

 

[TNJed]

Technically, day trading is trading the tick. Too fast and furious for me.

What tools do you use?

Just Scottrade with a straight cash account and basic platform. I'm practically using an abacus!

Been looking at Zecco for when I make that move. I've hear good things about thinkorswim. You?

 

[mikecat adjuster]

This is all so thick with thought. Very interesting. Sad really how History repeats itself and we allow it to. It's a pyrimid scheme and some people who do the rape of the economy profit and seldom do they pay for there crime because the crime is not easily proven.

I believe it will result in terrific wars. I hope I am wrong. I have two children who I love with all of my heart. But countries with leaders who watch their citizenry becoming more disgruntled will have to do something. Desperation will result in aquisition by power. One little battle will draw in bigger guns and it will spill over into adjacent territories, bringing in more power and more players until the mightiest of leaders are drawn in. Oil and other energy resources will be at a premium. I think we've increased our reserves fairly substantially for this reason. I know Pelosi wanted Bush to tap into the reserve, but I think there were reasons we did not.

I don't want to bring politics into this, I'm just saying that the economy per se scares me less than what consequences many don't recognize. It does suck not having a high standard of living, but that will pale in comparison if the downward spiral results in crop shortages and lack of food availability worldwide and that kind of turmoil.

I have been thinking of buying real estate of late. I am still watching though. I have many thoughts and factors to weigh including those mentioned here. Great thread.

 

[30ashopper]

This free market is too manipulated for me to guess it's volatility. Just playing the far extremes on a bear slant and ETFs can be great for that. Trying to think of them as options with no expiration. Though there is a time decay this market's swings can more than overcome that.

As far as the quote, I don't really agree with countries calling in debt. That wold be an act of war practically. But wanted to quote in full. Though, with money flowing so fast into bonds they actually went negative, it seems no loss is the new gain for banks flooded with TARP money. Right now bonds are the only safe place to park it even at 0% which says everything about our current market.

Just concentrating on the macro view and trying to work my way in so my short term guesses are just that. Everything else is just gravity.

No doubt, that was an incredible occurence.

One of the things I've been wondering about - while a lot of folks have been harping on the TARP, we're seeing 3-month treasuries at zero thanks in part to banks parking TARP assets at the FED. So the circle goes - the FED takes on debt by selling treasuries at low rates, lends to banks at 5%/9%, banks choose not to lend and instead park TARP funds in low interest treasuries... doesn't the FED make out like a bandit assuming TARP rates are higher than the treasury rates the banks buy? Of course, it's temporary, as the banks have to pull the funds or loose money. But for now, the banks are funding the FED's lending to banks... with the FED making a nice cut on the transaction.

 

[TNJed]

No doubt, that was an incredible occurence.

One of the things I've been wondering about - while a lot of folks have been harping on the TARP, we're seeing 3-month treasuries at zero thanks in part to banks parking TARP assets at the FED. So the circle goes - the FED takes on debt by selling treasuries at low rates, lends to banks at 5%/9%, banks choose not to lend and instead park TARP funds in low interest treasuries... doesn't the FED make out like a bandit assuming TARP rates are higher than the treasury rates the banks buy? Of course, it's temporary, as the banks have to pull the funds or loose money. But for now, the banks are funding the FED's lending to banks... and making a nice cut in the mean time.

bingo. Some call it refinancing others ponzi. It hurts too much to cry.

Borrowing your way out of debt rarely works out well. I think that's what happened to Japan.