Corepuncher's Account Talk

[mojo]

Yes that was excellent. Thanks.

"By the way, in the bear market from 1929 to the bottom, stocks declined 89%, with six rallies of returns of more than 20% -- and most of them produced renewed optimism. But what happened was that the economy continued to weaken with the debt problem. The Hoover administration had the equivalent of today's TARP [Troubled Asset Relief Program] in the Reconstruction Finance Corp. The stimulus program and tax cuts created more spending, and the budget deficit increased."
http://online.barrons.com/article/SB...djemWR&page=sp

 

[Corepuncher]

Yes that was excellent. Thanks.

"By the way, in the bear market from 1929 to the bottom, stocks declined 89%, with six rallies of returns of more than 20% -- and most of them produced renewed optimism. But what happened was that the economy continued to weaken with the debt problem. The Hoover administration had the equivalent of today's TARP [Troubled Asset Relief Program] in the Reconstruction Finance Corp. The stimulus program and tax cuts created more spending, and the budget deficit increased."
http://online.barrons.com/article/SB...djemWR&page=sp

I've also noticed that, roughly, 20% seems to be a magic number. Big bear rallies seem to top out 20-25%. But it also seems to work in the inverse...drops of about 20% or so seem to be good times for a short term rally catch. A 20% downturn from our "recent" top of 943 would put us around 753...which coincidentaly, is near the 741 Nov low. That level, IMO, may be a good one to catch a rally at. However, I don't think it will last, and we will ultimately breach that mark to the downside. Be quick or be dead.

 

[Corepuncher]

If you want to see what the TSP loan rate is (and also the instantaneous G fund rate), go here:

http://tspcalc.com/tsploanrate.php

It simply returns the number. I am importing it into my "TSP Loan" spreadsheet automatically so you won't have to go looking for it. As a reminder, if you want that calculator, click below my signature.

you can compare a TSP loan to a car loan, credit card loan with or without monthly fees, based on a fixed payment or % of remaining balance, and now even a home equity loan, with tax deduction. Amortization tables are printed on 2nd page (tab) of spreadsheet.

I am thinking about buying 50% stocks at 810 for an anticipatory bounce off the 800-805 stop out level...but it would be quick play because I think next time we hit 805 ish, we are going down and will be getting to know 700s very well. Longer term, I think we break that 741 low and in fact get into the 600s (DOW < 7000) before years end. It may take until 3rd quarter's earnings to do it...if the bond market does not collapse first.

I plan on being bearish and selling the rallies through the foreseeable future. Credit cards and consumer spending will be a huge weight on the economy...it's just getting started. If we keep insisting on spending money we don't have (government), our dollar will be no good too. We need to write off all the defaulting loans now and get the pain over with. Of course we won't...and this will drag on. Good for us bears...we will reap the benefits by selling every rally. Oh and option arms / alt a resets peak in 2010 last I remembered. What a nice thing to look forward to.

 

[Corepuncher]

just testing video links

http://www.youtube.com/watch?v=PrZnM4pa_Lo

http://www.youtube.com/watch?v=1grSrasToHI

Cool...it worked!

 

[mojo]

Currently 100% G and willing to wait a while. We could very well rally to 900 or so but I'll sit this one out with a small profit and be happy.

I bet we will break back into the 700s on the S&P before the end of March. Once we hit 804 again, chalk it up, we're breaking lower. That means a minimum of 9% to be gained if you sold today. In reality, I'm looking for 750ish to buy some stocks.

That will be a nice 16% gain when I buy back at 750.

I'm waiting for the same I'm out until there is a substantial drop.

 

[Corepuncher]

I'm waiting for the same I'm out until there is a substantial drop.

Anyone who is scared of missing a "rally" and goes all in, is playing with fire BIGTIME. Good luck to ya'll doin that

 

[JTH]

Anyone who is scared of missing a "rally" and goes all in, is playing with fire BIGTIME. Good luck to ya'll doin that

+ 1 to what CP said.

I wouldn't call anyone a fool for doing so, but for some of the newer folks I would say it is extremely difficult to catch a short news based bear rally under TSP's 12:00pm IFT EOB prices.

 

[Uptrend]

A rising tide lifts all ships

 

[mojo]

A rising tide lifts all ships

Mine is in dry dock

 

[Corepuncher]

A black hole sucks in all.

 

[Boghie]

A rising tide lifts all ships

And, a rip-tide flips all boats

While I still have 15% in the American stock market I really don't like what I see. A downside Black Swan is far too probable for me to deal with the IFT limits.

Good luck UpTrend

 

[Corepuncher]

Great article relating PE ratios and dividend yield of the S&P historically to where we might expect it to go. Using past data, a target of 500 on the S&P is conservative!

http://www.marketoracle.co.uk/Article8772.html

Not much change in the analog system...same dates. Jan 2001 and March 82 using the currrent search criteria.

I took a look at this and think that using a 10 day bond yield trend may be insignificant and constrictive to the number of matches...especially considering i have a 180 day bond yield trend in the mix already. Therefore, I have effectively removed it (by putting a '99' as the STD range).

Only other good match that results is May 2002. Market went down quite a bit after that one. Modified output here:

 

[Corepuncher]

The retail sector is smoking death right now and we get retails sales Thursday:

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

I fail to understand how the "estimate" for January is "-0.3%"...when the previous 3 months were each < -2.0%. I predict retail will lead the market lower on Thursday. Also have initial jobless claims as well (last week was the highest number yet). Tomorrow MAY be a small rebound day...perhaps not the time to buy...even if we are down early. We SHOULD crush 805 on the S&P and go into the 700s soon IMO soon.

PS...speaking of retail...I hope nobody owns Sirius/XM http://finance.yahoo.com/q?s=SIRI

 

[Corepuncher]

I"ve been bearish for a while now and never before have I felt more confident in my stance. The amount of money being blindly "thrown" at the problem is just sickening. The way the administration is trying to maintain an unsustainable system is just pitiful.

The inevitable is coming...but politically, they must "appear" to have done everything they could. Doesn't change the end result...which is high unemployment...thousands of retailers going under, banks being nationalized, autos going bankrupt, and the stock market going way down again. Those are the for sure items...and everyone should be prepared for those.

Glory days of cheap credit are over, despite the administration desperately trying to maintain that broken system. We Americans are living a life of luxury...even "low income" people have TV's and such. It won't be long before the rest of the world sees that it is not worth propping us up so that we can all live like kings.

 

[malyla]

I"ve been bearish for a while now and never before have I felt more confident in my stance. The amount of money being blindly "thrown" at the problem is just sickening. The way the administration is trying to maintain an unsustainable system is just pitiful.

The inevitable is coming...but politically, they must "appear" to have done everything they could. Doesn't change the end result...which is high unemployment...thousands of retailers going under, banks being nationalized, autos going bankrupt, and the stock market going way down again. Those are the for sure items...and everyone should be prepared for those.

Glory days of cheap credit are over, despite the administration desperately trying to maintain that broken system. We Americans are living a life of luxury...even "low income" people have TV's and such. It won't be long before the rest of the world sees that it is not worth propping us up so that we can all live like kings.

While watching Bloomberg TV this morning and listening to the reports of the earnings which were almost all losses, I had a thought about why we are seeing this volitility. Everyone is trying desperately to slow down the deflation of this credit bubble that includes housing mortgages, insurance (credit default swaps), and the toxic assets (reselling of CDS's without the collateral causing speculation on non-existant assets coupled with the bundling of bad mortgages for sale to banks and investment companies). They are trying to have a slow controlled deflation instead of the crash and resulting depression that is caused by the cascade of failed business that will occur in a rapid deflation. Everyone knows that the toxic assets will have to be taken off the books causing a loss on balance sheets, but if that can be done in a controlled slow drain with Fed money cushining the small falls, then they may survive as a bank/company. That is what they are trying to do and that is why, if they succeed, 2009 will be a slow unwinding of toxic assets from the balance sheets. Listening to the reports of earnings seem to confirm this as most companies are reporting losses that, IMHO, should be much greater.

I for one hope they succeed. If this is done right, the companies/banks will absorb their own losses due to this high risk speculation from the last decade in the long run but remain a viable company in the short term with the help of the FED, which does expect to get paid back when the crisis is over and all books are clean and healthy. The risk to the FED is that after that money is given out, the company/bank defaults with no hope of retrieving that loan. Hence, the stress test on banks/companies before they will be given money (some insurance for the FED). The second risk is if a panic starts that ruins this whole scenario. I trust that they can do this (slow deflation with removal of the toxic assets). If the people trust it, then 2009 will be bad (10-20% down?), but it will be better after the balance sheets balance once again. Another question, Can this slow deflation and cleaning of books of toxic assets be accomplished in one year and do we have the cooperation of the foriegn investment banks as well?

Also, rates will be kept low during a slow deflation to encourage lending, so the F fund should be OK in 2009. All bets are off if the crash happens.

Good luck everyone.

 

[Corepuncher]

Decision Time

I call this "Decision Time" as the market appears to be coming to a crossroads.

The uptrend price channel (between the two blue lines) has been broken. This is the end of an important trend, as it came directly out of our "bottom."

Note that prior to 1/13/09...and since the beginning of this crisis, we closed below the 850 level 7 times...and below 840 4 times.

Since 1/14/09, or over the last 20 trading days, we have closed below 850 16 times and below 840 11 times!

Our new "range" looks to be approximately 805 to 875 (between black lines).

We've got strong January support around 805, also near the lower Bollinger band. I would say that 805 is the "last man to beat", because below that, there is no support until our November lows of 740-750.

I've got to believe that nothing will fundamentally get resolved over the next few weeks, therefore, I predict downward movement. I think we'll spend some time in the 700s. The question is, how far down will short push this market before covering? Maybe just short of the Nov lows? I'll venture a guess as to the next near-term bottom:

765

Only problem with that, is we could break 805, hit 765, and be back to 800 in the same day! Therefore, you might choose to buy only after we break the Nov low, not just get close to it.

As for F, I believe it has some upside, and eventually may make new highs. My next stock move, maybe be to simultaneously buy 50C and 50F from 100G. That way I'm hedged a little no matter what.

Could also get a bounce off 805, or 810's, if we get there Thursday (we may, as we have retail sales and initial jobless claims). That could be a risky play...but I'll consider it. Many times we bounce the very next day after a lower Bollinger band touch before resuming downward.

 

[Gumby]

Re: Decision Time

I call this "Decision Time" as the market appears to be coming to a crossroads.

The uptrend price channel (between the two blue lines) has been broken. This is the end of an important trend, as it came directly out of our "bottom."

Note that prior to 1/13/09...and since the beginning of this crisis, we closed below the 850 level 7 times...and below 840 4 times.

Since 1/14/09, or over the last 20 trading days, we have closed below 850 16 times and below 840 11 times!

Our new "range" looks to be approximately 805 to 875 (between black lines).

We've got strong January support around 805, also near the lower Bollinger band. I would say that 805 is the "last man to beat", because below that, there is no support until our November lows of 740-750.

I've got to believe that nothing will fundamentally get resolved over the next few weeks, therefore, I predict downward movement. I think we'll spend some time in the 700s. The question is, how far down will short push this market before covering? Maybe just short of the Nov lows? I'll venture a guess as to the next near-term bottom:

765

Only problem with that, is we could break 805, hit 765, and be back to 800 in the same day! Therefore, you might choose to buy only after we break the Nov low, not just get close to it.

As for F, I believe it has some upside, and eventually may make new highs. My next stock move, maybe be to simultaneously buy 50C and 50F from 100G. That way I'm hedged a little no matter what.

Could also get a bounce off 805, or 810's, if we get there Thursday (we may, as we have retail sales and initial jobless claims). That could be a risky play...but I'll consider it. Many times we bounce the very next day after a lower Bollinger band touch before resuming downward.

CP

Great analysis. I think you are spot on. Good luck

 

[Guest2]

Lets kick it past 840 and test the upper B-Band first. PLEEEEASE !

------------> DRIVE - BY - HELLO ---------------->

 

[Diesel]

Re: Decision Time

As for F, I believe it has some upside, and eventually may make new highs. My next stock move, maybe be to simultaneously buy 50C and 50F from 100G. That way I'm hedged a little no matter what.

Thanks Corepuncher. It makes me feel a little better with the IFT (50G/50F) I went with yesterday.

 

[ATCJeff]

Re: Decision Time

Thanks Corepuncher. It makes me feel a little better with the IFT (50G/50F) I went with yesterday.

nice move!