Griffin Account Talk

[fedgolfer]

... 4% india only? Now there's some growth potential.

 

[Griffin]

I wrote back on the 15th

It may be that the market was betting that the 3Q earnings were going to come in stronger then expectations creating a suprise upside, with that reality starting to look like it is slipping away - there may be a lot more optimism out there then was warranted, creating some panic.

I think what were seeing today is this getting played out.

I just moved to the F-fund - I don't see the market bouncing back tomorrow - Awhile ago someone asked me what I thought would cause a double top. At that time, I did not believe that we would actually see a recession and I did not see the subprime being the cause. However, I have to admit that this "Big Bank" plan to stem off the credit crunch has me thinking that there was a lot more damage done to the economy then was being admitted.

The US has long been the growth engine of the world. However, the new belief is that this is going to change and the US growth would be supported by emerging markets (primarily China). Perhaps this credit crunch and the ultimate realty of the geopolitical situations brewing around the world are making folks rethink the feasibility of that model. Maybe, just maybe...... the world needs the stability of the United States economy and the backing of the US military to maintain the global growth engine and with that slipping.......could make for a very bumpy ride.

What happened with Cat this morning really has me wondering about the validity of this speculation.

A couple of days ago I was expecting a move to 1520 (or lower) as a result of the upward channel having been broken. Things are now so oversold, I have to believe the dip buyers will be stepping in later today or on Monday. Obviously, I wish I had hung out in the F-fund for one more day, but the move lower just did not seem to be forthcoming the way things looked. Such is life, I would definitely be buying in today if I wasn't already there, so I will not be moving out.

 

[fedgolfer]

that 1500 call you made is still in the picture the QQQQs are rolling over... AAPL reports on Monday... and if the selloffs after Q3 earnings continue, we could see more red in the tech sector... which its leaders are just beginning to roll over. I'm hoping for buyers to come in since i'm fully invested TSP... this hope thingy has killed my account balance the past few days. Thoughts on 1500 in the s&p?

 

[airlift]

Thanks Griffin!

 

[FundSurfer]

CAT has been expanding their operations. Even though they disappointed, I think I'll buy today. Construction is booming around the world.

 

[Griffin]

that 1500 call you made is still in the picture the QQQQs are rolling over... AAPL reports on Monday... and if the selloffs after Q3 earnings continue, we could see more red in the tech sector... which its leaders are just beginning to roll over. I'm hoping for buyers to come in since i'm fully invested TSP... this hope thingy has killed my account balance the past few days. Thoughts on 1500 in the s&p?

1500 has support coming from the 50 dma and it is supported by the closes in June. A move to 1500 is going to signal to traders that a double top is forming. The does not bode well given the concept of declining growth and I believe that will lead to a neutral to bearish tone overall.

If we are going to continue the bullish trend, the S&P needs to hold the line here and rally on Monday.

This goes back to our comments about slow growth to no growth. Can we be bullish in a slow growth environment?

Last year when it was becoming failry obvious the housing market bubble was bursting, everyone started looking for a soft landing. When it appeared that was going to happen, folks stayed bullish. These subprime pullbacks have made a repeat of that logic difficult. Without measurable growth, that may make that kind of "relief" rally very difficult.

We are going to see a trend change here and which way the balance tips is going to come down to a few grains of data one way or the other.

 

[ATCJeff]

1500 has support coming from the 50 dma and it is supported by the closes in June. A move to 1500 is going to signal to traders that a double top is forming. The does not bode well given the concept of declining growth and I believe that will lead to a neutral to bearish tone overall.

If we are going to continue the bullish trend, the S&P needs to hold the line here and rally on Monday.

This goes back to our comments about slow growth to no growth. Can we be bullish in a slow growth environment?

Last year when it was becoming failry obvious the housing market bubble was bursting, everyone started looking for a soft landing. When it appeared that was going to happen, folks stayed bullish. These subprime pullbacks have made a repeat of that logic difficult. Without measurable growth, that may make that kind of "relief" rally very difficult.

We are going to see a trend change here and which way the balance tips is going to come down to a few grains of data one way or the other.

Good post. My question, with respect to oil, what price do we see consumer spending plunge? I'm thinking $100. This number will be very emotional for all.

If consumer spending falls, Christmas retail sales will suffer. When this starts, watch out, everyone will start talking recession.

 

[fedgolfer]

CAT has been expanding their operations. Even though they disappointed, I think I'll buy today. Construction is booming around the world.

You may be able to get in on CAT at the triple bottom today... at least it looks like a smart buy on the charts.

 

[Griffin]

Good post. My question, with respect to oil, what price do we see consumer spending plunge? I'm thinking $100. This number will be very emotional for all.

If consumer spending falls, Christmas retail sales will suffer. When this starts, watch out, everyone will start talking recession.

Last year when oil doubled the price at the pumps tripled....hmmm go figure. Then we saw that back off - but it got people really freaked out. Didn't someone say then that in order for the price at the pumps to be in the low 3's nationally that oil should be around $100 a barrell?

When this war kicked off, we all were jokingly calling it Operation Iraqi Liberation - it's a shame we never executed that operation. Anyway, I dont' think your going to have to wait for Christmas, after today recession is going to be the talk on the town.

1500 on the S&P at close - <big sigh> DAMN!

 

[fedgolfer]

"Dow Plunges 366 on Recession Fears"

That's the headline on yahoo finance.

Anyway, after Black Friday, there was another day or two of red, correct? Followed by the huge rally. Will history repeat? Didn't the Fed open the credit doors that week? They have to do they same thing, right? 100% chance of a 50 basis point cut?

 

[nnuut]

today DOW -2.64%
Black Friday Dow plunged 22% in a day!
Not quite the same, Id think!!

 

[ATCJeff]

"Dow Plunges 366 on Recession Fears"

That's the headline on yahoo finance.

Anyway, after Black Friday, there was another day or two of red, correct? Followed by the huge rally. Will history repeat? Didn't the Fed open the credit doors that week? They have to do they same thing, right? 100% chance of a 50 basis point cut?

No chance of a rate cut. Inflation is still around. Just look at energy(oil) & food. Yes I know they are not included. But the consumer knows these two are sky rocketing. Extra money is going towards paying these necessities. Extra money that would have been spent on retail this holiday season.

 

[350zCommTech]

No chance of a rate cut. Inflation is still around. Just look at energy(oil) & food. Yes I know they are not included. But the consumer knows these two are sky rocketing. Extra money is going towards paying these necessities. Extra money that would have been spent on retail this holiday season.

Did you read the Fed beige book? They admitted to cutting .50% because they feared the credit markets. The "helping the economy" talk was just BS cover on their part. They even admitted to being skeptical of the -4000 jobs number, which was later revised to be up 90k.

IMO, the problems in the credit markets are BIG. They will cut again. The question is how much. Helicopter Ben has proven that he does not care about inflation. He will save his wall street buddies first.

 

[fedgolfer]

Helicopter Ben has proven that he does not care about inflation. He will save his wall street buddies first.

Yes, that's my point inflation vs recession... Ben will have to use the tools he can to avoid recession. It's really not even his choice, he'll have to bend to the pressures that be.

 

[Griffin]

Guys,

Today was bummer, point noted, but what it tells us is that the market was expecting the 3Q earnings to knock it out of the park so to speak. From a technical perspective, today was a very real possibility that had been coming for several days. It is absolutely no suprise that it stopped at 1500.

Monday, we will see cooler heads prevail, and if they don't - were likely looking at a bear market. The good news is that were aware of it, and we can take up (or continue) a capital preservation position.

The really good news is we know that we should not expect a rally to automaticlly push to new highs. That is a very useful piece of info. This market will become range bound very quickly and that makes it ideal for us.

The last piece of good news, is that the bond market has a tendency to respond favorable to a rate cutting cycle - which gives us the F fund option for CP.

There is a silver lining on this cloud and we are in exactly the right place to take advantage of it.

 

[Warrenlm]

I think I understand what you're saying, but on a fine point, I don't think a Monday up means the week will be up or vice versa. I'm thinking the middle and last half of the week are more important to read.

 

[Griffin]

I think I understand what you're saying, but on a fine point, I don't think a Monday up means the week will be up or vice versa. I'm thinking the middle and last half of the week are more important to read.

True, but at the same time, I won't be suprised to see this morning turn around fairly quickly after the obvious rough opening that is coming.

 

[Griffin]

We are closing in on 1520 and while it is nice to see some of those loses erased, were still not out of the woods on this correction.

1520 is the key to the S&P, that is where this correction took it's nasty little turn, and now it needs to get back there. It looks like it's going to close around 1517, which definitely puts it in position to inspire some early buying tomorrow.

Existing home sales comes in at 1000 EST, and this number has been suprisingly upbeat throughout all of this subprime debacle - so I don't fear it. After two solid green days, we are seeing the various indicators (MACD, Stochastics, etc.) starting to turn positive.

I'm real happy with this V-bottom that has formed, it definitely is inspiring, although, I am not remotely kidding myself that the bullish trend of the past few years will continue as it has for the past year - I still believe the winds of change are blowing.

 

[airlift]

Griffin,

Are you pulling out before the end-of-week? Tia.

 

[Griffin]

Griffin,

Are you pulling out before the end-of-week? Tia.

Break out your texting dictionary!

IMHO - IDK, this V-bottom may be 2G2BT, OTOH i'll SIO til it's BTTT.

Ya Dig?

J/K

OK, I'm done practicing for the day my daughter becomes a teenager. I've noticed there is this air of "spooky Friday" building. I guess country wide is at the heart of the matter - as it probably should be (those bastards :toung.

I may be out by Friday (or sooner), but the technicals are just now turning around and it could take a couple of days to make the move we need to scare the bejesus out of folks. Once we move above 1520 we should get an enthusiastic rally but that may be very short lived. Depends on how much we vascilate around the current level - any move above 1530 I would consider a "sell strength" opportunity - although I will be getting very cautious around 1525. Yeah that means tomorrow more then likely.

Today's close was awesome - I did not expect that, ultimately, I'll make my next move as soon as things start looking toppy.