From our 3/04/09 daily market commentary:
I don't know how long this slide is going to last, but I have a feeling it is going to end in a "whooosh", and hopefully sooner rather than later. We have seen them before, but this mother of all bear markets may just need to hit the "puking" level before it turns.
What is a whooosh, you ask? It is one of those days that moves sharply lower out of the gate. Painfully lower. It falls fast and furiously, perhaps as much a 8% to 10% on the day. The CNBC reporters are no longer joking around. There is panic on their faces. They jump from correspondent to correspondent looking for answers.
At some point around lunch time, the last bullish investor gives up, calls his broker and yells, "Sell it all!". He hangs up the phone, takes a seat, and watches in disbelief as the market starts to tick up.
It is gaining strength and it is moving quickly. All of the bears who are out of the market see the turn. Some are heavily short (losing money when stocks go up) and they are buying back those short positions adding to the upside action.
There is a lot of cash on the sidelines and investors and traders are getting concerned that they might miss this rally.
It's a half hour before the close and the Dow, which was down 600 or 700 points earlier, is now down just 85. The skeptics are sitting on the sidelines like a deer caught in the headlights, not sure if they should jump in or if this is just a temporary rebound that will turn back down.
15-minutes until the closing bell and the Dow is now up 50-points. Decision time. It's obvious to those who have missed the last 700-point rally, that they better act now or they will miss the next 10% move. Buy, buy, buy!
The Dow closes up 180-points and there is chaos on Wall Street. The news of the reversal is the top story on every TV and radio station, and every news related website. Joe-Sixpack sees the news while eating his evening meal and thinks that it may be time to call his broker in the morning to see what is going on.
Some of the more savvy TSP participants, who are pro-active in their accounts and had run to the safety of the G and F-funds, are now logging in to make interfund tranfers to get back into the stock funds, but of course they have to wait a couple of days before it takes effect.
The next morning the Dow gaps up another 150-points. It appears to be the real deal, and the buying continues throughout the day as the Dow tacks on another 500-points. In just over 24-hours the major indices are up about 25% from the lows they made just one day earlier.
And that my friends, is a whooosh! It's happened before, and it will happen again.
I'm not saying that it will happen today or even in the next few weeks (although it very well could). But I believe that's is a very good possibility of how it will go.
The spoiler to the story is that the low made will probably get tested again at some point, and we'll go the through the whole, "is this the bottom" talk again. Tune in to see how it ends.
View the entire article here.
I don't know how long this slide is going to last, but I have a feeling it is going to end in a "whooosh", and hopefully sooner rather than later. We have seen them before, but this mother of all bear markets may just need to hit the "puking" level before it turns.
What is a whooosh, you ask? It is one of those days that moves sharply lower out of the gate. Painfully lower. It falls fast and furiously, perhaps as much a 8% to 10% on the day. The CNBC reporters are no longer joking around. There is panic on their faces. They jump from correspondent to correspondent looking for answers.
At some point around lunch time, the last bullish investor gives up, calls his broker and yells, "Sell it all!". He hangs up the phone, takes a seat, and watches in disbelief as the market starts to tick up.
It is gaining strength and it is moving quickly. All of the bears who are out of the market see the turn. Some are heavily short (losing money when stocks go up) and they are buying back those short positions adding to the upside action.
There is a lot of cash on the sidelines and investors and traders are getting concerned that they might miss this rally.
It's a half hour before the close and the Dow, which was down 600 or 700 points earlier, is now down just 85. The skeptics are sitting on the sidelines like a deer caught in the headlights, not sure if they should jump in or if this is just a temporary rebound that will turn back down.
15-minutes until the closing bell and the Dow is now up 50-points. Decision time. It's obvious to those who have missed the last 700-point rally, that they better act now or they will miss the next 10% move. Buy, buy, buy!
The Dow closes up 180-points and there is chaos on Wall Street. The news of the reversal is the top story on every TV and radio station, and every news related website. Joe-Sixpack sees the news while eating his evening meal and thinks that it may be time to call his broker in the morning to see what is going on.
Some of the more savvy TSP participants, who are pro-active in their accounts and had run to the safety of the G and F-funds, are now logging in to make interfund tranfers to get back into the stock funds, but of course they have to wait a couple of days before it takes effect.
The next morning the Dow gaps up another 150-points. It appears to be the real deal, and the buying continues throughout the day as the Dow tacks on another 500-points. In just over 24-hours the major indices are up about 25% from the lows they made just one day earlier.
And that my friends, is a whooosh! It's happened before, and it will happen again.
I'm not saying that it will happen today or even in the next few weeks (although it very well could). But I believe that's is a very good possibility of how it will go.
The spoiler to the story is that the low made will probably get tested again at some point, and we'll go the through the whole, "is this the bottom" talk again. Tune in to see how it ends.
View the entire article here.
