arwen... I think we are near bounce levels. I don't think the market dropped this fast in 2008. Should be a bounce in a day or two. Bounce how far ?.... I dunno.
But I will say this, the S&P has left three gaps that should get filled. The highest one being around 1330. I'll look for a rebound to that level. You people might think I'm nuts with these S&P gaps. But I've done my own study now for some years, S&P has not left a gap unfilled as yet.
The S&P needed to hit 1348 to the upside to fill a gap. I stated that was the level I was looking for the market to rebound to. On July 21, the market was trading around 1345 and could not seem to make 1348. I was watching CNBC at the time. CNBC announced that the congress was near a resolution on the debt ceiling. The market jumped up to 1348 and faded back. Then CNBC announced that it was not true that there was any resolution and the market faded more. I found the whole thing quite interesting.
Last week, markets sold off hard. It appears that it was known that the S&P credit downgrade was coming.
For a good bounce I also like POT MOS CAT DE & FCX. I especially think in light of silver and gold prices that FCX is cheap. Copper got hit hard today, but is still selling for $3.92. One year ago copper was below $3.50, gold around $1200, and silver below $20. At that same time FCX was trading for around $38. FCX is very close to a buy in my view.
I nibbled today some L&G, CLNE & SD & EUO. Time to start lightening up on the short side and get long. I'll stick with ZSL. Silver not acting as strong as gold, silver only up half as much as gold today.
<For a good bounce I also like POT MOS CAT DE & FCX.>
But I wouldn't touch any of them long term. I have been saying forever commodities were up because of the fed handing money to Goldman/the banks. Those days are over. Banks got killed today, and they are going to get smacked in the mouth if they cry to Congress or the Fed.
Look at stuff with yield. HMH has gotten killed. It is now yielding north of 10% and is well diversified. Bond yields save for treasuries are up because of the S&P downgrade which is stupid. What did treasuries do today? They went up in value and down in yield, and so will all the other bonds eventually.
Cash or investments that put off cash are king. The days of fiat currencies are not over. They may be 20,50 years from now, but not in the next five or ten years. We are still having deflation. Housing and wages, the two most important items in terms of wealth and income, are still down from 2007. Don't get fooled into thinking things are going to get better. They are not.
All these supposed huge corporate earnings were sugar coated. Corporations weren't hiring because they knew demand stunk.
Forget about high growth stocks like Apple, Google ETC. I repeat, buy things with yield. Look at corporate bonds and corporate bond ETFs. I wouldn't buy them in free fall, but in 2008, I was able to buy airline bonds and other bonds with 30 and 40% yields, and if things hold to pattern, I may be able to again.
<<< But I will say this, the S&P has left three gaps that should get filled. The highest one being around 1330.>>>
Typo or brain fart I don't know... but that S&P number should have been 1230.... sorry.
RG, I appreciate your analysis. I hadn't thought about or looked at the S&P gaps.
Hopefully we do get a bounce. Look at the VIX....all time high suggests some relief in sight I hope.
I like nothing but shorts.
FCX is a gold and copper play that is below its November level and has been trending down for MONTHS. I say NO WAY will it turn up in the near term.
All that heavy equipment stuff... in a global recession: No Way
Potash: I have direct experience last time around. Potash falls when the broad market falls in a recession. Period.
I hope you were joking, at least about the broken leg!