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ProShares Ultra Dow30 Message Board

  • eyefo eyefo May 4, 2010 10:54 AM Flag

    Bully Takes A Tumble

    My My!

    Down 228, 11000 suddenly looking awfully far away.
    (I could make the analogy of being near the top of Mt Everest and every ten feet seems to the climber like 1000 feet due to the thinness of the air... but I won't)

    TRIN is a nasty 1.99 (that would be just in the Grizzly area)
    A number of stocks falling below their 50 DMAs, breaking support and so on.

    I added to my existing positions, except MDT which I covered since it was not working. (Davenport, please tell this to your wife, that without even knowing me, her "aura" defeated me and I've learned my lesson!)

    I'm not going crazy though, if this is the real deal, we do have time and a good distance to fall.

    I don't know if it matters much in terms of shorting consumer discretionary, since XRT and RTH are getting smacked, and its high time they do!

    Both of these proxies for the retail sector have broken their recent support and are aimed at their respective 50 DMAs.

    I hope we have bid adieu to 11,000 for a long time.

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    • Eyefo -

      Yep, it should, but here's the REAL problem.

      Folks dumped their stocks and moved the cash to bonds. Yes, a stock can go to zero. I've owned several that did that.

      Bonds can do the same thing. Think about the domino effect of government and corporations defaulting on bonds worldwide. Compound that with everyone trying to exit the trade at the same time and NO ONE wants to lend money to anyone.

      Now, that's DEPRESSION!

    • Quant trading at its finest. The downside of machines not fundementals running the market.

    • Today will likely put the fear of God in average investors.

      How can it not.

      On one hand if you want to say it was NOT a computer glitch, then you have an incredibly vulnerable, unstable, market.

      On the other hand, if you want to say, "not to worry, folks, just a computer glitch", well.... perhaps that's worse?!

      For month after month market pundits have talked about how well the economy is going, and how you'll make your money back, the banking/CDO crisis of 2008 was a freak event, and now this.

      So here we are, all our retirement money in this fun house bunge jumping market.

      What happens with all that "cash on the side lines" that the perma bulls keep hawking.

      Oh, and BTW, that Greek thing... not a problem, it will be contained.

    • <<Fourth, the S&P 500 "double top" projects to a negative price level.>>

      I think you asked me about this over a year ago, and I speculated that in that case you should ignore the usual measured move. But this is far from certain, and it does bug me.

      <<If you ARE correct, then get long brass and lead, not gold!>>

      And booze and cigarettes.

      Incidentally, my wife tells me that onions here went from .49 to .99 lb. within the last two weeks.

      It's the end of the world, I tell ye!

    • Sorry, I'm not convinced.

      First, the market rallied back. Yep, it's down 350, but we've been there before.

      Second, this was triggered by algorithmic trading. The machines took over. Some stocks went to zero ... WTF? The algo shops took advantage of those stocks, perhaps on both sides of the trade - short it, buy it back, and sell it again. This happened in minutes.

      Third, this is not the first time you see "double tops" in markets. Look at the following decades 1910s, 1960s, 1970s, and 1980s. Start with zero and end in 9.

      Fourth, the S&P 500 "double top" projects to a negative price level. Take Oct. '07 high - Oct. '02 low - 1576 - 769 = 807. A break below the low projects to 769 - 807 = -38. Until today, I didn't think that was possible, but I'm sure the algo boys could make it happen!

      Last point, for you to be correct a complete worldwide financial armageddon must happen. Is it possible? Yes! Is it likely? Besides, what's your hurry? If the Dow drops to 5,000, you have several days to get correctly positioned in the market, unless the algo shops make it happen in minutes.

      If you ARE correct, then get long brass and lead, not gold!

    • <<Well, I decided to sleep all day... anything happen?>>

      Nope. Not to worry. Just an average day in the market.

    • "I lean toward the idea that we're starting a bigger sell-off."

      Of course, that's what you're hoping. But the facts prove otherwise.

    • Well, I decided to sleep all day... anything happen?

    • This is what happens when there are no bids.

    • I said: <<I believe we are now seeing the validity of my argument.>>

      True intraday (if computers can panic). But not true, in general, unless we see a continuing sell-off.

      Some market commentators are saying today was just a technical glitch---at most a temporary phenomenon.

      I don't accept this. I lean toward the idea that we're starting a bigger sell-off.

      Where's Eye?

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