Saturday, August 11, 2007

Is the Sky Falling ? Part 2

The first image above this post is today's front page of the New York Times. It tells us that yesterday central banks around the world intervened in the money markets to prevent panic from spreading. The second image is today's front page of the Chicago Tribune telling us that jittery markets are looking to the Fed for help. The third image is from yesterday's Business Week Online edition and needs no explanation. The associated article "Keeping the Bears at Bay" can be found here. The top image is today's cover of Barron's. The headline : "Market Turmoil". Notice the classic colors of fear, black on red.
My conclusion? Same as yesterday's. This market is going up.


PMK said...

Carl, we all agree with you this market is a screaming buy around current levels.Investor angst is at levels normally associated with meaningful market bottoms. The NYSE Arms hit a very elevated 2.97 Friday morning. The VIX is at the highest level since early 2003. The ISE Sentiment Index 10-day moving average is at the second lowest reading on record. The CBOE total put/call 10-day moving average is also at the second highest reading on record. Money market funds, this week, saw $36 billion in inflows, the most since 2005. As well, the average 30-year mortgage rate fell nine basis points this week to 6.59%. This is down from 6.73% three weeks ago. Trading had a panicky feel again on friday even as global central banks inject further liquidity into the system. Insider buying in general has soared recently, but especially so in financial equities even as investors stampede out the door, according to In fact, this round of insider buying is led by the troubled financial industry, particularly among real estate investment trusts and other companies exposed to the subprime mortgage fallout. Bottom line > BUY

Anonymous said...

Absolutely, I salute to the bulls... this market is headed a lot higher. Risk/Reward definetly
on the side of the Bulls.

Anonymous said...

Carl , the sky is only falling if you are so ignorant and have not bought friday morning after the weak hands sold in a panicky fashion. I agree this market is going higher... and I mean a lot.

Anonymous said...

This credit mess is's like having your wife using the family credit card and she can't remember what she bought or how much she spent. The bills are now just starting arrive in the mail. Sure we can use another credit card to pay off first....but that will only add to our problems later. Markets don't like the unknown, how many more hedge funds are in trouble?

Anonymous said...

Rally next week seems very reasonable.

A rally next wee does not mean the bull is back.

The length and extent of this credit problem is unknowable at this point, but it does not look like it will end in days. My guess would be weeks or months.

Get ready for an interesting ride!

Anonymous said...

my take is this
the mkt is done in this corrective process , and while i believe
there is more upside to come in the longer term i stiil faovr a decline towards 12200 before the end of the yr . next yr mostly a sideways move in the elections
and then another leg to the upside
to follow into 2010 . technially bottoms to come in with the 10 ad line making its momentum lows
the print lows usualy follow as this 10 adline makes a higher low
time wise we have another at least another12 months left before we begin the next leg higher , in the mean time we will stay with in a range bounce market basis the dow
12180 and 13500 . short term this next move up should not make new all time highs and for the month ending augest 2007 a close in the area of 13500 should be expected
and then a long choppy decent into feb 2008 before a sideways trend sets in . the season for home sellers and buyers is over , the realestate mess should be subsiding yet there will be no solid proof of improvement untill next yr as most homebuyers like to be moved in before school begins
lastly many stocks most likely are makeing there prices lows now yet
we will still need to see a wash out after this secondary peak towards month end . in short we are going to see a 5 point sideways swing over the next 12 to 15 months . forget trend trading
and take what you get on both the upside and the down side .
thats my story and im sticking to it

Anonymous said...

There is so many people telling we bottomed and so many "experts" interviewed saying that "this is not a problem and the situation is under control" that I have some difficulties to imagine that we are going to see new highs.

I'll be bullish when "experts" on CNN, CNBC, Bloomberg ... will all have "end of the world comments".

These so called "experts" did not see any sign of the current fall ... how can they be trusted in the current situation ?

Anonymous said...

You must be just a little troubled at the bullishness of most the above commentators. "Screaming buy", "this market is headed a lot higher", "the sky is only falling if you are so ignorant"....comments like this would seem to indicate there's more to be done on the downside.

Jay Strauss said...

I am NOT the BEST Ew guy, but A simple veiw fo the current market seems to be looking at a top at dow 14k,
An "A' wave LOW at dow 13,200 on Aug3rd,and a "B" was high on Aug 8th.

Next would aboviously be a C wave DUMPING, and Im expecting it to occur on Aug 13 and 14.
best wishes
NO knew highs this year.

Anonymous said...

Carl - Thanks for posting the front you point out they are often excellent contrary indicators.

I saved the Barrons dated Sept 4, 2000, which was right at the exact secondary S&P high of 1530, and just prior to the start of a 500 S&P point plunge.

The cover of Barrons shows a speeding express train churning out a river of dollars with the headline "Can Anything Stop this Economy"?

Uh, that would be yes.

Anonymous said...

I love the plastic bear! Gave me a much-needed laugh after last week..

Anonymous said...

" "Screaming buy", "this market is headed a lot higher", "the sky is only falling if you are so ignorant"....comments like this would seem to indicate there's more to be done on the downside. "

Excellent comment from someone IMO, but that does not mean we will not see a rally next week. I think the comments do point to a series of rallies that keep on failing until we hit bottom. Those positive comments should all disappear when we really have reached bottom - whenever that is.

Anonymous said...

I don't do alot of posting on other blogs but it is amazing to see people so bullish because sentiment is so bearish. That is pure horse shooey. Was anyone alive in 1930? 1931? Or many other times when headlines were negative and the markets fell? I can easily explain the headlines and the negative news. It is one thing to be a contrarian yet another to know when bad news is indeed bad news. The market will resume its down trend soon enough.

Anonymous said...

I continue to enjoy and appreciate your insightful contrarian observations and commentary.

In trying put together some of the pieces of information that you publish on your blog along with various other sources, I can't help but think of one of your predictions for George Lindsay's point 23 being reached in July. I am expecting your near term bullish rally based on climbing the "wall of worry" for the SPX back up to the 1500's over the next few days to weeks that would complete your point 25 for the Dow Industrials.

Obviously,I no longer expect new market highs in the next few weeks or months but a volatile choppy trading range with a generally sideways to downward bias.

I guess you could add me to your contrarian list as generally neutral to bearish for the near to intermediate term for the broad market averages pending the internal strength characteristics of the next rally.

I personally think that bulls may climb the short term wall of worry, but if derivatives have "just begun" a full blown meltdown, the extent and magnitude of the damage may be currently underestimated and bulls may have a another wall of worry to climb but from lower market average levels.

Perhaps a contrarian perspective would include capitulation of many permabears who remained bearish until as recently as this past year as market averages approached new highs, the soothing words recently issued in press releases by public officials, and central banks around the world publically advertizing the injection of hundreds of billions of dollars in only a few days along with many other classically bullish indicators that may have now caught some entities on the wrong side of the market.

Anonymous said...


You are completely missing it. Who are you fading here? The journalist or the general public. Go to yahoo finish and check out the latest poll.

Out of 300,000k votes.
33% thinks this is a BUYING opportunity.
56% thinks it's best to HOLD.
12% said to sell...

88% remains FULLY BULLISH!!!!

Anonymous said...

Screaming buy here, too many doubters and pessimists.
This market is going up on monday.
Dow should make new highs very soon.
Option expiration week will squeeze
the shorts and as usual the underinvested crowd will have to buy at the top.

Anonymous said...

pmk should to see the stockmarket the breakfast- 21 agoust- and not killed with the toasted because of the panic.
jajajajajaja the Big crash are here.