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Guest Post: Market Dislocation: Dow 11,908?

Tyler Durden's picture


Submitted by Charles Hugh Smith from Of Two Minds

Market Dislocation: Dow 11,908?

I've got a bad feeling that the Great Intervention Rally of 2009 - 2011 is about to hit an iceberg.

January 2011 is eerily reminiscent of January 2000
. Ignoring warning signs of being overheated and overloved, the stock market rose month after month, defying doubters.

With 12,000 within one good day's run, the Dow reached 11,908 in the week of January 10, 2000, and then rolled over. The next week it sprinted again for 12,000, hitting 11,834, but alas, the mighty advance was over. The S&P 500 topped out a few months later and then started down a relentless three-year slide.

I sense a dislocation coming in global markets.
For goodness sakes, don't put any money on it (please read the HUGE GIANT BIG FAT DISCLAIMER below), as the timing of the dislocation is unknown.

Technically, we're in the zone where the Dow rolled over in 2000. Depending on whether you track weekly closes or intraday highs, that zone extends from about 11,725 to 11,908. As I type, the Dow is at 11,745.

That could be important, because that spike in 2000 looks like the left shoulder in a multi-decade head and shoulders pattern. The current Central Bank-goosed advance could be the right shoulder. If so, the coming dislocation could be deep and prolonged.

Here is a chart of the Dow JOnes Industrial Average, 1977 - 2011.

The S&P 500, meanwhile, has traced out a gargantuan double top. Optimists can discern the possibility of a triple-top, but I doubt the Central Bank interventions that have goosed the SPX to these heights can work their magic long enough to push the index 300 points higher to complete the triple top pattern. (As I type, the SPX is 1,285.)

What is the basis of my doubts? I think Michael Panzner of Financial Armageddon has pegged the macro situation exactly: the Federal Reserve and the other central banks, and all the governments frantically borrowing and spending trillions of dollars on fiscal stimulus and financial bailouts, are assuming this is merely a cyclical downturn which can be "cured" by massive intervention with a time-stamp of a few years.

Well, the clock is ticking, and the authorities have borrowed, printed and pumped unprecedented sums of money into the global economy to "get it through this rough patch" for two years.

Authorities are claiming the "recovery" is now "self-sustaining." Fine: then stop the QE2 goosing of the stock and bond markets, and cut Federal spending by $1 trillion, returning the deficit to "only" $500 billion a year rather than $1.5 trillion a year.

Does anyone seriously think the economy and stock market will continue "recovering" if the trillions in intervention and stimulus were pulled?

But as Panzner asks: what if the downturn is structural rather than cyclical? In that case, the central banks and Central State authorities are simply digging a deeper hole with every loan, every bailout, and every deficit.

Many of us have spent years describing the myriad ways that the global economy is indeed in a complex, interlocking chain of structural challenges. The idea that the imbalances in the global economy can be "cured" with permanently high levels of borrowing and spending and continued intervention to prop up equity markets is absurd.

Which brings us to the coming dislocation. The stock market is famously supposed to be a discounting mechanism which looks out six months. The Fed's QE2 POMO support of the stock market is set to expire in summer, so the market has at best five months of goosing.

Is the smart money going to wait until May to exit, stage left? Why take chances after a stupendous run-up since August? Why not take profits now and let the chumps play the game of holding on for the last dollar of profit?

I like the absurd precision of 11,908 as a target for the final stage of the Great Intervention Rally of 2009 - 2011. Maybe we get there, maybe not; but technically, we are in the sweet spot to roll over hard and complete the right shoulder of a long-term head and shoulders pattern.

If you prefer a fundamental-analysis reason for a dislocation, then please read the Wile E. Coyote Economy by David Rosenberg, via Zero Hedge.

As the Star Wars guys and gals said: I've got a bad feeling about this.


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Thu, 01/13/2011 - 16:20 | 874011 BigJim
BigJim's picture

Did they have POMO and QEn back in 2000?

Methinks not.

Thu, 01/13/2011 - 16:22 | 874026 bob_dabolina
bob_dabolina's picture

Who needed pomo when you had 50, 60, 70, 80,  100:1 leverage?

Same shit. We all know how that ended.

Thu, 01/13/2011 - 16:23 | 874033 SheepDog-One
SheepDog-One's picture

Right they didnt have Imagination Land back then, and they still dont have it today either. 

Thu, 01/13/2011 - 16:33 | 874086 Rogerwilco
Rogerwilco's picture

Greenspan was seriously spooked by the prospects of a Y2K bank run. The Fed dumped hundreds of billions into the system in the late '90s to preempt any troubles -- roughly the equivalent (in todays dollars) of the combined TARP/POMO subsidies.

Thu, 01/13/2011 - 16:45 | 874152 Pool Shark
Pool Shark's picture


I've had the same feeling all day even before reading this post.

US$ off bigtime.. should be helping equities and metals, but everything's down today: stocks, metals, muni's, commodities (except ag)

Feels like.... deleveraging

Thu, 01/13/2011 - 16:50 | 874177 SheepDog-One
SheepDog-One's picture

Back in 2000, they actually HAD billions! Today? Empty bottomless pit of debt.

Thu, 01/13/2011 - 16:58 | 874223 JW n FL
JW n FL's picture

The bottomless pit of debt does have the full force of the United States Marine Corp. behind it!

Thu, 01/13/2011 - 18:51 | 874651 velobabe
velobabe's picture

just my 2¢'s, but i think these jokesta's who know the dumb damn numb american, just can't fathom what these numbers represent. i sure can't, i can't even imagine a trillion dollars is, means = nothing to a layperson like me. they know this about the people in this country. i mean i would like to have the true grasp of what these numbers and figures mean. they just come from no where and doesn't impact my mind. i think the rest of american is on my same flight path. i sure bernank and comp know this to be true in the general american populace.

Thu, 01/13/2011 - 20:14 | 874857 JW n FL
JW n FL's picture
by velobabe
on Thu, 01/13/2011 - 17:51


just my 2¢'s, but i think these jokesta's who know the dumb damn numb american, just can't fathom what these numbers represent. i sure can't, i can't even imagine a trillion dollars is, means = nothing to a layperson like me. they know this about the people in this country. i mean i would like to have the true grasp of what these numbers and figures mean. they just come from no where and doesn't impact my mind. i think the rest of american is on my same flight path. i sure bernank and comp know this to be true in the general american populace.


1st great pics from you always, God Bless You!

2nd... its not money, its not paper... it is "1's" and "0's"! being moved from point "A" to "B".

3rd... and most importantly... people, I will use my Mother as an example... My Mother gets her Bank Statement every Month and it says she has "X" amount of dollars in her Bank account... which the FDIC does protect to any amount now as described by her Personal Banker...

Now in walks me... with this in hand...

Operation 1 - RESULTS Operation Date: 1/13/2011 Operation Type: Outright Coupon Purchase Release Time: 10:15 AM Close Time: 11:00 AM Settlement Date: 1/14/2011 Bitmap
Maturity/Call Date Range:

07/31/2016 - 12/31/2017 Total Par Amt Accepted (mlns) : $8,412 Bitmap
Total Par Amt Submitted (mlns) :

$20,995    Inclusions: Bitmap

  CUSIP ID Security Description Par Amt Accepted ($) 912828LD0 T 03.250 07/31/16 3,000,000 912828FQ8 T 04.875 08/15/16 0 912828LL2 T 03.000 08/31/16 168,000,000 912828LP3 T 03.000 09/30/16 93,000,000 912828LU2 T 03.125 10/31/16 337,000,000 912828FY1 T 04.625 11/15/16 3,000,000 912810DX3 T 07.500 11/15/16 101,000,000 912828MA5 T 02.750 11/30/16 377,000,000 912828MD9 T 03.250 12/31/16 115,000,000 912828MK3 T 03.125 01/31/17 184,000,000 912828GH7 T 04.625 02/15/17 12,000,000 912828MS6 T 03.000 02/28/17 559,000,000 912828MV9 T 03.250 03/31/17 167,000,000 912828NA4 T 03.125 04/30/17 416,000,000 912828GS3 T 04.500 05/15/17 236,000,000 912810DY1 T 08.750 05/15/17 165,000,000 912828NG1 T 02.750 05/31/17 51,000,000 912828NK2 T 02.500 06/30/17 26,000,000 912828NR7 T 02.375 07/31/17 51,000,000 912828HA1 T 04.750 08/15/17 239,000,000 912810DZ8 T 08.875 08/15/17 101,000,000 912828NW6 T 01.875 08/31/17 0 912828PA2 T 01.875 09/30/17 267,000,000 912828PF1 T 01.875 10/31/17 98,000,000 912828PK0 T 02.250 11/30/17 852,000,000 912828PN4 T 02.750 12/31/17 3,791,000,000 Bitmap

   Exclusions: Bitmap

  CUSIP ID Security Description   912828HH6 T 04.250 11/15/17

and..... so on for the year prior...


and I say... Mr. Personal Banker of my Mother... what effect does this have on my Mothers Monies that are located in your Bank and NEVER, EVER change?

Is my Mother living with a false sense of security?

well....well.... well.... well.... is the answer.


So whether or not You understand how the money is moved (Not Printed) or not is not at issue..


Do You understand that $1 last year was part of "X" amount of other dollars... 12 months ago.

Now do you understand that Ben has printed 30% more money since then (Lite number 30%, to date.. please anyone tell me I am wrong by 2 fucking %... I dare you!)

Thusly, Your Money in the Bank... that looks the same as it always did is in fact worth that 30% he printed less...

The idea that things will turn, sounds great... I like things that sound good / easy, just like everyone else...

BUT! they might not. and that is as well a Blatant Fact.

So, while you can... stock up on things that you need, then things that you want and then things you where going to wait to buy when the time was right.. becuase shit, is cheap as it going to ever be again (in almost all cases).

Do you own silver? how would you trade with someone in the event that all things in the world did not go perfectly? gold? 1 oz.? pieces... you are a big spender then. good for you, but think about being prepared.

as well...

you can have all the gold and silver / platinum and / or whatever.. food / medicine... but if you cant keep it, then you dont really own it. 9 10ths of the law is possesion.

so, get an extended clip, a few of them... and load them up. or... follow this video advice from Ron White!

The reality, is your quality of life will not change.. other than your food / gas / and / or other is more expensive equal to Ben's printing (and hoping and for inflation) at least... but other than that, "1's" and "0's" being moved from here to there.. dont really matter...

if this doesnt make sense... then watch this..

Thu, 01/13/2011 - 21:42 | 875072 velobabe
velobabe's picture

bless you bro, glad someone invented R O C K  n  R O L L †

Thu, 01/13/2011 - 22:56 | 875195 StychoKiller
StychoKiller's picture

Assuming a dollar bill is only 6 inches long, a Trillion of them would reach from the Earth to the Sun (98 Million miles) with room to spare!

Thu, 01/13/2011 - 16:21 | 874015 Misean
Misean's picture

In 2000, Greenslime was slowing the rate printing. B.S. Bernutty hasn't just kept the throttle steady, he's put pedal to metal.

But what does a number based on fiat mean? 11,908 in Y2K Greenslime bucks (gold was 260ish) is like 52,000 Y2K11 Bernutty bucks.

Thu, 01/13/2011 - 16:21 | 874017 Bartanist
Bartanist's picture

If it happens again, what TPTB need to do is take that opportunity to restructure the banking industry when things are down.

Break up the mega-banks and write off everything that is even close to crap. Then lets get a re-set based on fundamentals instead of HFT power and leverage.

Thu, 01/13/2011 - 16:26 | 874050 SheepDog-One
SheepDog-One's picture

Yep! Theyll certainly have learned their lesson THIS time, and realize it time to seriously reign themselves in once and for all for the good of the peasantry.  ;P

Thu, 01/13/2011 - 16:22 | 874023 SheepDog-One
SheepDog-One's picture

I personally hope all the permabulls get caught in a few major down drafts, confident Bennie will come save the day for them while they watch it all continue to slide down. Theyre at the end of their rope, calls for more Q/E's out into infinity are just nonsense, they're fooling no one.

Thu, 01/13/2011 - 17:06 | 874270 duo
duo's picture

The close before Intel's earnings in 2000 was the high, right?

Thu, 01/13/2011 - 16:22 | 874024 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Could the U.S. Dollar rise 50%?

"It is well within the range of possibility that both bonds and stock markets will experience 25% declines....meanwhile the vast debts remain...a mad rush for U.S. ensues..."

Thu, 01/13/2011 - 16:44 | 874146 abalone
abalone's picture

Go "The Duke" with scoop

I like it

Thu, 01/13/2011 - 16:22 | 874025 Deep
Deep's picture

Correct me if i am wromg, I do not see DOW hitting 11908 first week of Jan. 2000


Thu, 01/13/2011 - 16:23 | 874031 RobotTrader
RobotTrader's picture

Maybe gold stocks are telegraphing an epic crash in risk assets.

After all, they always decline 3x faster than anything else in a "dislocation".

As of now, bank and retail stocks remain unfazed.  We'll have to see if they crack to confirm gold's weakness.

Thu, 01/13/2011 - 16:29 | 874066 Bill Lumbergh
Bill Lumbergh's picture

Would you characterize today's action as "bludgeoned" or just "blowtorched"...also would this action be on "world record volume" or just "national record volume".


Thu, 01/13/2011 - 16:31 | 874077 SheepDog-One
SheepDog-One's picture

Robo personally I think youre talking out of your ass.

Thu, 01/13/2011 - 16:38 | 874112 Sophist Economicus
Sophist Economicus's picture

Is that what that smell is?

Thu, 01/13/2011 - 16:41 | 874129 SwingForce
SwingForce's picture

If your feet smell and your nose runs, you're built upside down.

Thu, 01/13/2011 - 16:36 | 874102 erik
erik's picture

XRT (retail) has not regained its highs along with the major indices.  XLF (financials) is still below April highs for now.

The major non-confirmation of a market selloff occurred today with the USD dropping beneath its 50 day moving average.  The confirmation of a potential selloff still has 4 signals supporting it; copper, crude oil, 10 year, retail.

Thus 4 of 5 are not sounding the all-clear signal just yet.

Thu, 01/13/2011 - 16:40 | 874124 Robot Traders Mom
Robot Traders Mom's picture

Come up stairs honey. Your trench coat friends are here to play world of warcraft again.

Thu, 01/13/2011 - 16:44 | 874126 AGoldhamster
AGoldhamster's picture

Roboboy - as a whole in your camp - since already early this european morning:

132x, 128x and 126x my next targets. Though not sure whether all will be hit. But anyway for those positioned on the right side of this raid - a lot of fun. As with the profits later - at the lows - we will have enough power to double up the longs ... long live white witch Blythe ... and blythe bitchez 

Thu, 01/13/2011 - 16:57 | 874214 trav7777
trav7777's picture

I have been wondering the same thing as the HUI and XAU fail to confirm the POG.  But, at the same time, the TLT continues its epic slide.

Bank and retail stocks won't be the place to be during such a crash...but given price dynamics lately, there is nowhere to be.

Thu, 01/13/2011 - 17:02 | 874243 JW n FL
JW n FL's picture

Like or Love what he says... he bases his comments in numerical facts and historical trends. FACT! and then he takes his time to come here and share his findings. so that you fucking monkeys fucking a football can bash him.


so, allow me to once again remind everyone here.. we are on the same team, like it or not.


Robo was down for a while last year and missed while he was gone...


So unless you can fucking show a chart where Robo is wrong... junk your momma or your wife / sister.

Thu, 01/13/2011 - 17:10 | 874290 abalone
abalone's picture

Well said...I must say your new avatar has softened your image a notch too

Thu, 01/13/2011 - 20:20 | 874882 JW n FL
JW n FL's picture

Careful... truth will get you junked, no one likes ugly facts... thusly its my fucking fault shit is fucked up and I tell the truth...


as for the attack dog! highly trained to jump and lick any and almost all people! Divorce will make you meaner and nicer all at the same time... I am not always as angry as I used to be, just some times now.

Sat, 01/15/2011 - 00:26 | 878294 abalone
abalone's picture

Glad to hear. You certainly weren't scared that's for sure. Somehow the ZH landscape has shifted as I also recall many waiting for Robo's unprecedented humorous market wrap ups. Oh well, I'm sure there will be a Renaissance some time soon.

Thu, 01/13/2011 - 17:06 | 874273 malikai
malikai's picture

Queue QE3 and the flight to commodities and metals to follow.

Or, queue the deflationary spiral that wipes out everything.

I wonder which choice our overlords will make.

Thu, 01/13/2011 - 16:23 | 874035 unwashedmass
unwashedmass's picture


couldn't agree with this more. we coming to a terrifying moment as all the intervention fails.

Thu, 01/13/2011 - 16:24 | 874041 Apostate
Apostate's picture

Why worry if rates are going to stay nigh zero?

Dow 72,000. Even if munis start to crack up, that money will have to go somewhere, and it won't be under the mattress. 

Thu, 01/13/2011 - 16:29 | 874058 SheepDog-One
SheepDog-One's picture

DOW is already at about 182,000 in Benniebux, priced in 2000 Greenslime $250 gold correlation.

'The money has to go somewhere and it wont be under the matress'.....far wiser place for that money to go is into stockpiles of long term food stores, firearms and ammo.

Thu, 01/13/2011 - 16:44 | 874148 ssp2s
ssp2s's picture

"Why worry if rates are going to stay nigh zero?"


A million or so Tokyo housewives already have the answer.

Thu, 01/13/2011 - 18:03 | 874500 Apostate
Apostate's picture

That's a good point, except for that our favorite chairman "invests" vigorously into stocks, especially through his friends in investment banking.

Thu, 01/13/2011 - 16:24 | 874043 unwashedmass
unwashedmass's picture


note the intervention right now in the gold/silver markets where the CBs are now methodically walking the both of them down.

what happens when they stop?

Thu, 01/13/2011 - 16:25 | 874045 Whalers
Whalers's picture

Right on the money. 

Thu, 01/13/2011 - 16:30 | 874070 HarryWanger
HarryWanger's picture

This ain't 2000. It ridiculous when people data mine charts to try and predict the future. Different time, different economic environment. We have tons of money being thrown into this economic machine to power it forward. That didn't happen in 2000. This will go on for some time, TPTB have no choice.

Thu, 01/13/2011 - 16:32 | 874081 SheepDog-One
SheepDog-One's picture

Money throwing is over, now get back in that store room and pack up those dildoes! Housewives of america are depending on you Harry!

Thu, 01/13/2011 - 16:36 | 874104 fiddler_on_the_roof
fiddler_on_the_roof's picture

Funny. I like different views which Harry provides. But this is funny.

Thu, 01/13/2011 - 16:40 | 874127 duo
duo's picture

NSA plant

Thu, 01/13/2011 - 16:43 | 874143 High Plains Drifter
High Plains Drifter's picture

He is researching the ZH bears.  I wonder how much longer he will be around here.  When his stores are burning and being looted , and his Chinese made junk is being carted off, by the car trunk full, ala 1992 in Los Angeles, nobody around here will care.

Thu, 01/13/2011 - 16:48 | 874166 High Plains Drifter
High Plains Drifter's picture

I wonder if his stores sell that shitty Chi com furniture that makes people sick.

Just a note to anyone that reads this. Do not and I repeat, do not buy any furniture or office chairs made in China. Gads, the things smell bad with a strong chemical odor.

Thu, 01/13/2011 - 16:52 | 874188 SheepDog-One
SheepDog-One's picture

Probably shipped with bedbugs and lice in em as well.

Thu, 01/13/2011 - 21:56 | 875101 The Profit Prophet
The Profit Prophet's picture

"Wangers Discount Dildos"....its got a nice ring to it.

Thu, 01/13/2011 - 16:35 | 874096 bob_dabolina
bob_dabolina's picture

You're stinking stinking up the place Harry.

Thu, 01/13/2011 - 16:38 | 874115 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

" It ridiculous when people data mine charts to try and predict the future."


Wow...  just wow...


How's the psych paper coming?

Thu, 01/13/2011 - 16:49 | 874171 downrodeo
downrodeo's picture

"How's the psych paper coming?"

+1 too funny!

I hope TD will reprint it as a guest post; ya know, just for the entertainment value...


Thu, 01/13/2011 - 16:41 | 874130 kornholio
kornholio's picture

wanger you have got to be the most clueless person on this blog

Thu, 01/13/2011 - 16:47 | 874164 HarryWanger
HarryWanger's picture

Really? Look at SPX, it can't even fall past 6 points without dip buyers rushing in. You tell me who is clueless. I'm looking at what's in front of me not something that happened 11 years ago and trying to make it fit. It doesn't fit. Just look at the tape.

Thu, 01/13/2011 - 16:54 | 874201 Sophist Economicus
Sophist Economicus's picture

Oh Harrrrry....The 'dip buyers' are buying from 'top sellers'....SPX barely above LAST JANUARY's high with a lot of ping-ponging in-between.   That is one shitty risk/reward profile -- especially when you factor in dollar purchasing power loss. 

Thu, 01/13/2011 - 17:07 | 874278 SheepDog-One
SheepDog-One's picture

Buy da top, Harry!

Thu, 01/13/2011 - 16:41 | 874133 Rogerwilco
Rogerwilco's picture


It was early March 2000, my birthday to be exact, and I logged on to my trading account and laughed out loud. Everything was green and up big, some gains were over 800%. My ten year old daughter was leaving for school and she asked me what I was laughing about. I told her that all of my stocks were waaay up and she said I should sell some because it was my birthday.

I didn't take her advice, but I remember the lesson well.

Thu, 01/13/2011 - 16:41 | 874136 Robot Traders Mom
Robot Traders Mom's picture

Harry-I wouldn't be short the anal bead market right now judging from the collection I saw at your house last night

Thu, 01/13/2011 - 16:59 | 874162 Ferg .
Ferg .'s picture

Yes , it isn't 2000 . In 2000 unemployment was just over 4% . In 2000 municipals weren't at risk of insolvency . In 2000 the national debt , at $5.65 trillion dollars , was less than half of what it is today . In 2000 the housing market wasn't in tatters .  And despite all the cheap cash and negligible interest rates things still aren't much better .

Thu, 01/13/2011 - 17:05 | 874265 JW n FL
JW n FL's picture
by HarryWanger
on Thu, 01/13/2011 - 15:30


This ain't 2000. It ridiculous when people data mine charts to try and predict the future. Different time, different economic environment. We have tons of money being thrown into this economic machine to power it forward. That didn't happen in 2000. This will go on for some time, TPTB have no choice.


We will see 12,500 Plus... and it will run 24 hours a day on TV News Channels about how great eveything is.


If you dont like what Harry says that is one thing, I dont like the FACTS... but they are the Facts!

Thu, 01/13/2011 - 17:09 | 874286 SheepDog-One
SheepDog-One's picture

Nothing is a fact until it has already happened. BTW who cares what the DOW prints, when youre staring at $6 gas and $20 6oz coffee at the store?

Thu, 01/13/2011 - 20:23 | 874886 JW n FL
JW n FL's picture

Yes sheep dog... see above for my long winded description of exactly that...

Ben will print, he has said it.. and it will continue until he is gone...

12,500 looks good on Faux News and CNBClueless, both... sprinkle a little inflation magic in and we are already above 12,500.. Oops?

I dont like it, but it is a Fact.

Thu, 01/13/2011 - 17:16 | 874315 the rookie cynic
the rookie cynic's picture

I'm not sure Bennie and the Feds will tolerate a crash. Not sure they can stop one, but it'd be major egg on their faces if DOW bombed. So I suspect they'll try to keep it sneaky (print and debase) rather than suffer a patent sell-off in equities. I think a debased dollar and higher stock prices might be the more likely outcome. Just a guess. Same disclaimer as above. I'd like to know what other's think about this.

Thu, 01/13/2011 - 23:15 | 875231 JW n FL
JW n FL's picture

Someone post the Bernake interview for the new guy please...


rookie.. look man, he (Ben) said he was going to print... he even offers up a schedule so you can front run the printing... treasury pomo schedule


So, we dont think... he will print... I just showed you when.. and there he was on 60 minutes expalining why hes going to print.

Thu, 01/13/2011 - 23:16 | 875234 StychoKiller
StychoKiller's picture

Brawndo!  It's got what plants crave!  As any Doctor will tell you, you have to be d@mned lucky to prescribe the right treatment when the diagnosis is wrong!

Thu, 01/13/2011 - 16:33 | 874087 Deep
Deep's picture

Hello, I posted earlier, According my charts and looking at historical prices, DOW did not hit 11908. Please explain too me, I am confused.

Thu, 01/13/2011 - 16:54 | 874196 SheepDog-One
SheepDog-One's picture

Can you post your chart of what the DOW was on that date then?

Thu, 01/13/2011 - 16:56 | 874211 HonestJohn
HonestJohn's picture

11,722 looks like the high to me Jan 14, 2000...close enough


Thu, 01/13/2011 - 19:05 | 874699 reading
reading's picture

It says in the article -- 11,908 was an intraday high not a closing high.  11, 722 would have been the closing high...weekly close I believe.

Thu, 01/13/2011 - 16:36 | 874099 wswarrior
wswarrior's picture

I don't understand people who pick a point and time like 2000 and think that it has anything to do with today.  Not at all relevant in my opinion as looking at past charts serves no predictive value with respect to stocks.  

Thu, 01/13/2011 - 16:39 | 874122 Deflationburger...
Deflationburger with Fleas's picture

Its different, but Greenspan did boost the last of the tech bubble by slicing rates a ton.  A rate cut in 2000 = $1 Trillion Benniebux today.

Thu, 01/13/2011 - 16:51 | 874180 HarryWanger
HarryWanger's picture

Exactly! That's what I said too. Look at the tape in front of you not the one from some point in the past. The one in front of me (SPX) is being bought on any dip of 5-10 points. There are a lot of buyers jumping on any small pullbacks. And based upon RECENT history, that's a wise move.

Thu, 01/13/2011 - 16:57 | 874217 Sophist Economicus
Sophist Economicus's picture

THat means there are a lot of sellers causing those small pull back too.    Or as we used to say, You Pump before you Dump....But that was in another time and place....

Thu, 01/13/2011 - 17:06 | 874272 mynhair
mynhair's picture

Harry, you continually confuse real buyers with the scum PDs.

Thu, 01/13/2011 - 17:21 | 874329 the rookie cynic
the rookie cynic's picture

Does it matter who the buyer is? (I don't mean from a moral or philosophical standpoint.) I mean, what if it was 10 Saudi Princes, 12 swiss bankers, and a Robo in a pear tree? Would you still "fight the tape"?

Investors hate this Fed crap. I personally hate it, but traders are seeing it for what it isA: Fraud they can take a slice of.

Thu, 01/13/2011 - 23:16 | 875233 JW n FL
JW n FL's picture

Someone post the Bernake interview for the new guy please...


rookie.. look man, he (Ben) said he was going to print... he even offers up a schedule so you can front run the printing... treasury pomo schedule


So, we dont think... he will print... I just showed you when.. and there he was on 60 minutes expalining why hes going to print.

Thu, 01/13/2011 - 16:37 | 874107 antidisestablis...
antidisestablishmentarianismishness's picture

I've been hearing great reasons why the rally is over since about March 12th of 2009.

Thu, 01/13/2011 - 16:39 | 874121 SheepDog-One
SheepDog-One's picture

Then when the rally IS over soon, everyone will be posting 'Well DUH who the hell couldnt have seen THAT comin'!

Thu, 01/13/2011 - 17:06 | 874271 JW n FL
JW n FL's picture

Yes! with all the printing being done... yes.

Thu, 01/13/2011 - 17:06 | 874274 JW n FL
JW n FL's picture

Yes! with all the printing being done... yes.

Thu, 01/13/2011 - 17:02 | 874244 High Plains Drifter
High Plains Drifter's picture

Well its like Charles Biderman has said at least two times on CNBC. Who is buying this market? Of course he knows as well as we do, who is buying this market. The outflows from the mutual funds is continuing again , after taking a break. John Q Consumer is out of the market and has been for a long time. As soon as they recaptured some of their losses, they said au revoir et salut.

Thu, 01/13/2011 - 16:37 | 874108 whatz that smell
whatz that smell's picture

IF asteroid hits earth

AND stock market goes up

THEN bulls are in control

ELSE activate robotroll


Thu, 01/13/2011 - 16:39 | 874118 Takingbets
Takingbets's picture

It is absolutely impossible for that to happen as long as Inkjet Benny is in charge.

Although I am still not participating in this farce due to uncertainty!

Thu, 01/13/2011 - 16:41 | 874135 SwingForce
SwingForce's picture

If silver is down a buck, why isn't JPM flying?

Thu, 01/13/2011 - 16:46 | 874155 AGoldhamster
AGoldhamster's picture

because it has no wings ... hehe

Thu, 01/13/2011 - 17:56 | 874473 Eternal Student
Eternal Student's picture

Pigs can't fly. :)

Thu, 01/13/2011 - 16:45 | 874147 MrTrader
MrTrader's picture

Ladies and gentlemen, I can tell you from my sources that almost EVERY HIGH FREQUENCY TRADING BOUTIQUE is in the process of making several billions in risk free front running money - thanks to the Federal Reserve. Ben and his braniacs have created ZERO JOBS and masses of self proclaimed hedge fund paper millionaires. A COMPLIANCE MANAGER IN ONE OUTFIT is supposed to be multi millionair thanks to BEN´s QE II helicopter injections. Never in my life, I met a Compliance officer taking 7 diggits home. Degoutant!

Thu, 01/13/2011 - 17:07 | 874276 goldmiddelfinger
goldmiddelfinger's picture

Where do I enroll?


Thu, 01/13/2011 - 16:53 | 874193 MGA_1
MGA_1's picture

Unless somebody pushes the wrong button at the fed, I think we should be ok.

Thu, 01/13/2011 - 17:04 | 874259 Rogerwilco
Rogerwilco's picture

I think we should be ok.

Yeah, Ben's got your back -- LOL.

Thu, 01/13/2011 - 16:55 | 874203 Voodoo-economist
Voodoo-economist's picture

turn on log scale, timeline 1945 to 2011 and you will understand why the conclusions drawn in this article are completely wrong. Oddly enough some months ago a 0 spike appeared in bloomberg data so the log scale is useless now. Luckily i saved out that chart. have a look below. the rally from 100 to 1000 looks very similar to the rally from 1000 to 10000, so do the corrections following the rallies. Now get yourself a gold chart for the last correction period and youll see where all the fun comes from...deja vue all over


Thu, 01/13/2011 - 17:05 | 874261 High Plains Drifter
High Plains Drifter's picture

President Bloomberg?  Has a nice ring to it, does't it?  :)

Thu, 01/13/2011 - 18:28 | 874580 Escapeclaws
Escapeclaws's picture

I was struck by that, too. I think CHS is sticking his neck out making market predictions. He's a great critical thinker otherwise.

Thu, 01/13/2011 - 17:00 | 874227 trav7777
trav7777's picture

CHS is foolish...the L shoulder in that chart took 3 years to develop.  We'll still be talking about this 2 decade H&S in 2013 at this rate...

Thu, 01/13/2011 - 17:01 | 874234 mynhair
mynhair's picture

But who is left to sell anything?  86 year old buy and holders that could care less?

Thu, 01/13/2011 - 17:01 | 874236 buzzsaw99
buzzsaw99's picture

The market won't go down until the right people are holding the bag. Therefore, ergo, it will keep going up quite awhile longer.

Thu, 01/13/2011 - 17:08 | 874282 mynhair
mynhair's picture

But the right morons refuse to buy!  So, now what?

Thu, 01/13/2011 - 17:17 | 874317 SheepDog-One
SheepDog-One's picture

But no one IS buying, not here, and not higher. Personally I dont believe this conclusion that the 'new normal' is print and pump to eternity. 'The right people are not holding the bag, ergo, they will keep pumping it up until someone does'? I dont believe that, just as likely they know the game is over now, no benefit to further fraudulent pumping, so the rug is pulled out. OR, some unseen event pulls it out for them...false flag attack, anyone?

Thu, 01/13/2011 - 17:37 | 874398 buzzsaw99
buzzsaw99's picture

'The right people are not holding the bag, ergo, they will keep pumping it up until someone does'?

Exactly. What, pray tell, will stop them from doing this? It will take years at this rate for them to unload at a profit onto the pension funds. Peak to peak seven years is my guess. That would put the decline starting in the fall of 2014.

Thu, 01/13/2011 - 17:01 | 874238 goldmiddelfinger
goldmiddelfinger's picture

Today's Close: Another Miracle on Ice

Thu, 01/13/2011 - 18:40 | 874620 alien-IQ
alien-IQ's picture

not just the closing "miracle" but note the AH no volume 20 point bump in DOW futures. The magic of central planning hanging out like John Holmes at a show and tell party.

Thu, 01/13/2011 - 17:01 | 874240 anony
anony's picture

The only way f'r this market to fall is for a half dozen Financial Jihadists to give back, with usurious interest the trillions in bonuses and secret payments they were given by Hank Paulson and theBenBenank at a secert meeting held in Paris at Theatre Chocotte.

At that meeting they vowed to hold the market up to the minimum 10K level and 1200 on the S & P adding 10% per year via Robo-trading the funds for which will be provided at Crazy Horse once a year hereafter.

No worries, this is a done deal to assure that all fund 'investors' are at least paid back in dollars at par.  They will be mollified even though their dollars will purchase less and less and less than they would today when the retirees one by one leave the work force beginning last year. 

Predictions of imminent crashes or fall backs of 10% are by those who are short this market and will do anything they can to encourage massive selling without which a fall is impossible. 

There will always be a bid to hold the Dow at minimum 11,000 this year, 12,000 next and on and on and on.

Turn a deaf ear to all gloomers and doomers. They have already cost us trillions in paper profits over the last two years.   

Thu, 01/13/2011 - 17:51 | 874453 the rookie cynic
the rookie cynic's picture

You might have a point. Who can sell more than the Fed and the PPT can buy? Why would the sell and crash their debt laden balance sheets? They can't get closer to solvency without prices going up, after all. Make sense?

Thu, 01/13/2011 - 23:17 | 875235 JW n FL
JW n FL's picture

Someone post the Bernake interview for the new guy please...


rookie.. look man, he (Ben) said he was going to print... he even offers up a schedule so you can front run the printing... treasury pomo schedule


So, we dont think... he will print... I just showed you when.. and there he was on 60 minutes expalining why hes going to print.

Thu, 01/13/2011 - 17:07 | 874280 Hubbs
Hubbs's picture

Wait a minute, lets be consistent. Now that every small fry retail investor has yanked his money out of the market, then it's just the big institutional investors left. right? Index funds, pensions, insurance etc-they can't really yank the money out of the market. So then with fewer suckers in the market, the FED can keep the share prices pumped up with fewer and fewer stock purchases on thinner and thinner volume. So how does the market crash if the PDs are doing the FED's bidding and buying the market, and all the toxic leverage machinery out there, which could initiate a vicious feedback sell scenario, at least for now, is deactivated?


Or better yet, how much of the equity market does the FED already own on its balance sheet? Assuming some of these big retail, insurance. pesnsions start cashing in...slowly, allowing the FED to buy them up...won't FED wind up owning a controling share of all the companies?


So...Exactly/ or roughly how much of the S&P belongs to the FED already?

Not a bad Thorn industry in the OMEN triology controling all the world's food source, only the FED will own all the industry, paid for with cheap electrons injected into the financial money printer computers.


Thu, 01/13/2011 - 17:12 | 874285 mynhair
mynhair's picture


Buy the fukking dip!

Morning:  S&P down 3, VXX at 33.72

Close: S&P down 2.2, VXX at 32.99

Thu, 01/13/2011 - 23:13 | 875225 ZeroPower
ZeroPower's picture

The VIX (and even less-so the VXX/VXN) do not track the SPX 1:1.

Thu, 01/13/2011 - 17:19 | 874321 SheepDog-One
SheepDog-One's picture

Equity markets dont matter, commodities, bankrupt states, a worn out military set to revolt...these are the things that matter.

Thu, 01/13/2011 - 17:30 | 874361 Sophist Economicus
Sophist Economicus's picture

Ahhh, all that toxic machinery is many many trillions.   FED hasn't gotten there yet, and never will. 

Also, the markets were way oversold in 3/09.   FED timing may have been brilliant or a coincidence then.   QE2 has not lowered rates, yet that was an intention of the FEDs in August, ooops.   Maybe, just maybe, QE2 or 3 or 4 won't really be as tightly correlated with the asset booms we happen to be seeing now.   First crack in the veneer should be fun to watch

Thu, 01/13/2011 - 18:35 | 874597 Dburn
Dburn's picture

Remember the start of 1999 when everyone said that the NAZ was way overvalued? It went up around 100% that year. This was after a 25% gain in 1998 when the Asian flu hit.
We have one more bubble to go. Lets call this one the Mobile Apps bubble ( the take your money and run). You all think aapl is overvalued, you haven't seen nothing yet. Here are a few stocks that I found that was either a huge Momentum stock in 1999 or a hybrid. They make Apps for mobile devices and has other area of business. One makes the processors that most of these smart gadgets runs on and has a PE of 105

Look at OPEN. What is there to hate about this stock? Well its main product is getting dinner reservations anywhere in the country ( for those who can still dine out) . It came out at around $30.00 a share and is now around $80.00. It has a PE of 157. It happens to write mobile Apps for the various smart phones and Pads.

What this tells me is there isn't enough inventory of Mobile App Stock companies, but never fear Kleiner Perkins is handing out money likes it candy as GS and Morgan Stanley clear the decks for a veritable deluge of "Pure Play" app companies.

Will it be as big as It has the potential. For example forecasters are saying 11-25 Million iPad and 61 Million iPhones will be sold next year (Imagine aapl with a 100 PE), while the Google competitors are hot on the trail. They seem to be selling more but they are coming off a low base while research in motion get virtually ripped apart. Each smart device has and estimate of 10 apps which will get inflated to 100 apps downloaded and paid for which means in the next few years if smart gadgets can hit 400-500 million world-wide, why that's 50 Billion or more in Apps.

They will become more complex as the newer generations of smart shit comes out which means Adobe may very well have a Photoshop for the Android for $99.95 while Microsoft tries to squeeze more out of the Office suite when they realize their mobile smart phone is history.

But it doesn't stop there. Think of all the manufacturing parts companies , accessories ...the whole eco-system that GS will create withy Cohen exhorting people to buy buy buy.

People say there is no more catalyst except for the Fed to move this market up. I say look at the stocks up there and that will give you a hint as to what's coming. remember what happened when Netscape IPO'd in 1995. You can bet Bennie and the Jets are going to back this bubble with everything they don't have. It will be a monster.

The NAZ could get back up to 5300 and then go past that as the old Dow companies jostle for position by showing they are App companies too. Remember Enron should be the rallying cry.

It starts this year and it has a run time of at least two years or maybe longer. Like the last bubble in tech stocks, millions of jobs were created. Then promptly lost when the market crashed. However for a period of time the unemployment number will look good and the deficit will go down as insiders cash out of those FACEBOOK shares they got for 49 cents at $900.00 each.

Small App companies and big app companies. Profit? Don't matter. P/S is what they will shift too and when that doesn't work anymore, valuation comparisons. If company Y has a P/S of 70 then company Z should have it too. That's when all the laggards get picked up as people turn over every rock in pink sheet land looking for companies building mobile apps as the PC world and the Internet get a facial reconstruction over the next three years.

The pink sheets will be going wild. The commercials for OLBs will be all over the joint. CNBC Booyah Boy Kramer will be screaming BUY BUY BUY. The Audience will go back up like a rocket.

HFT algos will have to be improved as 100s maybe 1000s of new stocks hit the market. The volume will be awe-inspiring. Brokers will go back to work as our phones light up with cold callers "if I could show you something of interest , would you be willing to invest xxxx?" . Training classes on how to daytrade, with the MSM taking it's camera to the guy who made a billion in a day trading options. The $25,000 rule will be lifted. Got $500, you can get a Margin account. Many will get lucky and watch it go to 5-10G and tell all their freinds working at Starbucks.

Deny it and you lose. Stay in it too long and you lose. Short it too soon and you'll lose but GS, Morgan Stanley and a host of newcomers along with the feeders like Kleiner Perkins and friends will all be making a killing. Yes their will be a a IGB (It Goes Boom) deritive for the well to do to bet against everyone.

How can it miss? Look at FFIV that makes mobile apps in addition to networking probes and other equipment. This is another stock that took out its overvalued high of 2000 by 100% in the last 6-8 Months. The Vampire squids have their noses up and are starting to suck. Don't go short yet. This will make the reverse merger chinese stock mini boom to bomblet look like amateur hour.

The boys got away scott free and they are back again ready for the next robbery as the middle class takes the last of what it has and does panic buying right at the top. They hate the middle class. The sheeple. It's their God Given right to steal as much as possible. Unlike Greenspan who raised interest rates every month during 1999 and 2000 which helped kill the Bubble, Bernanke will stand pat.

That will force desperate people back into the market that has a plate setting for them.

Serving Candy coated turds, as many as you can eat. New sq foot records are set daily in th ehamptons. 200,000 Sq foot houses will be the new standard.

 Then ...Kaboom ...and if your asleep , you'll miss another 80% drop in 30 days. Cue the LSM who interview sniffiling couples who exercised their stock options and owed 2 million but hung on becuase they were told there would be cookies and a 100% gain. By the end of the year all they have to show for it is a 2 Million dollar tax bill, no job, no house as the bankers kick back and say "we be bad MoFos" becuase Mark-to-Market never got put back in and everyone of those companies exist only in pictures.

The people with the best message boards will be going nuts. The best Bullshit on the message boards will win win win. Then they will log back in after it heads down with a new screen name telling everyone to short short short.A 1000 new Trading services will be launched.

We are good for one more massive bubble becuase this is America and it doesn't take any raw materials to build apps. Whoo Boy, squeeze that Orange.

Thu, 01/13/2011 - 23:17 | 875237 ZeroPower
ZeroPower's picture

Good post, little to add besides saying that the Nasdaq bubble of 2000 will long be forgotten after this current one gets to stratospheric highs. You simply can't not be invested in certain parts of tech right now. Old-school media and manufacturers, unless they can get their act together, are dead; and cloud computing, anything wireless, anything mobile, is in and will lead to soaring valuations for the time to come.

Fri, 01/14/2011 - 00:49 | 875352 poor fella
poor fella's picture

Glad iWokeup and iDontcare for any iPhad sweatshop-made crAAPL. Is the next step of evolution a crook in our necks as we stare down at our stupid phones? Looking somebody in the eyes and putting away distractions can be so liberating - alas, the internet ad-space, facebook-stores, and pimp-my-life for affiliate pennies will be around for a tad longer....  social-network gaming is right there in your comment... put away childish things...   instead of playing Farm-ville - how about starting a REAL #@%^* garden?

wow - iNeed an iCheeringup ;)

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