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How Far Will the Market Fall?
Now that we are solidly in “RISK OFF” mode, traders, managers, and investors are asking how much downside we are looking at. It is safe to say that those who were piling on longs with reckless abandon are now potentially staring into the depths of a great chasm. I have included charts below showing the important Fibonacci support levels. Let’s take a look at how far down is down.
*1,300 – The first big figure. Already broken intraday, but it held the first time.
*1,286 – The 50 day moving average, the no brainer, most bullish target. The “buy the dip” crowd takes a first bite here.
*1,280 – 38.2% Fibonacci support level.
*1,260 – 50% Fibonacci support level.
*1,230 – Broken resistance from the November high. Europe blows up again. Take your pick: Spain, Ireland, Britain, Portugal…
*1,167 – The 200 day moving average. It must hold for the bull market to stay intact. This is where $5/gallon takes us. Double dip recession talk reemerges. The “buy the dip” crowd takes a second bite.
*1,117 – The November low. The “buy the dip” crowd throws up on its shoes and pukes out the last two “buys”. We spike down, triggering another “flash crash.”
*1,000 – The next really big figure. Ben Bernanke, with the greatest reluctance, announces QE3. Bond prices soar, taking ten year yields to 2%. Homes prices collapse again, triggering a secondary banking crisis.
*666 – The Saudi regime falls, and 12 million barrels a day disappears from the market for the indefinite future. Unemployment hits 15%. Obama is toast. Your broker turns bearish and tells you to sell everything. Welcome to the Great Depression II. It starts raining frogs.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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Give the PPT a little credit would ya. They can stop this thing dead in its tracks. We won't go any lower than 1250-1260. Mark my words ... you heard it here first.
S&P <1000, The "Greatest" Depression? We passed the last exit ramp miles ago. Only a question of when...
I love the smell of napalm in the morning
I'm changing my avatar to napalm nicky, I justlove the smell of disaster in the mornign as I read Turd's misery index.
life is sweet
Didn't PTJ call this a few weeks ago?
Oh, I forgot about the warnings. You must have been way ahead of the curve on Tunisia, Egypt, and Libya...
...and confirming the margin squeeze now underway, airlines announced a 50% cut back in the fare increases being sought....they fear the consumer might not swallow them....
As we see more margin pressure on corps I wonder when it will start to trickle through to the analysts' re-guesstimating eps??? Of course those nasty algos will be the last to know...
I am 50% in SQQQ
And 50% in QQQQ.
Always an interesting read. However there isnt much chance of the house of Saud falling any time soon. Oman Bahrain and Yemen would fall first and give us plenty of warning.
Warning to do what. Gasoline dosen't store too well for
long term, diesel is better. If you got the dough convert
at least one vechile to propane. Good kits for toyo 22r
engines. But the dough comes into getting a propane filler
off your big tank. My next conversions from fiat are H20
storage, and 1000 gal propane tank in addition to the
500 gal. I have.
It occured to me last night, long after Jim Rogers interview that I watched yesterday, that he said, somewhat sheepishly that he had "bought" some US Dollars. He admitted that he is often wrong. But it occured to me that when Mr. Rogers says he bought dollars it means that he has sold commodities.
That is how you buy dollars....
gh
Forgot to include 925 on the S&P 500 which is the 61.8% retrace of the run-up off the March 2009 lows. Rhymes with March 31, 1938.
Mad Hedge fund trader, for a minor in math, you are an idiot. You gush on your website about driving the Nissan Leaf and calculating its savings for 15,000 miles per year.
Here are the facts. The range is listed at 73 miles. That means you cannot realistically go more than 25 miles one way. Commuting, that is 50 mpd, a relatively modest commute. Lets say 250 work days per year, that is 12,500 miles per year. Less if you travel a lot. A 10,000 mile limit is more reasonable.
For more realistic range figures
http://green.autoblog.com/2010/06/14/nissan-pegs-leaf-range-between-47-a...
Might be OK for San Diego, if you rip out the A/C and heater. Elsewhere, not so much.
Sure, you can often find plugs at the end, but generally those have been occupied, if there are any. Planning any commute that requires a plug to make the round trip is folly, ie more than 50 miles R/T. You had better have a way to lock the parking space from any vehicle. In most places, having a reserved parking place with electricity does not come cheap and could easily overwhelm any savings.
Then there is battery decay. Over the lifetime of all batteries, the capacity decays. At some point you will find yourself with a lot shorter than 25 mile leash.
Anyone who trys to drive more than 12,000 miles per year in a Leaf is risking his life and the life of others on the freeway. This thing is not suitable for freeway driving:
http://www.thetruthaboutcars.com/2010/10/nissan-leaf-range-scenarios-anx...
Unless it is always downhill.
I wouldn't hire you to count the money in my piggybank, much less manage funds.
Who is the idiot?
He carries a gasoline powered generator with him.
You ninny.
*1,230 – Broken resistance from the November high. Obama is toast.
*1,167 – The 200 day moving average. Obama is toast.
*1,117 – The November low. Obama is toast.
*1,000 – The next really big figure. Ben Bernanke, with the greatest reluctance, announces QE3 and is awarded several Medals of Freedom by the new "democratic" arab governments. Mexican government hires drug cartel mercenaries to stop influx of undocumented workers from El Norte. NetJets raises rates 10X as families of Wall St execs are rushing out of the country. Buffett announces that he's "itching to pul the trigger" again. Obama is toast.
*666 – The Saudi regime falls, and 12 million barrels a day disappears from the market for the indefinite future. Goldman LBOs NetJets from "Uncle Warren" and nobody except Goldman execs (past and present) are able to leave the country "in style". "Uncle Warren" finally pulls the trigger... this time the gun fires. Obama seeks asylum in Lybia.
Libya won't have him. He'll rely on Rahm to give him refuge in the new city-state of Chicago.
There is only one FACT we need to be aware of:
That MotherFuckingPrintingPressssssssssssssssss!
BTFD. Short oil.
Yes, but we haven't seen that bottom in raining frogs yet, have we?
dont count out Prez O, he went from semi obscure to #1 in a short amount of time. Dont forget there are still may that believe in his hope & change. Facts are facts.
"Hope" is not a fact. It is ignoring today's statistics while waiting for tomorrow's to be better. O's meteoric rise had far more to do with being backed by Soros and lots of Wall St money rather than any otherworldly ability. The only thing I'd guarantee O would do is bless the banksters with more bonuses and keeping the kleptocracy working.
Surely you jest.
People who live on hope will die in despair. The Holy O has got nothing to do with anything real.
the more charts I look at... the more this doesnt look too good. In addition to Steel, Copper, check out the banks. (WFC, BAC etc...) they are both breaching 50 DMA's as well.
I expect some tests of the 50 dma's in the market soon...
Probably get choppy there before the real fun starts...
I'm wondering how a collapse of housing prices @S&P 1000 will cause a new bank crisis. Am I not thinking enough? Have they re-entered the real banking business?
No..but they never offloaded any of the shit from before...still carrying marked up turd and paying bonuses..haha what a sham
A rolling loan gathers no loss...
Really uncool not to tell us what to buy when it starts raining frogs...
I would recommend large propane-fueled deep fryers and cooking oil. Flour, too.
A feast of boiled frog, rat kabob, and bark is hard to beat.
An old VW bus down by the river bottom would make your dining experience complete.
May I offer you another sip of MD 20/20?
LOVE your outfit...is it Goodwill?
I can tell you that the Steel and Copper charts are not looking good at all. Both are trading just under their 50 DMA's and that trendline is starting to roll over.
More weakness there could put pressure on other commodities... Oil is the wildcard tho.h
madhedgefundttrader...a few questions for you. What option positions do you recommend, outright or spreads for your anticipated move? Short memories keep us from bringing up the Flash Crash Crews when discussing a potential break in the mkt, any thoughts on how speed could be a factor in a break. Without any severe rejection of a new high at this point...considering the time frame all the way back to 666 in the S&P, a pull-back to 1278 only puts us at a 10% retracement on that larger time frame....murder I know if it unfolds in a week, but overall is that enough to tip it over and begin an actual trend lower. How much more insight into the fragility of the system do we need before people are actually considering pulling money out for capital preservation? Its been expensive not being more invested watching it rise and I have let the potential speed of a break override the trend following format of just staying long it. I might actually be more pessimistic than you in that should events overwhelm the fed, what rule of thumb will we apply........other than following the prices of investments as they thrash around? If leverage is back and another break begins...will gold move up in an orderly fashion as it did before? Or will it get rinsed out with everything else in a limit down fest?
The House of Saud and Al Qaeda are not friends. Sure is quiet out there...
Now that you mention it . . . very quiet indeed.
Too quiet.
The silence is deafening.
Market is getting choppy at the top here...
Always nice to remember how quickly things can get scary when the market has those -200 to -300 days...
Got my eye on that 50 dma... shouldn't be too much extreme action before that is breached... if it does.
TPTB will push the USD below 50 before they let the market touch 666 again. This should by now be obvious.
They would rather see people paying $10 for a loaf of bread and $15 for a gallon of gas than AAPL under $100. Those are their priorities.
Correct. The Fed's mandate is now solely to stabilize the stock market. Nothing else matters; especially the "little people."
The end of this corrupt system is nearer than you think...
the 7 month long bottom trading range has been broken in all 3 US Indexes... to my mind this is either going zig-zag side/crab ways and then dropping or it's going down from here without wiping its feet ...i shorted the S&P 2 months ago (hurting a bit calling it so early!) and Nasdaq today ...I like to bet against myths like the Fed and PPT will be able to support these markets... even with WS help who failed in 1929 to support the Indexes with money and bluff and same happened in Japan too (Nikkei down 45% still) ...sack loads of counterfeit money cannot pump the stock markets, full stop.
I disagree. Lets get a restest and break of ES 1292s and then you can have your sentence. For now we are in a chop and only a break either way will tell whether we should have BTFD or sold sold sold. Much too quick to short everything right away. Plus, the bernank is on. Market tanks when he's on, but dip is bought usually after.
This.
I'm leaning towards BTFD personally.
So,... what your saying, is things are looking up. Super, I love optomism.
ditto.
all is ok and getting better.
http://covert2.wordpress.com
If your short...
What he is saying is, when the shit hits the fan, you won't be able to sell shit, let alone stocks from your E*Turd account! LMAO
We have weeks left folks...
Our positive marching orders could not be more clear:
*1000- .... QE3. Bonds soar .......
is direct instruction to go to Ten Year or Thirty Year US Treasury Zero Coupon Bonds:
Back up the truck, buy with both hands, go all in, balls to the wall, bet the ranch, mortgage the house, sell the kids, borrow up to the hilt, be fully invested.
What could go wrong? It's all backed by "the full faith and credit" clause! Interest rates are going to go down big, right?
Look at the price of the US 10 year in the second half of 2008. It soared--temporarily--when the world went into Risk-Off mode.
This may offer an approximate road map for the next 6 months, especially as QE2 winds down.