Dow

[ananda77]

...High volatility as 'Institutional Index of Core Holdings' critically close to apex and break-out;

...so far, 'Institutional Index' held 2002 support

...again, SPX 500 failed below 853/855 after 820 supported

...Dow intra day traded down below 1867 before recovering

Trading Strategy: BEARISH -short to medium-
-slightly short hedged >816 -to short hedged + short hedged accumulating ~858 (+); SPX 500 STOP: 880 (Close > or = 880)
-accumulate stocks -medium to long term-

Kind Regards

[dumbass]

just a hunch tonight maybe the night for a move lower in the dow heading for a retest of previous lows ,

[dumbass]

i was picking SP500 848 pivot to be big resisitance and to take the market lower, a close above 848 is a bullish sign for a market maybe attempting a rally.
currently at 865.

[ananda77]

Monday/Tuesday: -sell the fact day- after testing SPX 500 878 (915?)

Trading Strategy: BEARISH -short to medium-
-slightly short hedged >816 -to short hedged + short hedged accumulating ~858 (+); SPX 500 STOP: 880 (Close > or = 880)
-accumulate stocks -medium to long term-

Kind Regards

[winner69]

This article suggests that the S&P trading at about 29 current earnings estimates but really is trading at something like 57 times expected earnings ...... ouch

No reason to get too excited .... even if the glass is half full

http://www.investorsinsight.com/blog...ng-crisis.aspx

Those Wild and Crazy Analysts

I have been writing about analyst earnings forecasts for some time. Earnings forecasts just keep dropping. I talked with the very interesting and gentlemanly Howard Silverblat from Standard & Poors, who is in charge of assembling the data for the S&P earnings. When I went to the web site, I noticed that "core" earnings were not on the spreadsheet. Core earnings take into account pension fund commitments and other items that sometimes do not make it into reported or operating earnings. During the last bear market, core earnings were a lot lower than reported earnings, as companies adjusted their pension commitments to make things look better than they were. I was wondering if we would see the same thing happening now.

I asked Howard about that, and he said they were having some issues in calculating them but expected the core earnings numbers to be back up in a month or so. And he quoted sources that suggested S&P companies were underfunded by $250 billion in their defined-benefit pension plans. Late last year, the Bush administration waived the requirement that companies fund their pensions to at least 92% of needed capital. It is now down to 80%. That leaves companies some room to play with on their balance sheets.

I commented on how bad earnings were last quarter. The web site shows earnings were a negative $3.14 a share, the first time they have ever been negative for a quarter. Ever! That was with 65% of companies reporting. He commented that it was worse than that. They don't have it up yet, but with 78% of companies reporting, losses are now a staggering -$8.56 a share. And it could get worse. The write-offs this quarter are just huge.



As he wrote, companies are not only throwing in the kitchen sink, but the refrigerator, washer, and anything else they can find as they seek to write off everything they can, to get it over with and start the new year fresh. They need to do a kitchen remodel, but there is no financing available.

So, how does that affect total earnings for 2008? The table above shows analyst projections from March of 2007 through today. Notice how they kept falling over time. They are now down 70% from what was expected two years ago. Earnings for 2008 are a paltry $29.57 and dropping. The S&P 500 closed at 868.60. That makes the P/E (price to earnings) ratio 29.4. (I use a decimal to show I have a sense of humor.)

So, what are they projecting for 2009? Let's take a look. Notice that they too have been falling over time.



If the S&P 500 were to close where it is today, and using the estimates for the first two quarters of 2009, the P/E ratio would be 36.4 on July 1.

But what if earnings merely fall to where they were in the last recession, or about 55-60% of where the projections are today? That would drop the 12-month trailing earnings for the four quarters ending June 30 to $15.90 and result in a nose-bleed P/E of 54.7 by the middle of the year.

If earnings don't come in dramatically better for the first quarter as opposed to last quarter, we could be setting up for a nasty summer bear market. Even in the bear market of 2001-2, the P/E did not get above 47. Which, by the way, at a 47 multiple would correspond to a range for the S&P of either 1111 if the earnings come in as projected or 731 if they come in at the lower range.

I see nothing on the horizon which suggests the economy is going to get manifestly stronger in the next two quarters. The real risk is that earnings come in weak for both quarters and investors simply despair this summer, throwing in the towel and bringing about a vicious bear market. I would seriously consider hedging any long positions you have before earnings season this next April. If they come in stronger, then we will see.

[ananda77]

This article suggests that the S&P trading at about 29 current earnings estimates but really is trading at something like 57 times expected earnings ...... ouch

No reason to get too excited .... even if the glass is half full

...further confirmation that equity prices are NOT EVEN NEAR HISTORICALLY NORMAL LEVELS (see attachment) despite the rantings of currently dry-docked institutional investors to the contrary!!!

...this is still very much THE BEAR... and asset price deflation will not stop until the last bit of hot air is squeezed out of the bubble... no matter what the GOV-FREAKS are churning around in their 'leaky syndrome brains'...

Trading Strategy: BEARISH -short to medium-

short hedged accumulating ~858 (+);
-accumulate stocks -medium to long term- on fresh market lows

Hussman: There is No Substitute for Mortgage Debt Restructuring

...From a valuation standpoint, I do believe that the stock market remains undervalued (though still far from the deep undervaluation we observed in say, 1974 or 1982). Accordingly, I do expect that long-term investors are likely to achieve reasonably good returns in the area of 10% annual total returns over the next 7-10 years. However, we have to be well aware of the tendency for weak markets to overshoot on the downside, so we continue to be unable to rule out even the 600 level on the S&P 500 as a possible (though not an expected or predicted) outcome.
http://www.hussmanfunds.com/wmc/wmc090209.htm

Kind Regards

[Dr_Who]

HOLY SHIAT! Game over!

Geithner Says Bank-Rescue Plans May Reach $2 Trillion

http://www.bloomberg.com/apps/news?p...eEE&refer=home

[Dr_Who]

The DOW just broken through the support level. LEts see if will bounce back or not. It can be a painful week ahead guys. Hold on tight.

[Dusty]

Agree its not looking good Dr. ... But for the last few months Thursday has frequently been the big sell off day only to be followed by a rebound Friday. S&P hanging in there above 800. Dow seems to have too many distressed heavywieghts.

Yeah should Dow finish this week sub 8000 then next week we could see retesting of the Dow's Dec 08 low of 7500. The lack of detail and huge sums involved with Obama's package seems to be creating more sceptisism than confidence.

[ananda77]

...The Treasury’s newest Financial Stability Plan (Bailout 2.0) is only the first step. It aims at putting in place enough new bank-lending capacity to start inflating prices on credit all over again. But a new bubble can’t be started from today’s asset-price levels. How can the $10 to $20 trillion capital-gain run-up of the Greenspan years been repeated in an economy that is “all loaned up”?

...read on and find out>>>

Bubble Economy 2.0: The Financial Recovery Plan from Hell
by Michael Hudson
http://www.globalresearch.ca/index.p...t=va&aid=12265

...for the market -a new bubble can’t be started from today’s asset-price levels- means: prepare for new market lows

...SPX 500 -804 missed; market recovered due to short term oversold and traded into 835 – 851 range; does the market have the strength to maybe testing and taking out market cap -878 (??) -doubtful-; failing again = test of November 21st. low AT LEAST;

...anyway, institutional selling in up trend as well as buying in uptrend alternating, which points to either sector rotation and setting up new hedges or both;

Trading Strategy: BEARISH -short to medium-

short hedged accumulating ~858 (+);
-accumulate stocks -medium to long term- on fresh market lows


Kind Regards