MAJOR breakdown

[wallstreetsedge]

markets are signalling a major breakdown... i would start exiting long positions and get on the short side.. especially overvalue d companies like solar and tech

some co's id watch are goog, emc, rmbs, brlc, rimm, aapl

[TonyM]

Maybe, maybe not, but I keep getting these flashbacks for some reason.

Originally Posted by Jack24

Please keep buying the dips, Cramer sheep.

Buy them all the way down to Dow 9,500, Naz 1,975, and S&P 1217.


Thanks!

Originally Posted by Jack24

Say what you want about me.

I gave all of you fair warning.

Here's some more great advice - this has only begun. This will be a massive correction. You can not afford to be a dip buyer here. You will get destroyed.

Take whatever profits you have and seek shelter. And wait out this storm.

Originally Posted by Jack24

I honestly believe DJIA is headed for 11,200. The Naz is headed for 2,120.

[wallstreetsedge]

it definitely could be a bear trap... i never put that though past me but i do think that a majority of stocks in this market arent even close to being oversold yet. also if you think the market is goinna run, then you definitely still havent taken into acct the subprime mess and credit crunch. think of this, the market is a 6 month indicator of what the ecomony is doing... if you had to look at it percentage wise, were only 10% of the way there... 2008 is goinna be extremely rocky

id probably start to look to invest in less illiquid alternative investments, small caps, and definitely high yield bonds.. start heading into the defensive companies and companies that everyone needs.. when one economy goes bad, at least another will flourish so start jumping into companies like intc, calm, major companies no one can live without

youre goinna see a lot of selling and people covering their house calls soon so i would jump out of volatile stocks - most notably tech and solar

i would keep going short on financials, subprimes, homebuilders, and insurers... we have record breaking defaults and ORI is still an untapped resource..

[wallstreetsedge]

yeah... good thing no one listens to me and i get a negative reputation point

[pedrom727]

I agree with you, we've never seen anything particularly like this in our history. The sheer leverage and ease of money after the '01 recession caused extremely relaxed lending standards which are now obliterating the foundations of our credit system. The ease of cash also caused hundreds of Billions to be invested into AAA rated paper with 9-11% returns which now have almost no value due to lack of buyers.

This in conjunction with the depreciating value of homes which looks like it might continue down to 30% are hammering the consumer. I'm even more convinced after seeing Intel's report just now. I've heard reports of people leveraging money for fixed investments (SIVs, CDOs, etc) up to FIFTY times. Now with no demand and no ability to mark these assets to market, nearly our whole banking system is being held hostage.

JP Morgan might be able to put out decent numbers but even if they do it will likely be shadowed by INTC's lackluster quarter and their outlook will likely be to slower growth as well. My prediction is that Washington Mutual will report greater than $2 per share in losses on Thursday, leaving a 1350 level in the S&P 500 by the end of the week not that far beyond belief.

More and more this is beginning to look like the perfect storm; when we factor in the Federal Reserve's HORRID response time and the transition between extremes in interest rates which occurred during the upward slope of the housing and economic cycle we are being left defenseless. The Jan.30 interest cut does not do anything to help us out of this mess which is developing for at least the first two quarters.

We have also broken several key resistance levels in the indexes and the news is not looking like it will get better. I'd be bracing my portfolio for the worst, this crisis keeps spreading to more and more areas of the economy.

[MrSer]

I was just thinking about buying ORI puts.

[aiki14]

As much as I hate to agree with the OP, and in spite of the fact I am an uberbull by nature. The S&P falling below 1380 is very troubling, there is a long way to the next support level which could be near 1250. That would be DJIA 11100. The earnings season is really iffy, especially in the financials which will lead us out of this eventually, but it doesn't look like this quarter. And Citi didn't appear to completely clear out the trash which amazed me. If Merrill doesn't write down a staggering amount then it will be another quarter at least before we can start putting this mess behind us.
I would be looking at portfolio protection strategies at this time. Keep some cash on the side and consider index puts or Short side ETF's. If your really long term, dollar cost average, even this will pass.

[madcowdisease]

Originally Posted by kthomllc

markets are signalling a major breakdown... i would start exiting long positions and get on the short side.. especially overvalue d companies like solar and tech

some co's id watch are goog, emc, rmbs, brlc, rimm, aapl

When you say "watch" do you mean be concerned with or are you watching these for good entry points? I hold a sizeable portion of my portfolo in GOOG and am now at about my cost basis. However, I hear the quarter is good and was thinking of bailing on the positive news and sitting in cash at that point.

[wallstreetsedge]

Originally Posted by MrSer

I was just thinking about buying ORI puts.

funny that you mentioned ORI.. ive been saying that for a while on this forum


as for watching, i mean as in those stocks will determine where the market goes and im short on this market right now.. right now it looks like...

GOOG is on its way to 550
EMC is heading to 14
RMBS going to 12
BRLC goes to 2
AAPL goes to 140, minimum 160

[pedrom727]

What is your opinion on the argument that stocks usually bottom at the beginning of a recession? I saw a UBS analyst come out with a report stating that historically markets have bottomed 6 months before recession is over, and thus January would be a buying opportunity. I still am skeptical though particularly with the destruction of liquidity and credit that seems to be prevailing.