Hey Ico,

The Double Bottom QQQQ weekly did seem to signal a rally. I'm curious to know your take on the next few months. I have finally saved some money and might want to do something with it. I'm still thinking the top occurs in August followed by a hard downturn until November. Any thoughts?

I've been under employed for several months now. Do what you can to keep money coming in until you find something worthwhile. I've been volunteering my time at a local university lab. The economy is extremely bad right now and getting worse. Good luck.

Volatility index slides to more than two-month lows

In my opinion once the VIX drops into the 20 range the market will fall because the money will have dried up... But here is the marketwatch opinion anyway:

http://www.marketwatch.com/news/story/story.aspx?guid={7B0D2FEA-6CBA-4B51-BD97-F110843BA9EF}&siteid=rss


NEW YORK (MarketWatch) -- The burst of cheer in the financial sector that has stocks rallying to a fifth consecutive week of gains also has the CBOE Volatility Index, or VIX, poised for its lowest close since late September, just ahead of Wall Street's meltdown.

VIX 37.09, -1.76, -4.5%) on Thursday fell to an intraday low of 36.96, its lowest intraday level since Jan. 28, and putting it on track for its lowest close since Sept. 26, 2008, when the volatility index closed at 34.72.

Foreshadowing its slide, the VIX, which usually moves in the opposite direction of the S&P 500, on Tuesday shifted gears, falling along with the broad stock market gauge in what analysts said often preceded a change in direction for stocks.
"The market's main gauge of risk, the VIX, broke down a couple of days ago suggesting that the brutal market downdraft we suffered in the fourth quarter of last year was simply a one-time massive margin call and not an economic omen," said Jack Ablin, chief investment officer, Harris Private Bank.
Video: MarketWatch's Hot Stocks: Retail Sales
Retailers' March sales offered some glimmers of hope that the industry may have endured the recession's worst. J.C. Penney's shares jumped 7.6% while Wal-Mart and Costco shares were down after the discounters' results fell short of Wall Street expectations.

"While there are certainly economic challenges ahead, I view the steady decline in implied market volatility a positive signal," Ablin said. The volatility index ran to a record high of 89.53 on Oct. 24, trading above the 80% level for a total of four trading sessions amid "concerns about failures, nationalizations, (and) bailouts," said Scott Fullman, director of derivative investment strategy, WJB Capital Group Inc.
On Wall Street Thursday, a surprising projection of $3 billion in first-quarter profits by Wells Fargo & Co. (WFC:
Wells Fargo & Co

WFC 18.33, +3.44, +23.1%) helped sparked a rally among shares of large banks as well as the broad stock market, with all three major indexes heading to weekly gains. Read more about Wells Fargo.

Hasn't Monday been Red in most of these rally weeks?

Green.

Makes me wonder if some senators have actually read the constitution.

Big Financial corporations used to control the volatility by serving as a money buffer to all the trades. Now that the money has dried up they can't do that anymore. So the activity of Day Trading is controlling the volatility.

When the volatility drops again is when you need to be the most careful. It either means Big Money is back and controlling things or the money flow has died off completely. Under these circumstances it's more likely to be the end of money flow. That would be when the economy dies.

Today's activity is most likely caused by the expiration of options for this month. I see now that it will always make the markets "go the other way". So we end the week in Red. I should have realized that sooner...

I'm still on the sidelines till I can afford to enter again...

Wish I could move off the side lines and join you in the markets too... Looks like it will be Bullish for a while. My best guess is that this could go on till August before the next peak occurs. There are no guarantees in this mess though. Sooner or later reality has got to set in. Strange that everybody knows it's a hallucination but up goes those castles in the sky.

Green, We can Hallucinate it!

My best guess is that the markets will rally for awhile, but just enough to set up the next Big Crunch. The fundamentals are still horrible and people are drowning and grasping for straws. There is money to be made in both directions. Short term I expect the Financials and Real Estate markets will go up just enough to sober people up and then do a yo-yo for a bit before they crap out again. Just my take. Dangerous game here though.

Some interesting tidbits in that otherwise kooky video. I'll have to do some investigating. Thanks.

Do I see a double bottom on the weekly Q's? Could there be a short term rally? Hmmm?

Thanks for the info

Does anyone here know where I can find Volume Weighted Average Price charts, for free?

Green, because of daylight savings time.

It's a pity. DeFazio was one of the few congressman that I use to respect. Something seems to have gone wrong and he got a big head. He's out of his element. He simply doesn't know what he's talking about and doesn't realize it... Oh well, I can't imagine that he can win this one. Dumb move on his part... Someone should educate him...

Seems smarter to play the Bear market on the way down, and a whole lot easier...

Yes DOW 6500 was the number I was expecting based on the dollar. Now however I think it's probably too optimistic. Once the Medicare and Medicaid bubbles burst we could see DOW 3000 in a few years.

Gapper = FXP for old time sake

I just took a glance at today's market. Good luck...

Gapper = AVII, for no particular reason...

RED for 2009 and 2010 and 2011, based on my feeling that history goes in cycles. And looking forward to World War III in about 10 more years!

Red, tax selling and Christmas shopping.

Sell on the news...

Seems that every rule they create to protect stock traders always ends up being abused to take advantage of stock traders.

Is this their interpretation of the new naked short laws?

What about allowing two picks for each gapper and tanker?

Thanks AD I wasn't aware of that.

Not sure about what will happen to the automakers unless congress sets up a loan. Lots of people are going to lose their jobs this winter. I think we have at least three more years on the downside before a recovery. It's painful to watch.

So 8000 broke down. Unless the volatility continues I think that my 6500 target will be reached by years end (way too early). The thing that worries me the most is that the Fed keeps screwing up. This economy is a chronic problem that has become acutely inflamed by incompetent treatment. Bears will make money at least.

Must have been a shallow quake, usually I couldn't feel anything under a 4.8 when I lived in California. Aftershocks can be as bad or worst than the original.

Off the topic. Ico, have you read this about Texas?

http://blogs.discovermagazine.com/badastronomy/2008/10/27/texas-falling-over-the-cliff-of-doom/

Somebody forgot to post the message: Tuesday's and Thursday's are Green, Monday and Wednesday's are Red, Friday's are Random, and then switch every other week until Bernanke speaks. Then we toss a coin.

The POO is rising for sure.

I like petrochina's chances today

http://finance.yahoo.com/q?s=PTR

The understatement of the day: "If the Bank of Hank" - a new industry nickname for the Treasury - "really wanted that capital to go towards new lending, they would have put some provisions in the document," said Fitzgibbon said.

From what I've read the British figured that much out but our guys didn't...

I would do exactly the same thing if I were in their place too. It makes no sense from a business preservative for banks to make loans now with the market on the verge of a potential collapse. Much better in every way for them to wait it out and then buy up a bunch of cheap assets. This was so obvious from the beginning that I have to wonder why Paulson, Bernanke, the Congress, the Whitehouse, and even freaking Warren Buffett et al. didn't see it coming. So, now what are these guys going to do? It makes me shutter to think about their next move.

Look at the 3 year chart of brk.a

Gapper = SKF

Tanker = BRK.A