I think that guy set up that fibo level upside down. It's actually at the 61.8% level, not 32% level.
Like I said, if the only thing dragging these things down hard the way they are is the fear of a massive default on the CDS market, then that will actually easily be resolved. The Fed has to bail the entire market out of that because it will destroy too many firms. Literally.
Hedge funds are getting destroyed by the day because of their over leveraging of some 10 to 1. So, all this is just good to clear out the excess. Remember, the DOW from 2000 to 2002 only fell 25%. Right now we're what? already 10% off the highs? And on hugely more profitable and stable positions in these companies. So, there's no fundamental justification for this. It's all technical market mechanics. And as I said, that gets quickly resolved many times violently to the upside. I think Brinker is dead on when he says the bears are going to have their lunch handed to them shortly. (no pun intended)
ISIS tonight shows what happens to over shorted companies. Many in AMZN learned. Imagine what will happen when those short the banks and brokers realize 50% declines were nowhere near justified. Actually, I think much of the market's overall run last year was due to that over-leverage. Over leverage usually ends up being more stock to sell than otherwise would exist. So, we're paying for that now.
There's no other way to explain the decline in the $SOX or $BTK or $XLF.
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