Replies to post #12394 on Zeev's Turnips Patch-No Politics (ZEEV)

[D2]

Zeev,

What do you have in mind tomorrow ?

Also do you think Morgan will spoil the party Tuesday ?

D2

[The Freep]

Zeev. . . I'm just now catching up over here, and you may have addressed this already, but I'm curious about your take of the NDX making a lower low yesterday while the Naz did not.

It certainly could be a viewed as a double bottom on the NDX (second bottom slightly lower on lower volume can often be bullish), but of late, the NDX has foreshadowed the Naz moves. This gives my "inner bull" lots of concerns, as does the seemingly endless supply of equity call buyers (and the lousy chart patterns in a host of financials).

the freep

[ajtj99]

Zeev, I would hardly call this 83% drop in the NDX over 2-1/2 years being brought back to standard on the time scale you are thinking of.

They've let it slide 83% already. Where is that safety net?
If there is one, it got tangled up with the anchor and is at the bottom of the ocean.

I am not talking economics here. I'm also talking market valuation correction.

Just because the Nasdaq corrected from 5100 to 1200 does not mean we should be close to a depression. Did 1966-1982 correct 83% in 2-1/2 years? No. Did 1929-1932? Pretty close to it. Why is that invalid?

As for last September, I only remember WP as one who was talking about lower lows after Sept. 21 (Steve Lee also owned up to that too, I guess). Mostly I recall frenzied buying of the bottom.

Once a bubble gets pretty deflated, it loses its ability to bounce. Half full, you can still bounce a ball. Once it gets close to flat, it doesn't bounce very well. That's an over-simplification, but it illustrates my point pretty well.

Being of great mind, I think you might agree a good analogy would be "it's the physics, stupid."

BTW, if that decline going into July 24 had all the makings of a great bottom, why did the NDX make a new lower low yesterday? That's a failed re-test in this market, pointing to lower lows on the COMP by the pattern of divergences in the COMP and NDX (remember May when the NDX breached the Sept. lows and the COMP had not yet, and remember what happened later?)

The reason is because the bottom is not in, and this bottom will not hold long.

[G Pardue]

>As true Clintonistas would say<

Zeev-

What is a 'Clintonista'?

Grant

[Mustache Pete]

Zeev, when you speak of sentiment, it is always tried and true measurables such as tick, trin, and put/call. What about Zeitgeist? Nine Eleven changed the world. How do, ahem, the turnips account for variables which defy quantification? Haven't you been forced to incorporate more seat-of-the-pants thinking into your forecasts?

A.

[shtirlitz]

There is no "safety net". The very thing that ppl think there is one is incredibly bearish for this market.
And this is nothing like September. September was shock, fear, market was tanking never to come back.... Now everyone is catching a bottom for the next miracle bear market rally.

Forget VIX. It can hit a 100 easily. Put/Calls are all below 1. And other technical indicators may be negated too. The whole feel of this market is different.

"We all know that this market is crap, and stocks are expensive junk, and that economy isn't picking up and very sluggish, and that 11 rate cuts didn't work, and that housing market is toppy, and consumer getting overextended, ... but its gotta have a bear market rally, because technicals look oversold, so we'll catch the bottom and sell to greater fool who will think its a new bull market".
I don't think thats how it works <g>

[Sir Realist]

We are going into a "revaluation metrics" period, and the powers that be (and for good reasons) will make sure that the metrics is brought back to the "standard", over many many years.

1) Who are 'the powers that be'?

2) What are their 'good reasons'?

3) What do you mean by 'the standard'?

4) If you refer to central banks, or the Fed, specifically, do they really have the tools at hand to moderate the overall rate of bear decline so it's spread over several years?

5) Do you find any technical merit to the H&S in the $USD that limits its rebound?

6) Have you defined a market projection for:

a) the next year?
b) an anticipated bottom number or date of arrival?

7) Don't the weakening consumer spending numbers provide a huge warning signal, which, coupled with the lack of business spending/investment, indicates things could (intermediate & longterm) get considerably worse?

Btw, your efforts and willingness to respond to so many questions from a large audience continue to evoke admiration from these quarters.

I wish I could follow more of your specific trades but I'm experiencing my first losing year, the first time I've been down in two successive quarters, and my risk aversion has grown too great to even consider trading unless I can project rallies lasting 3 days or longer. (That's what happens when you trade what was a 'microcap' account to begin with... and leaves of absence from the market have occurred at precisely the periods I was waiting for.... and I, similar to you, rarely short).

In 2000, it was much easier, as I then traded the account of an investment club, which was large enough to quickly overcome losses that occurred in the long decline of that Autumn and post a decent gain by its end. And I did very well with this small account last year, even prior to the 9/21 low. (And I missed the first 2 weeks of that subsequent rally due to another leave of absence).

I do agree with you that nothing like a 30s Depression will occur from the market decline, but I do think a more severe recession than has been felt so far in this bear, lies ahead.

I'd appreciate it if you'd take some time for these questions. And if you have any advice for a smaller portfolio trader like myself, who has reached a point that I miss many of my own bestest calls because of my reluctance to daytrade (I'm more conducive to swing trades), I'd be a rapt listener.

Thanks for your consideration;

--Kevin