Woodshedder, December 5th, 2007
How many of you banked coin at the Honey Hole? Don’t worry, there will be more opportunities.
The indexes have now clearly established a downtrend line and are using the 50 day and 200 day moving averages as support/resistance lines. If you want to continue banking coin through this correction, you need to learn how to use these simple tools.
The Philly Banking Index looks like someone has made one to many trips to the money hole. That it will re-test its lows seems obvious. Note the glaring failure at the 50 day moving average.
The Nasdaq Composite is my favorite, sporting a huge reversal from the 50 day resistance.
What can we learn from these charts?
- The bankers are no where near done declining
- The indexes just made a lower high
- Overhead supply is building
- There are gaps to be filled below today’s prices
- Volume again rose on the downside move
- Stochastics giving clear sell-signals across the board
What is there to be bullish about? The RSI(2) will likely go near oversold tomorrow if the indexes gap down and trend downward throughout the day. This will setup for another oversold rally, which will likely see the indexes test resistance at either the blue downtrend line or a major moving average. Should this occur, you will find yourselves at the Honey Hole. Fill your greasy bear paws with the sweet goo.
Other than a very quick oversold rally, I see nothing, technically speaking, to be bullish about. Enjoy the second leg down, and banish from your thoughts any fantasies you were having about V bottoms.
How many pounds of meat can you get from the average Emu?
Dogwood, I don’t know that I ever weighed the meat, off the bird.
That picture is the bird minus the breast. The breast is fairly substantial in size. I have more to say about the size of the bird, but I’m trying to work it in to this post. If I can’t, I’ll tell you more about the size of the bird in a later comment.
LOL. Very metaphorical fellahs.
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But can I just say how much I love this line:
Should this occur, you will find yourselves at the Honey Hole. Fill your greasy bear paws with the sweet goo.
That is just a fucking classic in the making. LOFL!
You guys don’t mind if I buy more JPM puts do you?
That fucker Diamond is the last asshat standing.
SKF looks good here.
I have to say, Karen Finnerman was extremely compelling on her short LEH thesis.
Shed, W bottom pending?
Dogwood, couldn’t fit it in the post.
One Thanksgiving, 1998, we had harvested a bird for the holiday to enjoy with a group of friends with whom I was in graduate school. We all lived in a group of trailers spread out over 1100 acres. The Emu farm was on this property.
The party started the night before Thanksgiving as we figured it would take 12 hours or so to cook that big ass bird.
Well the bottle went round and around, and we were all good and liquored up, with a severe case of the munchies, and we all gathered in the kitchen to put the bird in the oven.
It wouldn’t fit!!! It may not seem funny now, but we laughed our asses off. We laughed for what seemed like an hour.
In the end, we got a hacksaw and sawed the legs off. The breast would barely fit by itself.
So I don’t know how much the meat weighs, but it is a big ass bird.
Jake, thanks. JPM had a huge failure at the 200 day today.
Love the “You’ve Ben Bernakeed” curser (sic) message ….
Boone, you got a link for that Finnerman piece? I’d like to read it.
Hard to say on a W bottom. I would feel a lot better buying a W or double bottom than a V.
My opinion? I think we see lower lows, with a probable test of Aug. lows on the Nasdaq. I’m trying to ignore the fundamentals, and focus only on the technicals, but that is hard to do. If I combine the two, I can’t figure out why a 20% correction wouldn’t be about right.
I got Ben Bernankeed today.
Thanks 8. I love that feature.
See Finnerman video here:
http://www.cnbc.com/id/22201978
Wood:
That’s some real southern slapstick shit.
The big birds sound like candidates for the pig roasting pit!
It looks like the SPY is headed for another inverse head and shoulders. Thanks to the FED.
Now both the bulls and the bears have “Ben Bernakeed” ….
Odd, No?
Bpoe, the Fed has nothing to do with it.
The inverse head and shoulders is due to the slowing to negative GDP growth, weak job numbers, housing crash, etc. etc. etc.
The Fed is simply trying to keep the banks from imploding. It is not trying to prop up the markets. If you think otherwise, go back and read their statement.
If suckers would have not bought that punk rally two weeks ago, we might have wrung out the excesses by now and be actually somewhere near a sustainable bottom. As it stands, we will have to go through bloody battle again for the bulls to be convinced.
The key to the punk rally was the failure of the stocks in China to rally. Keep this divergence in mind along with the charts. I agree that the Fed isn’t the reason for the downturn. He did cause the chart pattern by a smaller rate cut.
bpoe, excellent point, re: China divergence. I’ll have to look more into that.
Isn’t BPOE the Elks?
no it stands for the biggest pig on earth !!!