Saturday, November 10, 2007

Bye Bye Miss American Pie...Charts

It was rough and tumble for the US markets this past week - virtually nothing was spared.

Highlights included:

A further break-down in the broad market.
Increasing panic within the financials.
A further weakening of the US Dollar.
Expanding new 52-week lows in listed equities.
A break-down in the Nasdaq and NDX indices; no longer bucking (and bucking!) the trend.
Nasdaq Volatility surged to the levels achieved in August.

If you're thinking this is going to be another routine correction for the US markets and that the rewards for buying-the-dip will be plentiful as always, then I envy your courage. But you sir, are no Joe Kennedy.

And there's really no need to rent any scary movies this weekend. These three charts will do the trick - though not exactly nicely...

Dow Jones Industrial Average - 1900 - 2007:

US Dollar Index since 1971:

NYSE Margin Debt since 1968:

*Credit and Historical Charts for the above charts.

**The DJIA chart is as of 19 October, 2007; the alltime closing high, 14,164.53, came 9 October, 2007. The Dow closed Friday at 13,042.74.

...I'll talk to you Monday; where if we are down more than .75% in the pre-market futures I am adding aggressively to index shorts before the normal trading session opens. Good luck out there.

1 comment:

Bozo said...

Bottom line is . . . well, bottom line. If you're retired, as I am, and you don't have enough cash in FDIC-insured CDs to last ten years, you're in for a major wake-up call. Stuff goes up, stuff goes down. When your account is up, you take half off the table, say thank you very much.

Folks who try to second-guess this market are playing with fire.

Oh, and never buy on margin.