Monday, September 29, 2008

I am hearing that Fed should cut the rates tonite?

A few buffoons on bubble TV have been giving from their guts tonight.

Fed should cut.
Fed should pump.
Mommy should take care of us.
We need fries and burgers, we missed happy hours.
Politicians save Wall Street otherwise we hurt Main Street.

Here is my answer for all of the above: NO.

They have a bill who knows how many fingers in the jar. Why they can not take a natural market correction, why they need steroids all the time.
Why they should cut the rates? Rate cut can do nothing to the current situation except a few hours of pop in the market. Dont they know this themselves? Are they all trapped in somehow , wanna get out?

They are going to congress on Thursday again. Why Fed should cut before? Why they should probe the market before voting?

Today reminded me those hectic days from 2001. Bottom bottom bottom, capitulation capitulation capitulation, climax climax climax. But all I see is their climactic appetite for calling bottom. At one point, a clown on B. TV used the word "bottom" 7 times in a minute.

Another thing about today was the coalition of suckers. Army of suckers consisting of fund managers and analysts was all in agreement on one thing: It is all fault of Congress. Everybody blamed Congress. Do you remember who they used to point their finger at after Fed announcements? Poor Benny. He now seems safe for a while, with the army begging for mercy.

I expect S&P500 to gap down huge tomorrow as millions of suckers tried hard to prevent the inevitable before the close. Market should have closed at the low tick, it didnt. Reason? Hope. Dont worry market knows how to fix it. You wanna scare the suckers? Open down and sell off. That should do it.

My take is, we gap down 15-20 ES points and sell off more before reversing intraday.

Edit:

Now you wanna see a scary thing? Check this out. Joe blow is trying to catch the sword with his mouth.

If today's drop didn't scare them, imagine what will have to happen tomorrow. Market will not reverse until that ratio spikes over 1. Watch it !

35 comments by xTrenders :

Sam said...

You said reversing intraday. Is that the IT bottom or just an intraday bounce?

Atilla M. Demiray said...

A tradable bottom for a few percent.

gev said...

Are you planning on trading for the few percent or holding for longer-term gains?

PCP said...

Atilla,

20-30 down would be a relief for the suckers. It would only encourage them to buy more calls and start another wave of bottom callers.

I see where you are coming from though. Any thoughts on tightening up that stop a few points or is the whipsaw going to be too big for that?

PCP said...

Sorry, but that EPC can't be right, can it? Largest points drop in Dow, down 7% in SPX and EPC is practically flat? That must be a mistake.

Atilla M. Demiray said...

Todays range on SPX was over 100

It should be at least 70 tomorrow. May God help Mr 6Pack

Atilla M. Demiray said...

It is not a mistake, I couldnt believe it myself too, I went to the CBOE web site to calculate myself. It is correct. That is why I am screaming here. BE CAREFUL.

tamas said...

Thank you Atilla, for sharing your talent with all of us!

dadoes said...

So because j6p is bullish you think we go below ES 1000?

Atilla M. Demiray said...

Market is now panic driven and there is only one thing that can stop it. A good washout.

I dont see it yet.

SPX 1000?

I dont know.

I will stay short as long as it drops. Use trailing stop.

apconcen said...

Atilla,

my qoute screen is messed up. Are you saying we dip below 1100 then rally from intraday ? Can you give a rough target with levels instead of point(s) form. Thank you

Atilla M. Demiray said...

I thought I geve you all this weekend:

http://xtrends.blogspot.com/2008/09/heavily-short-es-from-1214-1217-range.html

apconcen said...

okay so we closed at DOW/SPX 10365/1106

The futures are saying we gap up to
CASH 10500/1123

Are you saying we open down minimum
SPX 1091 cash ?

That would mean we have 32 SPX points to fall before the open !!

BH_Trade said...

"Market is now panic driven and there is only one thing that can stop it. A good washout.

I dont see it yet. "

Your call for a severe down move was very timely. But might you be getting a little Prechter-esque on your downside expectations here? 2nd largest % down move in S&P and highest vix reading in 20 years and you don't see a washout? Not saying we can't go lower from here, just saying we DID already have a washout.

Atilla M. Demiray said...

I think we open around 1100 on ES

Atilla M. Demiray said...

I watch different readings to define washout.

Internals / volume summations / sentiment none of them indicating a washout

johnboy said...

apconcen,

I'll defer to Atilla's wisdom, but methinks that the current futures price will take a hammering once the asian and european stock markets operate overnight.

There's a long time for things to get even more bent out of shape between now and tomorrows open in the US!

johnboy said...

bh_trade,

Isn't being Prechter-esque generally a good thing?

Purely based on his track record, that... He's sitting on a boatload of stockmarket profits right now, accumulated over decades, trading both bull and bear markets.

Granted, it doesn't seem like he's a day trader any more. But cash is a position too, and my understanding is he got heavy in cash in advance of the decline. Not really a bad position to be in right now for a non-day-trader!

tamas said...

Atilla,

Do you think the US goes into another great depression? If yes, how long / severe do you think it will be?

Thanks.

beato99 said...

Hey Atilla,

Would you be comfortable being short foreign markets after tonights action in the US? Or will there be a bottom/bounce in the US to cause rallies overseas?

Many thanks.

dadoes said...

Atilla,

How was Internals / volume summations / sentiment like at the 2002/2003 bottom?

Are they similar to now?

Atilla M. Demiray said...

I think there will be an intraday reversal tomorrow.

I will update on the blog when I believe it is happening

Atilla M. Demiray said...

Foreign markets follow US usually, when the market reverses here, it is not wise to be short foreign markets

Atilla M. Demiray said...

I dont know about the depression, there are a lot of theories.

Atilla M. Demiray said...

fundies bot tons of bank shares today, i think they gonna puke tomorrow

AJ said...

Atilla,

nice to see someone that believes in Schumpeter creative destruction, i am happy the bill did not pass...

thanks for your excellent insight

aymon said...

attila, you think spy can get to 1067 tomorrow? 1067 would be 20% below 200dma. and according to garyscommonsense, everytime market gets 20% below 200dma it always bounces back to 50dma within a month,.

Atilla M. Demiray said...

I dont know where the bottom will be, i am using a trailing stop, let the market take me out

ARAK said...

What is your trailing stop? +2.5? Sorry if it sounds intrusive. Trying to learn from someone really good at the game.

You rock Atilla. Nothing against Sol, but you explain yourself well and it makes us newbies follow your thoughts easily. Wish Sol weren't as cyptic at times. My wishes he gets well soon.

Atilla M. Demiray said...

what is 2.5

ARAK said...

2.5 points trailing on the ES

Atilla M. Demiray said...

no i prefer 0.25 when vix is over 50

bubb said...

hang seng etc looking less weak atm...

ARAK said...

Do you think futes will get to 1140 by morning at this rate? I guess Nikkei is giving the wind behind the sail for. Europe might be another story

anabolic said...

Atilla, so your hard stop at 1156 has shifted?

May I know which area would you get stopped out?

thanks.

ps. HUGE recovery of Hang Seng in the morning session.lets see if it continues in the afternoon.