Good Tuesday morning.
It looks to be quite the week, starting with a wee bit of a gap down this morning.
I’ll have a post up assessing the global Big Picture (pun intended) before 8 EST later today. Then, at 9am or so, the latest Apprenticed Investor column goes up at TheStreet.com titled, "Why Guess the Bottom?" Tomorrow, I am scheduled to guest host Morning Call on CNBC from 11am to 12 noon EST.
Finally, if you haven’t done so yet, go read yesterday’s So Much for the Decoupling . . .
I assume that readers of this blog do not need to be told not to panic or do anything reckless. (Gee, where did those frothing uber-bull trolls in comments go?). If you want to gamble, use a tiny amount of cash to dabble in some
long dated calls — but days like today are no reason to attempt any
foolish heroics.
But for now, here’s a snapshot of the futures:
>
US Markets:
Note that the CME overnight limit on US futures are as follows:
DJIA 650 points
S&P 500 70 points
Nasdaq 100 105 points
Russell 200 37 points
That’s the most they can drop before they are "locked, limit down."
>
And, here’s Europe:
Future via Bloomberg
Good morning, everyone.
Let’s start the day by calling the Dow’s close.
I’ll go with 11,659.
10,700
14,600
Intra-day reversal leads to a new closing high . . .
Larry Kudlow……
So So funny…….
I heard that Kudlow is going to replace Cramer in Mad Money.
While I think today we will get the same 4-7% whack as everyone else yesterday, I think what happens tomorrow will be more important….the FTSE has made a huge rally off its open as of right now.
Here’s a better question:
What was the catalyst for yesterday? To blame it on the stimulus plan is stupid IMO.. Of course, we faithful TBP readers think this should have happened 6-9 months ago, but why now?
Jay, perhaps it is because slowly the truth is getting more and more in the light. For so long it has seemed that most participants have had blinkers on. I noticed that the banks in china, were a big part of the sell-off of late.
Close?
11,250 area….
Euro stocks ralley after rumors of Fed rate cuts fixing the problem coming out. Once people see emergency cuts aren’t good or do nothing they’ll panic even more.
“To blame it on the stimulus plan is stupid”
The fact the President came out with a stimulus plan is what made people panic.
The AEX –Dutch stock market, Amsterdam– was down another 5% at the opening but is going up based on rumours the FED is going to cut rates before the opening bell in the United States.
I didn’t read anything yet about the influence of computer orders on the market crash –see also 1987. Indeed, speculators like you and me do have SL’s these times. That was not the case a couple of years ago. Maybe that accelerated the loses in Europe yesterday. Also because the liquidity was lower than normal, due to your holidays.
“No need for concern, sir; it’s only
natural in a period of transition
for the more timid element to run
for cover” Norville Barnes (The Hudsucker Proxy)
Given that US markets were closed yesterday, major players have been propping up (mainly) the FTSE and the US futures to postpone a collapse. Look for Wall Street to trade within a -5% to -3% range until the European markets close, then US markets will fall sharply. For those with a good memory, this is exactly what happened in october ’87. Having said that, we’re not going to crash like 1987. Technically, short term, this market looks much more like 1973.
27 trillion dollars in global credit derivatives. That is the Catalist.
paulson is about to whistle past the grave yard.
Last week I said it would be a two week plunge to 11,300. It looks like it will do it in a few days. I will be looking for a bounce there. The speed at which we are falling apart, we may get capitulation, the bounce everyone is calling, and new lows all in the same day LOL.
Listening to Paulsen, they are whistling in the graveyard, insisting fundamentals are still sound…they don’t want to panic everyone. Either that or they are all brainwashed zombies at this point.
11,359
0.22% in equities right now…rest in short term BoC paper…phew.
I assume this will be the biggest opening gap down in points in Dow history…how about percentwise? Barry anyway to get that info?
11,800.
Sharp dropoff @ opening, then equally sharp midday rally, ending with bumpy gradual decline to close.
“Futures off a tad . . . ”
I’m debating which is more appropriate:
Monty Python’s “Tis but a flesh wound”
or
Animal House’s Kevin Bacon “All is well!”
=========================================
SURPRISE! FOMC rate cut of 75 basis points! Look at those futures change!!!!!
Fed Panic cut just done…3/4…market will still drop 200 today IMO. Then what will they do?
When do we get to hear how Iran is responsible for the global market meltdowns?
OMG! Bernanke is such Wall Street’s bitch!
11,001 – where it will meet psychological resistance,
unless…
everybody comes unhinged, and there is no psyche to stop the fall.
Be very careful walking on Wall Street today (stay near the curb).
keep panicking …… sell some more
Can you say Fed Panic?
OMG. What now?
11720
Dear Hints-from-Ben,
My horse is gone and the barn door is open. What should I do?
From Bloomberg:
Fed Cuts Rate 0.75 Percentage Point in Emergency Move
http://www.bloomberg.com/apps/news?pid=20601068&sid=aEgwdDHD5Fbs&refer=economies
“I can smell their fear!”
–Cyborg Commando “The Tiberium Sun Chronicles”
Not much bang for the buck. I can’t believe what I hear on CNBC. Those guys remain shameless.
ONLY 75bp? Some were looking for 100?
Hold on to your Feddy Bear. Gonna be a fun ride.
The Bitch puts out.
Let’s wait couple of days and see what happens. History shows markets spend more time going up than down, and all down markets have bottoms. Unless the Fed fails to act, this is just about over.
Emerging markets is at a historical bottom. Even if it goes down more, it is still at a place to make a lot of money by year end. Europe only needs a little catalyst to go up quickly for a couple of days.
Mr Ritholtz, your happy dance is now looking like a tiresome and repetitive ‘I told you so’. I don’t think I would trust a pessimist like you with my money. Clear vision and a willingness to make a call outside the mainstream shows strength, especially when it is fact based. Once the market starts rising, will you start perpetually calling for the next big drop?
So far, it look like I am the only clear thinker who posts here. Maybe posting here is a mistake on my part since so many sloganeers live here. I wish Kudlow would reopen his blog again for replies.
Is there anyone else who can write and think at the same time? You don’t have to agree with me, just show you have more than broken clock economics and airhead quips to support your opinion.
If not, where is a good blog where thinking people congregate?
To answer your question ‘Where are the bulls?’ … you’re chasing them away in order to be surrounded by like thinking people.
Here comes the rate cut. Told you so.
Next question is: what happens now? If you are caught pants down, sell some into this premarket “rally”.
Still may have the largest gapdown ever. They had to do this…what do they have to lose at this point? If you are 4th and 20 from your own 45 with 10 seconds left, you throw a hail mary into the endzone.
As I said yesterday though, how does this prevent the margin calls?
this will put some fight in the bulls.
11,800…
Emergency cut by the FED: makes you wonder why they normally need two days for their regular FOMC-meetings, but if the market breaks down apparently a serious deliberation doesn´t seem so necessary. What a difference a week makes… no really, what difference does one week make?
Futures don’t seem to care…
cinefoz,
Everyone with a sense of logic could see this was going to happen two years ago. I know, because I started looking for a house and was astounded by what I found and saw. It was only a matter of time.
The time is here and this is what everyone with a sense of logic predicted. What are you mad at Barry about? That he is profiting off of it. I’m profiting too, the Fed just made my gold worth at least 10% more by the weekend by cutting 75 basis points.
Ben is a moron.
Image all the people that went all in on margin figuring the rate cut news on CNBC would have no chance of making the market go down.
He just doubled the problem from what it was this morning.
Now the panic will DOUBLE.
As I was speculating over the weekend, despite his tough outer demeanor, Bernanke is stock market’s poodle. He blinked and has reinforced the Bernanke Put. Whether that matters materially to the market or not, is a different question. Market now knows how to get Ben to get off his ivory tower.
>> Maybe posting here is a mistake on my part since so many sloganeers live here.
No! Cinefoz, don’t get discouraged just cuz you’re in the minority. Your posts are reasoned and well-written. And I bet nearly *everyone* here thinks the same thing. It’s just that they disagree.
Personally, I don’t know whether you’re right. I’m inclined to disagree but really don’t know.
Forgot to add, this reminds me of the first 25 bps rate cut in 1998. Market was so pissed off that it got a mere pittance (after the LTCM debacle), it sold off furiously. It took a cleverly timed second 50 bps 45 mins before option expiry to satisfy and rally the markets.
Too soon to know where we end up, but I have been reading a lot and talking to a lot of folks and there are many folks who are stuck and wish to get out.
The Bernanke Bendover.
>> cinefoz,
>> Everyone with a sense of logic could see this was going to happen two years ago.
If I recall, cinefoz was bearish and in cash not too long ago. It’s just that he plans to deploy that cash now. In other words, he’s had a sense of logic.
How do you spell panic???
Bernancke….
Ciao
MS
Cinefoz, when all those around you loose their heads, and you are able to keep yours, perhaps you do not understand the severity of the problem.
Markets………………fluctuate. This will probably become a Bull blog over the next few years.
Looks like Bernanke is Bush’s bitch.
This Fed cut is a clear sign of panic on the part of this maladministration. I mean- how the hell can they revert to the tried (and truly ineffective) Greenspan method?
As someone said a few comments up- panic will only increase now.
“If I recall, cinefoz was bearish and in cash not too long ago. It’s just that he plans to deploy that cash now. In other words, he’s had a sense of logic.”
Good for him. I don’t read this blog everyday, just when there’s big news.
If he wants rational thinking, my personal opinion is that everything just has to go down for awhile. I take the viewpoint that there’s a lot of rotten stuff, no one knows all of the rotten stuff out there, and it scares investors. That scare, plus the lack of money to pay the outstanding debts such as credit cards and mortgages and the like, ensure a downside to the American economy. Why? Because everyone buys everything with credit! I get looked at weird because I think debt is evil and try to pay off everything as much as I can in cash. When that point of view is king in this country, it’s not that hard to find out why we are in the situation we are in.
They fired their gun and the beast keeps coming…. ok, now time to be concerned.
cinefoz,
When there is a tradeable botton, things here will change. I suggest keeping the powder dry and not trying to outguess the market for short term moves.
Ken Fisher made the point that a trader needs to evaluate what he believes to be true to find out if it is really true.
Bear markets are different and what worked on the way up can be crushed if attempted on the way down.
11403 Bank it Danno
A comment from elsewhere that I thought were good:
“I come from an Asian country that got whacked in 1997 and I remember still the admonitions from the IMF, WB about the need for central bank independence and monetary and fiscal discipline. So our central banks were basically ordered to raise interest rates and cut spending.
I guess the rules only apply to us.”
I’m listening to Bloomberg radio, and they some traders are VERY skeptical on this (and then talked to some).
I just think the surprise of it, compounded with the sheer size of the cut, sends a clear signal to investors of how bad things are.