The big 3-3-3 drop will be when people will sell massively to get out of the market, whatever the price.
And margin calls will catch all those invest with leverage.

Finally someone who understands EWT.

1+

I just checked my bank. It's not on the "weakest" list but it's still loaded with the toxic debt. I think my money is safer in TOS. I wouldn't even know what bank to put it. According to Dr. Roubini, there's going to be a domino effect once these banks start going. WFC is probably the strongest at this point in time. I'm worried about my parents because much of their money is at WM. My grandfather lost all his money when his bank closed during the great depression.

Where did you check that?

According to the Fibonacci Retracement Tables, There's about a 67% chance for a retracememt rally tomorrow. I was told by the author of the site that the time to sell or hedge is when it gets to 75%.

http://tinyurl.com/5w57uv
[Open in new window]

The FED should have cut 50bps yesterday. (3mo T-bills at par, well 0.04%)

There is no inflation but only future deflation. Let the dollar find its place, the rest of the world is just as screwed as we are. Look at Russia and Asia. If we get any sicker they die.

A bounce or crash is coming. Today’s movement and the IV on most stocks are off the charts. MS and GS hold that golden ticket. Where they go the markets follow. I believe their collapse can not be absorbed.

Today, I felt disgusted and nervous about the future of America. The chatter is that we Japan'd, get ready for the hockey economy. (A crash to flat line, their problems started with RE and so did ours) Lets hope this t is not the case as I am not looking forward to 15+ years of muddle.

There's already talk about a merger or sale of MS and GS with other banks. I read sometging about it in The NY Times I think.

The transformation of the USA into the USSRA (United Socialist State Republic of America) continues at full speed with the nationalization of AIG
Nouriel Roubini | Sep 17, 2008

Last week we argued that, with the nationalization of Fannie and Freddie, comrades Bush, Paulson and Bernanke had started transforming the USA into the USSRA (United Socialist State Republic of America). This transformation of the USA into a country where there is socialism for the rich, the well connected and Wall Street (i.e. where profits are privatized and losses are socialized) continues today with the nationalization of AIG.

This latest action on AIG follows a variety of many other policy actions that imply a massive - and often flawed - government intervention in the financial markets and the economy: the bailout of the Bear Stearns creditors; the bailout of Fannie and Freddie; the use of the Fed balance sheet (hundreds of billions of safe US Treasuries swapped for junk toxic illiquid private securities); the use of the other GSEs (the Federal Home Loan Bank system) to provide hundreds of billions of dollars of “liquidity” to distressed, illiquid and insolvent mortgage lenders; the use of the SEC to manipulate the stock market (restrictions on short sales); the use of the US Treasury to manipulate the mortgage market (Treasury will now for the first time outright buy agency MBS to manipulate and prop up this market); the creation of a whole host of new bailout facilities (TAF, TSLF, PDCF) to prop and rescue banks and, for the first time since the Great Depression, to bail out non-bank financial institutions; the recent extension of the collateral available for the TSLF and PDCF facilities to a much wider range of toxic securities including equities and thus allowing the Fed to effectively manipulate even the stock market; and a whole range of other executive and legislative actions (including the recent bill to provide a public guarantee to mortgages for banks willing to reduce their face value).

I LOVE Roubini - he was on KCET the other day and wiped the floor with the other two panelists.

1+

Don't ya think that if your account grows 30-50% in one day, you're just one trade away from a bust? C'mon people, don't shock me anymore, let's put some good money management skills in. :)

I'm hedged to complete delta neutral at this point - so whatever the market throws at me will make me smile. Also - if we rally a few days I'm turning around and ride it up.

Don't forget - I'm not a bear by nature. Someday I'll be a bull - probably the day you turn into a bear.

Hey Mole-what is your hedging vehicle of choice? I've been going with calls a month out, but I'm curious as to which ones you buy (how many months out and how many strikes in or out.)

Thanks!

Congrats evil ones! Big gains today! Awesome week, and it's only half way over.

Don't let any choppiness fool you - stay hedged and keep your puts (unless told otherwise right here ;-))

Good job, Mole and Berk!

Keep the hits coming.

if we stretch EW rules and allow 2 points overlap due to AIG save excitement we can say 3 has ended today( or about to end).

We're below fork's median line as of today - expecting a bounce to upper blue fork's trendline to start soon - Friday/Monday

http://forkoholic.com/images/spxbounce.jpg

Here you go again - 3 IS NOT DONE!!!

If you know anything about EWT then you should know that wave 3 is never the shortest wave. It might not be the longest but in large cycles chances are it IS. Looking at a 1 year chart it is very apparent that wave 3 is far from done:

http://screencast.com/t/WE6rQ0yUVaM

Just compare it with wave 1 which is still quite a bit longer and it'll be clear to you. Sometimes you need to step back a bit and look at the big picture.

Wave 3 is far from over people.

I was talking about 3 of 1 of C or 3 of A of C or whatever your count is.
not about 3 of 3

Perhaps you should make that clear (and label charts appropriately) - many of our readers are not EWT aficionados and might change their trading based on incorrect or confusing information. Just a suggestion...

If SP close below 1175 (or even 1200) friday , this will be along term bearish signal...
But we all already know that ... but big institution and hedge fund will go out.

Have you see, gold,petrol and bonds ... youhou ....
Follow $canadian, gold and petrol going up, but not $can
(Ressource currency which is correlated).
This is a divergence in my book.

I know bond are boring, but thay are GOOD investement.. trust me !

Energy ... an other partial cashing on short XLE.

molecool : Something I have learn : you did't make any money if you didn`t cash it.!

Excellent week for me too ... $++ and having fun on evil speculator with you guys.

Sitting on my options like an old hound dog. But got myself to delta neutral (hedge) before the close as we probably see a bounce tomorrow. Oversold and the wave needs some recharging...

Dow 10,0000 and below. Only 1/2 way there.

My guess is we're down hard again tomorrow which sucks in the late shorts. That will give the market some powder to squeeze up. And the PPT will help them on Friday.

I expect a little bounce soon - no worry.

Yup, I'm there with you Serge

My SPY Weekly chart:
http://www.4shared.com/file/63411450/c24ec135/SPY_Weekly_9-17-08.html

Mt SPY 30 Min Chart for last 2 trading weeks:
http://www.4shared.com/file/63411269/943256e0/SPY_30_Min_9-17-08.html

Moontrader's turn date is about to hit, and so is Dr. McHugh's (though Dr. McHugh's does allow for some fudge factor)

Don't worry Mole and Berk, this is just a preparatory bounce for another nasty, nasty market splat.

So my EW Master Evil Speculators, Wave 5 should be equal to Wave 1? OR could it extend and be as large as Wave 3 (assuming it is ending soon)...

Wave 3 is NOT done. We might get a little bounce for a while but wave 3 is going to take us down to below 10,000.

I give and I give and I give - and this is what I get? ;-)

Seriously - take a look at this:

http://screencast.com/t/WE6rQ0yUVaM

Wave 3 will be longer than wave 1. Now both of you guys go and burn your charts.

Thanks Mole...

Sometimes it is helpful to be reminded of the big picture. I do not think since I've been visiting/posting, I've seen your view of the total wave count.

But I will not burn my charts, nor delete them. Because bounces do happen...

Yes, we'll get a bounce - most likely tomorrow or at least before the week is over. One does not exclude the other. Wave 3 after all has subwaves, right?

I was just kidding btw - it's Evil Speculator after all - roll with the punches....

Everyone: NO CHARTS WERE HARMED DURING THE PRODUCTION OF THIS POSTING.

It's funny... have you notice, it's like a heaed and shoulder that broke up ( weekly. )

Mole,

What's your prediction of tomorrow's market, Down or up?

I'm looking at the $NAUD, and it says we bounce FRI or MON, perhaps even tomorrow.
Sorry I can't be more time specific.
Just listen to Moontrader, that's what I do.

Thank you Z.

Here some thoughts, mostly a follow up with the previous post:

http://moontrader.wordpress.com/

However, I point out that we're approaching a capitulation, and my dates for a bottom on Friday or Monday are absolutely valid.

If it does not come soon we are in a bigger world of hurt then we realize. What are you looking for to indicate the bounce?

I guess we're going to have to search for some good long positions. No point in sitting around if the market is rising from a major bottom.

When you say bottom on Friday, do you mean capitulation on Thursday OR on Friday?

Congrats on your success today Mole!! That is awesome!

Thanks toad! Biggest gain ever - account grew by 40% today. Would have been 50% had I not grabbed my hedge a bit too early.

Meh - I owned the bulls today.

One of my accounts went up about 40%. Another one went up about 38%. Only had 2 index options.

Nice!

Smokin'!!!

1+

(btw, when do I get my cut?)

Good for you!! Time to get paid $$$... You stuck to your convictions and were rewarded, we can all learn from ya!

I bought a few index calls, but there's no way I'll be able to hedge my whole portfolio without selling some of my positions.

Wish I could get in on the fun with you all but having never done any short selling and very little with the market overall... and having limited funds right now.. I'll have to sit on the sidelines and watch the ride. Been too busy paying off my debt these last 2 yrs.

I have to say, it's quite interesting, entertaining and informative to be reading all this.. glad I stumbled upon this site.

As a result of the naked shorting law just instituted on ALL STOCKS, it may indeed be Bears' Last Stand.

I doubt the last stand part --- we still have some room before we hit the trendlines I've drawn, but I'm trading fairly light at the moment.

I'm also aware that LEH was a heavy holder of ESLR, and the stock has just been taken to the woodshed. Is this the reason for the massive selloff, or has something changed fundamentally with the stock?

on cnbc today they said there are 17 stocks that can't be naked shorted

CNBC??? Don't you know that kind of stuff is going to rot your brain?

Please don't tell me you watch Cramer as well...

CNBC is like watching a bad B movie... I mean where do they find these people? And to think that their comments move the markets at times... crazy.

they are expanding that to ALL equities starting tomorrow.

Where did you read that ... ? This will slow our growth of prosperity.

Should we add on gold ?

Oh joy - which is why everyone was loading up on them today - LOL

no doubt... what a joke..

I doubt it. Nothing the Fed has done has worked so far, why should this work?. Investors are selling their positions in financial institutions because they're undercapitalized and have worthless junk on their balance sheets. The Fed can't put a firewall between the stock market and millions of traders without just closing the markets completely.

Well, if that is a 'last stand' I'm happy with it. My account grew by another 30% today - how's yours?

UPDATE: 40%

i wonder how the bears are gonna take the market down much lower, if they can't naked short anymore. lol.. bastids and cheaters.

LEVERAGED shorts....I.E. PUTS.

And screw us "Evil Speculators" driving the market lower. When a hedge fund liquidates....that will drive the market lower.

Skål!

I was being cynical ;-)

They won't have to. We'll just wait for the longs to keep puking on their shoes.

I think that's why everyone is shorting today, beanie. Also, the large hedge funds have tons of stocks in possession. Otherwise they just buy 100,000 puts. But yes, it'll be a bit harder for us small guys.

It's funny!A lot of bottom fishers are getting carved up.I think we close on the low, and we might only be less than halfway there.

Yeah, we just got another standard a/b/c - those bottom fishers are completely insane. Talking about stepping underneath a falling sword.

removed

I should have held my index puts--what the hell, I'm still making money.

Not that I didn't tell anyone ;-)

I will never doubt my evil impulses again.

Sorry for rubbing it in - must be tough to sit this one out.

Oh, I made plenty of money without the index options.

Which other banks have significant exposure to default swaps? I know C does--what about BAC,JPM and WFC?

JPM has the largest book in the world. One of the reasons why they had pick up BSC.

BTW, where are those doubters today who were giving me hell for predicting a massive drop? Please go back and look at my charts and then send me a fruit basket.

I never doubted you, but where do I send the basket?

Evil Speculator
666 Devious Pl.
Hells Kitchen, Abyss 60666

Money market breaks the buck, freezes redemptions
Reserve Primary Fund stung by Lehman collapse, investor withdrawals

NEW YORK (MarketWatch) -- One of the original and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."

http://www.marketwatch.com/news/story/money-market-fund-breaks-buck/story.aspx?guid={56A2CEE5-5A53-4A27-A4BA-585CFBE173A4}

The system is seizing up right before our eyes.....

removed

Heaven forbid we get 2 500 point down days in a week....

I mean...Russia only lost 20% one day and 10% the next....Who says this "CAN'T" happen?

Skål!

Wave 3 is here!Enjoy it if your short.This impulse down could be 850 Dow points which puts you on the next Fib level AND trend line going to March of '03.Doh!!

C.C. do you see a short term rally to 1205 before we begin the next leg down?

``The panic going round the money market world is what they've been investing in is not as safe as they thought it would be,'' said Dominic Konstam, the head of interest-rate strategy in New York at Credit Suisse Securities USA LLC, another primary dealer. ``If the banks don't want to lend to each other they don't want to lend to the banks. That means where else are they going to put their money -- they're going to put it in T-bills for safety.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=auO79aKmWnp8&refer=home

Boy - you are fast :-)

Check out the TNX today - 33.92. Not as bad as yesterday's bottom but the day is young.