DOW down 223 points in 1st hour of trading

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If you owe the bank $10,000 and you can't pay, you have a problem. If you owe the bank $100,000,000 and can't pay, then the bank has a problem.
 
Dow down lots; good articles in Wall St Journal today; bought paper copy, so I don't know what's free and posted.

Good articles in the sense of probably accurate; not good in the sense that I read allaboutit on this blog weeks ago. I suppose we should call the big media the "olds" and blogs are the news.
 
I am in the Tech business and it is getting slammed. One of the biggest buyers of tech gear is the banks and financials. If they are going to layoff they are not going to be spending new money on any new network or storage gear.
 
The wife of my best client is a hotshot at IBM. She had a bunch of whuddayacall'em warrents? to buy in the 80s she got as a bonus. Exercise them, exercise them I say, and she actually listens to me. . . .and then buys something else back in the mkt which is down 25%. So instead of patting myself on the back, I am gritting my teeth, IBM being down "only" 10% or so.

Why is is that people never perceive that things can go down? The Wall St Journal has a story on a part of the brain being devoted to optimism, which I haven't read yet.
 
IC - I can give you a guess based on my experience. Earlier this week I covered my shorts on financials and this morning at opening I sold all my puts on financials. If others are thinking like me, they are covering their shorts to get prepared for a bear rally in the financials. Check out what the ETF for financials did today. I think the symbol is XLF. If it is optionable, I would guess there were alot of calls sold.
 
With the VIX almost at 30 its too crazy for me to play this market. My buddy wants me to learn to do a straddle. I just want to go play golf and relax. Its starting to feel like gambling to me. Almost like betting the horses.
 
IMO, you will see the market put on a bear rally next week and close just above its 200 day simple moving average. This will be a huge sell signal, and the market will follow with a multi-day or multi-week selloff. If you see a gap-down open the day after the market closes above its 200-day SMA, it is time to go aggressively short.

Just my 2 cents worth.
 
Take a look at the put to call ratio on XLF. A major change today.

bltserv - Trying to straddle the VIX, would be like trying to straddle a lion in the African wild. Personally, I would rather play golf. But, there is a trade to made here, just not a straddle.
 
IR--I just don't understand that stuff. And I don't do what I don't understand. I think that it is all about psychology and nothing about underlying values.

My family has kept our small capital for over 100 years by being verrrry conservative. And I will continue to be so.
 
ll - I am sure IR was not suggesting that anyone who does not understand or feel comfortable with what he was talking about should use the information to trade.
 
Here is the article lawyerliz mentioned.



Yet those who saw the future too brightly -- people who in the survey overestimated their own likely lifespan by 20 years or more -- behaved in just the opposite way, the researchers discovered.

Rather than save, they squandered. They postponed bill-paying. Instead of taking the long view, they barely looked past tomorrow. Statistically, they were more likely to be day traders. "Optimism is a little like red wine," said Duke finance professor and study co-author Manju Puri. "In moderation, it is good for you; but no one would suggest you drink two bottles a day."

Sounds a lot like the bulls over at Lansner's blog.

Indeed, the researchers suspect that the breakdown of this brain network may contribute to clinical depression. All in all, Dr. Seligman said, optimists tend to do better in life than their talents alone might suggest.

Except lawyers.

Surveying law students at the University of Virginia, he found that pessimists got better grades, were more likely to make law review and, upon graduation, received better job offers. There was no scientific reason. "In law," he said, "pessimism is considered prudence."
 
Pessimism IS prudence. I'm ashamed to say the Journal is still in the car and I haven't read it yet, but I'm glad that I turned to guys on to it.

Bring on the Prozac!!!
 
shizumaru - No, wouldn't that have been fun? But I did talk my father into selling his shares at a loss about a month ago.
 
After a deep short-term selloff like we have just witnessed, the professionals often come in and pick up bargains. Today (11-13-2007) The market gapped up and appears to be holding its gap. This is professional buying. Do not be surprised to see this action develop into a full scale short squeeze that will take the market up near 13400 where it will collide with its 200 day simple moving average.
 
I almost laughed today when I saw Yahoo's Finance headline this morning:

"Stocks Rise As Credit Concerns Wane- AP

Wall Street extended its advance Wednesday as investors grew more optimistic that the worst of the credit crisis is over and as the government released tame October inflation data.

awgee - glad your father didn't have to stomach the 50% drop that one day. Though Etrade did gain its value back the next day.

IrvineRenter - apologies for the n00bish chart analysis but with a short squeeze and looking at the 200 day moving average, that means we have a long way to go down? Working at a mutual funds company, they have been sending us analysis that the stocks for American companies have been undervalued and they are looking at picking up certain companies. I tended to disagree with this analysis because I felt that the stock prices were taking into account an inflated monetary supply finding its way through the system. I've been a little conservative on buying and haven't made any large purchases because I'm a little skeptical of the profits being made by these undervalued companies.
 
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