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how close are we to capitulation?
Old 02-11-2016, 11:52 AM   #1
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how close are we to capitulation?

Downturns generally end in capitulation. Wonder if we are anywhere close to it with the market in the last few days. I don't see this bear market being anywhere close to what 2008 was as banks are not nearly as exposed to bad oil loans as they were to the mortgage fiasco.

Plus low oil prices should be a shot in the arm to the economy, not a drag like lower house prices. The next bull should be much more robust than the currently ending one.
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Old 02-11-2016, 12:00 PM   #2
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Don't think we're anywhere close to capitulation as there are plenty of bulls still around. When all the bulls become bears is when the bottom is in. moo
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Old 02-11-2016, 12:13 PM   #3
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When the headlines start looking like this isn't it a sure sign that the end is near.....?

The world can't afford another financial crash - it could destroy capitalism as we know it. http://tiny.iavian.net/8xc7

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Old 02-11-2016, 12:35 PM   #4
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When the headlines start looking like this isn't it a sure sign that the end is near.....?

The world can't afford another financial crash - it could destroy capitalism as we know it. The world can't afford another financial crash - it could destroy capitalism as we know it

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We are indeed beginning to see articles like this but that doesn't mean we are near a bottom. This will build and build for some period of time to where these articles become the norm. The bottom is probably a way off at this time but, as these things tend to go, closer than we think. I figure another 15%.
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Old 02-11-2016, 12:37 PM   #5
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I don't know how close we are to market capitulation, but I am not yet worried enough to look for a job, so we must still be some ways off.
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Old 02-11-2016, 12:40 PM   #6
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I don't know how close we are to market capitulation, but I am not yet worried enough to look for a job, so we must still be some ways off.
A most excellent indicator indeed.
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Old 02-11-2016, 12:40 PM   #7
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Not close, IMO. Oil hasn't finished yet. It has to clearly bottom first. There may be more fallout from the banks. Banks were supposed to do better with rising interest rates, but now interest rates have dropped again, and people are concerned about bank loans to the energy sector.
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Old 02-11-2016, 12:44 PM   #8
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If you look at Gold prices, we must be close. We have to be closer than last week...
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Old 02-11-2016, 12:47 PM   #9
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I give it 3 more weeks of pain. Then a rally.

I know it's only one indicator but that is what the chartists are showing.

My other indicator is when my smarter-than-everyone-else neighbor sells everything. Her last remarkable insight was the third week of February 2009 and she proudly announce she went 100% to cash.
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Old 02-11-2016, 12:51 PM   #10
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Ask me again when we are down at least 30%. This is still a bump in the road. A big bump, but a bump. When we fall into the sinkhole, we can think about capitulation. My 2, take what you wish and leave the rest.
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Old 02-11-2016, 01:05 PM   #11
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IMHO capitulation will occur when some of the oil based companies file for bankruptcy.
Looking at CHK and SUNE - these are an indicator we are getting closer. The US economy is actually fairly heathy so you have to look at the driver of the problems.
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how close are we to capitualtion?
Old 02-11-2016, 01:08 PM   #12
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how close are we to capitualtion?

how close are we to capitualtion?

I don't know about "we" but "I" am pretty close!!
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Old 02-11-2016, 01:18 PM   #13
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how close are we to capitualtion?

I don't know about "we" but "I" am pretty close!!
When the cover to Time magazine, if it is still around, says we are in a bear market.
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Old 02-11-2016, 01:27 PM   #14
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Tales from a "capitulation" past.

It was October 1, 2008. The S&P 500 was at 1,161 which was about 26% off it's high. That week the bottom fell out and the market plunged another 260 points . . . a whopping weekly decline of about 22%.

Now down a total of 37% from its high and in seeming free fall, I watched as literally everyone seemed to be running for the hills. Ha! I thought. Capitulation.

So I piled in, buying a bunch of stocks in various classes on October 8th.

Surely I had caught the bottom.

But no. The S&P continued to fall by another third before hitting bottom

It was a bit humbling to throw a ton of money at the market and then watch it disappear as if it had been thrown into a wood chipper instead.

That mostly, but not entirely, cured me of my ambitions to catch that particular falling knife. I'm quite proud that I made one more, much smaller, purchase during that bear. On March 2, a couple of days before the ultimate bottom.

Suffice it to say, things need to get a whole lot uglier than this before I start buying in earnest. We're only down, what 16%? Bah! Kid stuff.
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Old 02-11-2016, 01:33 PM   #15
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volumes are still low and VIX is only at 30. It was at 40 in August. I'm betting on quite a while. We really won't get there without higher volumes.
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Old 02-11-2016, 01:48 PM   #16
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Agreed, much higher volumes on big down days. Then a lull with not much change and not much volume, then about 3 days of small up days on light volume.
That is what I am looking for.
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Old 02-11-2016, 01:50 PM   #17
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And it could be all up from here, and no capitulation. A simple 15% correction.
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Old 02-11-2016, 03:15 PM   #18
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I give it 3 more weeks of pain. Then a rally.

I know it's only one indicator but that is what the chartists are showing.

My other indicator is when my smarter-than-everyone-else neighbor sells everything. Her last remarkable insight was the third week of February 2009 and she proudly announce she went 100% to cash.

Marko, please update us on your neighbor!


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Old 02-11-2016, 04:28 PM   #19
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A headline like this tells me we might be close. Not just the death of equities this time, it's the death of capitalism.

Video: The world can't afford another financial crash – it could destroy capitalism as we know it - Telegraph
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Old 02-11-2016, 04:36 PM   #20
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My crystal ball says: the S&P will hit 2100 before it hits 1800.
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