Are we in or nearing the capitulation stage of bear market?

[Dawg52]

Quote:

Originally Posted by 2B Please stop saying anything positive. We won't get a real turnaround until 100% of all investors slit their wrists and collapse.

I'm getting close to digging out a razor blade. Not sure I could do it with my electric razor. Thank god for Tylenol PM. Definitely needed at bedtime right now.

[TromboneAl]

Capitulation:

In the stock market, capitulation is associated with "giving up" any previous gains in stock price as investors sell equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.

After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom.

[REWahoo]

I tired to buy some Capitulation yesterday but couldn't find a price quote for the stock. The symbol is CHOKE, right?

[2B]

Things are getting so bad I might be forced to retire in San Antonio.

I used to dream of having as much money as I've seen flee my portfolio this year. Hell, I used to dream about having what has disappeared this week.

[al_bundy]

on cnbc they are always quoting the VIX

did some reading on some blogs over the last few days and in 2002 the VIX didn't spike at the lowest point. it spiked to 40 in July 2002 and the October low was a on a lower VIX.

same here, i think we'll see another big drop sometime next year where the VIX will spike to 40 then a rally, another drop and that will be the end when no one expects it

[REWahoo]

Quote:

Originally Posted by 2B Things are getting so bad I might be forced to retire in San Antonio.

You've overshot capitulation and landed in purgatory...

[cute fuzzy bunny]

Quote:

Originally Posted by SteveR That said, I don't see the bottom any time soon. Way too much debt in dark places that has not yet hit the street.

Yeah, but is the fear of that already priced in, and is the impending reality going to be better or worse than whats priced in?

[socca]

Quote:

Originally Posted by clifp I think we will see Dow 20,000, and S&P 2400., and perhaps the NASDAQ will reach record highs. It is just a matter of time.

Well, it depends which mental model is most appropriate: the U.S. economy has caught a cold, or the U.S. economy has cancer.

If the latter view applies, then some questions to ponder: Are the easily identifiable tumors in the U.S. economy benign or malignant? If malignant, how easy will it be to excise them before they metastasize? Will the conventional monetary and fiscal solutions work this time around? Are our wise and farsighted gov't officials capable of 'thinking outside the box'? Are they even aware that they're inside a box? :confused: :confused:

[Bikerdude]

Quote:

Originally Posted by cute fuzzy bunny Yeah, but is the fear of that already priced in, and is the impending reality going to be better or worse than whats priced in?

I thinks its priced in for the "known unknowns" but not the "unknown unknowns" to quote Rummy.

[Jeb-NY]

Well I moved 4% from cash to equities last week and another 3% at the end of Mondays trading. This was all done in the IRA and Roth accounts. Part of the plan was to sell some similar funds outside the IRA as a way of moving about 3% of cash, the rest was my start to move more into equities and get rid of some of my high expense funds into Vanguard. Problem is I didn't sell the funds outside the IRA not thinking there was a rush and now I feel like I would be selling on a down panic. Don't really need the cash till sometime next year so, still trying to decide.

Jeb

[2B]

Quote:

Originally Posted by al_bundy on cnbc they are always quoting the VIX

I've had numerous people throw the VIX at me as the indication of future stock moves. There is absolutely no correlation between the VIX and S&P.

The market has opened up. I wouldn't be surprised to see a massive wave of selling come in later today and crush it again. That might be capitulation. I'll repeat that IMHO market bottoms are not always marked by an identifiable "capitulation." People will go back and point to some big sell off and say that it was there but nobody saw it at the time.

[youbet]

Quote:

Originally Posted by al_bundy i think we'll see another big drop sometime next year where the VIX will spike to 40 then a rally, another drop and that will be the end when no one expects it

OK, thanks. I've got that pencilled in on my calendar......

[Moemg]

Quote:

Originally Posted by 2B Please stop saying anything positive. We won't get a real turnaround until 100% of all investors slit their wrists and collapse. .

This is worse than slitting my wrist . I had a dream I went back to work . I was so tired today I couldn't get up until almost ten !

[freebird5825]

i had a dream that my teeth were coming loose one by one and i had to remove them. it could have been the prime rib and choc cake i had last night...or was it the market conditions insinuating itself into my subconscious?
hang tight...we're all sweating this one out...

[dex]

Quote:

Originally Posted by 2B I've had numerous people throw the VIX at me as the indication of future stock moves. There is absolutely no correlation between the VIX and S&P. The market has opened up. I wouldn't be surprised to see a massive wave of selling come in later today and crush it again. That might be capitulation. I'll repeat that IMHO market bottoms are not always marked by an identifiable "capitulation." People will go back and point to some big sell off and say that it was there but nobody saw it at the time.

Put a daily chart of the VIX above the chart of the S&P.

Then draw 2 horizontal lines on the VIX at 30 & 17

Then draw vertical line from the VIX to the S&P chart where the VIX hits or exceeds the 30 or 17 line for the latest information.

What do you see?

Also look back and see what a prolong time under 17 or over 30 looks like on the s&P.

[dex]

If I knew how to post a screen shot, I would show you the chart.

[cute fuzzy bunny]

Shift-printscrn will capture your entire screen. Go into MS Paint and hit "paste". Then use the dotted-box tool in the toolbox near the upper left corner of the screen to cut out what you want, then save the file to a .JPG and attach it to a post. Alt-printscrn will capture just the current active window instead of the whole screen.

In vista, theres a snipping tool in the lower left quickstart area, looks like a pair of scissors on an oval. Click that and it'll bring up a screen where you can outline what you want and then save it.

[ziggy29]

As long as almost every triple-digit rally in the Dow is met with a wave of selling that brings it down to flatline or worse, the bottom hasn't been found.

[dex]

Vix chart
Extremes in the the VIX can be used to find turning points.

Note - the 30 & 17 are not absolute numbers - it depends upon the time period you are looking at. If the VIX was in a range of 5 to 15 for awhile then that range would show turning points in a generally up market.

[2B]

Quote:

Originally Posted by dex Vix chart

All your plot tells me is that during severe down turns in the market people are nervous and the VIX rises and during market up moves people are less nervous and the VIX trades at a lower level.

I don't see a cause and effect or even a reliable sell / buy indicator. Like most forms of technical analysis you can use it to clearly explain what happened.