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

[2B]

You might want to change to monthly...it'd stink if you guys had to be bought out by the feds 3 days before the monthly checks came in...

I've never heard of a FA that didn't conveniently deduct the fee from the client account.

 

[dex]

Another indicator might be this weekend's newspaper headlines.
If you see words like panic, depression, bear market etc it might be a sign of a bottom.

Hey,
How about "It might be a bottom if..."

 

[harley]

The important question in all of this is how will it effect the changeover to all digital tv? Nobody will be able to afford those converter boxes!

 

[ladelfina]

harley, we will be lucky not to be entertaining ourselves with hand shadows!!!

 

[2B]

Today was the capitulation -- if it goes up tomorrow. The S&P down 57 points sure feels like we capitulated. Unfortunately, downdrafts usually stop when something just positive enough happens that people think the worst must be over. Herd mentality then takes over and it's off to the races in the other direction.

It's fear and greed. Right now fear is winning big.

We're having this slaughter depite a growing GDP. Of course, everyone knows we're really, really, really in the worst recession since the Great Depression.

 

[Running_Man]

It feels to me as if we are in the opening throes of a panic. Reserve Management is withholding redemptions on their money market and breaking a buck. 3 month T bills are dropping like a rock. Gold had it's biggest one day move ever as faith in the US dollar is falling. T bill rates of 0.233 sure indicates a giant fear of lending, which by it's very nature is deflationary.

Is this all overblown by the stock market? I doubt it, this is further confirmation to me of the 70 percent drop in the BDI shipping index.

However to my way of thinking the total decline is far too meager at this point to be a bottom.

 

[newporttony]

It feels to me as if we are in the opening throes of a panic. Reserve Management is withholding redemptions on their money market and breaking a buck. 3 month T bills are dropping like a rock. Gold had it's biggest one day move ever as faith in the US dollar is falling. T bill rates of 0.233 sure indicates a giant fear of lending, which by it's very nature is deflationary.

Is this all overblown by the stock market? I doubt it, this is further confirmation to me of the 70 percent drop in the BDI shipping index.

However to my way of thinking the total decline is far too meager at this point to be a bottom.

VIX closed above 36. That's panic.

 

[dex]

The VIX hit close to 48 at the end of 2002.
The only positive is that it closed above 1150.
Also take a look at the volume 9.4B today - the previous month it was 1.2B
http://finance.yahoo.com/q/hp?s=^GSPC

 

[socca]

A few months ago (how many, I've forgotten), Bill Gross claimed in one of his monthly newsletters that the unrealized losses from the sub-prime mortgage mess and all of the financial instruments tied to these mortgages was in the trillions of dollars (again, I've forgotten how many trillions). At the time, I laughed and considered his claim absurd. However, the events of the last week make me wonder whether ol' Bill's estimate wasn't in the right ballpark. If so, then I have no idea how many financial bombs are still primed and waiting to go off deep in the bowels of our few remaining hallowed American financial institutions. We live in interesting times. I wish they were less interesting.

 

[Bikerdude]

PETER BERNSTEIN: And that's dangerous. But it's very hard to make the case that returns will be, say, after inflation, more than 6% to 7%.


Oh my God, 6 to 7% AFTER inflation. Bring it on!

 

[willowbeezer]

My vote is : dead cat bounce tomorrow. then roll over and die again...

In any rate, staying in cash for now and if the market rises and I miss the 1st 5-10% - so be it.

 

[SteveR]

As long as the media has nothing else to whip up into a foam, they will continue to convince folks the end is near.....after the next commercial.

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. Hang on....it is going to be a rough ride.

 

[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.

 

[2B]

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.

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

[-]The Porn Channel [/-]CNBC had their normal parade of market mover interviews. Everyone said that the market was going lower. They didn't know when it would end but they all said it wasn't over. That's a good sign.

 

[clifp]

Me bad

SELL, SELL, SELL. The crisis is going to get worse before it gets better, the light you see at the end of the tunnel, is a monster train that is going to squish you and all little investor like a penny.

The Dow will hit 2000 before it sees 20,000.
Social Security is going broke.
The terrorist have won.
Iran is going to nuke NYC, and North Korea is going to nuke LA, and Russia will finish off what is left.

Finally, learn Mandarin so that you can ask your future boss, "more tea venerable sir"

 

[Dawg52]

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]

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]

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]

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?

 

[Bikerdude]

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