The Bear Case

[NY4Ever]

Yesterday the painters showed up with red paint. Today at 3:30 they showed up with green paint. Tomorrow theyjust might show up with brown paint and you will find out what brown can do for you. Sell the rallies.

[NY4Ever]

I would not rule out a one day drop of 250 pts in the Dow. The extreme volatility which we witnessed today is very worrisome.

[Websman]

I would not rule out a one day drop of 250 pts in the Dow. The extreme volatility which we witnessed today is very worrisome.

My Vulcan instincts are telling me that your scenario is a definite possibility. Wouldn't it be great to be short if or when it happens?

[New-born baby]

I would not rule out a one day drop of 250 pts in the Dow. The extreme volatility which we witnessed today is very worrisome.

Extreme volatility is indicative of a market top, is it not?

[DSteckler]

Extreme volatility is indicative of a market top, is it not?

No. A series of 90% up days (a day in which Points Gained equal 90% or more of the sum of Points Gained plus Points Lost, and on which Upside Volume equals 90% or more of the sum of Upside plus Downside Volume) is indicative of a market top.

[NY4Ever]

The 3 day rally I had been looking for has apparently begun with yesterday's late rally. WMT, GM and XON are leading the charge. The best the bulls will be able to pull off will be one more day. That said, would not wait until tomorrow to sell with Dow up 80 and Nasdaq up 22.

[B.J]

Extreme volatility is indicative of a market top, is it not?

I thought volitility was more of a bottom indicator. panic = volitility?

[NY4Ever]

I thought volitility was more of a bottom indicator. panic = volitility?

I t wasn't in 1962 and it wasn't in 1987.

[B.J]

Agree NY. There are dozens of pieces to the puzzle, which is why few, if any, can consistently get it right.

[Tatnic]

I thought volitility was more of a bottom indicator. panic = volitility?

I think $trin is a better indicator of when to buy or sell short-term. If you plot the 10 day simple moving average of $trin with horizontal lines at 1.2 and 0.8, you can see the extremes. When the 10 day pops up over 1.2 that typically means its time to start looking for buys...when it drops down below 0.8 its time to sell. We hit 1.34 the other day which was the highest level since Jan of 2005. Go back to 2004 and you can see levels that were over 1.7, that was an ugly stretch for sure. On the sell side, we dropped below 0.8 last Nov/Dec after that huge runup.

Since everyone likes to play the prediction game, me included, I predict that the markets will continue in the same vein, ie FED watch. We'll move back up in anticipation of the FED pausing, then when they raise again and say it ain't over, the market will correct. GDP and chain deflator numbers were both bullish as well which will provide the needed fuel.

[Tatnic]

I would not rule out a one day drop of 250 pts in the Dow. The extreme volatility which we witnessed today is very worrisome.

so, I'm curious. Why would you think a 2% drop is like the sky falling? And now that we didn't get it, are you happy, unhappy, indifferent?

[sowersnc]

Yesterday the painters showed up with red paint. Today at 3:30 they showed up with green paint. Tomorrow theyjust might show up with brown paint and you will find out what brown can do for you. Sell the rallies.

So does the brown paint show up today?

[Homersays]

Took your advice and sold Friday. Thanks NY

[billyjoe]

sowers,
The brown pants show up today.

billyjoe

[lemonjello]

LOL

I'm sure there will be hundreds of talking heads calling for a bottom.

sowers,
The brown pants show up today.

billyjoe