The Market Crash of 2008 continues. I watched the carnage unfold on my market model in real time and I’ve never seen this level of panic before. Scary. The VIX touched 58 yesterday, a new all time high. It probably would’ve touched 60 if we went any lower than the lows yesterday.
Everyone at work is scared about their 401k’s and pulling money out. What did I do? I upped my % contribution yesterday.
My friends, these are the times that try men’s souls. I believe we are starting “the race” to the bottom (or not).
“We’re seeing panic all over the markets right now,” said Javier Barrio, head of equity sales for Spanish clients at Banco BPI SA in Madrid. “Governments are taking steps to try to reduce investors’ fears but confidence is weak.”[via Bloomberg]
The scary thing is that one of my simulations show the S&P500 could reach 700 rather quickly.
I remember Warren Buffet getting long Yen about a year or two ago. Was he lucky or just shrewd?
After seven years of providing the cheapest source of funds for investors buying higher-yielding New Zealand dollars, Australian dollars and Brazil reais, the yen is appreciating as $587 billion of subprime mortgage-related losses force banks to restrict credit. It strengthened 4.4 percent on a trade-weighted basis in September, according to the Bank of Japan’s effective exchange rate, the most since August 2007, when the seizure in capital markets began.[via Bloomberg]
Shrewd is the answer.
I know this was so last week but CitiGroup is buying Wachovia’s banking business. Whether or not its a smart move remains to be seen but things *might* be turning around for this bad boy. Any glimmer of hope is welcome news to long term shareholders, like myself. What’ll make me feel really good is if CitiGroup (C) can get back above the 50 WMA. At least my $20 average cost positions would offset my $40 average cost positions. 
Update: I must be cursed. Right after I posted this, news comes out that Wells Fargo wants to buy Wachovia in its entirety. Ugh!
Here’s yesterday’s volatility spike. This could very well be the bottom, I hope! My S&P500 market timing model made a 4 STDEV move yesterday and issued the strongest BUY signal yet.
I’m very cautious these days because I’ve been averaging down and losing money. This is an extremely stupid way of investing in the short term but you gotta think long term here, and have the BOS to do so.
We are living in exciting times alright! I’m happy that the bailout plan was voted down but my guess is they’ll try to get it passed again. I’m not happy that 1.2 trillion dollars of market cap vanished yesterday but my Excel monte carlo simulations pointed to a slide to the 1100’s for the S&P500 if it broke through 1176.
I’ll update my model runs today to see where the S&P500 could go from here. I usually tweet the results on Twitter so if you wan to be the first on your block to get them, sign up for my tweets!
PS: The market timing model issued the strongest BUY signal yet yesterday. Even bigger than this one.
I’ve been busy rebuilding my Gold neural net model over the past few days with new data and inputs using the new version of Rapidminer. It’s the same model I used to write my published Futures Magazine article and tinkering with it should give me new insight into the current Gold trend. This is particularly important to me because I want to know if any future pull backs in Gold is a buying opportunity or something else. I predominately use my trend models to find buying opportunities and this works great in Forex and Metals.
Many people I correspond with thought the Gold market was crashing when the price broke through $750 recently. I seem to remember a lot option acitivity around the $600 level as well. My old Gold model told me otherwise and I paid a visit to my Gold dealer earlier this month. I’m curious to see if it will tell me to visit my Gold dealear again in October.
