Monday, September 29, 2008


is i am afraid that we have not quite seen the capitulation you'd like to see. The selling felt a little organized and i am afraid we might expect one more real nasty drop very soon. I mean, just think about if the shorting ban was NOT in effect???? We could have seen the DOW drop probably double what it dropped today.


Anonymous said...

Can you be a little more specific on "the selling felt a little organized"? As in organized by the shorts? I'll admit that it looks a little that way to me now, but at the time it felt like "capitulation".
By the way, great "call" on the $VIX bull flag (or since it's the $VIX maybe it really becomes a bear flag).

Blue said...

If the shorting ban wasn't in effect they would have closed our market today to prevent a 1987 like crash. There are very specific provisions in place in order to do exactly that. We still got VERY close today.

Look at the volume Stewie. We're getting massive price depreciation on relatively light volume. I was looking at the solars, SPWR for example. I will be watching SPWR tomorrow based on the Cypress distribution of their shares. I'm scratching my head at what's left to short. I think I rather long some gold and skf if we get another selling round. Think the Oct. 2nd shorting ban gets lifted, which would be on the same day the house gets back in session, lol.

Stewie said...

"organized" means orderly and planned selling as if to clear some positions to raise cash rather than 'raw' panic irrational selling.

the fact that volume isn't that great like you say makes me worry even more. Blue you should gimme a call when you are in portland. let me know when you'll be here and i'll give you my cell number.

HPT said...

Thursday will be WILD. Keep stops.

GTM said...

Here are the NYSE circuit breakers:

BTW: GLD is heavily weighted by the mining stocks. It's not even close to the movement of the commodity.

Orange Trader said...

I think I read somewhere that capitulation requires a large amount of volume.. I don't deal with volume in the market I work with.. so, it is even harder to find capitulation.
Doesn't larger than usual volume indicate capitulation under the right circumstances?

Blue said...

Stweie, I emailed you two weeks ago. Haven't heard back. right?

I'll try it again.

Anonymous said...

I disagree, I think that if shorting had been allowed for financial shares, the selloff would have been less extreme. the shorting ban is only for financial companies and a few more, I have been shorting regular stock with no problems.

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