The Day the Earth Stood Still

You may have noticed that September 15, 2008, under keen eyes of the Bush administration a form of corruption so viral and intense it spread throughout the entire planet - escaped containment in the New York Stock Exchange and crashed the world economy. The Hang Sen lost 60% of its value. The DAX was down 40%.

President Obama , in the most-watched inauguration address of all time, said that he took the reins of power in a storm. The subsequent legislation and initiatives he pressed through never had a chance to take effect.

In less than thirty days after Obama took power, the markets hit their second tier of resistance at 8200 and fell through, as I had written - and the world saw the US Stock Exchange continue to crash. George Soros, a man who makes a great deal of money out of trading the dollar against the Euro, recently stated that there is no end in sight to the current crash.

The economic board set December 2007 as the start of a grand recession. In keeping with style over substance and sizzle over steak, the Republican administration that had spent more money than any other in the history of the country - on their marketing budget - chose to emphasize how the "fundamentals of the economy are strong" and proceed along a deregulation track that allowed unbelievably massive fraud to occur (along with a few silent offshore campaign contributions). Billions of dollars were discovered, in 2008 - to have been stolen from the markets and investors. The perfect storm was coming. We discovered only later it had arrived - the market crash had occurred in the midst of a great recession.

And now, today. The markets will decide the final course of action for the economy. Not the governments. And this is how we will know we are safe. Instutions and large investment interests automate their risk management. If a stock drops below 10.00 per share, the large investment interests automatically drop it. When GE crossed the threshold of 9.93 per share, at closing bell - it was an almost certain short play down to 5.91. The short position takers have covered, and they are watching 7,000. And so should you.

7,000 is an important mark because it is a mark in which a significant number of the existing companies comprise the Dow Jones Industrial Average - by which their values must hold else the next tier of support may well be 5,000.

If 7,000 holds that will be the bottom of the market and you may as well buy in and get rich. If it doesn't, then the great depression of the 21st century is now officially upon us. The second wave of toxic asset scandals will come in the form of Credit Card debt default and the banking infrastructure will take a huge hit from which they may never fully recover.

Today is the day the earth stood still.


Gortháur said…
I believe that when you bally-hooed the Dow support of 8000 last late fall, I left a comment here to watch the March unemployment report and Dow 6000.

It is still coming . . ..

You may be right about a violent swing to something like 5000, but the Dow should go catatonic at 6000 after.

It is a once in a lifetime opportunity.
8200 was beaten down like a redheaded stepchild.

Lets see if we recover to 7700 (as i wrote earlier) and if the bottom forms there. Unemployment has to stabilize a bit..

One thing I will say however is that I think the big jumps will be

6900 --> 7700

7700 --> 8200

8200 --> 9000

so if you're playing a spider fund or a composite fund I'd go ahead and watch for when the rally points form below those three targets above and then pop it for 3% bracket rally and just go to the sidelines and wait after that.

I will say this too. Its a trader's market. You want to take a long position only after all the dust clears.

If you make 20%, I say - Keep it!!
Hope you were in today!

I was :-)