Toronto TSX Canada's benchmark index PLUNGED 605 points.....worst point loss in history....NOT % loss......
RIMM down $6.70 on 879,919 volume...average daily volume is 2,400,000......
POT down $5.90 on 868,164 volume..average daily volume is 1,700,000...
AGU( which I own) down $2.30 on 875,384...average daily volume is 1,600,000.....
My today's purchase UEX.TO down 85 cents to $4.93 my cost $4.88 on 1,075,504..average daily volume 606,000.......
Why am I highlighting VOLUME......because it was way LOWER than average on RIMM,POT,AGU...
RIMM traded ONLY 37% of daily average volume...
AGU traded 55% of daily average volume ...
POT traded 48.9% daily average volume...
A Technical analyst of National Bank in Canada who was the most famous BEAR has turned BULL today...FWIW !!!!
Find your OWN comfort level always with markets & stocks....
I have gone through many BEAR markets personally .....
First one was from Jan 1973...to Aug 1977....a span of 4 years & 8 months....a 23.4% drop in 56 months.......
1987 crash was a stunning 36%+ drop.......
Stock markets does these things on a recurring basis.......
It is up to YOU...to understand .....what markets are all about.....
It is NEVER straight UP forever.......
We had 3 corrections of 7% variety in the last 12 months.......
The current "downtrend is NOT over & IS NOT factored as part of the above"
To STAY in the markets....you NEED an "understanding of how much LOWER markets CAN go"
Markets will NOT change its course...because "you are UPSET"......
Markets WILL DO...whatever it WANTS to do for a very good REASON......like downtrend in US economy...which MAY affect world economy....
BLOG does NOT give buy or sell.
Saleem
23 comments:
Saleem,
Thanks for the update. I am not looking forward to tomorrow.
Was this more than you anticipated?
Have you repositioned as a result?
Have you considered QID shorting the Nasdaq? When I retire I may review this further.
The more I read on LDK the more I believe through 09 this is the stock to own.
What agriculture stock would you recommend?
I have seen some difficult times as well. I just did not understand what was happeining. I no longer feel naive' which is a blessing and a curse.
Thanks for all your support.
Diane
Hi Diane,
As you all know that I AM an optimist by nature......
But...extremely practical by habbit.....
I have been pulling money OUT of the market since august....every time I had a profitable trade....
Last time I pulled money OUT was on dec 24th.......
This correction has gone lot farther than what I thought....anything over 10%..I am NEVER ready for.....
But...My instinct(intuition 101)told me to get OUT of all Big caps tech.....
So sold RIMM @ cost..Huge gain in AAPL & $20 per share loss in BIDU.......
Once I did that....
I positioned in Solar as overweight (LDK,CSIQ & AKNS)...then AGU in Ag & MA as recession play.....
Why MA as recession play.....
I knew ...when times are TIGHT or TOUGH for whatever reason... charge card usage goes UP....exponentially..NOT down ???
AGU is the only one I will recommend in Ag....NOT because I own it....but you can benefit from my research....by the way it IS a Canadian Company alongwith POT.
Now you know the letter 87 in my handle has prepared for anything which market can DISH out...ready or NOT !!!
Saleem
Diane,
I read your posts and although this is not a comfortable situation to be in on the long side, all of stock investing history has shown that the markets will trade higher over time. If this is your retirement fund just sit back and enjoy the dynamics that are going to unfold in front of us. It's like watch that comet racing at us but at the end we all find out that it is going to be diverted and all will be well. This is a side show. The GS's of the world don't make any money if you do not sell.
Hi Dianne,
If you don't need the money then let it ride. Trying to time the market is impossible. Everyone who has a retirement fund (around the world) is taking a big hit right now. No one is left out. My growth MF gave me a lousy 6% dividend last year then promptly rolled over and down. And they are the experts? Why does this happen? Because a few big players decide its time to tip the market. Carefully selected program selling and a few words in the right ears and over she goes! I only lost money when I sold to soon.
What does everyone think of MKL? Showed reversal on the charts. Any thoughts?
Standards
Hi Saleem and others. I smell fear on the board and throughout other areas. This may be good and may be signaling we may be bottoming. Remember, a bottom is not a single event and it may take months. FWIW, hope all is well. Peace.
Saleem
I was just wondering : Do you buy your canadian stocks which are also traded on the us market on the TSX or on the US market. (AGU for example)
Minaccess,
I too smell fear and read small players jumping ship, giving up, selling out. Maybe that's the small volume today? The last to give in? Let's pray for a relief rally soon.
Standards.
Hi Frogvest,
As you know I am short Canadian $..so keep a very close eye on CAD ratio with US$.
I bought AGU in US$ account....because @ that time Canadian $ was higher than US$...
So i have adual bet with AGU That hopefully it will go UP but also I am gaining as IS with us$ gaining on CAD......
All my current position is in US$ and in US account......
Today I bought UEX in Canadian $ account.
Saleem
Hi Minaccess,
Retail customers are extremely FEAR driven in best of times...
& currently it is the worst of times.....
Markets are in freefall....tuesday could be the-LOW for this downtrend......then it will beigin a long drawn out base building process.
Saleem
Hi Standards,
No corrections/bear market are similar.....
We may see a grinding markets till April ER......just a HUNCH...
Tuesday we may want to forget..for a long time.....
Tokyo already down 600 points AGAIN !!!
Saleem
Good read if you don't mind having nightmares :
Several similarities between today's market and 1987 Crash(By MARK HULBERT)
The parallels between today's market and those preceding the 1987Crash are several -- and disturbing.
Then, the dollar was in a free fall against foreign currencies. Today, as well. And then, as now, the U.S. government showed no signs of being particularly concerned.
Furthermore, over the October 1987 weekend prior to what would eventually become known as Black Monday, foreign stock markets plunged. The same is happening today too.
It was obvious to almost everyone, prior to the market's opening on Oct. 19, 1987, that the Dow would have a terrible day. And sure enough, it did, losing 508 points.
U.S. stock markets likewise appear poised to have just as big a point loss this time around. As this is written, on Monday afternoon, the futures contract on the Dow Jones Industrial Average is off by some 520 points.
Of course, the DJIA today is at a much higher level than in 1987. So this benchmark would have to drop more than 2,700 points on Tuesday to match the percentage loss from the 1987 Crash. This contrast may prove to be only small solace to beleaguered investors, though.
More solace may be provided by another parallel with the 1987 Crash, however: The crisis then was primarily confined to the financial markets; the economy as a whole, as judged by the scorekeepers at the National Bureau of Economic Research, was not then in a recession; nor was it about to enter into one.
To be sure, it would be premature to declare that today's economic slowdown will not develop into a full-fledged recession. But some of the newsletter editors I monitor do believe that the extent of any economic weakness is being exaggerated.
One such editor is Norman Fosback, editor of Fosback's Fund Forecaster. The latest issue of his newsletter was emailed Monday afternoon. And though Fosback does not focus specifically in that issue on the global markets' freefall over the past two sessions, his analysis speaks directly to the question of whether or not the crisis the markets face currently will be primarily confined to the financial markets.
Fosback suspects it will be relatively narrowly confined. "The prospective business slowdown does not appear all that serious," he writes. This is for a variety of reasons, the most important of which, according to Fosback, is the strength in the global economy:
"The global economy is plugging along in reasonably good shape, thanks in no small part to the weak U.S. dollar (that is even now boosting foreign demand for U.S. products), and thanks as well to the economic boom in the developing world (most significantly the emerging economic giants of China and India, that are providing an awesome supply of low-priced goods and services to U.S. consumers). This global economic boom is the golden egg for us all."
What about the subprime mortgage crisis? Fosback says its impact is being exaggerated too.
"As horrendous as seems the current round of write-offs by financial companies, these same firms profited immensely from the subprime boom in the first place, and are now merely giving back some of their gains. The great myth is that individual Americans were reaping the windfall benefit of absurdly low interest rates on their mortgages. This belies the fact that not only are the borrowers' mortgage loans secured with their own homes, but the average adjustable-rate subprime mortgage borrower is paying a 9% interest rate. That hefty consumer cost has produced, and is still largely producing, a lot of annual profit for the loan financiers. In the long run, these yields will offset all of the defaults, and in a very real sense the current default losses are simply one of the foreseeable costs of making the higher-risk loans in the first place."
The bottom line, according to Fosback: "The recession, if one even comes, should prove to be relatively mild. Although corporate earnings will certainly fall, this is not the doomsday end of the global business expansion."
Fosback deserves to be paid attention to because he has been a newsletter editor since the mid-1970s, more than three decades ago, and has a creditable track record. Among his noteworthy accomplishments is the creation of the stock market timing system that, far and away, has the best long-term track record of any that the Hulbert Financial Digest tracks.
Hi Frogvest,
Thanks for posting a balanced view of what is going on.
Saleem
Hi Saleem,
It is reported that the sell off of the DAX is primarily small investors dumping shares with "conviction".
Barrons was suggesting MBIA as a play at these low prices. Their article read well. They are around $8. Break up value $30-$40 a share.
Sounds tempting on another dip.
Hi Standards,
GS & other hedge funds are short the market...joined by small investors around the world....
Capitulation creates many opportunities....MBIA or some strong stocks ...which will be dumped.....
I will monitor closely....if I am tempted to increase my exposure....
Added uranium UEX which had slumped almost 50% ....in TSX
Who knows what else on tuesday !!!
Saleem
Indian Markets:
The Sensex opened with a negative gap of 721 points at 16,884 on Tuesday morning.
The index is now down 9.8% (1,716 points) at 15,889.
The NSE Nifty has crashed over 12% (630 points) to 4,578.
The trading has been suspended for one hour now.
Going to sleep now...probably better I sleep in tommorrow.
Tommorrow morning should be UGLY, hopefully slowdown the rest of the day, as a few saavy buyers step in!
We'll see how my AAPL does tommorow. Earnings calls in a good market make me nervous....so in this market I am VERY NERVOUS!
Actually, I think AAPL IS going to beat estimates and have a positive outlook, but in this market who knows where the stock price goes. Regardless, its a solid company with a brilliant leader and bright future..for that I have conviction and hope for the best tommorrow.
p.s Anyone have a sleeping pill? ha ha
Buenas noches!
Hi Saleem,
I was reading yahoo headlines yesterday and I think that the list of article titles said it all:
*Oil down on recession worries
*Foreign futures down big
*Bank of China down 12% on bad paper
*Toyota sees market cap slashed...
*Bush sees economy as doing fine
FINE??? Bush sees the economy as doing fine? I looked at the headlines and just had to laugh at how out of touch the Admin. is! We all knew action needed to be taken weeks or months ago. How come us little guys knew it and they dont?
Hi Saleem,
Do you have a price in mind that you would consider adding to your LDK position? Thanks for any thoughts. Doug...
Hi Doug,
Leaders are "born NOT created"
Everybody has seen in horror "only talk & photo OP....ACTION is missing by those who think they can sell LIES"
BB said in oct....there is more risk to inflation..not growth...
Paulson said..housing will NOT affect economy.....
Bush....only READS ..whatever he is given.....
Enough said !!!
Saleem
Hi Doug,
Today MAY be a great day to add to any position...if one wants to...
I tend to buy....other stocks which may be on sale.....
I have all the LDK which I ever wanted....
Saleem
Thanks Saleem,
I am glad that you responded like you did because it made me re evaluate my thought processes this morning. I too, own enough LDK. I think I will just sit out my long position and wait it out. Best wishes today to all. Saleem, I will be keeping the blog up all day today in the hopes that you will post some intra day thoughts, ideas, commentary...
GOOD MORNING SALEEM:
Seems like we are all a little tired of the market correction.
I am not hearning any news about BBernanke coming to the rescue! Seems that Bush's ecomomic policy is also not to popular. By the time Congress talks the economy to death we will have dropped another 1,000 points. ANd Congress still will have accomplished nothing.. BooHou!
Can you tell me about your unraium play--did you buy some ??
Have a nice day, every one!
Madmax
SALEEM did you see this news?
Fed Cuts Interest Rate 3/4 of a Point
Tuesday January 22, 8:37 am ET
By Martin Crutsinger, AP Economics Writer
Federal Reserve Cuts Interest Rate Three-Quarters of a Point to Try to Head Off Recession
WASHINGTON (AP) -- The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday, the biggest one-day move by the central bank in recent memory.
ADVERTISEMENT
The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.
The Fed action was the most dramatic signal it can send that it is concerned about a potential recession in the United States. It marked the biggest one-day move by the central bank in recent memory.
The Fed decision was taken during an emergency telephone conference with Fed officials on Monday night. Those discussions occurred after global financial markets had plunged Monday as investors grew more concerned about the possibility that the United States, the world's largest economy, could be headed into a recession.
In a brief statement, the Fed said it had decided to cut the federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth."
Well lets see if this helps
Madmax
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