overnight is looking alarming

[solarbird]

Good afternoon.

The DJIA closed at 6,726, down -37.27, after a spastic day of training. The NASDAQ composite closed down at 1,321 (-1.84), and the S&P 500 closed at 696 (-4.49), the lowest level since 1996.

After the closing bell, overnight futures exploded to the downside, particularly in the NASDAQ, after Palm missed and Google issued an earnings warning. Dow futures are currently at 6,670.00 (-56 from close), the S&P at 689 (down 7 from close), but NASDAQ futures are currently sitting at 1,069.75, down 251 points from close. That's a 19% drop from close in futures for the entire index. Technology stocks have been holding the NASDAQ up. Someone - or several someones - are betting overnight that tomorrow, that stops. And that's what happens when I post in a hurry - I get my futures data wrong. The futures page I was looking at listed the NASDAQ-100, not the entire index, which is a different number. My apologies.

Someone is also betting that GE is bankrupt by June, if PUT action is any indicator, and it is. This isn't the only large company seeing this kind of betting, either; it's happening all over the markets.

Karl Denninger at Market Ticker talked about this process in his Monday postcast/"blog radio" programme; it's worth your time to listen to the first 10 minutes or so of yesterday's edition, the opening monologue. For those who won't: he's talking about the way that various collected types of fraud and embezzlement will get shaken out of the system, and how either the government can do it with investigative and regulatory powers, or the market itself will do it by stress-testing the credit-rating and stock valuations of one company after another until either they break or the market, as a whole, decides they won't. Normally that latter method is preferred - in an environment with some degree of trust (or confidence), it has various advantages - but that trust is exactly what we're missing. As I've been talking about for some time, no one knows who is lying and who isn't, and who is hiding what on their books and who isn't. Karl asserts (from previous experience) that In this environment, this process becomes indiscriminate, and does tremendous harm.

There's technical argument for being at the bottom of a wave-3-of-5 (or whatever you choose to call it; some people call it 3 of 3, regardless, it's the third and final leg down in a series) and therefore it's time for a retrace up across all markets, but it's tenuous and right now I'm not sure people are paying all that much attention to technical up indicators.

And that's all I have time for right now. Good luck.

eta: 10-year and 30-year T-bills sold off today, in a market rewinding to October 1996. There was some buying yesterday, but not to the levels you'd expect. I don't like this, not one little bit. Mr. Obama should be paying very close attention.

Comments

[silussa.livejournal.com]

I'm thinking we haven't bottomed yet for the simple reason that not all the bulls have thrown in the towel yet.

[firni.livejournal.com]

Hey, I had a JeHo come by (I really need to start looking at the security camera before I answer the door) and let me know that it's NOT going to get better, it's going to get worse because THESE ARE THE END TIMES!

[silussa.livejournal.com]

You know, I might find their arguments more credible except for the number of times they've been wrong about that.

[firni.livejournal.com]

I should find out if the rollers think it's the end times, too. OH NOES

[dogemperor.livejournal.com]

If you're curious, yes, they ARE ranting about that, and even worse, the NAR/Joel's Army "rollers" are now actively promoting things like gold investment schemes and "Christian Credit Unions" as a specific way of "taking back what's theirs"--and promoting the economic fuckitude as "Satan oppressing the US" because we haven't converted the US to a Joel's Army theocracy. :P

[firni.livejournal.com]

Someone should tell them that e-gold is a great idea.

[dogemperor.livejournal.com]

Actually, I'd be shocked if there ISN'T a scheme out there targeting NAR members involving e-gold; there honestly is a literal industry of various ponzi schemes targeting the neopente community and affinity fraud (often promoted in cell-churches) is a serious problem.

And Amway (speaking of neopente-linked Ponzi-scheme affinity frauds!) is ramping up its US operations again--and being promoted in NAR circles as a means of "wealth transfer" from the rest of us Sinful Folk. :P

[firni.livejournal.com]

I actually saw an Amway commercial the other day (accidentally) and was laughing at how they're trying to push themselves off as simply another way to get THE PRODUCTS YOU NEED. Like a rolling Walmart or something. *snort*

[brombear.livejournal.com]

Amazing how those pushing the spending "stimulus" are saying that it will help, yet the ones working the stock market deal with figures...

[llachglin.livejournal.com]

Um, those pushing for more federal spending to make up for the massive shortfall in private consumption and investment include numerous economists who work with figures all the time, and many of those who saw this crisis coming. The financial industry itself and all those Wall Street wizards "working the stock market with figures," on the other hand, has been consistently wrong about everything.

That said, there are major problems with government policy right now. First is the complete inability to face our problems and nationalize the banks, as everyone outside of the Fed and Treasury and Goldman Sachs seems to know is the only way out of the credit mess. The second is the consistent lowballing about how much government spending is really going to be needed. Our historical guide should be the wartime spending that finally ended the Great Depression.

[brombear.livejournal.com]

Yanno...I honestly have no idea what the heck is being batted around these days when it comes to the economy. One talking head says one thing, one says another. As for these idiots pointing fingers about who caused it, I'm still not seeing any legislation that addresses the mess we're in. It doesn't help when there are reports coming in about companies going under, but the execs getting the major payoffs.

What I can't understand is how spending ourselves deeper in debt is going to help matters when it seems that it would be more prudent to say "We're going to freeze spending for the next 4 years...review our spending programs, cut what we can, and get the debt down." But then again, I can't understand the stock market...it seems more like a very expensive game of monopoly to me.

Nasdaq futures

[(Anonymous)]

The NASDAQ composite and the NASDAQ 100 are two entirely different things. Based on your information, no one is betting on a 19% overnight drop in anything.

Re: Nasdaq futures

[solarbird]

Yep, and in my hurry, I looked at the wrong data. My apologies; fixed.

[whip-lash.livejournal.com]

That futures quote is for the Nasdaq 100 (http://dynamic.nasdaq.com/dynamic/nasdaq100_activity.stm), not the Nasdaq Composite. Nasdaq 100 closed at 1080.67, so we're good ;)

[solarbird]

And that's what happens when I post in a hurry. Thanks, will correct.