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

[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*