10.28.08 Random market thoughts

Previously I stated that I thought October 10, 2008 was capitulation day. I'm sticking to it. It was a partially objective, partially subjective conclusion. All hope was lost that day.

My new prediction is today started a Rally of Disbelief. Some comments from various message boards I read:

  • "Just as sure as it is up today, it'll lose tomorrow. Extreme volatility now"
  • "Sorry to disappoint but we're going down again. There are too many problems...the hedge funds, program trading & massive mutual fund redemptions by state retirement accounts, etc., are creating these huge one day moves. There is no follow through. There are no buyers. There is massive overhead supply. Fundamental analysis doesn't apply here. Technical analysis doesn't work either.
  • "Hold on to your arse, we're going down again."
  • "We will see markets bounce off 8500-8000 for about a year"

Such rallies are always interesting to experience. Nobody believes them. Many people will jump off and sell very soon because of their skepticism. Then as the rally continues, they'll fear that they might miss out on major gains and will buy, further fueling the rally. It'll go much further than anyone expects. Watch and marvel, as it happens in real time, how the market fools as many people as possible.

As always, if you listen to anything I say, you deserve to lose all your money.

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...and it's still going. The

...and it's still going. The question now is: will we crash on Friday once election hype dies down and unemployment is out? or on November 15th when the hedge funds unwind for the quarter?

Who knows?

Today I had the itch to sell. Then I told myself, "That's only you being fooled. Don't you know to do the opposite of what you feel?" So I didn't sell. I just moved up my stops.

Remember, the Rally of Skepticism should go much higher than anyone, including you and me, believe.