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[kaiser soze]

Art Cashin was on CNBC just now. Salient points : 1) He does not know of any major market bottom put on a wednesday. Ideal behavior was a big down Monday closing at the lows followed by a big intraday reversal on tuesday follwing a Tue morning sell-off. 2) After Monday & Tuesday's action (non-ideal behavior), he expected a reflex rally 3) Since that rally did not materialize, there is a chance a washout may materialize today. 4) Chance favors the prepared mind. My analysis : 1) I have never seen Art Cashin as shaken as he looked this morning. He seemed to be under a lot of stress and was maintaining his poise while answering Joe Kernen's questions, but the strain showed. 2) After Monday-Tuesday's tweezer bottoming action with price touching the 200 month moving average on SPX, COMPQ, NDX & Art's comments, my own gut feeling is that the floor (including Art) is long into today morning. 3) Hedge funds probably know this and are pressing their downside bet but may not grant the floor the respite they need. S&P futures open interest has risen dramatically and the large hedge funds (Citadel is mentioned in particular) are holding a huge portion of the open ineterst. 4) The short-term bottom will probably be a two day event with a trend-down day today followed by a morning or noon bottom tomorrow. 5) The NYSE Mcclellan Oscillator(ratio-adjusted) is oversold at 100 but is slightly below the 103 low of July 2007 that initiated this bear market. 6) It is my firm belief supported by a variety of fundamental and technical data that we are still in the beginning to middle stages of a vast secular bear market that has ways to go before a long term bottom is achieved. 7) For (6) to be true, the NYSE Mcclellan Oscillator(ratio-adjusted) HAS to break below 103.13. Let us see how this may be achieved. Because of the math of the NYMO calculation, once levels of over 100 are achieved in the oscillator, it requires huge breadth plurality to continue action in the same direction. Even decliners outnumbering advances (NYAD) by 2400 will only move the oscillator an additional negative 18 points, taking it to -118. To keep things in perspective, NYMO was close to 140 in the 1987 crash. It is exceedingly difficult to achieve 140 from current levels. 8) Once the NYMO has exceeded -103 on the downside by end of trading today, the long-term sell signal would be given. The market might then washout tomorrow morning and start a ST rally. PS : Thanks Fib-learnt a lot about Mcllellan dynamics from you.

Edited by kaiser soze, 08 October 2008 - 08:18 AM.

[dasein]

Thanks for the info - your analysis is also highly appreciated. klh