Post hoc ergo propter hoc

We had several arguments as to why the markets should rally, over the last two months.

1) The mortgage watch here at TT, which was supposed to put discretionary dollars in the consumer pockets.
2) The narrowing credit spreads
3) The Junk bond rally
4) Bailout programs and stimulus package
5) The 8.5 trillion in sideline money
6) The turn up in Baltic Dry Index
7) Technical divergences
8) Saturn, uranus and jupiter


But the trend prevailed and busted all those arguments. Had we rallied, one (or all) of the above arguments would have been the causality !. Now that we declined we can file away the above arguments in the category of Post hoc ergo propter hoc. Ok what now ? (i heard 1979 from da_cheif)

Now can ya folks see 5 waves completing on the SPX weekly charts. This is the opportunity of lifetime for those who want to make a name in this business. Ya know those famous words "This bottom will never be seen in my lifetime !". A whole bunch of analysts and market Gurus will come out of the woodwork and start pounding the table with bottom calls with variety of arguments. It's gonna be an orgy of bottom calling. I can feel it !.

Get ready for Phase II of Post hoc ergo propter hoc.

The market structure going into this fall is extremely bearish. So more than likely this army of bottom callers will be proven wrong again , i am afraid. Given that the cresting of the 9 month is due this month, there should be some bounce to excite the bulls once again, giving the illusion of an IT bottom.

Good luck !

Edited by NAV, 02 March 2009 - 10:39 PM.

Is that the special KoolAid brew of Jim Jones in your avatar ? ....saying that I was listening to 'Bec' on Foxnews this AM and 99% of the time I disagree with him but this AM he was pounding the table WARNING PEOPLE TO TRANSFER THEIR IRA's to treasuries, cash anything except stocks. He says he doesnst care if people call him irresponsible and that he was bearish from DOW 14K ( I cant verify it). He was rude, shouting and mad as hell calling economists and wallstreet types fools, etc and he wasnt just blaming Obama as he normally does. He was very very angry. It was the first time in history that a pounding bear has been allowed to scream and shout on national TV as far as I can remember as usually the bears that get on CNBC or Bloomberg are nice and cordial less thay they never get anymore airtime . eg. Precther was on Bloom and CNBC last week. If you didnt give hime 101% of your attention you would never guess he was bearish, smiles and all. I think this is a drastic sea-change ! I expect nimble,ogm and guys from wallsteetbear and capstool to be on TV soon as 'out of the mainstream' guests. Not sure what it means though ? "point of recognition ?"

Edited by BigBadBear, 03 March 2009 - 12:18 AM.

I'm still staying on record as believing that the refi money will be stimulative and will drive enough good economic news to trigger some buying. I thought that it would be an IT low. To be sure, it hasn't but it still could. It has only been a month or so that folks have really had that money in pocket and there are more coming. But now I see the potential of ongoing fear of ever greater governmental meddling and that uncertainty can and will take markets down. My call for a low is merely one of: when it turns, buy it, but not before. There's no floor under this thing so we need real visibility of good news and objective evidence of a turn. M