Phase2 of this three year bear will be more vicious

first: i want to thank the great t/a folks here for their great t/a. i read, i follow, and i use it in my VST and St trading, which consists of (sometimes, when the evidence is powerful) off-setting my highly leveraged, using mf's, core short position in what i believe will be a vicious three year bear market of epic dimensions. now: here is WHY Phase2 will be more dangerous, imho. in Phase1 there was a reactive rush using dramatic and historic measures (if you don't think "collapse" of the credit markets was/is an issue, just read bernanke's defense of the bear stearns rescue). they did apparently ease that part of the collapse and gave the many entrenched bulls reason to hope and to stay in. but: as the collapse enters into the mainstream economy, as the GE blowout and the imploding jobs market indicate, someone please tell me what sudden overnight bernanke surprise can re-hire workers or reverse cascading earnings ? what quick action by congress will (or could) do anything to stop the housing downward spiral ? and: i don't think anyone here who traded through the 1974 and 1982 lows will tell you that dramatic fundamentals don't matter. the problem is that the market has not been thorugh anything like this for so very long. none of the big declines since 1982 have had a serious fundamental enhancer: not 1987, not 1989, not 1997, not 1998, not 2002.

Edited by humble1, 13 April 2008 - 04:45 AM.

Y'all who reference GE as a blowout are sorely mistaken.

GE manages earnings. They have for years. Is it honest, is it ethical ? No and and probably No. Is it legal ? Yes. They do it.

This time Immelt got caught with his pants down. Each quarter they manage, certain people are told to do certain things. selling assets is one.

Immelt was expecting his dudes to sell a bunch of stuff before quarter end. 2 weeks before when he opened his big bazoo about being ok, the lieutenants still hadn't done it, but usually they get it done each and every time.

This quarter, the deals weren't there. The market dried up, and the liquidity and capital needed for doing deals, never materialized. Noone could buy their stuff. Its that simple.

so is the market being down affecting GE ? Certainly. Are they dieing and going to hell in a hand basket ? I doubt it.

I'd be a buyer of their stock long term. They have a lot of things going well that are macro trend benefactors. They know how to do this better than ANYONE else. Period. End of story.

I find it so comical to see all these things printed about companies like a GE. Some of you tradres need to do your homework once in awhile. Sure you're good at TA. But you pretty much suk when it comes to analyzing a companies prospects vs. current market conditions.

Edited by nimblebear, 13 April 2008 - 09:17 AM.

NB: i respect your view but read your post and think about what it says: GE has MANAGED earnings. what does that mean for NOW? : it means that things are so UGLY that even GE CANNOT FLIMFLAM its way around it. i suspect that GE's auditors drew the line sometime during the last two weeks - the critical weeks for auditors and earnings - and said "NO MAS, GE!" we don't want to get SUED ! look: i have a bit of credibility on this issue. i am the one who has been WARNING that GE would have to pay the piper. p.s. and i won't go into detail but i have a lot of experience as to how these people think.

Edited by humble1, 13 April 2008 - 09:52 AM.

A lot of fund managers are doing a lot of thinking over the weekend after GE's 13% chop on Friday. I believe many out there that bot the March low are rethinking their position and are more likely to reverse course this coming week. The GE earning miss was huge in my view as this is the economic bellwether stock. If GE can't manage earnings through Q2, then likely a break under 31.60 will force large block selling by institutions. For the record, i have no position in GE but I remain short June SP.

A break under 1250 will likely bring about the Wave 2 of the Bear.

Edited by kaotic, 13 April 2008 - 10:24 AM.

kaotic: welcome to you and an appropriate handle.

GE? Who would buy this pig anyway. Earnings mean nothing. They may as well put forth any bad numbers they can while the gettin is good. The bad numbers party may only last for so long so take advantage of it. On the other hand I don't like the looks of the market either. We are due for a smashing. I would not mind single digit p/e's in Dow stocks for the first time in many years. A stockmarket with a p/e under 10 would be a true solid investment. Ge with a market cap of 320 billion and a p/e of 15 or so is a joke. Buy a mutual fund or something would ya. Actually ge going bust would create alot of opportunity. Ge has a sweet debt/equity ratio. One false move and cya.