Sunday, October 2, 2011

Hang Seng getting hanged tonight

     Any last words for the Hang Seng index? The Hong Kong index is getting creamed tonight on China growth worries. It has completely broken down and is back to May of 2009 levels. Stocks connected to the China growth story are getting hammered the most with Wynn Macau down over 10% and CNOOC or China National Oil Company down over 5%. The Hang Seng index is down 870 points as of 9:47 PM PST.  It looks to be another interesting day in the markets tomorrow.

     Dow Futures are down a more modest 80 pts. Gold is up and oil and copper are down.  The Euro is down a small amount as well.

   
Market Recap
      The SNP 500 and Russell 2000 small cap indexes have made new lows for the year as the DOW was off 260 points at the close today.  The SNP 500 was off 32 points finishing below 1100 for the first time in a year.  Gold was up 27 dollars and oil was down 3% to 77.

     European shares also finished lower by 1-2% and the Euro got obliterated today dropping 1% which is a big move in currency markets.  The dollar rose against most major currencies as the flight to safety continues.  10 year treasury yields dropped to their lowest level in a few weeks at 1.784.    

My Take
      Bend over and grab your ankles!  That is how the market felt today.  We got a complete breakdown of the 1120 level on the SNP that had been providing support for the past 2 months.  It looks like we are starting the next leg down in this bear market.  I have been busy this morning but got to the computer in time to put on a short position on the Russell 2000 small cap index via RWM and also put on a short of the MSCI All World index via EFZ.  I will buy more only if they go higher and I have set a 5% stop on them in case my trade goes against me.  I anticipate we will get a quick and sharp drop down to 1040 as we have breached the 1100 level at the close today.  I also got stopped out of my XLE position early on in the day for a 3% loss. 

     October traditionally has been the month with the most stock market crashes by far.  I think this October will follow that script as stock traders are a superstitious bunch.  The good news is however, that after crashing during October, the market finds it footing and rallies into the end of the year.  The last quarter of the year is the best performing quarter of them all with average gains of 4%.  That is the script I will follow for the time being unless things change. 


Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

35 comments:

  1. I have not yet seen a single blog on stocks, so I'll keep this one with me. +following.

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  2. Hang Seng is going down! Take that subspace!

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  3. This is bad news for Hang Seng. Rest in peace. The title "Hang Seng getting hanged tonight," has made me laugh uncontrollably for a few minutes so well done on that buddy, haha.

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  4. Haha, nice post!
    I like your writing style and your blog!
    +Follow

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  5. Nope. I'm going to only buy stocks you tell me to. Only because you told me not to. So there.

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  6. Cool pic, not into stocks so much though :P

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  7. I'm still optimistic about China.

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  8. Probably just going to be a temporary dip

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  9. How's 'tsk' for last words?

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  10. Damn. Back to buying gold I guess

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  11. (but i support don't worry dude)

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  12. To bad the econimy is fake anyway!

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  13. Funny, how are all those bailouts working out! I can't believe that banks are starting to charge a monthly fee just to have a checking account with them. Unbelievable.

    Following

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  14. We are getting killed here today as well (almost 7% down today). -I'm from Argentina, i hope that answers your question :)-

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  15. @Yeamie Waffles

    Thanks man, i thought it might be too easy but said what the hell.

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  16. @ALunatic Pope

    Well, i just went short today, so it's probably time to buy stocks based on the dumb money indicator.

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  17. @heddin

    Gold, even after it's recent plunge is still one of the strongest markets out there right now. It's a great time to be buying gold I think.

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  18. @Noah Homola

    Bank of America's move is pretty ridicuouls in my opinion. My bank is also experimenting with a new ATM fee. I will take my business elsewhere if they do that.

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  19. @Hasidic Plumber

    Man, it really looks bad out there. People are selling first and asking questions later. A good buying opportunity is coming however.

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  20. I don't believe this will affect me at all.

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  21. yeah, nothing ever stays down....patience is the key if you lost.....

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  22. as long as gold keeps solid i will do just fine

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  23. August was really bad, Here was a great increase in the purchase of gold as the best investment.

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  24. The only thing I understood in this post was "stocks are dangerous."

    The world sounds depressing.

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  25. @Lemons Don't Make Lemonade

    You are exactly right, stocks are very dangerous, the good thing is however when stocks appear the most dangerous is oftentimes when it is time to buy. I suspect there will be a nice buying opportunity coming up in the next month or so.

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  26. Meh...
    I better drink my own piss.

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  27. Here's an off topic question, whats the minimum amount of cash one would put up in order to start trying to make real money in the stock market?

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  28. turns out that this day was the bottom and if you bought today you'd have made out pretty nicely

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