S&P500 at 830s...anyone watching this

Support level? Anyone watching Globex on this? As can be expected, CNBC doesn’t seem to be paying attention. Guess the F & GM bailout more interesting.

What do you think is especially interesting about this?

well, yeah, i know where you’re going with this. i’m not a believer of technicals either, but i’ve heard some chatter about the 830s being a support/resistance level for those types who use the tech analysis. a few guys at my shop made jokes about breaking out the old Dow 10,000 stuff too a while back. basically curious if anyone else was pondering this as a technical event. not my forte, clearly.

Actually, I wasn’t going anywhere with it, but I just don’t think this is a market where support is going to work. Usually when there is decent support, everyone says “well if oil is at 45 I’m definitely buying and at 50 I’m thinking about it.” Something like the average of everyone’s thinking produces support. I don’t get that feeling here. If you ask people if they would buy the S&P at 600, lots of people are like “600, wow that would suck. We would be taking quite a beating then. I guess I would only be a buyer if I felt like whatever got us there had stopped or something good had happened” I was thinking about post 9-11 the other day. Interest rates decreased, credit spreads went up, stocks went down, etc. for like two months and then one day without any particular event, it just turned around. Maybe that will happen here (doubt it, but maybe).

interesting take on the psychology behind the formation of a ‘bottom’ vis a vis the sentiment that “it won’t get worse because the funk is passed.” regardless of the move around a particular number, its tough to determine the true cause ex-post. today, for example, you had a nice news from HP, and an arguably good info on inflation. after trading ends, the importance of news vs. technical could be debated with no clear decisive argument. thanks for your post, i appreciate your perspective.

I’m holding a big long position in SPY. And I really hope the market’s going to turn soon. I think the post 9-11 seemingly random turnaround JDV described could happen soon. There was definitely a big doom-and-gloom attitude over the market, and now it seems to have reached its bottom. It’s been volatile, but bouncing over a fairly set range for about a month now, so a lot of investors that wanted to pull out while the market was falling might feel like it’s about time to get back in before they miss a turnaround. But maybe this is just wishful thinking.

I think it’s wishful thinking. New Exhibit A: The G-20 economic summit. Facing a once in a century depression the G-20 (first I have heard of that) meets to head off economic crises. The Spanish are delighted to be invited. They decide very few things including restructuring the World Bank so that emerging market countries can have a more significant voice. Perhaps our current crisis would not have been so awful if we had the sage advice of the Ghanians. The whole thing would not have been more ridiculous if it had ended with Gordon Brown leading an arm-linked round of “We are the World” with the other leaders. The bailout bill was a lie - apparently Paulson thinks he has $350B to spend on whatever else he wants to spend it on in his remaining 2 months in office (some very Merry Christmases can happen with 350 large). We still don’t have much of an accounting of what exactly the problem is. We have no plan for helping out the auto industry except either giving them money or not with some stupid stuff about executive compensation. Let’s have the gov’t step in and a) Guarantee warranties on American cars so people can feel safe by buying them b) Fix up union contracts by eliminating awful crap like “reserve work forces” that are people paid to sit home until the auto company needs them again. It’s not appropriate to use tax dollars to pay people to be lazy. c) Set up credit facilities so people can buy American cars. d) Jumpstart the Volt by offering generous tax credits to people who buy them and spend govt money building electric car infrastructure. We can politically allocate lots of money to helping build capacity for electric cars by painting the govt green. e) Assume some of the legacy costs of the automobile industry by incorporating them in current programs. or many other creative solutions. World govt’s are getting an F on their handling of the crisis which is a really bad portent. Honestly, Hoover would be doing a better job than any current world leader. (Central bankers are doing a little better like C)