Mini-November Crash Update

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[Chart Data Correction Posted]

After Thursday's seminal S&P drop to new lows not seen since the last decade, I thought I'd post my usual end-of-week ETF charts as an intermediate point of reference. Note that eleven out of eleven tracked sectors are highly oversold on multiple time frames.

This is extremely rare and indicates one form of capitulation in and of itselt, as we are seeing a complete throw away in every asset class but treasuries. A slight exception is Gold, which is just now starting to claw back as our nation prints money 24/7. A bottom? Probably not, but maybe soon.

With the VIX stretched more than +28% from its 15-day moving average (extreme in and of itself), insurance is far too expensive to purchase and even unlevered investors are left with no 'option' but to go to cash in this environment of unbelievable volatility.

The only saving graces?

1. There is relative strength in value stocks for the first time in a long time.
2. Commodities down over 15% in the last month.
3. Bond yields far below equity yields (for now) and bonds are as overbought as stocks are oversold.
4. Thursday's volume was quite strong.
5. If relative dollar strength can hang in there (probably optimistic), on a recovery - domestic and foreign funds may find their way back to the U.S. after an extended hiatus.

Admittedly, it's a short and hopeful list relative to what we face.

I don't care who you are, this is painful to watch and I can't tell you how much I feel for those nearing retirement. Sadder yet, I'm not sure who said it on CNBC Thursday, but - "2008 is the year 'buy and hold' went to die."

That's the state our economy/ country is in right now, but we've turned it around before and can do so again. Remain opportunistically pragmatic, and hang in there!

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Comments

[TheComingDe...:]

The problem is ...we are just seeing the tip of the iceburg. Wait until the THOUSANDS of companies file for bankruptcy and mass unemployment that will lead us into a DEPRESSION

2008 Nov 21 12:53 PM

[jgpietsch:]

Missing?

Six, as we all know, there is a government sponsored reinflation attempt afoot.

2008 Nov 22 09:09 PM

[LCACM:]

"but we've turned it around before and can do so again. " In the past US leaderssuch as Lincoln and FDR were not ideologues but pragmatic and wise. Judging by his recent statements at the Peru summit, it appears President Bush has still not learned a thing from this crisis and he has till next January 20th to wreak further havoc with what is left of the US economy.

2008 Nov 23 03:03 AM