Dave's Daily

MARKET COMMENT

October 9, 2008



Batman [Paulson] & Robin [Bernanke]

Batman: "It's time to get set, Robin. It's almost oda wabba simba."
Robin: "It's almost what?"
Batman: "Oda wabba simba. Six o'clock in our nomenclature. In the 14th dynasty, the hour of the hyena. The time when ancient Egyptian supercriminals invariably struck!"
Robin: "Gosh, Batman, is there anything you don't know?"
Batman: "Oh yes, Robin. Several things, in fact."


Who let the dogs out? And, what’s coming next might be the questions of the day for the Dynamic Duo.

Trust and confidence are kaput.

Worries persist over the number of CDS [Credit Default Swap] issues coming due and the ability of these to settle-up satisfactorily.

If you think I know anything beyond what I see on the tape you’d be wrong.

Two days ago I noted it was “death by a thousand cuts slices”. Today as my Novocain is wearing off it’s “by the seventh day, we crashed” with major market averages down over 20% cumulatively.

High volume and negative breadth were as impressive as you might expect.




The TED spread continues to reflect frozen credit.


































































































































Here’s some typical WS humor circulating trading desks today:

TARP-$700 billion bailout--Taxpayers Are Really Pissed.

CEO --Chief Embezzlement Officer.

CFO-- Corporate Fraud Officer.

BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING -- The art of buying low and selling lower.

P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.

BROKER -- What my broker has made me.

STANDARD & POOR -- Your life in a nutshell.

STOCK ANALYST -- Idiot who just downgraded your stock.

STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER -- A guy whose phone has been disconnected.

MARKET CORRECTION -- The day after you buy stocks.

CASH FLOW -- The movement your money makes as it disappears down the toilet.

YAHOO -- What you yell after selling it to some poor sucker for $240 per share.

WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.

PROFIT -- An archaic word no longer in use.

You may also be blindsided, steamrolled and shocked by some proposals to tax or eliminate preferences on 401Ks for higher income taxpayers. This would be a big negative for markets, investors and the incentive to save. See the article HERE which includes obligatory nanny state and class-warfare thinking.

We need to keep our sense of humor even amid the carnage. Hopefully the readers of this blog and newsletter have been made safer by it and can laugh along. If you’re in too much pain to laugh I understand.

Here’s the bright side. The markets are as oversold as they can get. We may get a sizable bounce at any moment. That could either provide an escape hatch for people still wanting to sell or one heckuva buying opportunity.

Technical analysis at these levels is not as helpful as one would like as markets are blowing thru support levels quicker than we can identify them. All we can do is try to help you identify a range of “possibilities” and that’s about it.

Have a pleasant evening.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: SDS, QID, SIJ, SMN, SRS, SCC, XLY, IYR, IEF, GLD, DGP, FXY, FXB, DBC and DEE.