Bearish Information

Re: Bearish Information

Rick -

Greets from the "left coast" to the "right coast" for ya. Have a wonderful new year, and may we all survive the flying gobs of falling humpty dumpty doo-doo in 2008.

Hoist a pint of prime Florida ale (gator urine?) for me willya? (Wish we wuz n NY, then we could really celebrate). Oh ya, and I can't be Mr. Schiff 'cause no matter how hard I'm rummaging around in my pockets fer silver en gold dollarz I can't seem to scare up 15 million USD.

Wouldn't mind renting his crib in Connecticut though. Here's a toast to Peter (and Metalman too, who's a chip off the old block in his own right). Yes, our Peter may go around "trawling" for new ideas wherever (like around here f'rinstance), but don't they all? ('cept EJ of course).

Like I said already - Greets from the "left coast" to the "right coast" for ya. I know who you remind me of, that guy in the Paul Theroux novel - "Mosquito Coast" - dragging his family off to the middle of nowhere in search of adventure! Poor family, following a nut like you around!

[rabot10]

Re: Bearish Information

WDCRob -

One thing you have to hand to Schiff is that he's been absolutely unwavering in his positions (I mean where he puts his own money - almost ALL of it, from what I could gather) for the past ten years.

There's something very interesting about this guy's investing style. He's head of a large brokerage, but he does not trade his positions at all as far as I know. He's held the same basket of gold stocks (very little bullion) for a decade and berates his clients for selling anything during the worst corrections. He does not seem to even remind them to take profits on the upswings.

No trading, no dollar cost averaging, little analysis of whether "the markets" are headed up or down. He just holds them, and the guy is doing very well indeed from those positions over time.

Sorry Peter what did U say U R doing with your own money?

[Jim Nickerson]

Re: Bearish Information RE. Mike Burk

Mike Burk http://www.safehaven.com/article-9113.htm 12/29/07

After reading articles on the web focused on various aspects of investing for several years, Mike Burk each week puts forth what I think is the most original technical analysis of anyone. He actually focuses on how the market may do the next week, which, of course, is very short term, and which incidentally rarely influences any trading decisions I make. He also keeps score for how weeks actually turn out compared to how he thought they would turn out.

His today's note shows his score for 2007 which was 20 correct, 20 incorrect and 12 what he defined as "ties."

Even though Burk's analysis for this coming week suggets a strong week, his "bet" for the first week in January is that the indices will be lower next Friday. It is uncommon that he departs from what is the best bet based on past histories of weekly performance. I assume his "bet" was made largely on the data he shows in the second chart of this week's note.

His articles of 10/1/07 and 10/6/07 I think were particularly relevant with regard to calling a top in the market. Those articles are http://www.safehaven.com/article-8527.htm and http://www.safehaven.com/article-8558.htm respectively.

In my post http://www.itulip.com/forums/newrepl...wreply&p=17282 I discussed Burk's opinions based on those two links referenced above.

The SPX and DJI hit their most recent highs on 10/9/07. The Nasdaq and NDX hit their highs on 10/31/07. RUT had hit its high back on 7/13/07 and that high has held. Unless I am missing something--certainly possible--Burk's call of 10/6/07

Conclusion
As of Friday's close everything is in place to indicate a market cycle high. If this scenario is correct there could be another move to modestly higher highs before a decline into a cycle low begins. If the R2K makes a new high this interpretation is wrong.

has held up.

I have been short the SPX, DJI, ndx, and RUT since opening positions on 9/21/07 and adding to them on 10/11 and 11/13 using SDS, DXD, QID and TWM. Through 12/26 I lost most of the profits I had picked up to 11/26 and have for the moment begun to regain some of them.

EJ is supposed to put up a followup article with regard to it being time to short the markets. His original reference is http://www.itulip.com/forums/newrepl...wreply&p=23126

If he thinks now is a time he is considering shorting something, I doubt his reasons will involve much of a technical basis compared to having more fundamental bases, but that is just my guess.

I think technically Burk has made some cogent analyses.

[Jim Nickerson]

Re: Bearish Information Re. Hussman

http://hussmanfunds.com/wmc/wmc071210.htm

Hussman in unrelenting is brow-beating the notions of the Fed "injecting liquidity."

He also notes from a week ago,

“The market has now cleared the oversold condition that it established a week ago. Stocks aren't overbought here, but overbought conditions in unfavorable Market Climates tend to be rare. The steepest bear market losses tend to follow immediately on the heels of such overbought conditions.”

Presently, the market has established just that profile. This is one of the very few situations in which I ever have a pointed view about likely market direction. Although the likely Fed rate cut (no opinion on 25 vs. 50) this week adds some uncertainty, and the market would most likely celebrate a 50-basis point cut, there is currently not much evidence that suggests that even such a rally would be sustained for long. In my view, the probable risks are skewed to the downside. I don't believe there is such a thing as the Fed getting “ahead of the curve.” LIBOR continues to be “sticky” in the face of multiple cuts in the Federal Funds rate, credit spreads continue to push toward new highs, and there is no reason to believe that minuscule volumes of Fed repos will have any effect in ameliorating credit risks.

Being a bear personally and getting my ass whacked for the last 11 days, I find comfort in Hussman's assessment of the markets, and I hope for my own personal benefit he turns out to be very correct, and good luck and best holiday wishes to everyone.

[Chris Coles]

Re: Bearish Information RE: Boeing...

Well this won't help close the trade gap...

Boeing Delays 787 Delivery on Assembly `Challenges'

By James Gunsalus
Oct. 10 (Bloomberg) -- Boeing Co., betting on the 787 Dreamliner to win back leadership in commercial airliners from Airbus SAS, postponed delivery of the plane by six months because of parts shortages and assembly delays.

Dreamliner shipments will now begin in late November or December 2008, instead of May, Chicago-based Boeing said today in a statement....

Link to article:
http://www.bloomberg.com/apps/news?p...efer=worldwide

With regard to production problems at Boeing, by pure chance I had put this up on The Register some weeks ago. Perhaps this will enlighten some of you to the long term consequences of Global Trade effects.
Shortage of Fasteners is the core problem

By Chris Coles
Posted Friday 12th October 2007 15:53 GMT

http://www.theregister.co.uk/2007/10...ayed/comments/

About a decade ago, the major companies decided to grab a chance to reduce their manufacturing costs and instead of maintaining their previous long standing relationship with countless small businesses that had supplied them so successfully over the previous decades, they dumped the lot and outsourced to the likes of China. Two things happened in short order. 1 a very large number of those previously sound, well managed small businesses went to the wall. As an example, some 800, yes, eight hundred, small specialist steel mills completely disappeared in PA. 2 The executives that had driven the change got their promotion and the investors made their profit. It hardly takes a brain surgeon to realise that the 2nd group were not about to tell the world, let alone their senior management that they had made a bad decision, particularly as the new suppliers of those fasteners had not yet got up to speed. (A previous comment referred to a large store room with piles of fasteners was correct). You see, what happens is the old expensive, (relatively), stock gets run down first and it is some time before the new stock gives any sign of problems.

But it gets worse. Remember the pet food scandal? Now, you have an industrial sector that HAD been rooted into a long term relationship with suppliers that, if you had a problem, were not too far from you, had every reason to worry about quality and were managed by small business owners who personally lost out if the business failed. Now, you have suppliers that in turn sub contract to a supply chain in a foreign country where there is NO long term record of maintaining that crucial interest in the success of the business. You see, you do not have the same business culture in a communist country because the culture is now dependant upon the local political cadre and the consequential corruption. And please, do not start to argue otherwise, we have had so many examples lately.

It takes great skill to create a sound supply chain for something that seems to be insignificant, a simple fastener. But fasteners are not simple. To manufacture you need an absolutely reliable source of the material, often very specialist alloys that have to be forged in small batches and you must also have a very reliable quality control. So, now you have a rod, or say a 10 foot long bar of your special alloy. Now, you need to use the finest machine tools and highly skilled employees to produce these fasteners, at the highest production rates possible. (When you need millions of identical fasteners, you have to produce them in seconds on specialist automatic lathes). And that brings us to the next stage of this problem. If I handed you the tooling for such a lathe, you would not give it a second glance. Without the knowledge of the difficulties that have to be overcome, hour by hour, to keep those machines running and producing those millions of fasteners, each to the highest tolerances, you cannot possibly know the pitfalls of outsourcing to a poor supply chain.
My heart goes out to the junior execs in Boeing that must have been discarded while the bean counters chucked them and their "home built" supply chain, who also got discarded. The next chapter is when another war breaks out, they will not be able to supply a thing, as all the old suppliers have long gone.

Some time hence, the USA will come to bitterly regret the loss of all those small, dedicated suppliers that they tossed to one side. I will bet my right arm on that.

[bart]

Re: Bearish Information

I was trying to recall this thread when I posted the Baltic Dry Index chart - it belong here more than where I posted it.

The BDI does seem to track fairly well, after a lag, with stock market drops.

[Jim Nickerson]

Re: Bearish Information Re. Duke-CFO poll

Alan Abelson's column, Barron's 12/10/07 http://online.barrons.com/article/SB...gazine_columns

Optimism among the CFOs is at the lowest point in the six years that Duke and CFO have been measuring it. The bears outnumbered bulls by an astounding 8-to-1 margin, with 72% of the CFOs queried more downbeat than they were only a quarter ago and a mere 9% feeling better about things.

They cited weak consumer demand, high labor and fuel costs and, of course, the woes in the credit markets as the biggest depressants. On this last score, a full third of the companies reported feeling a credit pinch, and roughly 20% reported employees stepping up withdrawals from their 401(k) accounts, a good many of them to come up with the dough to pay their mortgages or ward off personal bankruptcy.

Looking ahead, the CFOs see capital spending edging up a meager 4% and barely adding to their payrolls at all (but they do expect to increase outsourcing slots at a fair pace, which doesn't hold out much hope for what we still think is a pretty glum jobs picture).

As John Graham, director of the survey and a finance professor at Duke's Fuqua School of Business, comments, CFO optimism spiraling down in such dramatic fashion is plenty worrisome because CFOs have a track record of accurately predicting future economic activity, and their predictions run one or two months ahead of other common economic indicators.

Besides feeble capital investment and a less-than-bright job outlook, the latest survey, he says, points to weak corporate earnings.

None of this, incidentally, squares with the purportedly encouraging November employment numbers released on Friday by the fantasy factory run by the Bureau of Labor Statistics.

As our favorite pair of jobs scanners, the Liscio Report's Philippa Dunne and Doug Henwood, observe, the gains were very narrowly concentrated, and a lot of the additions represented part-timers eager to work full time.

They also note that so far this year, employment is up a whole 1.1%, the weakest showing since early 2004, when we were emerging from an extended stretch of jobless recovery.

Emphasis JN.

Do you reckon these guys know anything? Based on the markets' moving upwards so briskly, it must be that all's right with the world.

[Jim Nickerson]

Re: Bearish Information Re. Richard Russell

http://dowtheoryletters.com/ Subscription

12/3/07 Russell wrote.

Lest there are any doubts, here is the Richard Russell position on the stock market. We are in a primary bear market. The bear market was signaled when, on November 21, the D-J Industrials Average closed below its August 16 low of 12845.78, thereby confirming the prior breakdown of the Transports.

The bear signal arrived with the stock market already deeply oversold. Moreover, at the time, the bonds and the Utilities were both in rising trends. These two conditions set off a violent bounce in the market. But this most recent advance should not be confused with a "rebirth" or continuation of the bull market. No, the bear market is established -- it is fated to run its course.

I'll remind subscribers that rallies in bear markets can arrive suddenly and they can be violent. In fact, bear market rallies often look better than the real thing. Bear rallies often recover in a few days what it took the bear weeks or even months to accomplish on the downside.

Along these lines, I want to include a most interesting chart of the Dow below. This is a monthly chart. A monthly chart overrides in importance both the daily and the weekly charts, although, of course, a monthly study will usually take longer to exert its force. But momentum moves before actual price.

Study RSI at the top of the chart. RSI is a momentum indicator. Note that RSI moved into the overbought area above 70. It then formed a head-and-shoulder top pattern. And most recently, RSI plunged below 70. The last time this series occurred was back in 2000 (first red arrow). However, at that time the overbought formation was much smaller than the one that we see now.

At the bottom of the monthly chart we see MACD in the early process of topping out. The histograms have no yet turned negative. This chart does not bode well for the stock market --but since it's a monthly chart it's "signal" will probably be early.

So let me put it this way, if there is any confusion about my market stance, I want to dispel that confusion once and for all. I believe the Dow Theory bear market signal of November 21 was valid. The primary trend of the stock market is now bearish and in its early stages. I would use any forthcoming strength to pare back on stocks that you are not willing to hold through a bear market.

John Hussman has made the same point several times about sharp upward rallies in a down-trending market being good times to unload long positions if one is unwilling to own those stocks through significant declines as generally seen during recessions.

[GRG55]

Re: Bearish for Airbus, bullish for Boeing

Airbus to Cut R&D Spending as Dollar Breaches `Pain Barrier'

By Andrea Rothman and Jann Bettinga
Nov. 23 (Bloomberg) -- Airbus SAS may slash research spending to reduce costs as the dollar's decline becomes ``life threatening'' for the world's largest planemaker, Chief Executive Officer Tom Enders said.

The dollar-euro rate has ``passed the pain barrier,'' Enders said in a speech to Airbus works-council representatives in Hamburg, Germany, yesterday. Unions said today that the CEO's comment were ``absolute nonsense.''

Airbus prices planes in dollars, reducing the value of sales when converted into the European currency. The company also incurs the bulk of expenses in euros, leaving little room to combat the impact of fluctuating rates. Airbus parent European Aeronautic, Defence & Space Co. said Nov. 8 that the dollar's slump required 1 billion euros ($1.48 billion) in annual savings beyond the 2.1 billion euros already planned.

``The dollar has gone down even further since that was announced and the pace of the decline has increased,'' Airbus spokesman Rainer Ohler said today by telephone. ``This poses a threat to the Airbus business model. We have to consider measures to control the spending, and one of our largest budgets is R&D, so it's obviously under consideration.''...

Link to full article:
http://www.bloomberg.com/apps/news?p...efer=worldwide#

[GRG55]

Beikoku banare is Japanese for "quitting America" !

More Japan investors are 'quitting America'
From the International Herald Tribune
By Martin Fackler
Thursday, November 22, 2007
TOKYO: Many people in Japan are starting to talk about "quitting America," but they are not referring to a rise in anti-U.S. political fervor. Rather, they mean a move away from American investments that is altering global capital flows and helping to weaken the dollar.

This is seen in decisions made by individual investors like Daijo Okudaira, a 66-year-old clerk at a Tokyo consulting company. Like many Japanese, Okudaira had long limited his overseas investments to the relative safety of securities from developed countries, particularly the United States.
But starting late last year, Okudaira made drastic changes to his portfolio, putting $50,000 into mutual funds focusing on stocks in China and other emerging economies. He said he was drawn to these countries because they seemed to hold much brighter growth prospects than the United States did.

"People say the engine of the global economy is shifting from the United States to emerging countries," he said. "Emerging countries have growth and energy that America and Europe lack. They remind me of Japan 40 years ago."

Legions of Japanese investors like Okudaira have emerged as a global financial force to be reckoned with, sending almost half a trillion dollars of their nation's $14 trillion in personal savings overseas in search of higher returns. Until recently, much of this huge outflow of cash, known as the yen-carry trade, had gone into U.S. stocks, bonds or currency, propping up the dollar's value.

But Japanese individuals are now diverting more of that money away from the United States and the dollar and into higher-yielding overseas investments like high-interest Australian government bonds and shares in fast-growing Indian construction companies.

In part, this "quitting America" - beikoku banare, in Japanese - reflects an increasing sophistication on the part of Japanese investors, who embraced mutual funds only a decade ago and are still learning to diversify. But it also offers one more sign that the world does not depend as much on the U.S. economy as it once did.

Recent figures on mutual fund purchases suggest that this trend has accelerated since August, when subprime mortgage problems shook Wall Street - and, along with it, faith in the U.S. economy. Since early August, the dollar has fallen almost 8 percent against the yen, a decline that many analysts here say offers another indication of Japan's declining appetite for dollar-denominated investments.

"One lesson of August was the failure of American markets to recover," said Akiyoshi Hirose, head of research at Daiwa Fund Consulting, a company in Tokyo specializing in mutual funds. "On the other hand, Asia's emerging countries did recover quickly. So money is flowing out of the United States and Europe and into these newer markets."

In October alone, Japanese individuals pulled ¥33.9 billion, or $312 million, out of mutual funds that invested solely in North American stocks and bonds, according to Daiwa Fund. During the same month, they put ¥175.2 billion into funds investing in stocks and bonds in emerging countries, it said.

Demand for emerging-market funds has gone up so sharply that asset management companies added 48 such funds in the past year, bringing the total number to 183, according to Daiwa. The number of U.S.-focused funds rose by just three, to 137, it said.

Some analysts caution that the popularity of emerging markets may prove to be a fad, especially if stock markets in China or India start falling as quickly as they rose. Analysts also say the dollar's familiarity gives it an enduring appeal for many Japanese. Some analysts predict the eventual revival of short-term currency trading between the dollar and the yen, which had been an important support for the dollar's value before the market turmoil in August.

"A lot of dollar-buyers are just sidelined now," said Tohru Sasaki, chief currency strategist in the Tokyo office of JPMorgan Chase Bank. "They'll be back once currency markets settle down."

PCA Asset Management, a Japanese arm of Prudential PLC of Britain, said that until last year, its most popular product was a U.S. bond fund. Now, it says, 80 percent to 90 percent of the investment money it receives flows into its emerging-market funds, all focused on Asia. To meet demand, it has added five new Asia-focused mutual funds since January 2006. The most popular, a fund investing in stocks of infrastructure-related companies in India, has grown to $1.4 billion in assets in just one year.

Takashi Ishida, head of investment at PCA, said the emerging-market fund was particularly popular with investors in their 50s and 60s, who remembered the heady Japanese growth of four decades ago. These investors believe they recognize the same sort of growth in developing Asian countries like China, India and Vietnam, Ishida said. "Asian emerging markets appear safe to invest in because they seem familiar to many Japanese," he said.

Indeed, many individual investors cited a vague impression of cultural affinity when explaining their optimism about Asian emerging markets. Okiko Ebata, one of half a dozen individuals gathered on a recent afternoon for an investment seminar in Tokyo, said she invested in overseas stocks for the first time late last year, choosing a mutual fund focused on Vietnam.

Ebata, 59, acknowledged that it was a riskier choice than U.S. or European stocks but said that she felt comfortable. "I've heard people in Vietnam resemble Japanese," she said as the rest of the group nodded in agreement.

Okudaira, the clerk, said his China fund had doubled in value in less than a year. But even if Chinese investments cannot keep up such rates of return, he said, he and other Japanese would continue to diversify. "I now have money invested in America, Europe as well as in Asia," Okudaira said. "Japanese are learning how to reduce risk."

Link:
http://www.iht.com/articles/2007/11/...id=rssbusiness

[GRG55]

Re: Bearish Information Dow Theory "Sell Signal."

...Markets on average have stronger performance in the days around holidays, and I imagine a lot of people are still expecting some upward action between now and Tuesday, and as Russell pointed out, the fact is the markets are very oversold technically. Depending upon at what one looks, some indicators still are not as oversold or as negative as back just in August.

The equity put/call ratio on 11/16 hit 0.98. Such relatively high numbers may be associated with some sort of a bottom. Since that reading the market is lower, but the daily readings since have been 0.66, 0.79, and 0.82. Compare that to these equity put/call readings from 8/14, 8/15, 8/16 which were 1.08, 1.05, 1.02. These latter readings showed, I believe, a lot of fear amongst the equity option players, who are said to be the "dumb money." I hope I have that right.

My impression is that despite the markets approaching new lows, there is not much fear just now, so it will not surprise me to see a bounce and then for the markets to go even lower, but fer shure, that is just purely my speculation

The sentiment against the US $ also seems to be uniformily negative, what with the Euro over $1.49 this morning in Asia, and Airbus announcing $/Euro is now "threatening its survival". A (short-term?)bounce in the $ and the US indices would seem to be an increasing probability.

[Jim Nickerson]

Re: Bearish Information Dow Theory "Sell Signal."

I don't follow any of the Dow Theorists except Richard Russell and not him because of the Dow Theory. The Theorists apparently not infrequently disagree as to interpretation of Dow Theory according to what I see written from time to time.

Today, Russell wrote

It was a noble battle, it was a battle that seemed almost endless. But today the great battle ended. Today the D-J Industrial Average closed below its August 16 low of 12845.78, thereby confirming the prior violation of the Transportation Average. In so doing, the stock market and the Dow Theory have spoken -- they have confirmed the existence of a primary bear market.

One of the precepts of the Dow Theory is that neither the duration nor the extent of the primary trend can be predicted in advance. I have absolutely no idea whether this is fated to be a mild bear market or a severe one.

Well, there is one hope and one hint. The most authoritative bull or bear signal comes when both Averages, Industrials and Transports, break through critical levels simultaneously. That is not what happened in the current instance.

The Transports broke under their August 16 low of 4672.35 back on November 7. Today the Industrials finally confirmed, so the bear signal was not given simultaneously. If there is even a hint that this bear market will be "kind," this is the hint, but I'll admit that this line of reasoning may be far-fetched. The fact that we must operate on is that the primary trend of the stock market is now definitely bearish. The great primary trend of the market is pointing down.

I've done my best to prepare my subscribers for this possibility. True, I did continue to "hope" that the Dow could stave off a break below 12845.78. The Dow did resist that situation for week after week. Alas, today the support gave way, and the Dow succumbed.

What to do now? I don't have any magic formula. Prudence dictates that we be light, very light, in our holdings of common stocks. Those subscribers who are holding top-grade dividend-paying equities may decide to sit tight. Those subscribers in the "compounding business" with large reserve funds may decide to weather the storm, collect the dividends, and continue to compound, buying additional shares at whatever price the market may offer at the time.

Those with large stock holdings may simply decide to cut back. After all, a lot can be said for the luxury of a good night's sleep. Personally, I've chosen what I call the "way of the sleeper." I'm very low on common stocks, in fact the only common stocks I now hold is a limited position in GDX, the exchange traded fund for precious metal shares.

Thought -- the market was oversold or actually severely oversold as of yesterday's close. A big break today renders the stock market oversold to the extreme. This could lead to a rally very shortly, and such rallies often take the Averages back to test their initial breakdown levels. If we do get such a rally, it would provide subscribers with a second chance to lighten up.

Emphasis JN

Markets on average have stronger performance in the days around holidays, and I imagine a lot of people are still expecting some upward action between now and Tuesday, and as Russell pointed out, the fact is the markets are very oversold technically. Depending upon at what one looks, some indicators still are not as oversold or as negative as back just in August.

The equity put/call ratio on 11/16 hit 0.98. Such relatively high numbers may be associated with some sort of a bottom. Since that reading the market is lower, but the daily readings since have been 0.66, 0.79, and 0.82. Compare that to these equity put/call readings from 8/14, 8/15, 8/16 which were 1.08, 1.05, 1.02. These latter readings showed, I believe, a lot of fear amongst the equity option players, who are said to be the "dumb money." I hope I have that right.

My impression is that despite the markets approaching new lows, there is not much fear just now, so it will not surprise me to see a bounce and then for the markets to go even lower, but fer shure, that is just purely my speculation

Re: Bearish Information

WDCRob -

One thing you have to hand to Schiff is that he's been absolutely unwavering in his positions (I mean where he puts his own money - almost ALL of it, from what I could gather) for the past ten years.

There's something very interesting about this guy's investing style. He's head of a large brokerage, but he does not trade his positions at all as far as I know. He's held the same basket of gold stocks (very little bullion) for a decade and berates his clients for selling anything during the worst corrections. He does not seem to even remind them to take profits on the upswings.

No trading, no dollar cost averaging, little analysis of whether "the markets" are headed up or down. He just holds them, and the guy is doing very well indeed from those positions over time.

[WDCRob]

Re: Bearish Information

A Peter Schiff email. Kinda says "I'm right and you're wrong suckers" to Neil Cavuto and Ben Stein regarding Merrill Lynch from his prediction in August.

Just caught up with this. Kudos to Schiff. MER at $54 today, a few weeks after Stein was recommending it at $73.

And I have no problem with Schiff tooting his own horn here. If there's anything more gratifying than being right when you take a position that no one else agrees with I don't know what it is.

[Jim Nickerson]

Re: Bearish Information Re: Possibly pertinent data?

Richard Russell, 11/8/07

Yesterday Lowry's Buying Power Index (now 173 points under their dominant Selling Pressure Index) sank to a seven-month low. That's not good. The fact is that there's still very little urge to buy at these levels. When this occurs, the market usually declines to a level which finally attracts institutional buyers..

There have been three 90% down-days over the past three weeks. These heavy-selling days are rather rare -- when they appear in succession, it suggests that investors are in what I call "panic mode."

I've never seen the Lowry's Buying Power Index or the Selling Pressure Index data and have no idea how they are compiled; however, I think Russell puts more than a bit of relative importance on these numbers, or he wouldn't mention them.

I do follow the 90% volume and point days--up or down--and my data show three since 10/18/07. It was Paul Desmond who originated the studies on the possible significance of 90% up or down days in volume and points who as far as I know used the term "panic" to describe them.

I think the occurrence of three of these "panic" down days are not a good omen, but they could be rapidly reversed by two 90% up days in volume and points on the NYSE occurring within about 30 days of each other.