The most dangerous times for our fragile economy: The next 60 days!

This has been the most vulnerable period of this market crash and financial institution conundrum these past 2 months, but we are about to enter its most critical and dangerous period. That time is bounded by Congress going home on recess and doesn't reconvene until the next Congress reconvenes and the January 20th Inauguration of President Obama. The country has lost total confidence in Bush and Cheney and now Hank Paulson, just as we did with Katrina's "Brownie". This is the time of year we are to give thanks for our blessings and the only thing I can think we collectively are thankful for is that Bush et al will be finally gone!

God help this country in the interim. The Congress needs to make their recess short and get back to work soon after, as it is all about confidence right now and we are facing a collapse of GM and possibly their suppliers. This could precipitate the other 2 U.S. Auto makers having exaggerated problems and more layoffs. The unemployment figures today didn't help pushing the unemployed now to over 4 Million people, not including their families.

Art Cashin of USB Warburg was on CNBC this morning and said we need to hold the intraday low of 7,882 today with a meaningful bounce up off it. That is still over 100 points from the close yesterday. As I have said since September, the low for this market is around 7,200-7,300 on the Dow. There is a 20-year uptrend line that crosses at about the 7,200 level that if broken we all should pray, as we then would be headed down into the abyss. Let's hope this does not happen. Sorry for the gloom but that's where things really are. Cash is King!

Post Market analysis Nov. 13, 2008

The market did what I had expected it to, it went down below 8,000 and quickly bounced back up and the market closed up about 550 points to 8,800. This was simply amazing. There are several pieces of information which tells me that the market is not ready to go lower at this time.

The first piece of data was that the Volume today was significantly higher than yesterday and ending on a high note, which is a good thing. Secondly, the ratio of Insider Buying to Insider Selling was significantly higher today. This has not been the case for weeks. Also there seemed to be a positive reaction when it was announced that Sen. Chris Todd said there were no votes from Republicans in favor of a rescue for the Auto makers. I do not agree with the Republican rejection of a bailout. I have clearly stated a number of conditions for a bailout, the first being GM files for bankruptcy and the shareholders lose their investment, management loses their jobs and their is a government oversight of the company with conditions favoring more environmentally responsive measures.

Getting back to the market. We will stay between the low of 7,965 to the recent high of about 9,700. To make money you will need to play the range and when the Dow Index approaches either end of the band, take an action to buy or sell. I tried to sell my Shorts but failed to do so. I should have had an order in that executed without my need for a manual trade. I learned my lesson and it won't happen again. I also was preparing a trade to Buy an Ultra Long ETF of the S&P500, symbol SSO, but I didn't make it in time. Lesson learned, move on. :yeah: