Red Alert

[sweeps]

S&P 500 is down over 6% right now.

[Merch]

That's because the bailout didn't pass.

[Broken Arrow]

Yeah, I was just reading all about it. The sudden drop is breath-taking, if not painful.

[sweeps]

Down over 7% now.

This is either the buying opportunity of a lifetime, or the beginning of a long, devastating economic recession.

[kork13]

.........wow........... this is intense.... I'll admit, it's unnerving.

One consideration is that what could likely be happening is that automatic stop-loss programs are kicking in. Values are going down below pre-set levels, and shares are now automatically selling off. It's cyclical...

[aurielle]

The Dow is now down 721 points as of 12:35pm PDT.

[Coleroo]

I've been watching since 2:30, right after this thread was started. We're sitting here watching Bloomberg and all they're talking about is the plummet. The Dow just closed with a 5.4% drop...

[glock35ipsc]

10,365.45, -777.68, -6.98% right now in the aftermarket.

[kork13]

worse: Nasdaq: -9.14%. S&P: -8.81%. OUCH.

[Scanner]

I think it's a buying opportunity.

Oil will drop (and I'll lose a token amount) and people will start traveling, consuming, etc.

Remember to watch oil. . .everything depends on oil. . . I see the possibility of oil being $50/barrel. I"m buying on the way down.

[glock35ipsc]

I think it's a buying opportunity.

Oil will drop (and I'll lose a token amount) and people will start traveling, consuming, etc.

Remember to watch oil. . .everything depends on oil. . . I see the possibility of oil being $50/barrel. I"m buying on the way down.

Yes, yes, and yes!

[Broken Arrow]

This is either the buying opportunity of a lifetime, or the beginning of a long, devastating economic recession.

Perhaps it's a little bit of both?

The drop is due in small part to Wachovia's collapse, and in large part to the bailout plan not being voted through.

Otherwise, the economic climate hasn't really changed, has it? I mean, it's already been bad, but it wasn't exactly any worse off today than it was yesterday. Except for Wachovia. Again, today's drop is primarily due to the lack of a bailout, and it will continue to be this way until a bailout of some sort is finally hammered out.

However, daily fluctuations of the market is notoriously unpredictable as a reference for future market trends. Especially right now, when things are so volatile. I don't know what will happen next. I can't say for sure, but that's the point. No one can say for sure based on days like this. So, I wouldn't let one day drops like this (which has happened in the past and today's drop is said to be only the 17th largest drop in market history) set the tone for what to expect in the near future.

As for the matter of recession, I've argued for some time now that we are already in a recession. I don't care if it doesn't meet specific standards. You just don't see decade-old banks collapsing into non-existence in normal times... but maybe that's just me. And today's news didn't make the situation any better, but I would argue that it didn't necessarily make it any worse either. Besides Wachovia and the lack of a bailout, strong banks are still going to be strong and weak banks are still going to be weak.

Oil will drop (and I'll lose a token amount) and people will start traveling, consuming, etc.

Remember to watch oil. . .everything depends on oil. . . I see the possibility of oil being $50/barrel. I"m buying on the way down.

I think it's worth noting that despite the fact that Wachovia and the bailout bust grabbed the most headlines today, the two biggest sector drops of the day is Basic Materials and Energy (with financials being a close 3rd). But yes, I agree it's a great buying opportunity. In fact, I went into financials today. I'm not suggesting people has to get in exactly today, but for traders who are looking for great prices to buy into pretty much whatever they want, you really couldn't ask for better days than this.

[Scanner]

I think ticker symbol XLF looks pretty good buy. . .trading at 38 about a year ago - it's down at 18 today, off 50%.

I'll tell you. . .during all this, it makes ETF's look better than mutual funds. With my JAOSX, I have to wait until the damage has been done to assess the damage.

At least with an ETF you can put a stop order in.

[glock35ipsc]

The killer ETF for this year has been SKF. It a bear market type fund that basically shorts the financials. It is UP 57.25% for the year!

[Broken Arrow]

The killer ETF for this year has been SKF. It a bear market type fund that basically shorts the financials. It is UP 57.25% for the year!

True. I can't deny that. On the other hand, I'm not a huge fan of shorting in general. Even with ultra-short funds like those. They carry a much greater risk premium that is tied to the impressive gains. Sure, 2008 has been a great year for shorts, but you never know when it could turn around bite back....

Allocate accordingly to your risk level. That's all I can say.