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Friday, September 19, 2008

All stops pulled, the bear market is over....


The bear market is NOT over, it may change shape. The fundamentals of the world economy has NOT changed.
But first, let me explain why the stock market will rocket.

The US will setup a fund to buy distressed mortgages
The United Kingdom banned short selling of financial Thursday.
The United States banned short selling on 799 companies Friday. (but allowed by financial companies)
The US will guarantee Money Market Funds.
NEWS FLASH: SEC Order, Selling uncovered calls or buying pus in bank, financial, or insurance stock is restricted
I shorted the SHOE COMPANY DECK today, but required "approval code" from my broker. Thats how panicked the market is. The Dow is up less than 400 points, this is looking like a disaster! It should be up 1,000 points!

What will happen is this:
The market will soar, beyond imagination. Dow 12,000 is NOT out of the question. (TODAY even!)
I personally think we may open down big Monday, but don't count on it. If we crash, the ban on short selling will in effect allow the remaining financial institutions to profit from the fall, but barring the common person from doing so. Quote "Given the options expiration Friday, options market makers will be exempted from the short-sale ban until midnight Friday, provided their short sales are for bona-fide market making or hedging activities in the affected stocks, the SEC said."

If the "bear" market is be over, but for all the wrong reasons. We may hyper-inflate now.
If the government is to buy distressed mortgages, how will it be funded?
My fear is printing money (click for previous link).

In any event this is the final play, there is NOTHING left the government can do.
So either we crash, (Monday) soon, or the bear is over since the world's largest financial safety net was created today.

In any event, the USA as we know it will be may be changed as we socialize everything in sight.
I'll write more over the weekend, probably Sunday night.

UPDATE: 10:45 am, dow is lower than the open. Not a good sign for the market. I still think its possible to go higher, but DOW 12,000 is not possible I believe. I am leaning now towards all out crash Monday. But impossible to know until then. If you are in stocks TODAY IS A GREAT DAY to get out NOW. Worst case, you "miss" stocks going up 10% in the next 6 months. More likely case, you "miss" stock market down additional 30% in next 6 months.

Update: DOW soared over 700 points in two days, ending at DOW 11,388 EOD Friday, 9/19/08

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