{"id":71,"date":"2017-08-09T11:03:09","date_gmt":"2017-08-09T16:03:09","guid":{"rendered":"http:\/\/bullish.org\/?p=71"},"modified":"2017-08-09T11:03:09","modified_gmt":"2017-08-09T16:03:09","slug":"bullish-bobs-bullgram-aka-bearzillas-market-opinion-august-17","status":"publish","type":"post","link":"https:\/\/bullish.org\/?p=71","title":{"rendered":"Bullish Bob’s Bullgram aka Bearzilla’s Market Opinion August 17"},"content":{"rendered":"

Letter written to a new customer:<\/strong><\/p>\n

Some background is due you so you can understand my proposal towards the end.\u00a0 I came into this business 09.01.1968.\u00a0 The bear market of 69\/70 started in May of 69 and it was bad.\u00a0 Then we rallied into the bear market of 73\/74 and it was really bad then.\u00a0 By then I had learned a bit more survival tactics and a Fort Worth company called Robintech, saved my bacon.\u00a0 In April of 74 I was the number # 1 producer in the firm.\u00a0 Then we rallied and bottomed in August 1982.\u00a0 That month my wife of 16 years took her PhD, our paid for house, our two boys and divorced me.\u00a0 All I had to do was work and so I did.<\/p>\n

The next big decline was October 87 and it was a doozy.\u00a0 We were down around 27% in one day.\u00a0 Fortunately, I had my customers in cash for a move to Weber Hall & Sale from Eppler Guerin and Turner.\u00a0 We dodged that bullet.\u00a0 But we didn\u2019t make any money off it either, because prior to that I was buying deep out of the money puts that expired at the end of each month.\u00a0 I didn\u2019t buy them for that month because I didn\u2019t want any acat problems for my accounts.<\/p>\n

Then we went into the Greenspan put decade until 2000\/2001 and we did real well on the short side.\u00a0 We then rallied to 2007\/08 and in March of 2009, my new wife and I were the wealthiest we had ever been with my aggressive shorting.\u00a0 Unfortunately, we got crossways with each other over the portfolio and lost nearly all of it.\u00a0 I did keep a great wife out\u00a0 of it, but she is my $2M+ baby.<\/p>\n

So here we are today, with the DJIA over 22,000.\u00a0 I am going to recommend and ask you to sell nearly all of your portfolio because of that.\u00a0 In time, I would like to buy some gold\/silver stocks, but at first these may be one of the few sources of funds in this potentially rapid decline.\u00a0 So, I will wait.\u00a0 The only other thing I would buy here is no more than 5% of your portfolio in some of the 3X leverage bear market etfs.\u00a0 These could reward you nicely while you sit on the sidelines and greatly if we can add to the position as it goes down.\u00a0 That is a big if too!<\/p>\n

At these levels, I am looking for a normal pullback decline of 10-12%, 22,019 x 12% = 2,642 points.<\/p>\n

22,019 minus 2,642 points is 19,377 on the DJIA.\u00a0 I then look for a black swan to land, any black swan will do.\u00a0 https:\/\/www.nyse.com\/markets\/nyse\/trading-info#Circuit_Breakers<\/a><\/p>\n

Specifically, the circuit-breaker halt for a Level 1 (7%) or Level 2 (13%) decline occurring after 9:30 a.m. Eastern and up to and including 3:25 p.m. Eastern, or in the case of an early scheduled close, 12:25 p.m. Eastern, would result in a trading halt in all stocks for 15 minutes. If the market declined by 20%, triggering a Level 3 circuit-breaker, at any time, trading would be halted for the remainder of the day.<\/p>\n

A Level 1 or Level 2 halt can only occur once per trading day. For example, if a Level 1 Market Decline was to occur and trading was halted, following the reopening of trading, the NYSE would not halt the market again unless a Level 2 Market Decline was to occur. Likewise, following the reopening of trading after a Level 2 Market Decline, the NYSE would not halt trading again unless a Level 3 Market Decline were to occur, at which point, trading in all stocks would be halted until the primary market opens the next trading day.<\/p>\n

I look for the first day of this decline to be down 20% and in a reasonable time frame.\u00a0 This is where we \u201cmight\u201d add to your 3x leverage bear market etfs.\u00a0 This will put us about 19,377-4300=”15,077 at the close of the first day.\u00a0 At this point the DJIA is down about 12% + 20%, so the remaining clearing firms are going to be standing at the gate on the opening of the 2nd<\/sup> day with sell orders in hand to cover their margin accounts, because no one wants to be the next Lehmans or Bear Stearns.\u00a0 So rather quickly we close down another 20% or 4300 points and the market is closed.\u00a0 I doubt we would be able to buy any of your bear market etf at all that day.\u00a0 At the close of business on the 2nd<\/sup> circuit breaker down the limit day we are at 10,777.\u00a0 Are you feeling the pain yet?\u00a0 On day #3, all the tickets that have been coming in from the public, who no longer have brokers, via E-trade, Schwab, Fidelity, 800# mutual fund liquidations, “get me out at the market”,\u00a0 will drive us down another 20%, -4300 more points, to 6,477.\u00a0 At this point in my opinion, THE POWERS THAT BE will suspend trading for up to 7 trading days or more, while they try and get a handle on this.<\/p>\n

Your opinion is as good as mine, but I have studied this monster for over 50 years on a daily basis, so give me my due.\u00a0 I believe TPTB will re-open trading with circuit breaker limits on individual stocks, as they should, but they will take them off of the market and let it trade where it will.<\/p>\n

These are my 3 prognostications of where we will go:<\/p>\n

    \n
  1. From 6477 we sell off intraday to 3800 and close the day 4500-4800.<\/li>\n
  2. From 6477 we sell off intraday to 2000-2100 and close the day 3200-3600.<\/li>\n
  3. From 6477 we sell off intraday to 1000-1500 and close the day 3000 or so.<\/li>\n<\/ol>\n

    Which scenario you choose will depend on how many other Charlie Browns took their profits early and walked to the sideline.\u00a0 There will be some at the top and a few in the 12% decline and none in the circuit breaker down the limit days.\u00a0 Bear markets are designed to separate people from their money and clean out the system.\u00a0 This better do it!<\/p>\n","protected":false},"excerpt":{"rendered":"

    Letter written to a new customer: Some background is due you so you can understand my proposal towards the end.\u00a0 I came into this business 09.01.1968.\u00a0 The bear market of 69\/70 started in May of 69 and it was bad.\u00a0 Then we rallied into the bear market of 73\/74 and it was really bad then.\u00a0 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-71","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/bullish.org\/index.php?rest_route=\/wp\/v2\/posts\/71","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bullish.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bullish.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bullish.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bullish.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=71"}],"version-history":[{"count":0,"href":"https:\/\/bullish.org\/index.php?rest_route=\/wp\/v2\/posts\/71\/revisions"}],"wp:attachment":[{"href":"https:\/\/bullish.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=71"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bullish.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=71"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bullish.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=71"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}