It’s exactly like in 1929 this week- always after Paulson and Bernanke speeches markets drop

So far this week, trades are exactly like the week before we hit the real lows. First, a snap back rally of magnitude and all lost thereafter to drop to new lows in the next 2 weeks. We are still in the gap zone but the prospect is anyway not good. The earnings for the 4th quarter have been revised down from 55% gains to 28%, assuming that the banks may recover some ground probably but I do think still too high. Q3 was revised down from plus 19% to minus 8%, with banks the big negative contributor. I think Q4 will be a disaster with Capex (corporations spend the most money in Q4) being a disaster, especially for the tech sector since banks are the biggest spenders for tech equipment. First, they will scale back on employees big time and delay any investments anyway. The VIX was skyrocketing again heading for the above 80’s in 2-3 weeks.

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~ by behindthematrix on October 15, 2008.

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