Sunday Morning Coffee: 11?

Click charts to ENLARGE.

Some people are calling this market an '11', because it's worse than touching it with a ten foot pole. In other word, it's been a no-win situation, too oversold to short but not rebounding in a meaningful way for longs.
Some things never change, like Abby Joseph Cohen being bullish. I thought Goldman Sachs had taken away her telephone and kicked her to the curb, but she still showed up like Punxatawnee Phil at the Barrons Roundtable.

Even the ultrabull Tony Dwyer had to come out with a mea culpa on his 1800 SPX call.

Fed Chairman Bernanke has announced that "mistakes were made", although my guess is that it falls in the category of DATU (doesn't apply to us).

But how is that going to help us 'stabilize' the economy, preserve capital, prevent more catastrophic losses, and prepare for brighter times ahead (someday).

• Learn as much as we can
• Become our own truth squad
• Listen to the market

Learning. I'm always try to learn, to get an edge that will help me, in both understanding the markets and in risk management. I presume that's why you're here. How much have you ever learned from listening to central bankers (admittedly, Greenspan's book has educational value, his tenure at the Fed less so) or pundits? Maybe we need to choose better. I'm still a big fan of Mark Boucher (when I can read his stuff), Jeremy Grantham, Jeff Saut, and John Hussman. They're straight shooters who are not full-time sales hypesters.

A vital quote from Peter Bernstein:
"The trick is not to be the hottest stock-picker, the winning forecaster, or the developer of the neatest model; such victories are transient. The trick is to survive. Performing that trick requires a strong stomach for being wrong, because we are all going to be wrong more often than we expect. The future is not ours to know. But it helps to know that being wrong is inevitable and normal, not some terrible tragedy, not some awful failing in reasoning, not even bad luck in most instances. Being wrong comes with the franchise of an activity whose outcome depends on an unknown future (maybe the real trick is persuading clients of that inexorable truth). Look around at the long-term survivors at this business and think of the much larger number of colorful characters who were once in the headlines, but who have since disappeared from the scene.”

Here's a list of items from what I'll call the "Haggerty Generals" stocks, with revenue growth of at least 18 percent over the past four quarters, with daily and weekly oversold stochastics. In other words, larger cap stocks who have historically growth revenues and who are getting taken out and shot with everyone else.
Sorry, Rite Aid (RAD) got cut off from the top of the list (huge amount of debt is one issue I'm guessing). along with institutional selling, and no recent insider buying
Here's the same list, sorted by price (high priced stocks) from the daily stochastics oversold list.

Here's US Steel (X)...with a horrific selloff last week on massive volume. No technician can buy this chart if they look at weekly stochastics. Can you sell it? I don't know.
Conversely, here's John Deere (DE)...can you buy this (e.g. call options or stock with puts for risk control?). I don't know that either.

United Technologies (UTX)...another premium company getting smacked.
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Coca Cola (KO) meat or poison?
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From every catastrophe emerges opportunity, yet we have to ask ourselves are we closer to opportunity or more problems as the credit cycle unwinds with the housing bubble still deflating, unemployment far worse than stated (177,000 fantasy jobs created last month by the birth-death model make the negative 62,000 number, not negative 239,000), and monetary policy based on wishful thinking, not reality?

We have to ask ourselves daily whether we are getting closer to the truth or being fed more fiction, and what is the catalyst that can stop the carnage?

"Fools rush in where angels fear to tread."

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.