Friday 12/13/02 10:00 PM EST
In Tuesday's report we said "Today's rebound in the markets should quickly be retraced in the next day or two." The markets bounced a bit higher first, but the strong selling resumed on Thursday and retraced all of the earlier gains and then some. For the week, the Nasdaq lost 4.2%, ending at 1,362, the lowest close in a month. Since the post-Thanksgiving peak, the Nasdaq has fallen 10%.

CNBC and the rest of the mainstream media have largely ignored the fact that the recent sell-off is a global affair. The Nikkei 225 in Tokyo has fallen eight days in a row, its longest losing streak in over two years. The FTSE 100 in London has fallen nine out of the last ten trading days. Similar losing streaks permeate the rest of Europe and Asia. Gold has broken out to near a three-year high.

Our overall outlook for the U.S. markets continues to be:

In Elliott Wave terms, a large wave 3 to the downside is now underway, and it should take the DJIA down significantly below the October low of 7,200 before another sustained counter-trend rally can take hold. The 5,000 area is as good a rough target as any. Nasdaq? Look for triple digits.

Santa Claus may deliver a small dose of his alleged annual rally for the equity markets, but we'd view any short-term strength as an opportunity to bail out of any remaining long positions you may have.  Aggressive traders should look to establish or add to short positions.

Another seven market days remain in our daily book giveaway in the "Hair of the Bear" discussion forum. Each weekday from now through Christmas eve day, we will be giving away a copy of Robert Prechter's ground-breaking book "At the Crest of the Tidal Wave" to a randomly selected member of the Hair of the Bear forum. Click here to sign up and access the forum.

Have a great weekend! -- Grizzly

Invest carefully, at your own risk. Please read the disclaimer.

Grizzly's Growlings Archives
 

Tuesday 12/10/02 10:00 PM EST
As discussed in the "Hair of the Bear" Forum last week:

Despite the 77% crash in the Nasdaq from March 2000 to this October, we think the "The Great Bear Market of 2000-200[?]" still has a "long" way to go on the downside. We believe the huge counter-trend rally from mid-October ended at Monday (Dec. 2)  morning's gap higher opening.

In Elliott Wave terms, a large wave 3 to the downside is now underway, and it should take the DJIA down significantly below the October low of 7,200 before another sustained counter-trend rally can take hold. The 5,000 area is as good a rough target as any. Nasdaq? Look for triple digits.

We have nothing to add or change to that outlook, so tonight we'll zero in on the short-term picture on the Nasdaq from the Dec 2 peak. The small subdivisions are open to multiple interpretations, but it certainly appears that the markets are impulsing down in fives and up in threes, the essence of Elliott Wave analysis. One valid wave count is shown here:

Today's rebound in the markets should quickly be retraced in the next day or two.

Over on the DJIA side of things, we're still looking for a break of 8,200 as additional confirmation that the next leg of the decline is underway. We'll keep you posted as the short-term waves play out their hands.

And remember, each weekday from now through Christmas eve day, we will be giving away a copy of Robert Prechter's ground-breaking book At the Crest of the Tidal Wave to a randomly selected member of the "Hair of the Bear" forum. Click here to sign up and access the forum Stay tuned! -- Grizzly

Friday 11/15/02 9:00 PM EST
The markets rallied this week in a choppy, counter-trend bounce. The wave 4 advance exceeded our upside expectations just a bit.  (See Monday's chart.) In Elliott Wave terms, the overall pattern from the recently lows is corrective, not impulsive. Our short-term outlook suggests the bounce is about out of gas. The selling should accelerate starting early next week.

We're still looking for a break of DJIA 8,200 to confirm that the entire counter-trend bounce from mid-October is over, and that the next leg of the "Great Bear Market of 2000-200[?]" is underway.

Next week we'll be turning the market analysis reigns over to our friends at Elliott Wave International. Don't miss their "Free Week" special offer, detailed in the next section below. Have a great weekend! -- Grizzly

Wednesday 11/13/02 9:00 PM EST
Our analysis from Monday is on track:  "The short-term Elliott Wave pattern continues to show an impulse wave subdividing lower, strongly suggesting much more selling ahead, though some consolidation of the recent losses in a small degree 4th wave may provide temporary support for a day or two."

Tuesday and Wednesday delivered a choppy, unconvincing bounce. Sadman Hussein's albeit superficial agreement to the latest U.N. demands could spark only a momentary rally. The DJIA stands at 8,400, just about where it was at Monday's close.

Our short-term Elliott Wave outlook suggests the small degree wave 4 counter-trend bounce is over, or nearly so. (See Monday's chart.) The selling should accelerate through the rest of the week.

We're still looking for a break of DJIA 8,200 to confirm that the entire counter-trend bounce from mid-October is over, and that the next leg of the "Great Bear Market of 2000-200[?]" is underway.

Thanks for visiting bearmarketcentral.com. -- Grizzly

Monday 11/11/02 10:00 PM EST
Friday we summed things up by saying: "In all likelihood, at least a short-term top is in and the selling should begin accelerating, pronto. "

The markets confirmed that outlook today (Monday) with a sharp tech-led sell-off. The DJIA dropped 178 points (2%) and the Nasdaq got crunched by 40 points (3%). Things were particularly nasty considering that volume was moderate on today's quasi-holiday.

The short-term Elliott Wave pattern continues to show an impulse wave subdividing lower, strongly suggesting much more selling directly ahead, though some consolidation of the recent losses in a small degree 4th wave may provide temporary support for a day or two.

We're looking for a break of DJIA 8,200 to confirm that the entire counter-trend bounce from mid-October is over, and that the next leg of the "Great Bear Market of 2000-200[?]" is underway. We'll keep you posted as the short-term waves play out their hands.

Happy Veterans' Days and thanks to all those across the country who put their lives on the line for the U.S. everyday. -- Grizzly

Friday 11/08/02 10:00 PM EST
As discussed Wednesday, we think the markets got what they asked for in the Republican juggernaut and Sir Alan of Greenspan & Company's dramatic 50 basis point rate cute. Since Wednesday, the markets have responded with a thud. Over the last two days of the week, the DJIA drooped 250 points and the Nasdaq tanked 4%.

The markets have spoken, clearly saying "OK, we've just received the best news we could ever expect at this juncture, but it doesn't matter. War with Iraq is just a couple of months and a couple of steps away. The economy and corporate earnings are still stuck in Neutral, if not Reverse. The Fed just panicked, and they're all but out of ammo. Deflation really is a threat. We've just had a big one-month bounce. Thank you very much, I think it's time to bail."

Thanks for visiting www.bearmarketcentral.com. Have a great weekend!-- Grizzly

Wednesday 11/06/02 10:00 PM EST
"Be careful what you wish for, you may get it," as the old proverb goes.

We think "what's wrong with this picture" is that the large counter-trend bounce from October 9th is over, or just about so. We think the odds are high that at least a short-term peak was reached at today's (Wednesday's) post-Fed announcement peak. The short-term Elliott Wave patterns are looking more and more as if a short-term top is at hand. We're looking for a break of DJIA 8,200 to confirm that the counter-trend bounce is over. We'll keep you posted as the short-term waves play out their hands.

Thanks for visiting www.bearmarketcentral.com. While you're here, come on in and have a look at the rest of the site. Just scroll down this page to find the table of contents.-- Grizzly

Monday 11/04/02 10:00 PM EST
Friday's late news that the U.S. Justice Department may actually leave Microsoft alone (for a while) sparked another round of "irrational exuberance" Monday morning. The DJIA boiled ahead 212 points in early afternoon trading. From there, things cooled off dramatically and the DJIA gave back 3/4th of the advance to close up 54 points at 8,571. The Nasdaq Composite held on to more of the morning's gains, closing up 36 points to 1,396.

The markets appear to be anticipating a "pro-business" Republican victory in Tuesday's elections as well as a small interest rate cut by Sir Alan of Greenspan & Company on Wednesday. As we've discussed over the years, we believe the Fed is essentially irrelevant. It reacts to market conditions, it doesn't set them. Sir Alan's objective is only to not be caught with his pants down, too far out of line.

Furthermore, there's a good chance that the markets will sell off on any rate cut, as it may help solidify sentiment that the economy is weaker than most have been expecting. A rate cut would also put additional pressure on the already fragile U.S. dollar.

The short-term Elliott Wave patterns suggest a bit more market strength is likely to complete the counter-trend bounce from mid-October.  We're looking for a break of DJIA 8,200 as a first indication that the counter-trend bounce is over. We'll keep you posted as the short-term waves play out their hands.

As mentioned, Tuesday is Election Day is the U.S. No matter your personal politics, we urge you to exercise your vote. It's disgraceful that the U.S. has one of the lowest rates of voter turnout of all the democracies around the world. Some say this apathy is due to pervasive sentiment that "it doesn't matter" who gets elected. If it "doesn't matter" to you, why not cast a protest vote to send the politicians your message. Want to see lower taxes and freer trade? Consider the Libertarian candidate. Want to see the government do more to protect the environment? Go for the Green. Whatever your perspective, express it! "Democracy is not a spectator sport." - Grizzly

Monday 10/28/02 10:00 PM EST
Monday followed the pattern of the last week or so, i.e. zigging and zagging all over the place. The DJIA ended down 75 points (0.9%), near the lower-end of the day's trading range. The Nasdaq slipped 15 points (1.1%). 

So where do things stand for the short-term? Regular readers of these reports will of course note that today (Monday) marked the last of our standing crash candidate days. Obviously, we missed the mark. Over the last two weeks our  market "rubber band" was able to snap back and not break as we had anticipated. The buy-the-dippers came out in force as the talking heads and anal=ysts parading across CNBC resumed chanting their mantra: "the bottom is in, the bottom is in...."  We don't buy it for a second.

Why? As we've been discussing, the markets have exuded virtually none of the panic, capitulation, or blood in the streets that almost always mark a lasting bottom. Historic bear markets have never ended with a whimper. There's much more pain to be absorbed by the brave bulls before they throw in the towel.

Make no mistake about it, we firmly believe that the rally over the last two weeks is an admittedly large counter-trend bounce, all within the framework of the ongoing Bear Market. Nasdaq 5,000 will remain unapproachable for many years to come as the Great Bear Market of 2000-200[?] continues to run its course.

The short-term Elliott Wave patterns still aren't quite set up for a crash right now.  We're looking for a break of DJIA 8,200 as a first indication that the counter-trend bounce is over. We'll keep you posted as the short-term waves play out their hands.

Thanks for visiting bearmarketcentral.com. -- Grizzly

Friday 10/25/02 10:00 PM EDT
Sometimes the markets oblige our forecasts,  and sometimes they confound. Well, the confounded markets zigged instead of zagged today. Such are the hazards of trying to project the markets' daily moves. The DJIA rallied 126 points Friday, taking back a good chunk of Thursday's drop.

So where do things stand for the short-term? Regular readers of these reports will of course note that Monday marks the last of our standing crash candidate days. Barring some sort of terrorist attack or other cataclysm over the weekend, honestly the call is in doubt. The short-term Elliott Wave patterns just aren't quite set up for a crash right now. We're still looking for a break of 8,200 to signify that the counter-trend bounce is over. We'll keep you posted as the short-term waves play out their hands.

Make no mistake about it though, as of the recent lows on October 11th we have seen virtually none of the panic, capitulation, or "blood in the streets" that almost always mark a lasting bottom. We firmly believe that the bout of "irrational exuberance" over the last two weeks is an admittedly large counter-trend bounce, all within the framework of the ongoing Bear Market. Nasdaq 5,000 will remain unapproachable for many years to come as the Great Bear Market of 2000-200[?] continues to run its course.

Thanks for visiting bearmarketcentral.com and have a great weekend!-- Grizzly

Thursday 10/24/02 10:00 PM EDT

Not much to add to Tuesday's report where we said:

"In Elliott Wave terms, It looks as if the DJIA may eek out one more push higher Wednesday to complete wave 5 of C. It so, it'll be: "LOOKKK-OOOUUTTTT-BEELLLLOOOWWWW!!!"

The DJIA rallied 44 points Wednesday and another 60 points in the opening minutes Thursday. From there, the DJIA tumbled 280 points before bouncing a bit in the final half-hour.

Our outlook remains that on a break of 8,200 (key support at the top of wave A) the selling will accelerate, leading to an immediate plunge to about 7,000, where it should find at least temporary support. [Correction from earlier edition: Monday's small degree wave 3 peak was surpassed at Thursday's opening for about three minutes, so "technically" wave 5 did not "fail" Elliott Wave Tutorial.]

Our outlook puts the markets squarely in line for an acceleration of the decline into a "Third of a Third of a Third" wave potential crash on Monday (Oct. 28), our sole remaining "likely crash candidate."

Stay tuned!-- Grizzly

Tuesday 10/22/02 10:00 PM EDT
You're  probably tired of reading, and we're tired of writing, that bear market rallies serve their purpose, namely to relieve the extreme oversold technical conditions generated by the severe sell-off. Even the "Great Bear Market of 2000-200[?]" has to come up for air every now and then. The counter-trend rally has done its job. Now it's up to the Great Bear to "belly up to the bar" and do his thing.

Over the last few days, the rally has sputtered and faded badly. In Elliott Wave terms, It looks as if the DJIA may eek out one more push higher Wednesday to complete wave 5 of C. It so, it'll be: "LOOKKK-OOOUUTTTT-BEELLLLOOOWWWW!!!"

Our outlook is that on a break of 8,200 (key support at the top of wave A) the selling will accelerate, leading to an immediate plunge to about 7,000, where it should find at least temporary support.

This outlook would put the markets squarely in line for a potential crash on Monday (Oct. 28), our sole remaining "likely candidate." If the market rubber band does not snap at all in October, we'll have to conclude that our warning for an "imminent, historic crash" was off target.

Stay tuned!-- Grizzly

Thursday 10/17/2002 10:00 PM EDT
Our outlook for today (Thursday) proved to be wrong. The island reversal in the Nasdaq was not only invalidated by today's gap higher opening, it has morphed into something so rare we don't even know what to call it. For now, we'll go with  "reverse  island reversal."

Have a great weekend!. -- Grizzly

Wednesday 10/16/2002 10:00 PM EDT
As we expected last night, the Nasdaq gapped down sharply this morning, creating a bearish island reversal pattern. This pattern strongly suggests that at least a short-term peak has been reached, and the markets are headed much lower. Today the Nasdaq tanked 50 points (3.9%) in what should be the first of many down legs to come.

Nasdaq 100 (NDX) 10/14/02 -10/16/02                     

Tuesday 10/15/2002 10:00 PM EDT
Our market "rubber band" not only has not snapped (yet), it has propelled the markets much higher than we anticipated at this juncture. Make no mistake about it though, we firmly believe that this bout of "irrational exuberance" is an admittedly large counter-trend bounce, all within the framework of the ongoing Bear Market. Nasdaq 5,000 will remain unapproachable for many years to come as the Great Bear Market of 2000-200[?] continues to run its course. 

As this report hits the web site, the four-day rally is in deep doo-doo. After Tuesday's market close, Intel dashed any hopes the bulls have been clinging to that the economy is recovering and that high-tech will lead the way. Intel did not come close to meeting its third quarter earnings expectations. Intel mini-crashed about 15% at the close of extended hours trading Tuesday evening, at $14.35.

Furthermore, the Nasdaq 100  futures are trading a full 30 points below fair value, giving back the bulk of Tuesday's gain. If this sharp discount to the cash market holds through the night, it will set up a very bearish "island reversal" pattern.

We discussed the island reversal formation back on February 16, 2001. Here's what it looked like back then:

Nasdaq Comp 02/14/01 -02/16/01

The Nasdaq went on to drop 850 points, 34%, over the next 35 trading days.

Here's what tomorrow's trading is likely to bring:

Nasdaq Comp 10/14/02 -10/15/02        

Although our initial Crash window (Oct. 14) has passed, we firmly maintain that an historic crash is imminent. It may begin tomorrow. Stay tuned for a wild ride! -- Grizzly

Friday 10/11/2002 8:00 PM EDT
Well, the Great Bear taketh and the Great Bear giveth back. As we've been saying for weeks (years really),  bear market rallies are usually "sharp and short-lived." The past two days' rally has been sharp indeed. Monday will tell us about short-lived.

We've never claimed to be clairvoyant. If the Crash doesn't happen this Monday, the two remaining Mondays in October are the next most likely candidates. If the market rubber band does not snap at all in October, we'll have to conclude that our warning for an "imminent, historic crash" was off target.

We're received many inquiries from readers about whether the markets will in fact even be open on October 14th, due to it being Columbus Day. According to the NYSE, the markets will be open on Monday, but our guess is that it will be anything but business as usual. In these fast-moving and volatile markets, not too many traders will risk taking the day off.

Have a great weekend and stay tuned! -- Grizzly

Wednesday 10/09/2002 10:00 PM EDT
We're running out of different verbs and adjectives to describe the daily declines. The DJIA got tattooed for another 215 point (2.9 %) loss, bringing it below 7,300. The Nasdaq held up relatively well, slipping "only" 15 points (1.3%) to 1,114. The "Great Bear Market of 2000-200[?]" just keeps on rollin'.

To repeat from Monday, the 20% drop in the markets from the August counter-trend peak "has been a fairly orderly and tranquil 'mini-crash.'"

• Still no panic:  Today's TRIN reading was a neutral 1.01.

• Still no "blood in the streets": NYSE volume was an active but far from climactic 1.8 billion shares.

• Still no capitulation: Formerly highly-regarded anal-yst Abby Joseph Cohen has finally lowered her "12-18 month target" on the DJIA, but only by 500 points, from 11,300 to 10,800.  (Dear Abby: The DJIA has lost more than 500 points in just the last five trading days. Love, Grizz.)

This Great Bear is truly a world-wide event. The little-followed Dow Jones World Stock Index (CBT) is down over 50% from its March 2000 peak. The DAX in Germany is down over 50% YTD.

As this report hits the Internet, in early Thursday trading the Nikkei 225 in Tokyo has plunged  325 points (3.8%), breaking beneath 8,300 to a yet another new 19-year low.  Mizuho Holdings, the world's largest bank holding company, is down another 10% to another all-time low. Mizuho has crashed nearly 50% in the last two weeks. (Dear Maria: Why are you still not talking about Mizuho on CNBC? Love, Grizz.)

There are a few people worth watching and listening to on CNBC. Today, Art Cashin of USB-PW, one of the remaining gristled veterans who really understands what happens on the floor of the NYSE each day, said:

"Tomorrow  (Thursday) could be critical. If they turn out to be big sellers again, we may be within days of some kind of climactic resolution."

We couldn't have said it any better, Art! Regular readers of "Grizzly's Growlings" know that for two weeks now we've been eyeing Monday, October 14th as a prime candidate for the Crash of 2002, which is now right in line with Art Cashin's short-term analysis.

We're not clairvoyant, but October 14th is still our best guess for the exact date of the "Crash of 2002." (See last Friday's report.) 

We're received many inquiries from readers about whether the markets will in fact even be open on October 14th, due to it being Columbus Day. According to the NYSE, the markets will be open on Monday, but our guess is that it will be anything but business as usual. In these fast-moving and volatile markets, not too many traders will risk taking the day off.

If not October 14th, the two remaining Mondays in October are the next most likely candidates for the Crash. If the market rubber band does not snap in October, we'll have to conclude that our warning for an "imminent, historic crash" was off target.

Stay tuned! -- Grizzly

Crash Warning Updates
Crash Warning Issued Friday 09/13/2002

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Grizzly's Growlings Archives

Tuesday 10/08/2002 11:00 PM EDT
Asia is not following Tuesday's rally on Wall Street as the Nikkei 225 in Tokyo plunges another 200 points (2.4%) in the opening hours of Wednesday morning trading. The Nikkei sits (it's too weak to stand) at yet another new 19-year low, right at critical support of 8,500.

Mizuho Holdings, the world's largest bank holding company, was at one point  "lock-limit down" Wednesday morning, plunging another 11% to an all-time low. Mizuho has crashed nearly 40% in the last ten days. Why aren't you talking about Mizuho on CNBC, Maria Bartiromo!? -- Grizzly

Monday 10/07/2002 10:00 PM EDT
Ho-hum. Another day, another failed rally attempt, another triple-digit loss for the DJIA. These 1-2% daily drops in the markets have become routine. We should expect nothing less in the heart of the "Great Bear Market of 2000-200[?]"

The DJIA has now dropped nearly 1,700 points, about 20%, since the August 22nd counter-trend peak. The Nasdaq Comp is down a whopping 320 points, about 23%. Yet it has been a fairly orderly and tranquil "mini-crash." No real panic, no capitulation, no "blood in the streets," though no doubt a lot of painful bruises and broken bones have been inflicted.

The fact that the markets have continued their relentless decline over the past two months without an intervening rally of any merit, is in our opinion decidedly bearish. As we said back on July 19:

"The market rubber band is stretched about to its limits. It'll either snap back with a sharp rally, or snap altogether."

On July 24th, the DJIA did indeed snap back as it launched a month-long, 1,500 point "summer rally."

We think this time it will be different. The very fiber of the rubber band has lost its elasticity. We think there's 1,500 points of immediate downside risk if (we think when) it finally snaps.

Stay Tuned! --Grizzly

Sunday 10/06/2002 8:00 PM EDT
The global sell-off continues as the Nikkei 225 in Tokyo plunges 375 points (4.1%) in the first hours of Monday morning trading. The Nikkei sits (it's too weak to stand) at yet another new 19-year low. Mizuho Holdings, the world's largest bank, tumbled another 5% on top of Thursday's 15% mini-crash.

Friday 10/04/2002 9:00 PM EDT
After inching up in the opening moments on allegedly bullish employment news, the markets got hammered again today. Another one of those sharp but short-lived afternoon rallies failed to stick, and the markets went on to close near the lows of the day. The DJIA surrendered 189 points (2.5%) at 7,528 and the Nasdaq shriveled 26 points (2.2%) to 1,140.

For the week, the Dow lost 2.2% and the Nasdaq fell almost 5%. The S&P 500 dipped below 800 for the first time in five years.

The Nasdaq has now fallen six days in a row and six weeks in a row.

CNNfn's market-wrap story tonight asks: "How bad can it get?"  Our answer: a lot worse! We think we'll be near a bottom when CNNfn tells its readers "It can't get any worse!"

Have a great weekend! We need to get some "R&R" while we can as next week promises to be very interesting! --Grizzly

Thursday 10/03/2002 12:15 AM EDT
The Nikkei 225 in Tokyo plunges 124 points to yet another new 19-year low. Mizuho Holdings, the world's largest bank, tumbles 15%.

Wednesday 10/02/2002 10:00 PM EDT
As stated Monday, we were looking for "much more heavy selling dead ahead, interspersed with sharp and short-lived counter-trend bounces."

The markets delivered one of those sharp but short-lived rallies Tuesday, only to give back much of the gains today (Wednesday). As discussed many times since the March 2000 bubble peak, these rallies are to be welcomed, because markets never travel in straight lines, and the corrective bounces are needed to relieve the oversold conditions created by the primary down trend.

So if markets don't travel in straight lines, just how do they travel? In zigs and zags, or more precisely, in waves. These waves can be quantified and analyzed, and used to project the markets' most likely next move. That's where the Elliott Wave Principle comes in.

In Elliott Wave terms, the bounce and reversal over the last two days have the definite look of a corrective pattern within the ongoing bear market, and  not the start of a new bull run.  The wave pattern strongly suggests that the next wave to the downside is underway from today's highs. A clean break of about 7,000 on the DJIA should usher in the beginning of our anticipated Crash of 2002.

Today's "ooops du jour," as reported by CNNfn:

Some of [today's] biggest losses came around 3:40 p.m. when brokerage Bear Stearns entered an erroneous order to sell $4 billion worth of securities instead of $4 million, the New York Stock Exchange said. Bear Stearns was able to cancel all but $622 million of that sell order prior to it being executed, the NYSE said.

Bear Stearns spokeswoman Elizabeth Ventura declined to provide details about how the error occurred, what was sold and who was responsible. She did say the mistake will have no material impact on the brokerage's financial results.

Amazing.... Bear Stearns ought to get with NASA and see if they can find the spacecraft that was lost when they failed to convert miles to kilometers properly.

Stay tuned! Barring a "major market event" on Thursday, the next Crash Update will be Friday evening.  --  Grizzly

Monday 09/30/2002 9:00 PM EDT
The trading week kicked off sharply to the downside as nasty declines in Europe and Asia put the U.S. markets under extreme pressure from the opening bell. Europe's largest markets, including the CAC 40 (France), the AEX (Netherlands), the DAX (Germany) and the FTSE 100 (England), all tumbled more than 4% today. All of these markets are trading at or just above multi-year lows.

By 10:00 AM ET the DJIA was in the red by 230 points. After finding some support around 7,475, an oversold bounce recouped almost all of the opening losses. But at about 3:00 PM the sellers stepped in again and drove the markets way back down. The DJIA closed near its mid-range for the day, down 110 points at 7,592. The Nasdaq was hit harder in the afternoon sell-off, closing near the session lows at 1,172, down 27 points (2.3%).

Let's do a status check. As the third quarter comes to a close,  the Nasdaq is down:

• 11% for the month

• 19.9% for the quarter

• 5 weeks in a row

• 6 months in a row

• 3 quarters in a row

• 40% year-to-date

• nearly four thousand points, 76%, from its March 2000 bubble peak

This is what bear markets are made of!

Furthermore, we firmly believe that a lasting bottom is nowhere in sight. We've seen virtually none of the capitulation, panic, or blood in the streets that almost always mark a lasting bottom, much less THE bottom. We believe there is much more heavy selling dead ahead, interspersed with sharp and short-lived counter-trend bounces, such as we saw last Wednesday and intraday today.

The DJIA fell 11.5% in September, its worst September since 1931! For the S&P 500, this was the worst third quarter since, ahem, 1987, and we all remember what happened then.

We're still on the lookout for short-term signs of what we believe will be another crash of historic proportion. One prime candidate still looks to be Monday, October 14th, though it's still too far off to make a confident, specific call. Repeat, we are not (yet?) calling for a crash on October 14th.

To be clear, the purpose of our Crash Warning is not to frighten or intimidate. We feel obligated to bring to the table this potentially very serious situation that you'll never hear discussed on CNBC. We want everyone to be aware of the extreme risk at this juncture so you may take whatever steps you may feel necessary.

Absolutely, we may be wrong. A successful coup d'etat against Saddam Hussein would send the markets skyrocketing higher. So would elimination of the double taxation on dividends. So would any number of other possible but improbable market fixes.

Nevertheless, we believe the preponderance of technical and historical evidence strongly suggests that a crash of historic proportion is in the making, now.

Barring a "market event" on Tuesday, the next Crash Update will be Wednesday evening.
-- Grizzly

Monday 09/30/2002 8:00 AM EDT
Today is shaping up as another major downer for the U.S. markets. The DJIA is down about 85 points in pre-opening trading and the Nasdaq 100 futures are about 15 points below fair value. The action in Europe is heavily to the downside. The CAC 40 (France) and the AEX (Netherlands) are down more than 5.0%. Stay tuned for a wild day on Wall Street! --Grizzly

Friday 09/27/2002 9:00 PM EDT
Wednesday we said "The rally was sharp and steep, but it should be short-lived." Indeed, today (Friday) the DJIA plunged nearly 300 points (3.7%), its third-largest drop of  the year. The DJIA wiped out nearly all of the prior two days' rally. For the week, the DJIA fell 3.6%, the S&P 500 3.2% and the Nasdaq 1.8%. This makes five down weeks in a row.

The markets remain oversold, so again, be alert for additional short=term bounces early next week. The Elliott Wave picture continues to paint one of an historic crash in the making, now. If the DJIA does not start rallying by about noon Monday, things could turn very ugly (for the bulls). Our guess is that when the DJIA breaks 7,400, the selling will accelerate, leading to an immediate plunge to about 7,000, where it should find at least temporary support.

Have a great weekend! We need to get some "R&R" while we can as next week promises to be very interesting! --Grizzly

Wednesday 09/25/2002 9:00 PM EDT
The markets finally delivered that "dead-bull bounce" we've been looking for.  The rally was sharp and steep, but it should be short-lived. In Elliott Wave terms, today's rally traced out the bulk, or possibly all, of a corrective structure, strongly indicating much more selling ahead. Elliott Wave Tutorial We're standing pat, looking for that historic crash within the next 20 or so days.

CRASH WARNING UPDATE Tuesday 09/24/2002
Monday we said:

The Nasdaq has certainly led the way down. The DJIA and S&P 500 still have a way to go to break their late-July lows. Once that happens, they won't waste any time trying to catch up to the Nasdaq. It'll be: "LOOKKK-OOOUUTTTT-BEELLLLOOOWWWW!!!"

Momentum to the downside is accelerating for the Blue Chips. Today the DJIA plunged 189 points to its lowest close in five years, though July 24th's intraday spike low of 7,532 is yet to be breached. The S&P 500 tanked another 14 points to 819. But the Nasdaq held its ground. After trading in the green most of the day, the Comp closed off just 2 points, though still making another six-year low.

Since our Crash Warning on Sept 13, the DJIA has fallen  five out of seven sessions for a loss of 630 points, 7.5%. Despite this dramatic slide, we've seen still little if any capitulation, panic,  or "blood in the streets," though we're getting closer and closer every day. The markets look primed to snap.

Today's non-action by Sir Alan of Greenspan and the Fed took some of the heat for today's drop. But after eleven rate cuts in 2001 for 475 basis points, will another 25 basis points really matter? Not!

We're not ready to go officially on the record with this call (yet) but we're eyeing Monday, October 14th as a prime candidate for The Crash of 2002. Of course Mondays made market history in Octobers 1929 and 1987. We believe many investors will be receiving their quarterly brokerage and 401k statements in the days just prior to October 14th. The herd mentality just may take hold as investors collectively throw up their arms (or maybe just throw up) and cry "Just get me out, now!"

As this update hits the web site, there's no relief in early evening trading. The Nasdaq 100 futures are down another 8 points and the Nikkei 225 is down 150 points, hovering just above a 19-year low.

Stay tuned! -- Grizzly

 CRASH WARNING UPDATE Monday 09/23/2002
The markets greeted the start of Fall with a fall of their own. Another day, another triple-digit loss in the DJIA and triple-dozen loss for the Nasdaq Comp. The Nasdaq pierced through to a new six-year low, closing at 1,185. Incredibly, the Nasdaq is now down nearly four thousand points, 76%, from its March 2000 bubble peak.

The Nasdaq has certainly led the way down. The DJIA and S&P 500 still have a way to go to break their late-July lows. Once that happens, they won't waste any time trying to catch up to the Nasdaq. It'll be: "LOOKKK-OOOUUTTTT-BEELLLLOOOWWWW!!!"

We'll be watching the markets closely over the next few days, looking for tell-tale signs of what we believe is an inevitable crash within the next 20 days or so. Again, the markets are extremely oversold on a short-term basis, so a sharp but brief rally won't surprise us, or throw us off course. Fasten your seat belts for the ride of your life!

 CRASH WARNING UPDATE Friday, 09/20/02
Following our CRASH WARNING last Friday (09/13, see below), the markets have cratered, but not crashed. For the week, the DJIA lost about 4% and the Nasdaq Comp lost about 5.5%. Only a late-day rally today prevented the "Great Bear Market of 2000-200[?]" from winning every hand this week. The Nasdaq sits (it's too weak to stand) just 29 points above the July 24th low.

Short-term technical indicators such as the VIX, TRIN and the put/call ratio are deeply oversold, so a brief and temporary reflex rally would not be a surprise.  But neither would an acceleration of the decline.  When markets are In crash mode, the oversold indicators merely become even more oversold.  As "Papa Bear" Joe Granville has noted, there were "too many bears" before the Crash of '29.

In Elliott Wave terms, the markets may be tracing out yet another small degree 1-2 pattern. Each successive 1-2 draws the markets one step closer to what we believe is an inevitable Crash. A break of the late-July lows (DJIA 7,530 and Nasdaq 1,192) will likely usher in a massive wave of selling, marking the start of the Crash. Elliott Wave Tutorial.

3-year S&P chart      20-day S&P chart (as of 09/20)

Some on The Street argue that the various circuit breakers instituted following The Crash of 1987 will prevent another crash. It is more likely that circuit breakers will actually accelerate this Crash. In a severe downturn, traders will not be caught holding large (losing) positions with no possible exit mechanism. So as a bad situation turns worse, the selling is likely to intensify as traders try to exit ahead of the circuit breakers, thus adding gasoline to the inferno. The circuit breakers may only serve to prolong The Crash into a multi-day or even multi-week event.

To be clear, the purpose of our Crash Warning is not to frighten or intimidate. We feel obligated to bring to the table this potentially very serious situation that you'll never hear discussed on CNBC. We want everyone to be aware of the extreme risk at this juncture so you may take whatever steps you may feel necessary.

Absolutely, we may be wrong. A successful coup d'etat against Saddam Hussein would send the markets skyrocketing higher. So would elimination of the double taxation on dividends. So would any number of other possible but improbable market fixes.

Nevertheless, we believe the preponderance of technical and historical evidence strongly suggests that a Crash of historic proportion is in the making, now.

To say the least, the next few weeks should be very interesting. Fasten your seat belts!
 

 CRASH WARNING! Friday, 09/13/02
As of the close of trading today, we are raising our outlook from CRASH ALERT to CRASH WARNING. We believe a crash a la 1929 and 1987 is imminent within the next 30 days (through October 12th).

Wednesday 08/15/02
The markets greeted yesterday's pronouncements by Sir Alan of Greenspan with a great big "Oh Shit!" The DJIA sold off 206 points and the Nasdaq Comp sank nearly 3% in the remainder of afternoon trading.

Friday 08/02/02
Since our last update (at the short-term bottom on Wednesday 07/24), the market rubber band snapped back and launched a sharp and swift rebound. The DJIA zoomed ahead nearly 1,200 points in just four days.

Wednesday 07/24/02
In last Friday Morning's (07/19) Crash Alert, we said "The market rubber band is stretched about to its limits. It'll either snap back with a sharp rally, or snap altogether."