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I assume you believe the market is going to continue to go down to even new lows since you're all so doom and gloom.
So ... How much?
I wonder if anybody has the guts to make those predictions.
You just have to follow the trend. "The trend is your friend".
Look at a chart for the past few months. Take the low in October, the rally around the election of 9600 and look at what it has done since then. It has made lower "highs" and lower "lows". The trend is down. You don't need to have guts or predict anything. Until the market breaks out of the trend it is still going down. If it rally's and closes above 9625 we will probably have seen the bottom. Since that has not happened and we are trending lower I see 7000 as the next target.
Like HappyTexan I'm really not interested in making a predictions on where the equity markets are going to go. Too many changes are happening to reliably make a prediction. My guess about the equities markets is that they return to prices that bring the markets P/E ratios back in line with more historic norms. That would mean a good sized decline from today's prices.
Anyhow, I have next to nothing in the equity markets. That isn't going to change anytime soon.
Still nibbling...some FCX, BAC and GRA today. MMM and X on the watchlist. I think things will go down a little further with some tax loss selling this month, but you never know.
Rig is becoming very attractive again. Although many companies may rebid contracts as demand is down temporarily. I dont see oil going much south of $40.
Since that has not happened and we are trending lower I see 7000 as the next target.
I'm not agreeing or disagreeing, but if this is your prediction, are you shorting the market? Because if you have a strong conviction that this will happen, you might want to put some money on it. You don't even need options or margin, you just need to purchase a bearish mutual fund or an inverse ETF. I'm just saying -- there are many ways to make out big time if you correctly predict the direction of the market.
I'm not agreeing or disagreeing, but if this is your prediction, are you shorting the market? Because if you have a strong conviction that this will happen, you might want to put some money on it. You don't even need options or margin, you just need to purchase a bearish mutual fund or an inverse ETF. I'm just saying -- there are many ways to make out big time if you correctly predict the direction of the market.
I am holding SPY put options. And, I have been doing quite well on every dip.
Since that has not happened and we are trending lower I see 7000 as the next target.
Nah ... the market is stabilizing even more, IMO. Just look at the past few days.
Mortgage applications are way up (which means I'm right about housing too ) ...
CEO's are starting to call a bottom within the next six months and the market is always about what's going to happen in the next six months.
Even with the market tanking on the "official" news of a recession since December, 2007 ... it's actually good news because that means we've already been in a recession for a year so.
The average recession is 16 months so even if this one is longer, that means the worst is over.
Yeah ... the unemployment numbers will tank but the unemployment numbers are always the last to tank and, also, the last to recover several months after a recesion is over.
I think we'll see a lower low. In fact, I'm betting on it.
It's hard to be sure of anything in this market, though. Ongoing government intervention is whipsawing sentiment and causing unprecedented volatility. Good for trading; frustrating for longs.
The market may or may not bottom in six months, but as long as the trend is down, I'm not fighting the tape.
Nah ... the market is stabilizing even more, IMO. Just look at the past few days.
It is flirting with 8,000 again. Still in the same downtrend. Why buck the trend?
Quote:
Originally Posted by sheri257
Mortgage applications are way up (which means I'm right about housing too ) ...
Sheri,
Come on. The index of Weekly Mortgage Applications you are quoting includes Refi's. The Refi's surged because rates went down. Refinance volume increased from 49% of the loans to 69% of all loans.
It also surged in January, and the index was higher in January:
That was June 2008. The market was at 12,000. I guess that seemed low at the time.
A lot of CEO's and professionals have been dead wrong calling the market bottom. Here is one who called the real estate bottom in May of 2007. Real Estate did look bad in May 2007, how could it go much lower? But it did. Many markets have lost over 40% since that bold prediction:
Even with the market tanking on the "official" news of a recession since December, 2007 ... it's actually good news because that means we've already been in a recession for a year so.
The average recession is 16 months so even if this one is longer, that means the worst is over.
We have the biggest infusing of money to prop up the economy since the great depression, maybe even bigger than the great depression. This is a whole different animal, only compatible in scope to the great depression. Why compare it to much tamer recessions which took much less government interference? So the great depression lasted about 10 years. Lets say our slowdown only lasts 5 years. We still have 4 more years of this. And it is all semantics, a depression is a recession where the GDP contracts at least 10%. Before the great depression, all recessions were called depressions.
Quote:
Originally Posted by sheri257
Yeah ... the unemployment numbers will tank but the unemployment numbers are always the last to tank and, also, the last to recover several months after a recesion is over.
I will agree with you here. My feeling is you are getting creamed in the market right now and you are somehow looking for the silver lining. You could have kept in the bank and at least be ahead of the game. Me, I am enjoying the ride down. I don't want anyone to suffer with the economy, but I am going to ride the downtrend in the Stock Market. I bought more puts this morning and sold about 1/2 near the close.
Last edited by Winkelman; 12-04-2008 at 05:50 PM..
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