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this market makes no sense
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buyStocks
Bubble Watcher
Joined: Fri Nov 07, 2008 9:52 pm
Posts: 24
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 Re: this market makes no sense sniglet wrote: I'm predicting a Dow below 2000, and maybe even below 1000 by the time we hit bottom, over the next 4 years. Just curious why you think were gonna go this low? We experienced a drop of 80% during the great depression, and your 1-2k predictions would be a 86-93% drop. I thought I was pessimistic thinking we may get to 4-6K at some point.
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| Tue Nov 18, 2008 4:20 pm |
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davidlosh
Bubble Watcher
Joined: Sat Mar 01, 2008 3:56 pm
Posts: 20
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Re: this market makes no sense The stock market makes no sense?
It makes perfect sense. Automatic buy and sell orders will wring out every last dime of investor dollars not tied to the very same buy and sell patterns.
It's legal, quick, and effecient. As Martha Stewart will tell you "it's all gambling without inside information."
The Dow will settle down to 6000 before taking it's time to rally again up to 8000. It will float like a feather, moving back and forth with small ETrade Investors trying to catch the logic.
It doesn't have to make sense.
14000 made no sense. There was no corresponding data to support 14000, it was just there, with millions of people dumping in billions of dollars on speculation.
The one thing I learned on the Seattle Bubble was that the financial markets are the engine that drives profits.
So, if credit dries up where are the profits coming from?
The assets for any corporation are Real Estate. Intellectual property not so much any more, tech market is withering while I type.
If credit, and Real Estate are tanking what does the stock market have to offer?
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| Tue Nov 18, 2008 5:31 pm |
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The Tim
Bubble Blogging Buffoon
Joined: Sat Feb 17, 2007 6:02 pm
Posts: 827
Location: Kenmore, WA
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Re: this market makes no sense buyStocks wrote: We experienced a drop of 80% during the great depression, and your 1-2k predictions would be a 86-93% drop. Fact check: The Dow Jones went from a peak adjusted close of 381.17 on September 3, 1929 to the bottom during the GD at an adjusted close of 41.22 on July 7, 1932, for a total drop of 89.2%. See my handy comparison graph here.
_________________
For great justice.
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| Tue Nov 18, 2008 6:08 pm |
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buyStocks
Bubble Watcher
Joined: Fri Nov 07, 2008 9:52 pm
Posts: 24
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Re: this market makes no sense The Tim wrote: Fact check: The Dow Jones went from a peak adjusted close of 381.17 on September 3, 1929 to the bottom during the GD at an adjusted close of 41.22 on July 7, 1932, for a total drop of 89.2% Thanks for correcting me; I should of looked at the data instead of trusting the book I'm reading. Sniglet's prediction makes more sense now (I'm still leaning towards bottom of 4-6K).
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| Tue Nov 18, 2008 6:33 pm |
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lamont
Bubble Bloviator
Joined: Wed Nov 28, 2007 9:02 am
Posts: 213
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Re: this market makes no sense i'd like to see the markets rally back and test their 50-DMA or 200-DMA at some point.
the 200-DMA is up above 11,000 right now, so there's a lot of room for a bear market rally, but i've been waiting for one for awhile...
it looks like we're testing the 8,000 level again, but the rallies keep getting more anemic off of 8,000...
i guess my prediction is that once the whispers start that GM is going to fail in a matter of days that the dow will fall through 8,000
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| Tue Nov 18, 2008 7:10 pm |
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sniglet
Bubble Banter Boss
Joined: Thu Feb 22, 2007 2:58 pm
Posts: 680
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Re: this market makes no sense buyStocks wrote: The Tim wrote: Sniglet's prediction makes more sense now (I'm still leaning towards bottom of 4-6K). Don't forget that the Nikkei lost 80% from it's 1980s peak, which would be somewhere in the 2000 range for the Dow. Unfortunately, I think that this downturn is going to be worse since the global economic environment is so bad. Things wouldn't be nearly so dire if it was just ONE country or region that was hurting. Keep in mind that we have been through a completely unprecedented multi-decade period of credit creation, which led to an abandonment of prudent investing and pricing of risk. The unravelling of all this credit is going to be similarly unprecedented.
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| Tue Nov 18, 2008 8:45 pm |
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rose-colored-coolaid
Bubble Banter Boss
Joined: Mon Jun 18, 2007 10:26 am
Posts: 1978
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Re: this market makes no sense The market hasn't closed yet, but unless there is a furious rally in the last 2 minutes, we'll closed at or below 8,000 pts on the DOW.
I figured it'd take at about another 2 weeks to get here...and I thought I was bearish.
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| Wed Nov 19, 2008 1:59 pm |
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WestSideBilly
Bubble Banter Boss
Joined: Mon Feb 04, 2008 1:41 pm
Posts: 562
Location: Land of entitlement
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Re: this market makes no sense WestSideBilly wrote: WestSideBilly wrote: After yesterday, I figured we'd get a weak buy in the morning and a 300-400 point sell in the afternoon, only to rally back to ~8100 or so.
This has nothing to do with anything except the irrational, yet fairly predictable, pattern of the last few weeks. Well, I had the pattern correct, just not the scale.  Tomorrow's prediction: Open with a small buy to ~8600, steady decline to a close around 8200. Pattern correct, off on the scale. I need to refine my numerological estimates.  Tomorrow's (completely random) prediction: Support line sale down to 7500, afternoon bargain hunting back up to 7800.
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| Wed Nov 19, 2008 3:09 pm |
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buyStocks
Bubble Watcher
Joined: Fri Nov 07, 2008 9:52 pm
Posts: 24
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Re: this market makes no sense It'll be interesting whether we rally above 8K, I'm predicting no. Let's talk market strategy. I plan on making 4 large buys(simple indexes) for the long term as we go down to avoid missing the bottom. Trying to be disciplined, so chose at 7K, 6K, 5K, 4K since I'm thinking(hoping) we'll bottom in the 4-6K range. Must admit, though, I'm really second guessing my predicted bottom, because of Tim's graph at http://timothyellis.googlepages.com/Dow-Jones-Crashes.png. (as a disclaimer, gonna keep most of my surplus assets in cash)
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| Wed Nov 19, 2008 4:46 pm |
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The Tim
Bubble Blogging Buffoon
Joined: Sat Feb 17, 2007 6:02 pm
Posts: 827
Location: Kenmore, WA
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Re: this market makes no sense *Past performance is no guarantee of future results.
_________________
For great justice.
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| Wed Nov 19, 2008 5:26 pm |
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lamont
Bubble Bloviator
Joined: Wed Nov 28, 2007 9:02 am
Posts: 213
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Re: this market makes no sense lamont wrote: i guess my prediction is that once the whispers start that GM is going to fail in a matter of days that the dow will fall through 8,000 so, dow closed below 8,000... did CDS on GM spike today? for tomorrow, i'm going to guess that the market opens down on pessimistic selling, rallys sharply back above 8,000 on concerns it is overbought, and then sells off late as hedge fund unloading takes over and it closes down lower by 300+ points. although if it either drops straight down -800 points or melts-up +800 points i wouldn't be surprised. i don't have anything riding on this game right now.
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| Wed Nov 19, 2008 7:05 pm |
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deejayoh
Bubble Banter Boss
Joined: Mon Feb 26, 2007 12:14 pm
Posts: 1166
Location: Capitol Hill
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Re: this market makes no sense sniglet wrote: Don't forget that the Nikkei lost 80% from it's 1980s peak, which would be somewhere in the 2000 range for the Dow. Unfortunately, I think that this downturn is going to be worse since the global economic environment is so bad. Things wouldn't be nearly so dire if it was just ONE country or region that was hurting. Actually, I think that it might be just the opposite. The decline in Japan may have been worse precisely because it WAS an isolated issue. The Nikkei 225 decline happened over a period of ~14 years. Peaked at 38k in 12/89 and bottomed at 8k in 04/03. I think you need to factor in a couple of issues that occurred during that time frame which quite likely exacerbated the downturn in the Nikkei - In the course of that time you had 10 years of deflation in Yen denominated assets. Japan was the only market in the world with deflation so would have the effect of discouraging Yen-denominated investment and encouraging flight of capital to other currencies
- Once that got started, the hedgies got into Japan with the yen-carry trade. I don't think you can discount the impact of that. Just about every dollar that was lent in Japan for most of the last 20 years was shipped offshore for investment in other countries. That further decreased investment/increased capital flight. If this is now is a truly a "global" downturn then these factors won't exist in any single market- so if they exacerbated the Japanese downturn, using it as an comparison may not be appropriate.
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| Wed Nov 19, 2008 7:56 pm |
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lamont
Bubble Bloviator
Joined: Wed Nov 28, 2007 9:02 am
Posts: 213
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Re: this market makes no sense lamont wrote: for tomorrow, i'm going to guess that the market opens down on pessimistic selling, rallys sharply back above 8,000 on concerns it is overbought, and then sells off late as hedge fund unloading takes over and it closes down lower by 300+ points.
so far the open was about like I expected. the rally stalled before I thought it would stall (i was picturing up 100-200 around noon). if the inability of the rally to climb above 8,000 is any indication my closing estimate may be too optimistic.
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| Thu Nov 20, 2008 9:32 am |
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rose-colored-coolaid
Bubble Banter Boss
Joined: Mon Jun 18, 2007 10:26 am
Posts: 1978
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Re: this market makes no sense Yep, and when the auto bailout fails, we'll see an 8000 ceiling that isn't even tested for months.
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| Thu Nov 20, 2008 11:14 am |
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WestSideBilly
Bubble Banter Boss
Joined: Mon Feb 04, 2008 1:41 pm
Posts: 562
Location: Land of entitlement
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Re: this market makes no sense WestSideBilly wrote: Pattern correct, off on the scale. I need to refine my numerological estimates. Tomorrow's (completely random) prediction: Support line sale down to 7500, afternoon bargain hunting back up to 7800. So much for the bargain hunters saving the afternoon. Close around 7500.
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| Thu Nov 20, 2008 1:06 pm |
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