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Tuesday Prognosis: not good

deejayohdeejayoh
edited January 2008 in The Economy
If you haven't taken a gander at what is happening in Asia, Europe, and the futures markets - you might want to have a look see.

Tomorrow's market activity is shaping up to be dismal

Futures
INDEX VALUE CHANGE OPEN HIGH LOW TIME
DJIA INDEX 11,592.00 -514.00 12,130.00 12,140.00 11,569.00 11:29
S&P 500 1,265.10 -60.20 1,327.50 1,331.60 1,256.00 11:29
NASDAQ 100 1,773.50 -76.00 1,850.75 1,857.75 1,755.25 11:29

Europe
INDEX VALUE CHANGE %CHANGE TIME
DJ EURO STOXX 50 € Pr 3,703.05 -292.12 -7.31% 13:00
FTSE 100 INDEX 5,578.20 -323.50 -5.48% 11:35
CAC 40 INDEX 4,744.45 -347.95 -6.83% 12:10
DAX INDEX 6,790.19 -523.98 -7.16% 13:51

Asia
INDEX VALUE CHANGE %CHANGE TIME
NIKKEI 225 13,325.94 -535.35 -3.86% 02:00
HANG SENG INDEX 23,818.86 -1,383.01 -5.49% 03:01
S&P/ASX 200 INDEX 5,580.40 -166.90 -2.90% 01/21
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Comments

  • PndscmPndscm
    As someone around here once said: "beat the rush, panic now!"
  • SunTzuSunTzu
    Guess that downgrade of mbac finally got those foreign buyers of toxic waste to realize that they are holding crap. The markets in general will enter a self-reinforcing downward spiral where today's sell-off will create a US sell-off tomorrow and a US sell-off tomorrow will creat another wave of sell-offs the next day......

    The leadership and trustworthiness of US financial institutions will face serious crisis of confidence from all foreigners, this could be a problem down the road for our sources of deficit funding......
  • perfectfireperfectfire
    I'm almost feeling sick about this. I cashed out of all of my options on Friday in anticipation of a rate cut bounce this week, but now it looks like I may have missed out on the big crash event that we've all been expecting for the last several months. ARGGGHHHH :x

    So now I'm hoping somebody will start a suprise rate cut rumor, or a Warren Buffet buying the entire U.S. rumor or something to prop the market up until I can get back in.
  • deejayohdeejayoh
    edited January 2008
    it will be hard for the rate rumor to beat market expectations

    current betting is 100bp drop to **3.50%** (got ahead of myself there!)

    http://www.clevelandfed.org/Research/po ... /index.cfm
  • david_mcmanusdavid_mcmanus
    Thankfully, I moved most of my retirement funds out of the equities I had been in and into much safer investments. I still have a little bit in SRS though ;-)

    Something tells me there isn't going to be many happy people in a lot of places for most of the day tomorrow, but it's all part of the game. Perhaps I should just dump all my money into real estate?
  • Lake Hills RenterLake Hills Renter
    My 401k has lost ~10% so far in 2008. :(
  • AwaySoonerAwaySooner
    If everyone is expecting crash, then it probably wouldn't happen, you never know. There might still be time for bounce and you should get out then. My 401k is in MM and that still worries me, but not much choice there and I don't want to quit my job.
  • sidsid
    WOW... it was 21K last week
    Trading halted......

    http://moneycontrol.com/

    China also hurting
    http://cn.finance.yahoo.com/
  • AwaySoonerAwaySooner
    Gotto tell you guys, doesn't look good.
  • downpaymentdownpayment
    I think DOW will definitely break 12,000 tomorrow - remember it never really did test that level after crossing it in 2006.

    Question is, how low will it go, 11,000? I'm looking at buying, but can't quite tell where bottom will be. I personally think markets are getting somewhat oversold.
  • geongeon
    I'm also in the " feeling sick" pack. Held QIDs most of last year waiting for an event like this, but sold out at the end of November, looking to get back in big again on a rally.

    Took a one week profit on a smaller lot the first week of the year, but it will pale compared to what I could have been making. Hope BB creates a bounce. Sold half of retirement fund March of last year--was going to do more but didn't want to scare wife. :o

    Well, at least I've got cash sitting on the sidelines.
  • carlislematthewcarlislematthew
    "I personally think markets are getting somewhat oversold."

    I agree, although they'll likely get as oversold on the way down as they got overbought on the way up! Irrational fears can work on both sides.

    When I turn on CNBC and see that neo-con idiot Kudlow telling me to "absolutely stay out of the market - it's rotten", that is the moment when I will fully go back in to stocks (balanced portfolio, blah blah blah).
  • carlislematthewcarlislematthew
    "My 401k is in MM and that still worries me, but not much choice there and I don't want to quit my job."

    Are there no stable income funds (treasuries, etc) in your 401K? Those should be relatively fine even in times such as these. Unless you're the kind of person that wants to hoard gold in a safe (along with your guns and ammo). :)
  • TJ_98370TJ_98370
    edited January 2008
    Wow! Yahoo Finance is doing what looks to be real time updates on stock quotes. Either I have been incredibly unobservant in the past or this is something new.
  • perfectfireperfectfire
    Well there's the bounce I've been waiting for, but as usual I got in way way too early.
  • TJ_98370TJ_98370
    Fed Slashes Interest Rate 75 Basis Points
  • AwaySoonerAwaySooner
    More to come, traders are pricing for 50 more points in 9 days. Total of 125 points. Hoohoo, staying in cash seem like a good idea now!

    PS: My 401k fund does not have a pure short term treasuries options to select, even MM are tainted with MBS.
  • casey1167casey1167
    "Lake Hills Renter - My 401k has lost ~10% so far in 2008"

    Okay Mr. Lake Hills Renter, there is absolutely no excuse for you to loose 10% in this market. You are active enough on this site to know better!!!!!

    And by the way, all you with 401(k)s.... mine is up for the year because I put it all in short funds... (based on the wonderful advise given here by people like "AwaySooner" and "deejayoh".....)

    In my mind if the DOW closes with more than a 100 point drop, that will be huge given the rate cut.

    My thinking right now (as worthless as it is) is that financials will go up for one more day max, and then drop back to were they were last week. The issue is not earnings (effected by the FED rate) but buckets of bad loans in the back room no one is valuing yet....
  • perfectfireperfectfire
    casey1167 wrote:
    And by the way, all you with 401(k)s.... mine is up for the year because I put it all in short funds... (based on the wonderful advise given here by people like "AwaySooner" and "deejayoh".....)

    Some people have very limited options in their 401k. The safest place I could find for my 401k was a money market tainted by MBS like AwaySooner mentioned. I'll have more options in a few months; I hope the MM can hold it's value for that long.
  • casey1167casey1167
    Sorry to hear you have limited options.... I guess I just got lucky, which is highly unusual for me...
  • Lake Hills RenterLake Hills Renter
    casey1167 wrote:
    Okay Mr. Lake Hills Renter, there is absolutely no excuse for you to loose 10% in this market. You are active enough on this site to know better!!!!!

    I'm glad you think so, but that is not really the case. I am not financially savvy in the least, and even less of an active trader. The easiest way for me to screw up what little I have is to start moving things around based on investment advice off blogs and forums. :P

    Perhaps it is naive, but Dollar Cost Average works when things are declining, assuming they will eventually come back up again. I believe that they will, even though it may take years, and unfortunately I won't be retiring for quite a while yet even in the best of economic circumstances.

    I'm more concerned with my savings being eroded by inflation from the plummeting interest rates than I am long term losses in my 401k.
  • AwaySoonerAwaySooner
    You are not making sense! Your 401k drop 10% in a few weeks and you are worry about inflation? Everyone has to learn to manage their money. Remember nasdaq in 2000? Well 7 years later some still down 50%, and might never recover. Something to consider.
  • casey1167casey1167
    Mr. AwaySooner, please be gentle... There might be people on this blog that bought Drugstore.com (DSCM) at $67 back in 1999 who are waiting for it to recover.... it is still under $3 a share, but will spring back any time now. (same could be said about those that bought MSFT for over $50 back in late 1999, but that might be hitting a bit closer to home).

    Mr. Lake Hills Renter, I do not understand what you are saying, I base everything I do on what I read in Blogs. I thought Blogs were the most reliable new source out there, and that people on Blogs were always rational, nice, and well informed.

    Oh, and someone please explain to me how to do the quote thing... I can't figure it out.[/quote]
  • TJ_98370TJ_98370
    .
    casey1167 wrote:
    Oh, and someone please explain to me how to do the quote thing... I can't figure it out.

    square bracket "quote="casey1167""square bracket Oh, and someone please explain to me how to do the quote thing... I can't figure it out. square bracket "/quote" square bracket

    or click on the "quote" button and delete what you do not want.

    For what it's worth, some of us do not have the inclination to be an active trader. Are we destined to be poverty stricken losers and do we have to watch Jim Cramer if we decide to change our ways?
    .
  • casey1167casey1167
    TJ_98370 wrote:
    For what it's worth, some of us do not have the inclination to be an active trader. Are we destined to be poverty stricken losers and do we have to watch Jim Cramer if we decide to change our ways?

    Oh my goodness, I actually figured it out. Thank you TJ.

    And by the way, I AM a poverty stricken looser, and I don't even watch Cramer because I don't have cable.... but it is fun to watch the market, sort of like watch a game show on TV....
  • perfectfireperfectfire
    TJ_98370 wrote:
    Are we destined to be poverty stricken losers and do we have to watch Jim Cramer if we decide to change our ways?

    Ahhh, Cramer is just about the last person you want to listen to for stock advice. Watching for entertainment (or "lulz", if you will) though is another matter entirely.
  • AwaySoonerAwaySooner
    I am not saying we are going to be like Japan, but take a look at 1990 to 2003. That's 13 years. Today we are at the 1987 level.

    http://chart.finance.yahoo.com/c/my/_/_n225

    What happen to them? Banks holding bad debts and government lowering interest rate all the way to 0%. Destruction of money (write-off), no trust among bank and no lending. Deflation spiral, sound familiar?
  • MrRationalMrRational
    AwaySooner wrote:
    I am not saying we are going to be like Japan, but take a look at 1990 to 2003. That's 13 years. Today we are at the 1987 level.

    http://chart.finance.yahoo.com/c/my/_/_n225

    What happen to them? Banks holding bad debts and government lowering interest rate all the way to 0%. Destruction of money (write-off), no trust among bank and no lending. Deflation spiral, sound familiar?

    For those who feel that we're headed into a deflationary spiral analogous to what we have seen in Japan may want to read this paper by the Fed: http://www.federalreserve.gov/pubs/ifdp ... fdp729.pdf
  • casey1167casey1167
    I like how Bernanke is referenced in the paper.

    The paper has some great charts and graphs...

    Good link MrRational.
  • TJ_98370TJ_98370
    There is something to said about the buy and hold strategy also. Real life example – in April 2004 a family member bought an equal value of shares of AT&T (T), JP Morgan (JPM), SBC Communications (SBC), and Altria (MO). Their inspiration for these choices was that these stock were on the so-called "Dogs of the Dow" list for that year. Not what I would consider a thoroughly researched purchase. Since then AT&T bought out SBC, and Kraft (KFT) was spun off from Altria. As of 22 Jan 08, this collection of stock (T, JPM, MO, KFT) is up 33.5% overall, despite taking a 9.9% loss from 31 Dec 07 price levels. It has improved slightly since 22 Jan 08.

    I am aware that people like Mr. Market Ticker, whom I respect, are saying to get out of equities while the getting is good. Right now I am conflicted as to whether I should advise to ride this thing out or to get out and avoid this crazy volatility.
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