does it concern you that this retracement is perhaps the most sought after and predicted event in the TA community right now? Will it be self fulfilling/
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Black Week (Mar 5 - 9)
- Thread starter mg_mg
- Start date
does it concern you that this retracement is perhaps the most sought after and predicted event in the TA community right now? Will it be self fulfilling/
Most sought after? Don't know if I completely agree with that. I do believe that we will try to retest the lows. Fibs retracements are as good as any other indicator in order to find resistance levels.
Quote from scriabinop23:
does it concern you that this retracement is perhaps the most sought after and predicted event in the TA community right now? Will it be self fulfilling/
the most predicted ta on the street that we'll retest? OH YOU MEAN THE 2MD MOST PREDICTED AFTER THE BOUNCE WE HAD THAT EVERY SINGLE TA GUY,TALKING HEAD ON TV AND EVERY MEDIA PRINT CRIED FOR AND HYPED FOR DAYS ON END AND WE GOT? i love it when anything that is just remotely the bearish view is paraded around as"see everyones bearish we can't fall. wether this week or 6 weeks this markets going much lower
Quote from chanster:
the most predicted ta on the street that we'll retest? OH YOU MEAN THE 2MD MOST PREDICTED AFTER THE BOUNCE WE HAD THAT EVERY SINGLE TA GUY,TALKING HEAD ON TV AND EVERY MEDIA PRINT CRIED FOR AND HYPED FOR DAYS ON END AND WE GOT? i love it when anything that is just remotely the bearish view is paraded around as"see everyones bearish we can't fall. wether this week or 6 weeks this markets going much lower
actually (as admittedly a resident bull in this thread) i'm not attempting to imply "we can't fall because thats popular sentiment."
i honestly think this correction (if it indeed is a correction and not just an abberation) needs to drift to 1350, bounce up towards 1400, then back down to 1350 as the real retest. 1375 for the final retest depth is unbelievable to me, considering the intensity of the first selloff. so if indeed 1375 is all we need, then this 'bull correction' won't be long lasting, since the duration of the selloff will likely be equated by an equally intense buyback. vol goes both ways. We're easily 1 day away from 1375; and if so, we'll be back to 1450 in 1-2 weeks.
The question remains ... is a 2 week blip a correction, or an abberation? What are the shortest US equity market corrections in history? That'd be an interesting thing to bring up.
i'm just not sure its going to be the correction everyone is calling for, since with exclusion to subprime uncertainty, economic #s aren't totally surprise. The speed of the initial dump makes be wonder if the 'correction' itself was a headfake ... Look at May 06's correction. That took 60 days to 'gradually' unwind ... I mean, look at Nasdaq - it took about 1 day to go from near resistance to below support, wiping out entirely 4 months of progress.
With options expiration coming up, I'm very curious to see what will be driving the markets. With the wildness of that move, I'm curious if we get a rally that entirely or almost entirely wipes out the losses of the initial selloff. For another market example of this, look at the 30 yr bond. Almost at pre-selloff levels already.
I think we need a *real* crisis to sell this market off substantially, like Iran war, $80 oil, junk bond market freefall (not yet) from risk spreads spiking, etc. When people no longer believe a junk debt funded LBO spree is going to continue, and prices are truly out of whack (valuations), then I think we're ready for a real correction. Not there...? We need news of shrinking 08 GDP on top S&P average PEs north of 20 to warrant a 'deep' 10-25% correction. Thats not happening ... yet.
The market consensus is unchanged from 2 weeks ago to now, with exception there is more nervousness. Still a bull market. I guess maybe I'm looking for a start of a bear, not just a correction.
For fun and posterity: So with this message, I call for a "real" correction to occur in about 6 months. This will be in history not recognized as such. Here's how it goes. Markets retest 1375 within 2 days (or maybe they won't even test)... then rally hard in between now and then. Subprime worries will be temporarily forgotten, or 'deferred'. Then suddenly you'll get a triple whammy:
- Iran / Hurricane seasion (with hurricanes actually hitting) = expensive oil.
- Actual measurable and seasonally sharp divergence on consumer spending, linked to credit bubble popping.
- Some big event in the bond market .. maybe re-escalation of subprime, or contagion, or LBO gone bad ... something to truly dissipate liquidity (hasn't really happened yet).
Or maybe another one: Toyota comes out with giant negative sales surprise ... (consumer is done here) Days after the correction I see this:
Toyota Reports Feb vehicle sales up 12.2%.
The consumer isn't done.
By the way, should a new black week thread commence for Mar 12-16 ?
well maybe the suprise will be when the subprime debacle rolls threw the morgage market in general as banks tighten all credit. PLEASE REMEMBER WHEN THE MARKET STARTED TANKING IN 2000 THE HORIZON WAS AS SUNNY AS EVER IN HISTORY. THE MARKET LEADS THE ECONOMY SO IF THE MARKET TANKS THE ECONOMY FOLLOWS. also don't forget its been almost 5 years since this bull started and outside the 2 1/2 down years from 2000 to mid 2002 that means since 1982 we've only had a few down years and maybe 10 qtrs of the last 25 years were down gdp qtr's. were just due for some tough times to wash the excesses out of the system
Personally, I am 80% cash and about 20% long stocks. I am playing short term trends either up or down to scalp some $ here and there until I feel the market has found its direction.
IF the DOW gets below 11600, I'll start loading up on quality stocks at bargain prices and continue at each down level until I run out of cash.
IF the DOW makes new highs, I'll start buying any pullbacks until the market tells me it wants to go down again.
May not be perfect but it works for me.
I seriously doubt that the DOW will get much below 10600 this year; BUT I think it could get to that level before starting its next climb to new highs.
IF the DOW gets below 11600, I'll start loading up on quality stocks at bargain prices and continue at each down level until I run out of cash.
IF the DOW makes new highs, I'll start buying any pullbacks until the market tells me it wants to go down again.
May not be perfect but it works for me.
I seriously doubt that the DOW will get much below 10600 this year; BUT I think it could get to that level before starting its next climb to new highs.
Quote from chanster:
well maybe the suprise will be when the subprime debacle rolls threw the morgage market in general as banks tighten all credit. PLEASE REMEMBER WHEN THE MARKET STARTED TANKING IN 2000 THE HORIZON WAS AS SUNNY AS EVER IN HISTORY. THE MARKET LEADS THE ECONOMY SO IF THE MARKET TANKS THE ECONOMY FOLLOWS. also don't forget its been almost 5 years since this bull started and outside the 2 1/2 down years from 2000 to mid 2002 that means since 1982 we've only had a few down years and maybe 10 qtrs of the last 25 years were down gdp qtr's. were just due for some tough times to wash the excesses out of the system
2000's market had dow stocks priced as if 20-40% growth rates were sustainable. So while the economy may have seemed sunny, the issues in the stock market were due to correct even if we didn't hit recession.
Today's market isn't that way. To justify a lasting multiple contraction at these levels would necessitate a deep imminent recession forecasting negative earnings growth over not just q/q basis, but over several years. either that, or commodity inflation and superhigh note and bond yields that make stock returns look relatively unattractive. that scenario isn't in the cards, not until something deeper occurs.
subprime isn't great, so how can you concretely justify your argument? after all, stock market price is about valuation, not just chart action.
again i beg to differ with you. #1 if you take avg profit margins even from the very high 1990-2000 period and stocks are trading at 26 p/e's and thats not even factoring in avg profit margins before 1990 nor a greatly slowing or recessionary economy.profit margins are peaking. i'll use the home builders who all said were dirt cheap for years at 5-7 p/e's and low and behold they're now at 50-100 p/e's as there earnings have fallen 90%. YOU'RE BASING A STILL VERTY HEALTHY 17 P/E CURRENTLY ON THE HIGHEST UNSTAINABLE PROFIT MARGINS IN HISTORY AND 5 YEARS OF HUGE ECON GROWTH WHICH IS NOW SLOWING HUGE. also the lbo crap is a fantasy as they're taking on huge debt and financing from pension funds to buy these companies so its a net net wash. its funny how the market works. all what you've been speaking of the market has known for along time so its priced in. whats not priced in is what i've said about profit margins declining or the economy slowing big. I CAN ASSURE YOU OF THIS. EVEN THOUGH THE MARKET ACTS LIKE THEY KNOW EARNINGS WILL SLOW BIG ONCE IT HITS THE MARKET WON'T LIKE IT. IT'S LIKE KNOWING A SICK PERSON IS ABOUT TO DIE WHEN THEY ACTUALLY DIE IT STILL NUMBS YOU.
excuse me if i'm laughing at bit. but you tell me that in 2000 valuations weren't sustainable yet i've been arounf 25 years in the market and for the life of me i can't remember 1 person throwing up any caution. all i can remember is hearing terms like a "new era" or "the business cycle has been repelled and earnings will rise 20% forever" you're giving me these facts 7 years later.
MAYBE IN 2 YEARS WE'LL LOOK AT BACK ON THIS PERIOD AND SAY
" EARNINGS WERE'T REAL BECAUSE THEY WERE GENERATED FROM BORROWED MONEY THAT WAS NEVER PAID BACK" OR IT WAS THE 8000 HEDGE FUNDS WITH FINANCED MONEY THAT DROVE THESE MANIA OR WE'LL READ ALL THE STORIES OF HOW THE CHINNEESE PEASANT SOLD THERE OX TO BUY STOCKS. TIME WILL TELL WHO'S RIGHT
excuse me if i'm laughing at bit. but you tell me that in 2000 valuations weren't sustainable yet i've been arounf 25 years in the market and for the life of me i can't remember 1 person throwing up any caution. all i can remember is hearing terms like a "new era" or "the business cycle has been repelled and earnings will rise 20% forever" you're giving me these facts 7 years later.
MAYBE IN 2 YEARS WE'LL LOOK AT BACK ON THIS PERIOD AND SAY
" EARNINGS WERE'T REAL BECAUSE THEY WERE GENERATED FROM BORROWED MONEY THAT WAS NEVER PAID BACK" OR IT WAS THE 8000 HEDGE FUNDS WITH FINANCED MONEY THAT DROVE THESE MANIA OR WE'LL READ ALL THE STORIES OF HOW THE CHINNEESE PEASANT SOLD THERE OX TO BUY STOCKS. TIME WILL TELL WHO'S RIGHT