DOW Crashing ?!

Originally posted by Bono



as for the contrary theory, it could be applied as follows : most people are bearish on the market ... if they have already gone short ... then we have a problem, and the market doesn't have enough sellers to drop .. and could reverse course .. but if they haven't done so yet ... then this could be very very dangerous, as they would be encouraging each other to short the market and cause it to crash ...
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Very well put, Bono. Too many times in the 90's I got smoked being short when everyone was bullish. Consensus i.e. the trend can be right for a long time.

IMO a credible technical case can be made that the Naz is the late twenties-early thirties Dow. Similar percentage break puts Naz at 700. I see the Dow today though as more like the late sixties-early seventies market. Take off a zero i.e. 900 instead of 9k and check out the similarities from 97 on. I wouldn't rule out a 6000 DIA at some point.
 
pabst, thanks !

wow ... that's the second post on this thread projecting more than 90% drop for the DOW !

I've got an interesting question concerning the crash : what's your time frame guys for that scenario to happen ?
 
It's an interesting time in history, damn near anything can happen to cause max dung to hit the fan. Pins and needles will be the ortder of the day for a while imo. Remember , the mkt is not a happy camper with a full plate of uncertainty on the table.
 
yeah, but I don't hold anything overnite cause the other side of the coin is a snapback rally that's going to cause some serious wedgies.
 
the crowd is constantly trying to buy the bottom.... and the crowd will lose in the end. I know someone is taking the other side of my trades... and I doubt it's the big money.

Of course, I don't short sell offs... i short into the rallies during a long term sell off.
 
lundy,

you said something new on this thread, yet I find it very true : "The crowd is constantly trying to buy the bottom" ... and I think that's always the case in a bear market ... and that's exactly why this market has been free-falling ... maybe the day they give up ... and decide to remain on the sidelines would be the day when hope could start building up ...

I hear a lot of funds are already out of the market ... and these guys are sitting on a lot of cash ... did u guys hear anything about that ? 'coz if it's true, it could be very indicative.
 
The latest Investors Intelligence data shows:
Bulls - 53.0%
Bears - 29.0%

This is hardly what I call overblown bearishness. History has shown this to be great contrary indicator.
At a major bear bottom, these figures will be reversed. This may not happen for several years if we are in a secular bear, with the end of the secular bull in 3/00. We probably will have cyclical bull runs, but the probable trend is down and until we see the mutual fund cash go from the current 5.3% to double digits, the PE of the S&P500 get down to mid teens(at least), this market has alot of downside potential in the years to come.

The public is still enamored with mutual funds, with the latest data showing purchases being 144% of redemptions! At THE bottom, this public will not want to hear about mutual funds and will be dumping them at a fast pace.

Hold on tight :)
 
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