ES Journal Archive (2009 - 2010)

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Quote from emg:

if im right about this. in the long term, the bottom maybe around 400 in the big SP within 2 years or back in the 1995 level
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It sounds insane, but I find it quite possible.

On 5/6, the S&P dropped 100 pts in a day and the country's up in arms about flash crashes, HFTs, evil market makers shirking their duties, rogue traders with 75,000-lot sell orders, and so on.

Here we are down again over 100 pts in one week and the talking heads are benignly using the word "correction" and talking about scooping up equities at a discount.

The market this month has illustrated perfectly the "boiling frog" analogy:

You take a frog and put it in boiling water, it jumps out instantly. You put it in cold water and slowly heat the water to boiling, it falls asleep and dies.
 
400, really? I hope not. Would that be a major depression?

I do agree that around 1995 was the start of overvalue though. I think the market wants to be at 800-900. If you extend out at a "normal" rate of gain from 1995 then we should be at that level by now. Check out the second half of 1997, the end of 1998 and then the crash in 2002/2003, all down to that 800-1000 range. We need to go there and then a nice steady slow gain instead of these crazy bubbles that keep coming back.

But who knows...
 
Quote from Stock:

400, really? I hope not. Would that be a major depression?

I do agree that around 1995 was the start of overvalue though. I think the market wants to be at 800-900. If you extend out at a "normal" rate of gain from 1995 then we should be at that level by now. Check out the second half of 1997, the end of 1998 and then the crash in 2002/2003, all down to that 800-1000 range. We need to go there and then a nice steady slow gain instead of these crazy bubbles that keep coming back.

But who knows...
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My gawd, how times have changed so fast in such a short duration. Just last month, all these bulls would laugh you out of here had you said "800 or my baby!" I guess they ain't laughing now.

On a serious note, it took this market 14 months to rally nearly 200%. Just how long do you think it would take us to slide back down to 666, provided that we do fall back into another bear market? Longer than 2 months? Less than 4 months?
 
GAP number 4 in the making. I can't remember that we had 4 unclosed gaps in 2008 - you know credit crunch, Lehman Brothers, Merrill etc problems.

Basically, my question is : which bank is going to be bankrupt tomorrow ? I didn't catch it in the media outlets...:)
 
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