House of Cards ready to fall

the chart looks ready, certainly.

i'm long nasdaq instead, but it all correlates, but all charts asides -- lets look at fundamentals:

1) latest correction occurred largely driven by inflation scare from commodities runup. I maintain next one will be the same, but won't happen until energy wakes up again. I'm calling that to happen in late spring to summer. This warm winter is going to keep margins up, oil & natty down.

2) catalyst is needed. if earnings are solid, as i anticipate they will be this quarter because cheaper energy costs and continued low cost of debt [look at junk bond premiums], forward projections will revise upward.

I agree a correction is necessary, but I'm saying it hinges on energy, etc.

look at all the asian markets, which mirror ours lately - all buying up to new highs now (this week): aussie, hsi, japan ... I'm saying this selling has more to do with long funds on vacation.

last night we sold off hang seng 100 pts in US trading. hang seng closed 100 pts UP last night.

there is correlation ... I'll worry when our selling becomes contagious.

i can't help but think next yr will be a repeat of this... i'll grow nervous for a correction as oil hikes up and geopolitical risk returns and become more neutral.
 
Quote from dcraig:

Should be OK. Generated on Linux box using convert image processing utility. Display OK with konqueror browser and other image viewing tools. My firefox is broken, so I can't try that at the moment and my Windows box is no more so I can't try IE.

If you are using IE try Firefox.
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I got this error:

The image “http://www.elitetrader.com/vb/attachment.php?s=&postid=1299634” cannot be displayed, because it contains errors.

I am using SeaMonkey (Mozilla) on a Linux box.
 
Quote from eagle488:

http://stockcharts.com/h-sc/ui?s=VTI&p=D&b=1&g=0&id=p46983699022


http://stockcharts.com/h-sc/ui?s=VTI&p=D&b=9&g=0&id=p80455209565


This chart is most alarming. Santa Claus needs to come next week to keep the total market over the 50 day. If Santa Claus doesnt come and the market gets thrown under the 50 day, the correction is right upon us.

Then January will bring the grand selloff. So Santa Claus needs to come and if he doesnt, market is toast.
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yes, the charts do look alarming.

but I would take into account that many traders stay flat over the holidays, thus liquidating their position in the past few days.
 
you know guys: january is historically the strongest month in the market.

furthermore, pre election years have historically been up yrs for quite a long time.

aside from that, most economists view GDP picking up in 2008 ... and the market prices in forward #s.
 
Quote from Tums:

yes, the charts do look alarming.

but I would take into account that many traders stay flat over the holidays, thus liquidating their position in the past few days.
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Many people want to be flat over the Christmas / New Year period.

Many EOY / thin market games going on and some want just to be flat for closing their books (tax accounting), others want just to take their (skiing?) holiday.

Maria
 
Quote from eagle488:

My gut feeling is that its sideways until the New Year, but then 2007 will be a new ballgame.
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Sounds like RubberBird, aka Thornbird, to me
 
I think one should distinguish the nominal or price average indexes of the NYSE etc., which will I think continue up ward during 2007 perhaps with the Dow hitting 1500, from the values these numbers reflect.

I like to put this currently as "Dow is NOT at all time high. Dollar has dropped in value, so it takes more now to buy the Dow"

I.e. expect the value of dollar to continue downward, and as a result, the Dow and other indexes to continue upward.

Note this makes for a very happy IRS - you are losing value if long in US and yet paying taxes on your nominal "gains." This is just part of the coming inflation picture and how the US debt to GDP* ratio will be "controlled" if not ever paid. Although not very popular (good from a contrarian POV) I am long in Inflation adjusted bonds with the assets I could not get out of my US pension plan for tax reasons. Went very long in many different ADRs three years ago - on average more than doubled, with best SBS now up 700% (I retired a dozen years ago to live with Brazilian in Sao Paulo and that is the local water/sewer company - probably the world's largest and growing rapidly as half of population of Brazil is still without public sewers).
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*The nominal GDP going up even as the value of it goes down with more outsourcing etc.
 
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