we are in a trading range between 8K and 9,500. Logically, upside is expected.
I don't own BIDU. I sold it awhile ago.
How Do We Nail the Bottom?
- Thread starter netedge
- Start date
we are in a trading range between 8K and 9,500. Logically, upside is expected.
I don't own BIDU. I sold it awhile ago.
I am risking that the probability that we are closer to an intermediate low is much higher than the probability we are closer to an intermediate high. I'm looking for NASDAQ to retrace to 1700+ over the next few weeks. If it is on heavy volume, I am increasing my commitment. Otherwise, I will probably sell and sit on the sidelines until I see volume enter into the market. My guess though is that there will be significant volume on any move higher - which will bring further institutional and public money back into the market. No one wants to miss the next Bull, even if it is shorter one than the last.
the funds can easily push this market up 10% ..but down another 10%? hmm I doubt it. the upside potential is far greater than downside.
I agree. I think clearly the probability of large upside at this point is greater than the probability of further large downside. However, I always accept the possibility of large short-term fluctuations that may go against my hypothesis, so I am prepared to accumulate at lower levels if necessary and enjoying the bounce when it comes.
We are now in uncharted territory - SPX closed at 752 with a low of 747. This blew past the 2002 bear market low of 768. The fact that there was little, if any, support at the 768 low tells me we are not done dropping yet.
This drop from the high of 1576 13 from 13 months ago is a 53% drop. Only 2 bear markets in history have dropped this far - 1929 (total drop from top to bottom was 86% but it took 3 years) and 1937 to 1942 (dropped 60% but it took 5 years to do so).
Does this mean GD2? I am beginning to think so. The amount of wealth that has been lost is over $1trillion greater than the entire bear market of 2000 - 2002 which took 31 months.
People would rather have their money in a non-interest bearing account and safe than invest and so all confidence has nearly been lost in the markets. The rubber band is not stretched out beyond belief - it has snapped altogether. The last time we were at this level was 1997.
Next support area for the S&P (that's almost a laugher at this point):
-SPX 550 is where the trendline of the lows from 1942 touching the lows of 1974 and 1982 extends out to the present
-the next support low on the price chart of the S&P is 442 in 1994
-SPX 281 (the 161% retracement of 10/07 high to 2002 low)
Anybody out there ready to start a business with me to preserve gold bricks and jarred fruit preserves in underground back yard shelters?
This drop from the high of 1576 13 from 13 months ago is a 53% drop. Only 2 bear markets in history have dropped this far - 1929 (total drop from top to bottom was 86% but it took 3 years) and 1937 to 1942 (dropped 60% but it took 5 years to do so).
Does this mean GD2? I am beginning to think so. The amount of wealth that has been lost is over $1trillion greater than the entire bear market of 2000 - 2002 which took 31 months.
People would rather have their money in a non-interest bearing account and safe than invest and so all confidence has nearly been lost in the markets. The rubber band is not stretched out beyond belief - it has snapped altogether. The last time we were at this level was 1997.
Next support area for the S&P (that's almost a laugher at this point):
-SPX 550 is where the trendline of the lows from 1942 touching the lows of 1974 and 1982 extends out to the present
-the next support low on the price chart of the S&P is 442 in 1994
-SPX 281 (the 161% retracement of 10/07 high to 2002 low)
Anybody out there ready to start a business with me to preserve gold bricks and jarred fruit preserves in underground back yard shelters?
I don't think this is uncharted territory at all. It is reverse mania. 
I'm not going crazy with greed here, but I will tell you that the NASDAQ at this price is just an incredible steal, and I am buying like mad. I am conserving money in case it goes down more, and if it does, I am going to keep on buying. The lower the merrier. A once in a life time opportunity, and I cannot get enough of it. I'll let you know how it turns out in a year from now. BTW, to all the shorts out there - thanks for the opportunity. Appreciate it much.
Rich
I'm not going crazy with greed here, but I will tell you that the NASDAQ at this price is just an incredible steal, and I am buying like mad. I am conserving money in case it goes down more, and if it does, I am going to keep on buying. The lower the merrier. A once in a life time opportunity, and I cannot get enough of it. I'll let you know how it turns out in a year from now. BTW, to all the shorts out there - thanks for the opportunity. Appreciate it much. Rich
Quote from richrf:
I don't think this is uncharted territory at all. It is reverse mania.
Rich
I have to appreciate your conviction and courage during such a trying period and I was of the same mind you are until the past week or so when I began seeing things that have not been duplicated in history - not even in 1929. Scaling in on the thrusts down in the market may serve you very nicely on the rebound.
However, with no visible support out to the left on the charts I have no real idea what will spur the markets upward from here. Certainly fundamentals mean nothing to the investment community at this point. The forward assumption from the markets based on the pricing of stocks is that there will be little, if any, profits coming to anyone and a forthcomingi depression.
We all know that the emotion of the markets can cause an overreaction in extreme periods and this is absolutely the most extreme of periods. It makes me wish I was a daytrader as I believe those are the only people truly making money at this time. It's too risky to hold overnight any more.
The hypothesis that I am working on is:
1) The current market valuation is extremely cheap. Most of the current liquidation, that is driving the market down in a parabolic manner, is short-term, caused by a temporary dislocation of money from assets to treasuries. .01% on Treasuries is a good indication of the temporary anomaly.
2) The catalyst for the major market move up will be a) a huge injection of money into the system under Obama (it looks like Geithner will be engineering the injections along with Blair), and b) a forestalling of foreclosures using Blair's plan (Blair can't wait to get rid of Paulsen who is obstructing Blair's foreclosure plan).
3) Once the market moves about 10,000 (which should happen by February), the public will stop selling and begin re-entering the market with the aim of "breaking-even"
4) Selling will begin again when most of the public has broken even. Probably somewhere around 12000. After that, well ... I'll get back with you. My goal is 4X my investment using QLDs.
Rich