If a Sizable Correction Were To Take Place, What Would be the Reason?
- Thread starter shortie
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I voted other since you did not mention a raise in interest rates. Considering I read a best selling author whose main idea in his book was low and/or falling interest rates cause bull markets and high or rising interest rates cause bear markets, why you would not put this as a reason is beyond belief considering you seem to like to swing trade.
There is scientific evidence behind interest rates. As interest rates rise, the yield on the 30 year bond increases causing investors to substitute stocks which pay no or low dividends for bonds.
To create a bull market which is what a very smart former Goldman partner understands how to accomplish, all he had to do was lower interest rates and throw money from the helicopters which is what happened.
There is scientific evidence behind interest rates. As interest rates rise, the yield on the 30 year bond increases causing investors to substitute stocks which pay no or low dividends for bonds.
To create a bull market which is what a very smart former Goldman partner understands how to accomplish, all he had to do was lower interest rates and throw money from the helicopters which is what happened.
Isn't #4 close enough? Markets usually anticipate such things, so, yeah, I could see the market turning on expectation of rising rates.
The other thing, barring a black swan, could just be timing. The last significant up leg started at the end of August 2010, and big players will want to hold past 12 months for tax reasons. I could see a significant sell-off starting next fall, like some people anticipated but we never got last year.
I won't throw them out. But you're welcome to laugh. I never said it's the reason the market is up. I trade price action. Period. I don't really get into fundamental analysis and reasoning for why the market does what it does. If the trend is up, I prefer to be long. If the market tanks...great. I welcome another 2007-2008 trading environment.
Either way, it certainly doesn't hurt to be aware of the many cycles that exist in the market. To each his own.
I guess because both would lead to more QE and more long term inflationary pressures building in the system...increasing the possibility of US stocks shooting up into the stratosphere like they did in Zimbabwe or 1920s Austria & Germany.
Not rising in 'real' terms of course, but rising in local currency terms.
This poll was about a correction taking place in nominal terms, right?
Maybe there should have been an option, "A sizeable correction will never take place"
Correction takes place not because of "logical" reasons or nonsense concept of supply & demand. It happens because of 'fat fingers' like last may. But it is nice to know people are still trying to think 'innocentlly'
calling it a glitch.
calling it a glitch.Fragil recovery cannot take $100 oil....
so perhaps the question is would price of oil go up in a free and democratic society? Do these strongmen artificially keep the price of oil down?
There are some very good causation arguments for the markets to be up in the third prezzie year. If you examine the statistics closely, you will also find that presidents who are not re-elected have a significantly worse performing third year stock market.
It's a two way street (i.e. a low performing stock market causes a problem with getting re-elected) but there are also arguments to be made that the government might goose up the economy and thus the markets during this year in order to get re-elected (and their succes in doing so will determine the election outcome).
It's not as dumb as the superbowl indicator.
It's a two way street (i.e. a low performing stock market causes a problem with getting re-elected) but there are also arguments to be made that the government might goose up the economy and thus the markets during this year in order to get re-elected (and their succes in doing so will determine the election outcome).
It's not as dumb as the superbowl indicator.