We have now a bear market rally. Sometimes, these bear market rallies are very violent, therefore it is advisable to be flat or long. Logically, this is not the bottom, because we have to have another leg down. Therefore, after this bear market rally, permabull will have to get out, otherwise he will go under. It's possible we will have the bottom at the end of 2004 or in 2007. Before, we will have one or several wars. George W. Bush will not be reelected in 2004. Easing the interest rates will not help as the psychological condition of lenders has changed fundamentally, they will only lend to first class customers / companies. Greenspan will realize it would have been better for him to retire sooner. Many companies only have a limited profit potential today, as customers have lost money, valuations have gone lower and debt must be repaid. Debt is very high wordlwide (private persons, governments), this debt must be liquidated before the stock markt can rise again. There are some interesting demographic factors (the population of industrialized countries is very old). Some people in the US have based their retirement funds on stocks. These funds are partially lost. This all can lead to a depression. Look at Japan. Interest rates are nearly zero, and nothing is going on in this country since the end of the 80s.
Is the bottom in?
- Thread starter Brandonf
- Start date
this is how I am looking at it:
1. There is no bottom without some kind of bottoming formation on the charts. As has been stated before, a "V" is not a bottom, it is just a test of a support level.
2. The economy is not getting better, it is getting worse. There is no growth.
3. the Fed is so far unable to increase the money supply and we are actually experiencing deflation at the moment. This should kill any reasonable optimism about a pickup in growth this year.
4. The Fed rate cut next week is already being priced into the market.
5. There are still no "value" stocks inside any of the major indexes.
6. There is no net inflow of cash into U.S. equity mutual funds. Basic supply and demand here. Once the free cash is sucked from the money market, that's the end of the rally. For the rally to be sustained for long, new money has to come in.
7. There will be ongoing accounting restatements, especially after August 14th.
8. JPM is flirting with insolvency.
1. There is no bottom without some kind of bottoming formation on the charts. As has been stated before, a "V" is not a bottom, it is just a test of a support level.
2. The economy is not getting better, it is getting worse. There is no growth.
3. the Fed is so far unable to increase the money supply and we are actually experiencing deflation at the moment. This should kill any reasonable optimism about a pickup in growth this year.
4. The Fed rate cut next week is already being priced into the market.
5. There are still no "value" stocks inside any of the major indexes.
6. There is no net inflow of cash into U.S. equity mutual funds. Basic supply and demand here. Once the free cash is sucked from the money market, that's the end of the rally. For the rally to be sustained for long, new money has to come in.
7. There will be ongoing accounting restatements, especially after August 14th.
8. JPM is flirting with insolvency.
I'm not a fan of double tops or bottoms in general, but I can't ignore the fact that the Dow closed at 8736 on the 31st. If we have a rally tomorrow that flames out midday and closes around 8735 I would say that the double top is officially in the books and you can say goodbye to the 8700's for come Monday
Just a thought
Just a thought
Originally posted by Eldredge
Why do you suppose it is that everyone speculates whether we have bottomed when we have a bear market, but no one really asks if "this is the top" when we have a bull market? One question seems just as logical as the other, but it seems much more time and energy is spent speculating about the bottom than the top.
That's easy. Nobody shorts but traders. Everyone goes long
Good point though.
I guess you just have to look a little harder to find the "v"... or not. A Dow weekly chart should give you a clue. Oh look at that! Look at all those "v's". Is there another that appears to be forming?
The real question is... are we going to push higher thru the downtrend line on the daily chart presently connecting every significant high since May 20 including today's high? If we do it's 9500.
Or will the downtrend line hold and we go back to the lows...at least?
Aye chihuahua this is so hard to do.
Wait a minute, I don't have to predict, I just have to react.
Sweeet!
The real question is... are we going to push higher thru the downtrend line on the daily chart presently connecting every significant high since May 20 including today's high? If we do it's 9500.
Or will the downtrend line hold and we go back to the lows...at least?
Aye chihuahua this is so hard to do.
Wait a minute, I don't have to predict, I just have to react.
Sweeet!