It's OVER
- Thread starter PohPoh
- Start date
Many companies' earnings haven't been cut at all and keep growing quarter after quarter, yet their stock prices have dropped 60%, 70% and more (solar and fertilizer cos for example). Solar companies' P/E's were so high that there's plenty of room for more discounting, especially given the poor near-term outlook; however, fertilizer companies with steady near-term and long-term growth projections are trading at P/E's of 2-5.
Technically, a bargain.
Wall Street-ically, all bets are off. The institutional selling continues, probably for another couple of months.
I'm basically "working" these stocks in my IRA's, buying the oversold dips, selling the overbought rallies. At some point the phrase "buy and hold" might apply again.
They are the same, just different sides of the coin. Greed is the fear of missing a nice profit.
(Both can have parabolic moves and most don't know how to watch for the signals that show when a parabolic move is coming to an end.....)
Maria
have a look at the thread of short in the 10 year bonds... I posted that my system indicated that that there was a high likelyhood that it may well go three points higher and it did right after that call.
Have been in some private rooms and did call the reversal to the tick.
Gann's square of 10 is too crude for todays markets.
No longer in the business of giving away free money, no exact calls, you can do your own homework.
There is another remark I made here on ET in the last few days. If you look at the SP then you see the real battle was at approx 850 which was the support for a right angle triangle. That looks like it has now become resistance.
In the 30's it went down 90%. Now it is algo driven and "emotionless" rather than having floor traders refusing to take the other side of the trade. I keep on repeating that the scenario for the US at this time is no different from Germany pre WW II. Look where the Deutchmark in the end went.
I would say it is over for the US's dominance of the world.
Anything more?
Maria.
but that explains only speed of rise is less that speed of fall, it does not explain whether market indices overshoot bottoms. Markets always overshoot tops.
Market prices as an index is always higher that the true bottom prices. All what we see is an extension aways from that bottom, which is rising over time if humanity is producing more wealth.
I actually think some of that but on near term basis only (for the moment) to explain a possible rebound to come. I do not rule out further fall, nor the end of the fall. Last recession level is psychologically important. In addition, markets as a discounting processing, if they violate that level, it would mean that they did not discount correctly back at the bottom of the last recession.
We know that the job of the bear market is to discount correctly (adjust discounting factor, remove the weaks out of the system, etc).
In addition the world bank are the stock markets. If they rebound, the economy goes up as people feel richer, fear is reduced, confidence is improved, financing is better, etc.
So a market rebound on a technical level can CREATE the fundamentals rather than just price them.
I am never sure of anything that has to do with the market, but it seems to me markets generally go too far in both directions -- "fluff" as you call it at the top which has been referred to by a now infamous former Fed Chairman as "irrational exuberance" not supported by fundamentals, and panic at the bottom not justified by fundamentals. The best evidence for overshoot in the case of a bear market is that, in general, once a bottom is finally in, and only looking back can tell us when that has occurred, we will generally recover 10-20% of what been lost relatively quickly because of the overshoot. Then the recovery gets a lot tougher from there on up.