Phase II of the Bear Market?

[jreynolds212]

Who wants to fight against the SPX record. If you invested cash into the SPX about 10 years ago, then you would be looking at an average return of about 6% a year.

The chart says it all. The SPX could not break through its old highs and now its headed much lower. My experience tells me that when price cant shoot over its old highs on volume then we have some trouble.

Its interesting that a lot of the stocks on the SPX from 2000 are now gone, but still the price cannot get above the old high. That tells me that investors have no confidence.

P/E is a trap because stocks have traded at real high P/Es and real low P/Es with different excuses. The only real factor is the confidence and cash capacity of investors.

There are certainly times to invest in the SPX, but not at these levels. I would say that the SPX has to lose at least a few hundred points for me to want to look at it as a long.

As it stands, except for a select few equities, Im a bear on this market.

Quote from dsq:

"Has the advance in stock prices been driven by growth or inflation? It's not a healthy sign when massive amounts of liquidity are required to keep the markets afloat. If the economy is being driven by inflation then the only thing that will keep things going is more inflation, which is what's happening now. How far can we go before the wheels come off the cart?"

You might be right and so are the many other complex plausible arguments saying we are headed for a bear market BUT the record speaks louder than all the explanations and fancy theories.

Beleive me in the past i ascribed to all these arguments but ive seen them proven wrong every time.I think these theories all make sense in theory but every time i have seen these thoeries come out when the sp500 is in the teens, the bear forecast are never borne out....The arguments are all right but the forecast never comes to be...I have seen these dire predictions many times since 1990 when the sp PE is in in the teens

I personally just dont want to fight against the sp500 record anymore.After years of following wall st,I realize now that less is more as far as wall st. info/theories is concerned-too much static....BTW,i am not a super optimist ,i just care about what the market is doing in todays trading session. I also think housing in LA where i live will drop 50-60% from todays levels.

 

[dsq]

"The chart says it all. The SPX could not break through its old highs and now its headed much lower. My experience tells me that when price cant shoot over its old highs on volume then we have some trouble. "

I think charts accurately record the past.For predicting the future not so accurate.Great for short term trades but change in long term trends?

"Its interesting that a lot of the stocks on the SPX from 2000 are now gone, but still the price cannot get above the old high. That tells me that investors have no confidence."

a lot of the stocks in the spx in 1990 were gone in 2000...ditto for the dow...they rotate stocks in the indexes...in with the new,out with the old....

IMO,the market is going sideways for the next few months at least.Im not a bull or bear on this market...

 

[twang2]

Quote from tradestrong:

For all intents and purposes, I believe we've been in a bear market ...

When we are sitting at Nasdaq 1300 everyone will jump on the bandwagon.

I would like to see 3000 hit before we go down, though. Maybe in Jan we will hit it.

Twang2

 

[twang2]

Quote from gnome:

Phase II? Haven't had Phase I, yet.

Phase I was in 2000-2003. Look at Nasdaq on a weekly chart. We dropped 100 points plus on the qqq's.

Twang2

 

[tradestrong]

Quote from dsq:

IMO,the market is going sideways for the next few months at least.Im not a bull or bear on this market... [/B]

I'm looking at this from a very simplified perspective. Perhaps some might even consider it too simplified (and perhaps it is), but I just can't see any possible way that a meltdown in the financial industry is not going to spill over into the greater economy.

The money supply has been greatly reduced because of all the write downs. Granted all the stalwarts with lots of cash (like Google) which don't need long-term notes are going to be all right.

But here's the problem. Even GOOG is affected indirectly by a reduced money supply. Harder to get loans mean harder to get long-term debt by private companies. These are all the companies that advertise with GOOG.

So, in one way or the other, all the big boys are going to be affected no matter how miniscule it is. Any corporation which requires its consumers to have disposable income are going to be negatively affected.

Like I said, maybe I'm way off track here, but I see a snowball effect occuring. Small businesses with no ability to generate cash flow, consumers that have less disposable income because of speculative house loans will fuel the cascading of less and less demand for the big companies.

Do I see it being "depression like"? No, I don't, but I also don't see it as being insignficant.

 

[tradestrong]

Quote from twang2:

Phase I was in 2000-2003. Look at Nasdaq on a weekly chart. We dropped 100 points plus on the qqq's.

Twang2

I'm looking more from the perspective of 5-7 year business cycles with intermediate 6month-2year bear markets in between.

 

[tradestrong]

Quote from twang2:

When we are sitting at Nasdaq 1300 everyone will jump on the bandwagon.

I would like to see 3000 hit before we go down, though. Maybe in Jan we will hit it.

Twang2

hmm...that will be interesting to see if we do.

IMO, if we continue to go up, we'll be in for a much more violent downturn.

We might be able to "coast" along with a long drawn out downturn that doesn't affect the greater economy too negatively.

 

[rtstrading]

We are currently in the midst of a complex 4th wave symmetrical triangle that will most likely not be resolved for a few months.

If the current irregular 4th wave resolves itself to the upside at this point and several cycles support this, then I would look to a top in the DJI of 14500 in March.

The alternative in the complex 4th wave is additional time and an A-B-C-D-E typical pattern that does not resolve and top until April-June.

 

[Spectre2007]

its a fucked up close of the year,...

gut is telling me trouble/complacency building...lots of knife catcher mentality being trained for a pivotal push down.

 

[twofacedjoker]

Just go short everthing except the dollar! Ofcourse I am kidding.. or am I?