Some thoughts on the stockmarket

Quote from Cutten:

The S&P is at a critical point here. It feels as though there is a bit of a buy program building, every time the market tries to sell off, it gets a bid and pops up a little again. I think if we break above 1295 (short term resistance was 1290) then we could see a potentially very powerful rally in the last 2 hours.
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SPX put in (tradable) what it looks like a bottom at 1276 today on 1/23/2008.

It failed to take out yesterday’s lows of 1275.58 by 0.19 basis points. That makes it a PIPE BOTTOM, a well-known chart pattern. You can refer to THOMAS BULKOWSKI book
" Encyclopedia of Chart Patterns" for further reading on it.

The VIX did the same thing a PIPE TOP at 35-37 levels. You will see a pipe shooting up and it’s a bearish sign for VIX meaning we VIX will go down and markets will rally. Again refer to that book.
 
Quote from day7793:

Markets have nothing to do with recession, tail-spinning economy, and sky is falling. It’s about manipulated fear, doom and gloom, which people gave into.

This is all about downside greed and making money. It’s attended via implanting false stories about recession, dispersing fear and fright and using doom and gloom from our retail crowd.

It has been proven today 1/23/2008 that markets can still keep going down despite a stimulus package and despite a hefty Feds rate cuts. Cowards will be slaughtered no matter what since they can’t do much about it anyways.

Some well run companies have been cut down 30-50% in prices like AAPL, FCX, PCU, FSLR, GOOG, BIDU, and host of them are bleeding in red ink on my monitor. It’s about concentrated scheme by big institutional sellers to bilk the average Johnny lunch buckets.

Once again Wall-Street has shown its true colors.

You can’t fool me though.
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good post...... investors need to remember not falling into this gigantic meat grinder where the brokerage firms, the media basically work hand in hand to scare the weak hands to surrender at low price, then entice them to buy at high price.
 
This is the first time in 20 years that P/Es have approached their historical (100+ year) averages. It's still a long way from 1980 (PEs around 8 or 9), but at least things aren't overvalued.

Personally, I'd like to see even better values (requiring a further drop), but it's a start.

I do think one of two things is happening, though. We're either hitting a bottom (short or intermediate term), or we're in a bear market that is stabilizing a bit. Either way, the hysterical calls for a 1987-style crash and outright panic should soon start fading.

Quote from Cutten:


4) Valuations are reasonable in outright terms (PE below 16), and extremely attractive relative to bonds (earnings yield of 6.3% for stocks vs 10 year bond yield of 3.41%).
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I agree this is a spot for a bounce, probably nothing more than an oversold rally, the most vicious rally's occur in bear markets. I'm not sure why, but the refiners are begging me to buy them, as crude comes down, the crack spread should help them. Buying TSO and VLO right here.
 
I think that we are not done to the downside and there is a big sell off outstanding, nevertheless we can go down another 1000 points in the Dow and still there is no bear market. Recession along with subprime and interest rate crap is just the reason to clean out the market and therewith gives it a (this time) real fundamental reason to go where it belongs to and this is north. Not in form of a V-bottom probably and rather rangebound for a while. The globe has not seen a recession since Worldwar II and we wont have one before Worldwar III.
 
I wonder if Market Cap/GDP gives an indication as to whether any artificial support will be able to support the market over the long term. My observation is that even in countries with much smaller market cap/GDP and thius greater Govy wealth/stock market float ratio the Govt/Institutional cartel was unable to hold the market up LT.
 
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