Talking about a "Sucker's Rally"
- Thread starter SouthAmerica
- Start date
I didn't make any prediction whatsoever. For what I care the SP500 could implode 25% tomorrow. I couldn't care less.
All I said was
a) The fact that we're in a recession or depression doesn't rule out large price swings to the upside. It has happened before.
b) Bottoms happen when all the news is bad and no news are good. We're now at a major bottom? Maybe. Could the bottom be 50% lower? Sure can.
Really now? Explain to me please, in the following 1974 chart: WHERE THE HELL WERE HEADLINES POSITIVE????
A. June: New car sales drop 24%.
B. August: More Watergate disclosures, heavy selling.
C. August: President Nixon resigns.
D. October: Franklin National Bank collapses in biggest bank failure in U.S. history.
E. October: Public pulls in horns as U.S. begins to slide into the worst recession since the 1930s.
F. December: New car sales down 34%, housing starts at eight-year low.
We can end this debate pretty quickly. Look at the chart of the 1929 depression. The market did not go straight down. In fact, many of the rallies were in the area of 10-25%.
It's my estimate that we are at 1930 right now. Back then the market rallied from approximately 220 to 250, or 13.64%. In 1931 the market went from about 150 to 190, or 26.67%. Today could be the start of a 10-20% advance or it could be a complete washout. Who knows but it doesn't matter whether we are in a recession or a depression there will be huge rallies.
It's my estimate that we are at 1930 right now. Back then the market rallied from approximately 220 to 250, or 13.64%. In 1931 the market went from about 150 to 190, or 26.67%. Today could be the start of a 10-20% advance or it could be a complete washout. Who knows but it doesn't matter whether we are in a recession or a depression there will be huge rallies.
Here we go again, a huge gain in the markets and everyone thinks we touched bottom, wake up, this is not the bottom. Every single time we see this market action everyone starts talking how this is the bottom, we have heard so many time already, this is what I would call an opportunity to sell. What we had today is what you call a BEAR MARKET RALLY, yes we might go to 10k or even 11k but we are still in a bear market. There is no bull coming to wallstreet, you have to be a fool to fall for these rallies, the bull market is over and will be for a very long time, this bear market will be here for years. There isnt any catalyst to push the markets higher, dont be a fool and think the bull is back, sell the F$$king rallies......
This chart looks very similar to the date 07/02/1930 on the chart posted above. If so, we have a brief rally followed by a significant decline. Will history repeat?
You're making a case for a major bottom, which is pretty much the same as making a prediction.
News is irrelevant when it comes to price swings within a trading range, regardless of your timeframe, which could be minutes, days, weeks, months or years long.
IMHO, I subscribe to the theory of bottoms being made as part of a process. In hindsight it's pretty easy to see what may have led to the final thrust down, but not so easy to call it when you're in the thick of it.
As for news, I like to see the markets stop reacting to bad news, which I take to mean that there's no weak hands left.
Personally, this is a bear rally until proven otherwise. With bonds and commodities acting the way they are I don't think it's wise to look into this any deeper than that.
I'll be biased long at the open tomorrow, but that's about as far as Ill take it for now.