The stock_trad3r 2007-2008 market recession

[makloda]

Quote from frank grimes:
Why does everyone think the market rallies when rates are cut. At best it's a 50/50 prop. What happened to the indexes the last time the fed went into rate cut mode? I doubt anyone who is waiting on the fed wants to know the answer to that. I guess this makes me a bear, since everyone has to be classified on this site.

Frank in fact the 2001 cuts were the ONLY post-war rate cut cycle during which the SP500 tanked:

"The average gain in the first month following the start of an easing cycle is 2.99%, and the average gain during entire rate cut periods is 15.33%."

http://seekingalpha.com/article/47532-a-look-at-fed-easing-cycles-in-the-post-war-period

Of course, there is no rule that says this cut cycle (if it is a cycle) must follow the historical average pattern, for all I know the SP500 will go where most buyers and sellers will drive it.

 

[frank grimes]

Well ok I stand corrected, I thought it was about 1/2 the time. I will say if the fed keeps on cutting, the mkts will not like it. Bonds I think will throw a hissy fit, and the equity mkt will follow bonds. Unless of course, this time its different. Thanks for correcting my error Mak.

 

[stock_trad3r]

Kudlow is still right. Goldilocks is alive.

Perfect balance of growth and inflation.

Rising oil, wheat and gold prices not inflationary.

Anyone still short is playing with fire. Light, low volume, low magnitude selling after a strong runup tends to be bullish. NO huge red or blue candles. We have a couple weeks of consolidation and then p00f huge 2% rally, followed by another pause.

 

[makloda]

Frank I agree though, this time could be different. Definitely no need to throw caution into the wind.

One thing I am seeing though on the recent down days... None of the leading stocks are breaking down. Financials are still weak but they weren't leading since many many months. I'd like to see tech and the oil/commodity sector to break down before getting more aggressive on the down side. I'm just not seeing it. ERIC warns and gets a 30% haircut and AAPL is up 2% in response? You gotta be kidding me.

 

[JSSPMK]

Quote from stock_trad3r:

I said before if we enter a bear market I'll have Baron cancel my account.

Wow, awesome pledge

 

[frank grimes]

I'm with you there, but I think we are getting into the nifty fifty type enviroment. Funds and hedgies are just buying the same old stocks: AAPL, RIMM, GOOG, some energy stocks, a railroad or 2. It becomes a self fulfilling prophecy, until they all decide to take profits. It happens to momo stocks at the end of every cycle. At some point, the multiple just cannot expand, and it reverts to the mean, which is when they collapse.I'm not saying this is 1999, but the way these piece of shit china stocks are going parabolic, the mkt needs a rest. Earnings are going to be pretty poor overall, we are past peak earnings..Perfect time for the mkt to catch everyone being to complacent, or greedy.

 

[Longhorns]

Quote from makloda:

None of the leading stocks are breaking down. Financials are still weak but they weren't leading since many many months. I'd like to see tech and the oil/commodity sector to break down before getting more aggressive on the down side.

FXI down 6 points

DRYS down 8 points

China and the dry bulk shippers down on the same day....It's a black swan!!!! :eek:

 

[stock_trad3r]

EOD short covering frenzy right on time

dow added 40 points in just 20 minutes

time 2 cover

The fact that this market consistently surges EOD indicates that the shorts are ambivalent. No one wants to stay short overnight. This market could easilt gap up 1% as it has done in the past and give you a big loss if you're short.

 

[S2007S]

Quote from stock_trad3r:

EOD short covering frenzy right on time

dow added 40 points in just 20 minutes

time 2 cover

The fact that this market consistently surges EOD indicates that the shorts are ambivalent. No one wants to stay short overnight. This market could easilt gap up 1% as it has done in the past and give you a big loss if you're short.

One day you will realize buying the dip wont pay off.

 

[DHOHHI]

Quote from stock_trad3r:

The dow is only 280 points off record highs, which is about 2%.

The nasdaq and Spooz is off a couple percent as well.

I know *almost* everything.

NAZ off a couple percent of record highs? I hardly think so. NAZ (COMPX) was over 5000 at the peak (5048 on 3/10/2000). So at todays close of 2763 it needs to gain about 83% to reach the record high. More than a couple percent ....