the trend is up, market has bottomed.

My opinion for investing is that TA only works in short-term and if no new news comes out, like losing FDA approval puts TA to waste . 2 years 5 years 10 years TA is worthless. A company with high debt, no competitive advantage in an industry with low barriers to entry or many competitors, like Webvan, ETOYS or iridium (spelling?, its been a long time since I covered that short) will be bankrupt in the long-term no matter what TA says.

TA works very well intra-day as there is rarely any news that comes out during the day.

I am glad many people believe TA works long-term as I have made the most money investing against them.
 
Darkhorse
I for one agree with your overall assessment of the market environment. This is the busting out of America. You left out a few other notable problems in the world that will add
to selling pressure. But that stuff is for another thread somewhere. The Bear IMHO doesn't end in a bang. But leaves the forest in a whimper. After the destruction you don't realize
he has gone. When that happens the bull is still a calf and needs to grow slowly. I think there is more to go but next we need to have the Turk show up. He will come before the bottom is in....

Sooo the Turk is coming.....

:cool:
 
The falling dollar (vs Euro) is a bit of a red herring. First of all, it helps more than it hurts (as long as it is not sever) by making US goods cheaper to outsiders. I'm also very skeptical of the Euro economic performance as I have first hand accounts of things being quite bleak there.

Whenever CNBC talking heads latch onto a concept you should always question it. Notice how they have switched recently from talking about the small caps to the dollar. By the way, anyone else notice how the day they put the Russell 2000 on their bug, it started to top out and tank from a H/S formation?
 
what has to occur on Monday to negate my prediction?

a lower low on the NDX.


I don't use typical TA so it doesn't matter how my bottom day played out, so long as it's the lowest day.


If I can predict a bottom, I should be able to predict a top?

Your absolutely right. However, it takes hours and hours of research on my part to nail these reversals. I won't be looking for a top until the market goes up a bit. 500+ NDX was just an example, as the last time the market bottomed after September 11th, the NDX went up 700 points before topping off.
 
so did the Dow Transports.
<a href="http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=dtx&sid=0&o_symb=dtx&freq=1&time=8">
<img src="http://chart.bigcharts.com/bc3/quickchart/chart.asp?symb=dtx&compidx=aaaaa%"width=400 height=250></img></a>
 
And I'm not just talking about t*ts and a**.


However, the bottom of the market will come, when p/e ratios get in some relation to historical p/e ratios. As for the market until then, you better put on your parachute.

Just the facts.
 
Babak:

I agree that a modestly weaker dollar would be better for exporters. However I don't think we'll get to see the dollar drift gently downward like an autumn leaf on the breeze. It will be more like a bat out of hell freefall, and that will be like yelling fire in a crowded theater to foreign investors.

I also agree with you that Europe is still a backwater in economic terms. However don't forget that value is relative, you have to compare quality of goods AND price of goods. US companies are still very expensive assets, even at current levels. Tech stocks are crap, the only thing holding those up are regular rounds of short covering. The other US stocks actually producing cash flow worthy of investment- dowdy stuff like Wendy's, Gillette, Autozone etc. etc. are still too expensive relative to their values. European assets, on the other hand, are dirt cheap.

Europe is weak too, yes. But they've been weak for a good while, and so arguably they are closer to a recovery cycle than we are. Europe is also getting positive news out on the regulatory front, for example they recently killed a poison pill rule that will make takeovers easier. Whereas the outlook for US companies is kind of, um, straight down. We've had a wild party, now we have a hangover, and our prices are too high for the stuff we are selling that isn't junk. They are on the up elevator, we are on the down.

For most of the nineties we had an extremely virtuous circle. More money flowing into US equities made the stockmarket stronger and the dollar stronger, which started the cycle over again. Greenspan kept the good times flowing with easy money, cementing the notion that the mighty fed would prevent any decline. Well, nothing is free, so now we have a vicious circle. Mutual fund inflows are already going negative, which means they are selling every month to meet redemptions. This keeps the pressure on stocks, which makes foreigners even more worried. The dollar falls, foreigners get even more scared, the vicious circle gets more vicious.

Greenspan was like a drug dealer and the market got hooked. When you do crank for years and years, the comedown is extremely ugly.

p.s. a broken clock is right twice a day, which suggests even CNBC can occasionally hit on a valid topic...
 
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