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the trend is up, market has bottomed.
- Thread starter lundy
- Start date
The dollar is probably not near a bottom but there is reason to believe that both the Bank of Japan and the ECB will intervene to make sure that a landing is soft.
I agree that the S&P earnings estimate for '02 is not proven out yet. In fact, that estimate is back-end loaded in the Q3 and Q4. However,
a. large industrials such as MMM and DD have already made significant (> 10%) upside preannouncements on the year.
b. the weakening dollar will serve as a "just in time" cushion for the companies that might've come in a little lower than expectations but will now easily beat. The weakening dollar best serves the larger companies, which will weight the S&P 500 earnings accordingly.
Once the dollar weakens enough money will start pouring into it again not only for technical reasons (the dollar will get oversold) but fundamental (the weakening dollar will boost corporate profits). The dollar being overvalued for the past several years has probably been a major deterrent for foreigners interesting in putting money in the US markets. Don't forget that a few years ago the euro was $1.25 and now its only 0.99. The dollar is not exactly weak. Just getting back in line.
I do think that in a worst case scenario (hard landing for dollar) the Fed will intervene and/or the ECB will cut rates. Europe still recognizes that the US leads the global economy and they will not put that at risk.
I play both the long and the short side but as of this afternoon I am 120% long. Might as well put my money where my mouth is. I do own primarily low P/E defense-related stocks with low debt and lots of cash. I might be stupid but I'm not crazy.
I agree that the S&P earnings estimate for '02 is not proven out yet. In fact, that estimate is back-end loaded in the Q3 and Q4. However,
a. large industrials such as MMM and DD have already made significant (> 10%) upside preannouncements on the year.
b. the weakening dollar will serve as a "just in time" cushion for the companies that might've come in a little lower than expectations but will now easily beat. The weakening dollar best serves the larger companies, which will weight the S&P 500 earnings accordingly.
Once the dollar weakens enough money will start pouring into it again not only for technical reasons (the dollar will get oversold) but fundamental (the weakening dollar will boost corporate profits). The dollar being overvalued for the past several years has probably been a major deterrent for foreigners interesting in putting money in the US markets. Don't forget that a few years ago the euro was $1.25 and now its only 0.99. The dollar is not exactly weak. Just getting back in line.
I do think that in a worst case scenario (hard landing for dollar) the Fed will intervene and/or the ECB will cut rates. Europe still recognizes that the US leads the global economy and they will not put that at risk.
I play both the long and the short side but as of this afternoon I am 120% long. Might as well put my money where my mouth is. I do own primarily low P/E defense-related stocks with low debt and lots of cash. I might be stupid but I'm not crazy.
Originally posted by Vishnu
I do think that in a worst case scenario (hard landing for dollar) the Fed will intervene and/or the ECB will cut rates. Europe still recognizes that the US leads the global economy and they will not put that at risk.
I think the eu has the us in its sights. however, i am happy to report that their socialist policies promise to topple any economic superiority they may be fantasizing about.
I'm not actually doing this for humor or to go against what everyone else is doing.
I actually took all of these positions. I am really long. Some people don't get that, they think i just started this thread for an argument, so they go at me like this is a prize fight.
Aside from being obviously wrong on the exact bottom, I did manage this position by doublin down and such, so that I am at a profit and not a loss.
However, in retrospect, I can see that the market did bottom, and that I now have confirmation of this via new weekly high.
Overall, I feel that entering this position was a big success on the longer time frame indicators.
At this point in time, anyone who thinks this market is going down more here (and actually goes short) will lose their ass to me. This market is going to fly up, and shorts will get squeezed.
remember, I'm the king of doublin down!
I actually took all of these positions. I am really long. Some people don't get that, they think i just started this thread for an argument, so they go at me like this is a prize fight.
Aside from being obviously wrong on the exact bottom, I did manage this position by doublin down and such, so that I am at a profit and not a loss.
However, in retrospect, I can see that the market did bottom, and that I now have confirmation of this via new weekly high.
Overall, I feel that entering this position was a big success on the longer time frame indicators.
At this point in time, anyone who thinks this market is going down more here (and actually goes short) will lose their ass to me. This market is going to fly up, and shorts will get squeezed.
remember, I'm the king of doublin down!
Originally posted by lundy
Aside from being obviously wrong on the exact bottom, I did manage this position by doublin down and such, so that I am at a profit and not a loss.
At this point in time, anyone who thinks this market is going down more here (and actually goes short) will lose their ass to me. This market is going to fly up, and shorts will get squeezed.
remember, I'm the king of doublin down!
LUNDY, THESE TYPES OF COMMENTS ARE WHY YOU GET RIPPED TO SHREADS, AND THE NEXT TIME IT HAPPENS REMEMBER WHAT YOU SAID HERE!
Originally posted by lundy
I'm not actually doing this for humor or to go against what everyone else is doing.
I actually took all of these positions. I am really long. Some people don't get that, they think i just started this thread for an argument, so they go at me like this is a prize fight.
Aside from being obviously wrong on the exact bottom, I did manage this position by doublin down and such, so that I am at a profit and not a loss.
However, in retrospect, I can see that the market did bottom, and that I now have confirmation of this via new weekly high.
Overall, I feel that entering this position was a big success on the longer time frame indicators.
At this point in time, anyone who thinks this market is going down more here (and actually goes short) will lose their ass to me. This market is going to fly up, and shorts will get squeezed.
remember, I'm the king of doublin down!
Lundy,
I respect your opinions and all. And perhaps, you are right. Maybe this is the bottom. Who knows?! But in general, timing the bottoms and tops are next to impossible if not impossible. No one knows for sure how low things can go or high.
But perhaps if you are in a superduper uper long-term INVESTOR(notice I did not say trader), then buying at lower and lower prices is just what people call "dollar cost averaging" which will only lower your cost basis if you are trying to build a position over decades and decades like in your retirement 401K acct and such.
But, in terms of short to immeidate term TRADING, it's a TERRIBLE, TERRIBLE idea to try to time the bottom and average down. Because even if you are "right" and the next rally comes but by then you would probably exhausted your funds doubling down. That's what mathematicians called the "gambler's ruin". Or more technically correct - martingale strategy. Martingale strategies, though in theory sounds good, will eventually lead to total ruin in practice.
But as you said, you are betting only a small portion(i hope) in this timing the bottom idea. But it also seems like you are using options whose time premium decreases over time.
good luck trading
trader99
These have probably been noticed by most of us but I really want the Market to listen to me and go up, so I'll throw these out there as reasons it should do so.
1) A chart of the comp going back to '74 shows we are at or below a trendline drawn between the lows in '74 and '91. I think it's fair to say the excesses put on after '95 have been largely negated.
2) some nice hammer dogies on the weekly indexs
3) support at these lows dating back to '98
4) a high VIX reading
************************************************
LOGIC, n. The art of thinking and reasoning in strict accordance with the limitations and incapacities of the human misunderstanding.
1) A chart of the comp going back to '74 shows we are at or below a trendline drawn between the lows in '74 and '91. I think it's fair to say the excesses put on after '95 have been largely negated.
2) some nice hammer dogies on the weekly indexs
3) support at these lows dating back to '98
4) a high VIX reading
************************************************
LOGIC, n. The art of thinking and reasoning in strict accordance with the limitations and incapacities of the human misunderstanding.
MSFT, ORCL, and EMC are all looking a lot better although I'm not playing them unless they breakout.
Originally posted by futurecurrents
These have probably been noticed by most of us but I really want the Market to listen to me and go up, so I'll throw these out there as reasons it should do so.
1) A chart of the comp going back to '74 shows we are at or below a trendline drawn between the lows in '74 and '91. I think it's fair to say the excesses put on after '95 have been largely negated.
2) some nice hammer dogies on the weekly indexs
3) support at these lows dating back to '98
4) a high VIX reading
************************************************
LOGIC, n. The art of thinking and reasoning in strict accordance with the limitations and incapacities of the human misunderstanding.
I'm NOT saying this is or isn't the bottom. Who knows where it is. But my main point and only point is that it's POINTLESS trying to time the bottom or top. That's really shouldn't be a goal when you are trading.
As an old trader's saying goes,"Those who say they consistently time tops and bottoms are liars..." or something like that.
Of course, if the market rally "500 pts" as Lundy said, it will bring him glories to his EGO. Timing tops and bottoms serves only ONE purpose - to satisfy's people egos. Other than that, it has no real value in trading IMHO.
trader99