Why I think the decline has only just started

Quote from Q12:

I agree... anything drastic and the Fed steps in. When it comes to a complete meltdown, for what it's worth, in both 1929 and 1987 the market peaked 55 days prior to "crashing." While anything could happen, I'm leaning toward some additional selling on Monday but some buying into the close and a small move up over the next few days. Just when everybody begins to get comfortable we'll begin to fall apart again. I don't recall the exact figures, but in Barron's today they mention the fact that since 1965 the DJ30 has fallen in excess of 3% on a single day around 42 times... they go on to mention that in (around) 33 of these situations the market was higher 60 days later, by 4.5%+ on average (again, these are approx. figures from my failing memory).
More...


here you go:

So where do 3%+ declines usually occur during bull and bear markets? We looked at all bull and bear markets going back to 1962 to find out. If a bear market has indeed started, the 3%+ decline just 5 days in, will be the earliest yet. As shown in the first table below, most come well into bear markets. If the bull market continues, past data shows that there are plenty more days to come before the end of the cycle.

In all instances of 3%+ declines, the averages show that the S&P 500 rises in the month and three months following. When the 3%+ declines come during bear markets, the average gain over the next month is 3.40% and 4.35% over the next three months. When the 3%+ declines come during bull markets, the average gain over the next month is 2.95% and 9.32% over the next three months.
 
Quote from S2007S:

any major correction and the federal reserve will jump in and cut rates right away.

Just 2 weeks ago I posted that there was RECORD margin debt in the markets, approx 270-280 billion, this was of course when the DOW was at 12700+. There are so many new traders above 12,000 that if the markets were to jump back up the first thing they are going to do is sell and run far away from these markets. Its going to take a lot to get this market back to where it was JUST A WEEK AGO. Tomorrow I think the markets drop below 12,000, thats where selling will pick up again.
More...

I READ YOUR POST BACK THEN AND I WAS SHOCKED AT THAT AMOUNT OF MONEY ON MARGIN. I WISH I HAD ACTED ON IT BUT GOT STOPPED OUT ON SOME PUTS A FEW DAYS EARLIER.
WHAT FRIGHTENS ME MORE THAN EVER AS I KEEP ON MENTIONING IN OTHER POSTS IS THAT I THINK WITH THE YEN CARRY TRADE AND THE SPILLOVER INTO STOCKS I THINK THIS IS ' TOO BIG TOO FAIL'. THERES TOO MUCH AT STAKE AND THE CONSEQUENCES ARE HUGE FOR EVERYBODY. NO WAY THEY LET THE MARKET FALL. AS MUCH AS IT GRATES ME IM GONNA PLAY FROM THE LONG SIDE.
 
<i>"I THINK THIS IS ' TOO BIG TOO FAIL'. THERES TOO MUCH AT STAKE AND THE CONSEQUENCES ARE HUGE FOR EVERYBODY"</i>

There is no <i> "they" </i>who can hold up an entire market determined to trend lower. Outside forces can influence markets on a short-term basis only. Unannounced interest rate cuts and PPT antics are designed as a spark to cause bonfires. When those attempts get sold into, the result is even greater volatility and selling.

Go back and review the Nasdaq from 2000 ~ present and see how that "too big to fail" scenario held up.

I doubt we'll see any repeat of the 2000 - 2002 bear market, but be prepared for more selling ahead in 2007. The next leg down to follow any potential double-top or lower-high failure will fall faster, harder and further than the initial selloff has.
 
Dow futures up today and we might get a bounce (I doubt it, but we might)

Now the bulls will be back saying Goldilocks Economy all over again

Kudlow this.... Rogers that .... Gold at $1000...Oil at $100 blah blah *yawn*

They can't (won't) see the danger signals

Be very careful playing this market fellas...best just leave it for a month or two

Remember the old adage:-

"Fools rush in where angels fear to tread"
 
The "too big to fail" idea that people like to throw around....

Don't count on it. Anyone on this board who is a student of financial market history can point to several occurrences where whole segments crashed and burned, and all was lost. And that includes institutions.

The current market global and sector action was a long time in coming. It will be interesting to see which global macro players had their bets right going into 2007. Somebody took the other side of the popular trades, or at the very least, exited early - and is up huge.
 
NasdaQQQ was mostly down like others; premarket ;
its now about even ,near open.

R.Prechter [Mr. elliot wave]sent me a post card , kept it because it was several year early, lots earlier than mark Cook's November 06-March-2007 bear call. 2004 post card i think , i need to find it again.

It said''Question, what the purpose of a bear market rally???;
Answer -to sucker in investors for the kill''

:D Good warning; even if all details arent 100% accurate
 
What if those who were sitting on fat profits since July 2006 suddenly wanted out when the trend was broken Feb 26th, but unfortunately they all wanted out at the same time? They may have wanted to book some profits but unfortunately it got hyped as usual by the media and got out of hand? Just the old fear? not saying this is the case, just wondering. Unfortunately, now everyone is on edge and some people suffered huge losses in carry trades (as noted on my blog on the Goldman Sachs warning about "dead bodies"). these traders will want to sell whatever they can to balance books and reduce the "open losses", and this is what will cause some pain for next few months. if it trickles into housing then things could get very interesting. My blog address is part of my signature, so do not click unless you are interested in the GS warning!
http://lauristonletter.blogspot.com/
 
You must log in or register to reply here.
Back
Top