WTF is up with the market..

[Anunakki]

Quote from stock_trad3r:

Ok if it falls another 2% big deal. Is that really gonna matter?

It matters to us that trade the short term swings. But if you;re in for the long term then not so much.

But I thought this was a trader forum not an investor forum.

For what its worth I think we're going to head for the 50% fib around 1340 which is coincedentally about a 8.5% correction ..now THAT would be buying the dip.

 

[aaronk321]

Damn.. you think it would have two weeks of upside. I thinking it would take a shit within the next couple of days - the news from the fed, housing news, etc..

Quote from Anunakki:

I hate 'predicting' as its only been a few weeks and the market hasnt chosen a direction yet.

Even if this is only a correction to think that its over is naive.

People saying this is/was a mirror of the '87 fall are crazy.. that was a 36% drop and then YES the market just slowly climbed back up... umm.. we recently had a 6.5% drop so we're nowhere as undervalued as we were in '87 to think that we're just going to have a slow climb back to new high.

Lets look at some corrections ( oh I use the S&P as the Dow is really not representative of anything anymore )

2004 = 8.5% correction
2005 = 7.5% correction
2006 = 8 % correction
2007 = 6.5% correction ( so far )

Hmmmm... do you REALLY think this correction is finished ? We have worse economic news right now than during any of those previous corrections. Its QUITE unlikely 6.5% is the bottom. Lets just hope we dont hit a true bear market.

Sure we may pop back up to the 1420/1430 zone but with everyone as skitish as they are you can be sure that everyone will press "SELL" as soon as we get close to their breakevens and then the snowball will roll sending us down even further. Its psychology not financial fundamentals that will rule this market for the time being.

Im looking to go long for the next couple weeks and then Im going to short this bitch.

 

[Anunakki]

Quote from aaronk321:

Damn.. you think it would have two weeks of upside. I thinking it would take a shit within the next couple of days - the news from the fed, housing news, etc..

Well thats what Im prepared for.. more importantly Im looking for us to top out around 1420-1430.

I could very well be wrong and we just go down from here but my gut says we're going to have some upward momentum first.

 

[ByLoSellHi]

If people believe corporate earnings will improve, then yes, this market will rise.

I think that anyone who believes corporate earnings will even remain static, let alone rise, is being naive or optimistic.

It's all about earnings at the end of the day. 4Q were the weakest in 17 quarters. Why would anyone expect a rebound on that front amidst a weakening housing market?

 

[scriabinop23]

Quote from ByLoSellHi:

If people believe corporate earnings will improve, then yes, this market will rise.

I think that anyone who believes corporate earnings will even remain static, let alone rise, is being naive or optimistic.

It's all about earnings at the end of the day. 4Q were the weakest in 17 quarters. Why would anyone expect a rebound on that front amidst a weakening housing market?

for precisely that reason. the weakest in 17 quarters means that strengthening will come. look at home builders 4q for evidence of market psychology at its twisted. At the same time, housing permabears like you and me were killed (temporarily).

the markets rise when people buy. markets drop when people sell. the correlation between buying and selling and economic health can be a transient one at best. Last year, if you look at the charts, home builders were decimated on similar worries in a different part of the (same housing downturn) cycle. Furthermore, oil was already ticking past $70, acting as an inflationary pressure with relatively (recently at least) unprecedented negative future effects on the horizon. Now some of that pressure is abated, and slow earnings this quarter were expected all along. What about 08 and 09 earnings ?? Thats more important.

 

[cashmoney69]

Quote from aaronk321:



Hell, I sold out of GROW at a loss and what did it do today.. It decided to go on a 5 point run without me. GOD DAMMIT...

GROW is one of the reasons I was down 20% last year, and its big swings make it hard to trade. Volume for this breakout looks like it should've been higher. GROW is SO CHEAP, I cant let this trade run up without me . I'll buy like 10 shares, and see what happens.

 

[ByLoSellHi]

Quote from scriabinop23:

for precisely that reason. the weakest in 17 quarters means that strengthening will come. look at home builders 4q for evidence of market psychology at its twisted. At the same time, housing permabears like you and me were killed (temporarily).

the markets rise when people buy. markets drop when people sell. the correlation between buying and selling and economic health can be a transient one at best. Last year, if you look at the charts, home builders were decimated on similar worries in a different part of the (same housing downturn) cycle. Furthermore, oil was already ticking past $70, acting as an inflationary pressure with relatively (recently at least) unprecedented negative future effects on the horizon. Now some of that pressure is abated, and slow earnings this quarter were expected all along. What about 08 and 09 earnings ?? Thats more important.

I'm about to go to bed, but I just can't agree with this logic. Why would anyone assume a reacceleration? What's going to act as a further catalyst to ignite the consumer, after 5 years of pigging out and maxing their debt levels, extracting so much equity from their homes and spending the cash, and spending more than they make (the first time since 1929 - negative savings rate for two years in a row)?

At any rate, I wish you happy trading, and leave you with this excerpt and link, which even discounts the housing and mortgage issues I mentioned, and focuses on just the 'E' in P/E, and expresses my thoughts as well as anything, since I'm too tired to regurgitate it:

"All that aside though, what worries me about what’s currently going on is the potential deterioration of sentiment in the economy. Hard numbers are all well and good, but it’s positive sentiment that has people driving to the malls and businesses, upgrading their IT systems.

Some might say that the stock market is currently relatively safe because P/E ratios aren’t particularly high on historical standards (though they’re far from cheap). I don’t disagree that P/E’s aren’t looking exceedingly high, and though stock prices have shown strong growth over the past four years, I wouldn’t say the price growth has been crazy.

What makes me toss and turn a little at night, though, is the strong earnings growth that we’ve seen over the past couple years. It’s been a nice party, but how long can it last? I see merit in the argument that the needed correction after the Dot Com bubble was avoided by the exceedingly low Fed Funds Rate and the housing boom that it sparked. We may now be getting ready to pay that piper.

When you pull the “E” rug out from under the P/E we’re suddenly not sitting so pretty any more. Prices will adjust downward and the lowered sentiment will likely mean that they will adjust down to a lower average P/E than we’re currently at."

http://usmarket.seekingalpha.com/article/29972

 

[S2007S]

Quote from aaronk321:

I'm staying on the sidelines waiting for the next 5% drop to complete the correction. However, the market is running like normal. It appears China has completed their correction and will zoom up to another 100% year gain.

Hell, I sold out of GROW at a loss and what did it do today.. It decided to go on a 5 point run without me. GOD DAMMIT...

They said that many are waiting for the correction, or at least another drop below 12,000 to the 200 day moving average, but whats happening is if this doesnt occur people will chase the market and bid it up using sideline cash to buy back up. Im not worried about the run, if you noticed the volume today you can tell many werent buying into this rally.

I think the market makes another drop closing this time below 12,000. There hasnt been much fear in this market to begin with, when fear takes over the market thats when the buying should begin.

 

[cashmoney69]

Quote from S2007S:

when fear takes over the market thats when the buying should begin.

Attempt to catch a falling knife?...just average down til the market bottoms?... seems kinda risky.

 

[S2007S]

Too many people think this market can continue its double digit growth rate like it has for nearly 5 years. Everyone has to understand that markets go through cycles and that this could be the end of the long bull run meaning its time the bear makes its way to wallstreet.
There are too many economic problems that just cannot be ignored. In the past few days I have been reading that the subprime mortgage fallout is done with and that this could be the bottom, I may sound like I'm repeating myself over and over again but this is not the bottom. On a day the dow is up triple digits you may feel relieved to think maybe the bottom is in and that were now ready for fresh highs on the DOW, however I wounldnt be falling for it. Just last week many thought the markets were ready to spring back but Tuesday came and the DOW dropped 240+ points. This is not the same market that it was the last 9 months...........