I also think its getting frothy oil at 60+ will have an impact on the markets. But in general I don't see the markets moving much the next 3 months (my guess is +/- 4-5%). Can you say range bound? (Unless a major event occurs.) ozzy
I think we have a market crisis starting this weekend due to oil. Whatever that nonsense was with consumer confidence this morning, it's going to be gone when they get their papers tomorrow. And this 175 pip or so drop in the dollar vs euro? What's that all about? I went short into the close bwtfdik - I cut, run and cover at the slightest pain anyway. Geo.
All three majors Dow, S&P, Nasdaq are Head and Shoulders bottom with Dow already broken out. My experience is that when the breakout has punch, it does not matter how many indicators are over extended and overbought. Markets are going higher with NASDAQ reaching 2300 levels, but make sure that you exit at that point because this is the highest that will be seen for next 5 years or so, be ready for big swings down to 800 and then 1800 and then down 900 and upto 1500 and so on.
The dollar has strengthened but one of the reasons oil went up is that the dollar weakened. I conclude that oil should weaken not stocks. Stronger dollar is good for stocks, except exporters.
MONACO, Answer to: Am I the only one that sees a correction? You'll always see one if you manage to 'see' far enough ahead.
Indeed, but most traders are not smart enough to understand that. They are afraid to miss the top or the bottom so they anticipate already, which means that they go AGAINST the trend, although they are convinced that they are picking the top or the bottom. Perhaps ask the guys that when short in Google to be sure they wouldn't miss the top. Was it not 12 millions $ loss because the wouldn't like to miss the top?
You must have a very powerful system if you can see 5 years and more in the future, and even can say how the waves will go afterwards. The last time i read those kind of predictions was in may and june 2004 when people told me to be prepared for the worse. The levels we were at at that time (approx 900) would be horrible high compared to the huge drops that would follow in the coming months. Reality showed us that we went up approx 40% instead of going down. The difficulty of predicting the future grows exponentially with the lenght of time. Accuracy goes down exponentially with the lenght of time.
Technically the DJI, SPX and COMPQ are still in clear uptrends. NDX may have rolled over, leading the others, or it may just be "catching its breath". Who can say? Short term I see an uptrend. This may be the final hour of the echo bubble, it may not. If it is the final hour, bear in mind what Livermore said about that. People like to try and call tops/bottoms with fundamental reasoning. There are a lot of fundamental reasons for the market to go down. But fundamentals analysis ignores the immense power of psychology, and has always done poorly at timing, usually missing by years. The only place I know I can see psychology is in price. Mark Hulbert @ marketwatch.com thinks he can see psychology by monitoring a bunch of newsletters. I think he's wide off the mark, only seeing a tiny slice of the market. Anyone got better ideas?
To me, first spx need to go below 1203, particularly on a regular hour closing basis, 4 PM EST. Then only in my book bullish uptrend maybe ending. After that, if spx 1191 taken out on closing basis, then in my book uptrend ended. I can see downside support, but I don't know how far high this bull run can go without 2 or 3 % correction. May be someone can explain better. Valuation, overbought and other mumbo jumbo won't stop this market because lot of folks including me missed this run through completely or under invested and they want to get back in on every small pull back. That psychology, to me ends only if spx closes below 1203 first and then within a week or so closes below 1191. Anyone else care to comment please.
I think we will see a downtrend starting sometime next week. Among other indicators, the weekly NDX is working on it's right shoulder. But then again, never underestimate the power of a stupid herd. If you stand in the way, you're liable to get trampled.