The economy over all is in great shape. nothing wrong with the market.. holiday week.. im a buyer.. i have friends in mgt at retailers ...their numbers are just as good or a bit better than last year... Hallmark...
Guys, this may be the beginning of the wakeup call: http://biz.yahoo.com/ap/071121/holiday_shopping.html?.v=6&.pf=banking-budgeting If we have a Black Christmas, we'll probably have a Black Monday...
Tell that to the people losing their house, life savings, etc etc.....this economy is a joke. The only thing holding up the economy was housing. It wasn;t wages. The only ones getting rich working are the fat cats at the top. Job growth has been in the crummy low wage sector. I want proof that livable jobs are being created! If the economy were so great, we wouldn;t have a monster foreclosure market and tons of downsizings.
brasil, I tend to agree with a lot of your points here. You might want to view my liquidity cycle thread for more thoughts. http://elitetrader.com/vb/showthread.php?threadid=96555 Without reiterating most of the specifics, I had some older posts where I showed extremes in summation index/ise sentiment,. etc. I felt very nausious buying at those pts, but in retrospect, those were local bottoms. We are in similar territory here. It all comes down to, is this the standard 10% correction we have been seeing for decades (sans 2000-02), or is it worse? There are a few other sentiment indicators I look at, most say the same thing, and have been net pessimistic since 2002 bottom. Time will tell, but no matter what anyone says or feels, I have many quantitative reasons to believe joe mom and pop have not been complacent nor shoveling money at the markets since the 2000 debacle. The majority hasn't been convinced, nor suckered in yet, so we get these local pukes and shakeouts, then teasers as the markets climb back up. Couple counter pts. to ponder: 1) the yield curve WAS inverted for awhile this year, and no official recession occured (yet). Curve looks good here, but maybe the inversion takes some time to kick in? 3) Agree the fed will continue to cut. Once they start, they generally don't stop. That being said, it's not a great comfort knowing they started the same downward cycle in 2000. 4) Agree: no direct correlation to dollar decline and markets. I show that on liq. cycle thread. Sometimes it's divergent, others convergent. Lastly, as hideous as the financials look, they were still tanking about a yr or two before 2000 markets pk, meaning broad markets can still run without xlf, if someone can pick up the slack (tech, energy, etc..). Anyways, good insights and good luck.
Ah, but it's not just xlf. That sector will be OK after the bailout, but what about the rest. Can we bailout 25% of the economy? I suppose the answer is no. Can we make things look ok for awhile longer? I suppose the answer is yes.
Reading this thread and all the different reasons the market can go up and down just reminded me of what I already knew... react to the numbers (price) and trade accordingly... But to all you guys forming all these complicated opinions on the macro outlook and how the market will reflect it... It's all fun, and if it's just pure speculation/intellectual curiosity, that's great... but if you guys are seriously putting your money behind these decisions, you've got to realize that any money you make will be temporary and the market will later take from you. This business is about consistency, nothing else matters unless you're Brian Hunter managing OPM... and EVERYONE AND THEIR MOTHER is guessing the direction of the indecies. You just don't know enough... you might be thinking one step ahead, but the big players with the BP decide to run it up. So I recommend looking for exploitable edges from intraday price action... unless you'd rather be right than make money. The market has no logic. Actually, let me restate that: the logic of the market is to sucker people who try to trade by using logic and analysis that would work in other parts of the world away from their money when they least expect it. Now, with that said... and this purely comes from my asshole as well as from waht I picked up on this thread. But I think the only way to think about this is as if you're the collusion between the SOBs with the best insider information and the most BP. Breaking August Lows, even February, seems likey and possible, so letting that happen makes sense, but doesn't necessarily indicate a bear market... since everyone would expect it to be the golden sign to short and sell even though the easy short money could have well been made in the 15% drop... but who expects the lows to get broken and then the highs to get broken? That to me seems like the best way to sucker people out of their money... make em sell at 1340 and then after another rate cut or two have the banks come out and say they're done with their CDO rightoffs, inflate the statistics, and squeeze the shit out of the shorts... We haven't suckered the public in but sentiment wise I have to wonder if in this bull market cycle we will... now that's the ultimate goal always, to sucker the public in at the top, but perhaps the wallstreet scammers have already suckered the public out of their money so much that none exists to go into stocks? See I have no clue, how can any of you guys think you know this... just trade repeating setups/patterns and find your edge... if I had put all the energy I put into this post into looking through the T&S of wednesday's trades again I'd be that much better of a trader and maybe spot that intraday squeeze on XYZ a little earlier... Good trading (or speculating/predicting/gambling) to all.
GDP is recessionary if Clinton-era CPI is used. Bernackes hot air is the only thing supporting this market. Very precarious. If we can make it through subprime AND inflation goes under the radar (to consumers), it will likely turn bullish again. Short term only. After referencing Greenspans new tell all against the global spendthrift landscape (see Bernacke), inflation/low rates are here to stay. This is bullish, yes. But its also extremely inflationary, considering our position now (oil near 100USD) and moderate term, absolutely unsustainable without a total collapse. What I see is a decoupling of basic economic relationships, that under normal circumstances (and rational CB behavior), would be expected. CPI and GDP stats are rigged to suppress true inflation. M3 stats are pulled. No more tracking money supply. WHY. WHY has the Government concealed and fabricated these critical economic barometers and then passed off their cherry picked stats as point of fact? What I see is wild money printing to buy time. Not just the US Fed. Everyone. Japan. ECB. China. The Great 8. The same Central Bankers that meet every quarter, or what have you, to huddle up and play make. This Bull should have been done back in March - mind you, crashing at historical rate lows. But no, plunge protection team was there to stem the tide. The more astute and open minded traders on the board know thereâs a behind-the-scenes political agenda playing out (long term). Its my personal belief this agenda has much more to do with the current economics of the market than just economics itself. And I'm not talking about just the Iraq War or the construction of this new Intergalactic Space Station. Although those are major driving forces - albeit not the end goal. I'm talking about Global Government. The stated agenda of Global Elites that our elected Representatives support - via public documents made available through the Council on Foreign Relations (to which all the most prominent Reps and Senators are members), the UN, Trilateral, Bilderberg Group and various whistleblowers. Look it up if you don't believe me. Marching orders are to regionalize hemispheric 'custom unions' similar to the EU, then coalesce them into one. The preferred method to coerce submission from the people (or their rights, or their consent), historically, has been the Hegelian dialectic. Manufactured crisis that elicits an expected response, demanding the progenitors predetermined "solution". Gulf of Tonkin for example. Or Operation Gladio, another example. USS Liberty. Etc. The ancient art of State Craft. Look up the North American Union. Its real. Bush signed a "working agreement" with then-heads of State - Mexico and Canada - to put into effect. The NAFTA Superhighway is under construction right now. Local groups in Texas and Oklahoma are working hard to stop it. Discussion of the AMERO - our new Hemispheric currency - has enjoyed major media news time. Look it all up if you don't believe it. Research it for yourself. My personal opinion is an economic collapse not seen since the Great Depression is about to unfold. Economically speaking, this would be an overstatement. But some special plans have been laid in store for the American public. And the tools to bring about such radical social change are known, and have been used by our Government before. The map, method and intent is there. And the people, like always, remain largely ignorant.
dtrader98, I took a quick look at your ALC thread and was very impressed with your research. Hopefully I will have something useful to add to that discussion. The reason I believe this is a standard 10% correction is based on Martin Zweig's market research. He believes, and it has been a fact historically that bear markets begin with at least 1 of the following - an inverted yield curve, deflation, and/or overvaluation. It is true the fed was cutting rates after the bubble popped in 2000, but valuation remained very high throughout that period. Your question regarding the lagged inverted yield curve is very interesting and is something to think about. Also, after the Fed started cutting, small-caps outperformed in a big way and there was a lot of money to be made on the long-side from 2000 to 2002, if one looked away from the former tech darlings. So again, I am very worried about the state of this market, but given the extreme readings in sentiment, and the fact that you will only be right betting on the end of the world but one time, I am long for a trade. Also, it is interesting another poster mentioned the phrase "Being Right or Making Money". That is a title to a book by Ned Davis which is the inspiration to the core of my trading philosophy and methods. I believe (and Ned would agree) there are stock-market models which can capture outsized returns if they are applied systematically. I believe sentiment models are very robust and should be respected, especially when the spread between the smart and dumb money is as extreme as it is now. Finally, Cramer is saying you simply can't be long this market, look at AIG, there is no bottom in sight folks. Of course he could be right, but I would rather be on the other side of Cramer when he gets this emotional.
All clear now guys - 4% later Cramer posts he is positive on the rally... I would never use one sentiment signal in isolation, but Cramer once again demonstrates that when he unequivocally states the market can't rally, a tradable bottom is probably at hand. In fact, with this big rally, and the idea the Fed is now going to save us being accepted again, I believe the edge I was playing from a sentiment standpoint is all but gone. Watch that Cramer!!! People like him are here to screw you, not help you (whether from willfull malice or not, I have no idea and frankly it doesn't matter). I normally don't like to beat up on people, but I think pointing this out may end up doing some good for someone.
This is a great post. I would like to add - the only way the markets can lead more lambs to the slaughter (after this slaughter) is by doing what the lambs want and lulling them into thinking they can (again) predict market behavior. So after everyone is screwed out of their money this time, the markets will calm down again, become docile, asleep almost. It's a trick. Get an axe.