I think that everyone who's looking for this bottom, should read this article. I think that gary b. smith really hits on something great. It has changed my thinking on http://www.thestreet.com/comment/techforum/1348170.html
I agree with you. The article has a lot of truth in it. I think the bottom will come and go and we wont even know until afterwards that is was a bottom. I really like Gary Smith and his columns. One of the few I keep on reading. I think we traders, instead of picking bottoms, we should just accept the fact that this is how market is right now and just make the best out of it. Don't fight it - follow it...
Excellent article. It just goes to show that it's impossible to call a bottom although some make educated guesses. After the dramatic decline to date in NASDAQ - and with the economy anticipated to rebound in the second half -the pending interest rate cut should provide some some kind of floor in the market. The continuous bout of earnings warnings should be factored into the market at some point. I believe investors are more knowledgable today - and if they are already sitting on a 50-70% decline in their investments - they are more apt to hold now in anticipation of at least a partial recovery. The economy is still decent - i.e. low unemployment/strong housing market/low inflation. If the economy does show some signs of regaining strength - and consumer confidence improves - a lot of sidelined cash should enter the market. Thankfully, the US economy is in much better shape today than during the Great Depression - despite the correlation in stock market declines.
Wow !! - I'm sure eating my words. This is bordering on frightening in terms of watching my long term investments head south. I'm beginning to wonder just how far the market may decline. I hope to pounce with short term $ once the market finally begins rebounding. It may be a while. I won't take the risk of shorting at these price levels - although I'm sure many are making a killing. My hat's off to those folks.
Looks like the SP market was about 1250 at the time of this post and declined finally into the 700's. The point is that the human mind cannot fathom just how far a market can move (look at Sugar Fall 2004). This is one of the reasons that trend following is far superior to other methods and also why an oversold market can indeed be sold with the proper very wide stop. Thank you for your time.
Interesting you dragged out this old thread. I thought I saw where the OP got wiped out in the commodities crash. And he was well thought of as a good trader...
======================= Like this post,top part made made in March 2001; QQQQ seemed like it made the classic 50% bounce then .And some sectors did go on to great multiyear uptrends-POT sector ,some housing stocks. So interest rate cuts did help real estate uptrend then ; much media & markets simply resumed downtrend after after the dead cat bounce. But QQQQ, far from uptrending, made a classic dead cat bounce; downtrended again to below $20.00 Similiar ratios to DOW as in 1929, 1930s, except fragile food & fuel systems are much more conentrated now. Best of times ; and worst of times