Take a look at what happened in the 70's and 80's. This market is moving very much like that one. I think the market will grind down for quite a while now. The Euro going down is not going to help the multi's one bit. Though on the positive side for Euro companies they are going to show how much positive earnings they will generate.
Disagree with this, any other time in history probably a yes, but this time the global economy is in a credit crisis, the economy is so awash in monopoly money that they have to take steps now to control inflation, with bubble ben bernanke keeping easy money policies on the table for as long as he did will only create new asset bubbles moving forward. There is no turn around in the economy, the latest GDP figures are nothing but an illusion based off of stimulus money being pumped into the system. Its all artificial growth, nothing is natural at this moment, everything is being propped up. The problem with higher rates moving forward is its going to raise borrowing costs for businesses and consumers, not like they are borrowing anything at the moment, but just a step towards higher rates will certainly keep any borrowing by businesses and consumers on the extreme low end, it will also put pressure on mortgage rates, take away the $8000 tax credit come April 2010 and watching mortgage rates climb will only hurt housing going forward. This is not going to signal any positive movement for equities moving forward.
I tend to agree with this observation. There's no exact science to it, but it very much resembles the long sideways markets of the 70s. The question is when the big grind down will happen. Anyways, I often play devil's advocate to get people to challenge commonly held assumptions. I put this graph together a while back, but thought it might be useful to show here. Not all cases are the same, but if the recent behavior is any proxy, it should show that commonly accepted conventional wisdom can not be taken for granted. The same holds for things like commitment of traders, which moved exactly opposite to prevailing wisdom before the crash.
Recently, I did a blog on this exact subject. Blue areas are ones where fed funds are rising. http://scriabinop23.blogspot.com/2009/11/dispelling-recent-fed-funds-myths.html
Nice job scriabinop, Good to see that there are people who actually research these things before passing on old wives' tales.
I don't like making market predictions but this one seems too easy. First hour Friday stocks fall hard only to recover to daily highs by the end of the day. Could even be a breakout move up in the afternoon. The Fed already said that Fed Funds wouldn't be meaningful for a while. That's why they targeted the Discount rate this time. It will take a lot more than one or two apparent rate hikes by the Fed to turn the market south. Anyway, that's my 2 cents.
Rally my arse. Unemployment numbers still rising....economy is 70% consumer spending and Walmat an't look'n so good. market is hot air right now. I think it pulled back 7% from its highs.....hardly a correction.....look for 20% or more then flat for the a time....20% pull back would be a gift....but it isn't gona be over night. maybe some good Volititly for trading....all those 401k holders....get ready to be fucked again....