Discussion in 'Trading' started by jbtrader23, Jul 13, 2002.
When the institutions stop selling. Watch your favs on thomsonfn:
Washington Post came out with a very damning article on AOL accounting shennanigans which allowed the company to boost its revenue over the past two years to the tune of $270 million. Also it's CEO and director, Pittman, steps aside.
The stock, as well as the general market, closes less than 3% lower!
gotta hand it to Tim Villano (www.tradersfocus.com) who was bearish on AOL back in November.
The real sign of the bear market ending will be when people have been beaten enough times so that they will finally say "it's different this time. It won't be coming back." Just as they did the inverse at the end of the stock market's bull run (things are different this time / this is a new market economy with new rules / the old rules of valuation don't apply).
So far all I keep hearing is "we are bottoming" or "we are in a trading range" or "we see signs of strength" or "there is real value in the long haul". How long did it take before the talking heads on TV actually said "bear market" rather than "correction"?
I quote this because it is very well worth repeating.
Also Runningbear posted this link on another thread and it has been updated. http://lowrisk.com/nasdaq-1929.htm
I found the bottom chart interesting.
Good trading & be careful. Use protection, "Close Stops"
I watched with interest today after the close how CNBC and CNN would portray this decline. Think about this, we are at 8,000 on the DOW and there hasn't been a major terrorist attack after 9/11. Imagine where the DOW would be if there was? Even with the VIX plus 40, and other indicators saying it's time for a bottom, people seem complacent. CNBC interviewed people on the street in Washington DC and they all seemed nonchalant about it. Like "oh, it's no big deal". It'll come back. No one seemed overly concerned (paniced).
$11 billion mutual fund outflows for the week? Jeez, there have been trillions put into mutual funds over the years. $11 billion hardly seems like a panic. Maybe $100 billion would be.
It's going to take at least another 1,000 points of decline to get people attention.
Dude, thanks for the links.
But I was reading it http://lowrisk.com/nikkei.htm about the Nikkei
and I quote:
"The Nikkei peaked on December 29,1989 at 38,915. The devastating bear market that ensued dropped the average by 63.5% to 14,194 by August, 1992. The Nikkei has recently had another major downdraft and is currently at at approximately 16,000."
Dude! That article is sooo OLD! THe Nikkei 225 is at 10,202! And it dipped to 9500! And it was at 38K or roughly 40K.
So, for the Dow to follow the same path over 12yrs(God forbid), that means it could be as low as 2500!
But obviously, the Dow isn't as bloated as the Nikkei. The more valid index of comparison is the Nasdaq and even then it has gotten to lows now...
A friend of mine is writing a book called Dow, 100. Serious.
jbtrader23, they are just being professional. a panic bottom does not look like Aliens. if it did it would be so obvious everyone would buy, right?
a true bottom in a sophisticated market (like the US stock market) should be totally AMBIGUOUS. the hand-wringing uncertainty of whether it is "the" bottom or not should reach its height when the bottom occurs.
that's why these things tend to happen over the weekend or over a holiday or around option expiration...that extra little bit of uncertainty added to an already highly "difficult" situation triggers the natural response in weak holders/weak shorts...."i need to just get out of my position to reduce my stress"
so if we're looking for tops and bottoms from the media look for confusion and discomfort on the faces of the reporters/guests on CNBC and headlines with question marks in newspapers...
Just started to catch up on my reading. I saw your post of 7/14
re previous White House inhabitant. I agree the tone for this current stuff was set there. Along with him being a scum bucket.
He also gave us all the deregulation of industry that is causing grief to us all...To be fair about this the White House of the 80's
was no better. They to threw a party and ended with the Crash of 87. The S&L's and merger mania was their diet. If I recall correctly at least 3 people did jail time of sorts for that . Oh BTW
wasn't Alan Greenspan in charge all this time????
Separate names with a comma.