Is the bottom in?

Discussion in 'Trading' started by Brandonf, Aug 7, 2002.

  1. Brandonf

    Brandonf ET Sponsor

    I just wanted to start a poll coz I never have before, so here is the question..is the bottom in.

    A few things to consider before voting.

    Bottoms don't form just because the barber is selling short, though its a good sign that some sort of bottom may be in, at least enough to take the barber out of the game.

    In general the leadership of the last bull market will not recover and lead a new one. This means that whenever we do get our next bull market, its not going to be on the backs of tech (semi's, internet, biotech, telecome etc etc). I dont see much for new leadership, but maybe Im not looking hard enough.

    No bear market has ever ended with consumer debt near all time highs. In fact, no bear market has ever ended until until consumer debt was at or near new lows.

    Lower interest rates dont mean the stock market has to go up, even though in the past it generally has helped. The last few years of lower rates and stock prices is a good example of what should happen not happening..and that in and of itself can be a pretty powerful signal.

    Bottoms are a process not an event. They take a long time to occur, and usually the new bull market will not occur until there has been a long period of sideways accumulation.

    Last point, none of this really matters for a short term trader, but sometimes its fun to speculate on the future. :)

    Brandon
     
  2. My vote is no, the bottom is not in. There is not a stitch of upbeat economic news from any category. P/E's are still about 30% too high with no chance of accelerated earnings to lower the P/E. The Nas is still 45% too high with P/E's. This has been mostly a blue chip rally without the breadth to sustain growth. The retail public is still "waiting to pounce" on the lows to make back all their money they lost. As long as that is true, we are going lower.

    Technically we bounced off 7500 like a rubber ball which will not be the case at the bottom. "V" shaped recoveries fail because there is no base from which to build. The next stop should be around 9500 and maybe we will establish a new trading range b/t there and 7500.

    Ultimately, proper valuation and technical support suggest somewhere between 4500 - 6000 on the Dow, depending on the chart settings, ie, log vs normal scale, bars vs close only. The longer the Dow stays up, the better the chances are that 6000 will be the call vs 4500 because it gives the business cycle longer to recover, generate increased earnings and lower P/E's from that side of the ratio. Also, the longer we stay higher, the higher the major moving averages can go, thus providing technical support at higher levels.

    Whichever, the bottom is not in.

    imho of course.
     
  3. I'm long. Thats all that matters to me. I didn't catch the exact bottom thats for sure, no one catches exact bottoms.

    But my broker got me this far, and he says we go up and up and up.

    That said, yes I think the bottom is behind and below from where we are speaking now.
     
  4. just want to mention one thing I read on this board a while ago (last year maybe?).. you are right that lowering interest rates does not start the bull running again. but someone posted that the upswing usually starts at the *end* of the fed's easing cycle. thinking about it now, that sounds natural. why would they continue to ease rates when the market is going up? anyway, with the fed likely to ease rates before the end of the year, that would indicate we wont have the bottom this year at all.
     
  5. Biomech

    Biomech

    You forgot "I don't know AND I don't care".
     
  6. no gets my vote.
     
  7. Why do you suppose it is that everyone speculates whether we have bottomed when we have a bear market, but no one really asks if "this is the top" when we have a bull market? One question seems just as logical as the other, but it seems much more time and energy is spent speculating about the bottom than the top :confused: .
     
  8. Miki

    Miki

    We'll be at the bottom when permabull goes short.
    :D
     

  9. his broker must be one smoooth character...

    "go long on this one, the bottom is here & gone..."
    (1 commission this time)

    "ok, that wasn't the one - sell it & buy this one..."
    (2 commissions this time)

    "it's just a pullback, you should move your money into this one and this one for a nice pop on both..."
    (3 commissions this time)

    "according to my latest tips, these two stocks will outperform the two you just bought since we are now REALLY at the bottom - sell those two and buy these two...)
    ( 4 commissions this time)

    "the sector you are invested in isn't doing well overall - you should rebalance and diversify for the long-term uptrend coming - sell these two and let's get you into these 3 different sector play stocks...)
    (5 commissions this time)

    His broker's 1099 is the only thing on an uptrend here...

    ROFL:D
     
  10. As most topics on these threads, whether or not we have hit bottom, etc is just something to discuss. I have yet to read any thread that it is critical to life, so for those who must complain about a topic of discussion being unnecessary, please show me which of these topics are necessary.

    Permabull, are you kidding me? A broker is not going to get you in or out at the right time. They know absolutely nothing about market timing. I was one. I know what they are taught. I know what the back office preaches. You must be responsible for your own timing. Your post about your broker is hilarious.

    For the people who post "who cares", I suspect they are traders who short and buy puts. I do too, and as long as the markets fluctuate, I'm happy. But the vast majority of people do not short and buy puts. Their every waking moment is not focused on the market.

    These people, like permabull, know nothing except what their broker tells them, and there are not many brokers in the shorting business because they are too busy being money-gatherers; and for the average retail client, shorting is not appropriate.

    One hopes these threads attract constuctive thought and contrary opinion to those thoughts. But railing on the topic itself makes me ask, why participate in a discussion you feel is useless.

    The urge to post must be overwhelming.
     
    #10     Aug 8, 2002