One tiny little pullback and the world is going to end? Let me ask the oracles of the board, enlight me as to why this typical pullback past "May" is a complete reversal, I want to see the technical evidence calling for this massive destruction.
It is actually a 92.71789 % correction by October 19 (yes the Black Friday anniversary). This is only after the Rare Black Swan Formation...... Hopefully it does not also have the rare Vampire tooth formation....
I recall when Bob Brinker said his proprietary indications showed that the Nasdaq could fall to 1400. It had been at 5200 before that, eventually it went to 1100 or so. That's about an 80% drop and it was predictable by some. It's not out of the realm of speculation that our current market could drop 90% considering the state of the world economy and the idea that QE is coming to an end.
Then again, the Fed wasn't micro-managing every blip in the market in 2000. Granted, Greenspan was prone to unleash intra-market rate cuts to "juice" the market; but it's an apples and oranges comparison to the current market. The problem with this "hawkish" tone is that we've seen this ballgame every summer for the past 3-4 years. The markets (especially oil prices) bump up against an "invisble", yet everpresent "uncle point" in so much as the inflationista's are willing to enable the risk-on trade. Once it hits that point, we get the same ole' broken record about an end to the easing or a ratcheting down...that's until the market corrects 10% and all the bagholders cry foul and re-ignite the talk for more easing, and ever greater doses of it. UNTIL we see concrete proof that this is more than the typical jawboning, I'm not buying it. These guys are WAY too overinvested in keeping this scheme afloat; I see little chance they let the entire market go on its own. We know the thing would drop off the planet if that were the case.
Nasdaq was at that point primarily one sector plus highly speculative companies in others. The mainstream US indexes are quite different, massive drops are far less likely. Profitability is also very different. Something like S&P dropping 30% is more of a massive drop because it encompasses so many aspects of the world economy. The Dow for example is 30 big companies. Maybe you can envision a world where for example IBM 's total value is the same as one year's profit now, but I can't see that occurring anytime soon. I don't think QE has much of an effect on IBM at all, if you look at their income streams over the years. This site is often preoccupied with the Dow or S&P and what occurred in 2008/2009 is a very rare event. More likely in fact would be something like Gold crashing well below what anyone thinks. At some point, people may want cash, and realize Gold isn't really a haven. And then nothing would stop a drop. However, the S&P can only drop so far when corporations are extremely profitable and their assets are growing.
How long will it take to get below DOW 10,000 again? A recession could definitely make that happen even if itâs not a 90% correction.
being that buffet and soros... have been cut great deals by the FED in the past. And he even purchased some banks or trading firms. You would imagine they have good idea when the fed is going to support the market and when they are going to stop. I suspect this means at a minimum they believe the fed is going to ease back on the support of the stock market. (providing the story is true.)
The Fed is NOT supporting the stock market. It is not buying shares directly. It is at best making cash available for others to buy stocks. At some point they will stop buying, as they have done at <I>every single market top in history</I>