My Option On Dow 6,000

Discussion in 'Chit Chat' started by landman, Jan 22, 2009.

  1. landman


    I have been telling friends for months to expect the Dow to hit between 6,000 and 6,500. I was surprised to read (today) that others share that same view.

    For me, this notion is based on more than a feeling. I determined that the price of stocks were inflated and would need to correct themselves to levels near the beginning of when this bubble began--2000 to 2001. When I saw the availability of cheap money for mortgages hit the scene between 2000 and 2001 I always held the Dow's range at that time in my mind as what the "true" value of the market was--6,000 to 6,500.

    In light of home prices retreating to more reasonable levels and the exposing of numerous financial scandals, I am more confident that the artificial price of stocks will return to those pre-bubble levels seen in 2000 and 2001.

    Too me, the inflation of stock prices and home values coupled with the lowering of interest rates made the problem worse, given that inflation is designed to bring spending under control. When the cost of credit continued to get cheaper and cheaper (through lowered interest rates), it makes that impossible.

    This is just my opinion.
  2. Dow 7000 won't hit, so I'd have to say DOW 6000 is unlikely. DOW 6000 requires fundamental disruption of economic activities, up to and including both oil embargos and all out nuclear war. Have fun Mr 7 post since 2005.
  3. Regardless of our views on Dow 6000 we can all take a lesson from 7 posts since 2005. We need to listen more and shut up more often. You can't learn when you are speaking.

  4. I don't know about you, but I really don't get any satisfaction from playing a psychic. I would rather skip the pat on the back and go directly to making a profit.

    How do you intend to profit from your analysis? There are several option strategies that allow you to realize substantial returns if you are able to accurately predict the time frame and size of a market move.

    Here's a limited risk butterfly trade, right at your 6K prediction. Looks like you would only need to risk $8300 to make $90K (you can scale the trade to meet your needs, of course).
  5. Plus the OP is able to construct a coherent sentence, something 75% of the members on ET can't figure out.
  6. whatthe


    Would you rather listen to someone with 7 posts in 3 years, or 4000 posts in 6 months?
  7. landman


    Personally, I only post on subjects that are of interest to me. As I have a limited number of posts, I have a limited number of things I focus my attention on. On the other side, I find that those who have volumes to say are like those who are a jack of all trades but masters of none.


    8 posts (now) in 3 years
  8. Stockturd has ove 8000 post. Does that mean what he says is more relevant then the people who lurk this site to educate themselves.
  9. Mr J

    Mr J

    And you have only been a member for a month. What conclusion should people draw from that? Number of posts or length of membership is completely irrelevent.
  10. longhi18


    Post count shows intelligence? By your remarks it shows unintelligence but what do I know I only have a few posts.

    We are experiencing a global fundamental disruption of the financial industry. Also, an all out nuclear war would certainly put us below 6000.
    #10     Jan 22, 2009