this has got to be a blow off top

Discussion in 'Trading' started by Kicking, Dec 27, 2006.

  1. I think the key right now is if the 'dumb' money continues to flow into stocks and mutual funds. Here is what I mean - when I was a stockbroker/adviser, right about now is when my phone would start ringing with unsolicited orders. People don't like buying when things are down, they want to see it come up and then read about it in the paper. Keep in mind that this 'dumb' money typically only goes long and comes into the market in a variety of ways - regular accounts, 401ks, IRA's, pensions, etc. I believe that 'dumb' money is the reason why over time the indexes simply continue to rise when you look at longer timeframes. Without this 'dumb' money the market would be much more rocky, volatile, etc. I'm not arguing that this is a good thing, but if you have a portion of your investable assets into ETF's currently (and are long), you are seeing nice gains for a 'simple' investment.

    As somone else pointed out, the Dow is up approx 15% on the year, which is a little better than the 'average' that brokers use to sell to their clients. We were taught to show 8-12% a year is our target return. Well, 15% is great!! If you have money available, now is a great time to invest!! ... just like the old days ... :D

    #41     Dec 28, 2006
  2. Bowgett


    Where are they getting this 'dumb' money from? Oh, I get it. That is why this shopping season was so weak. It is because 'they' put all their money in stocks and mutul funds. :D
    #42     Dec 28, 2006
  3. '

    Actually, dumb money is employer contributed to a large extent, or comes from tax refunds, etc... so it doesn't hurt as much to put it into "investments" as there are significant tax hurdles, etc... to taking the money out of these accounts.

    The tapped out lower segment of the US consumer doesn't have these types of investments, since they are just trying to make it month to month. So, their absence is largely expected and therefore irrelevant. But they were the reason that christmas wasn't so bright this year.
    #43     Dec 28, 2006
  4. Lucrum


    Started in the late 80's here. But then I gave up on predictions shortly after my third blowout.
    #44     Dec 28, 2006
  5. Tums


    #45     Dec 29, 2006
  6. S2007S


    what a cheap shot you took, I might have sold out early but look where its trading now. You should learn to keep quiet.
    #46     Dec 29, 2006
  7. "Yeah I agree that this manipulated "rally" is bullshit."

    more loser trader mentality. this thread is full of these sorts of people

    translation: the people that either missed this move or tried to short it on the way up finally have to admit "i was wrong", but can't do that (even though their account tells it for them), so it's "manipulated" , it's "bullshit" etc.

    look, this aint yer daddy's bull market, but it's just as real as any other bull market, and caused by one thing - demand outstripping supply at price levels, that causes prices to rise.

    it's that simple

    the market doesn't care about you, and it doesn't care if you think it's "manipulated" (loser meme 101) or "fake" or whatever.

    this does not HAVE to be a blow off top. it will go down when it goes down. set your protective stops, and make your plays.
    #47     Dec 29, 2006
  8. O.P.

    This market doesn't "HAVE to be" anything. The sooner you learn this the better off you're going to be.

    Trade on, your tuition is not paid up to date!
    #48     Dec 29, 2006
  9. Tums


    should have, could have, would have.

    wish have.
    #49     Dec 29, 2006