Im hearing and reading everywhere that tomorrow is going to be a significant day, it could be the actual day we see the markets fall just like they did on black monday, however a part of me has me thinking that so many people are expecting this SIGNIFICANT drop, myself included, that the opposite will probably happen. There are so many people bearish now that I think im going to the bullish side, I find it amusing how market psychology works and I think its happening all over again. The market always stretches beyond its limit in extreme times like this, just like at dow 14k, the market only knew one direction UP and now only one way, DOWN. Any rally is sold just like every dip was bought back from 2002-2007. Tomorrow is going to be a day I think that could change the market environment forever, I think these last 2 weeks have changed the market place forever. I think this market will be a market that will never be the same again, trust has been totally lost in the financial system, the break in each financial institution and market worldwide has created a downward spiral to an economy that no one has ever witnessed before.
The continued move down will result from force, not choice. When the retirees get their next statements from their brokerages... ...well. Margin calls, redemptions, forced liquidation for other reasons, and investors with institutional funds getting physical nausea.
on a liter note, seems the futures have pulled back a bit... lets see what the markets have to offer in the am... i cant read all this anymore...
Now that we have a lost decade, I think prices will be a result of actual returns rather than potential. All the folks with 401ks have had it and will just keep their money in either cash accounts or bonds. I think this guy is dead on and we will be looking at the 6000s. http://www.thestreet.com/p/_search/rmoney/investing/10386237.html
There is going to be a bottom however no one has a clue where that bottom is, the bottom can be 8145 or 6732 maybe even 2349, no one has a clue however I just cannot see the dow losing 300-1000 points a day, eventually buyers will step in and when they do we could see a very strong 1-3 day rally of at least 5%.
Some guy did a study using live participants to simulate market behavior. He found that people tend to ignite a bubble, then deflate, then ignite a smaller one, and then they get wise after that. And I suppose that the tendency would repeat each generation.
I think right now people are scared of Monday. This week did not offer a pop so Friday is the last sell oportunity (since Monday could be black). Self fulfilling prophecy...just like technical analysis. I guess, with upcoming earnings reports, negative GDP, >150k unemployment, and low-key holiday retail season this market will be in freefall until Feb 2009. Then the we will quickly recover to 8k and linger on for next two years.
The surprise to everyone would be seeing the markets close up between 2-3% tomorrow. but it being a Friday has many people staying away waiting now for Mondays open to see the market reaction to any news being released over the weekend. Get ready for more volatility tomorrow, if you have a little cash on the side I would be going in long, not much just a little bit.