Who exactly is buying?

Discussion in 'Trading' started by will848, May 14, 2013.

  1. will848


    I don't understand this. Since November the market has been on a relentless rally, up 20% on no volume.

    What is causing this?
  2. S2007S


    I just want to know when a market is considered fairly valued, is it spx 1700, 1750, 2000, 2500, 5000?

    Its not your average investor who is making a salary of $50,000, they have been very left out in this almost 150%+ increase in stocks over the last 4+ years!
  3. S2007S


    Whats causing this is

    QE 1
    QE 2
    QE 3


    Historical low interest rates

    Cheap money

    LOTS and LOTS and LOTS of CHEAP liquidity from BUBBLE ben bernanke and friends.

    Without any of these free handouts the markets would be at least 50% cheaper, however we will never see that happen because the market has now become to dependent on these free handouts, maybe one day it will end, but for now the printing will continue and continue. The market has now passed this threshold, it is now at a point where these free handouts are the only thing that will keep it propped up, if BUBBLE ben bernanke had some courage he would stop the printing presses immediately, but he is too weak to do so.

    I find it very funny that if this market went up on average 1-2% a week that no one would say anything or even intervene to slow it down HOWEVER if it were the other way around and the market was falling 1-2% a week they would easily have intervened to slow the drop from accelerating....just like the housing bubble and the dot com bubble

    They did nothing to slow it down, by the time it was too late everything collapsed which is the same thing thats going to happen here, of course in due time this will happen for now you can buy any stock out of the thousands available and make on average at least 5-10% a month!
  4. will848


    I understand that it's from the QEs, but how does it exactly work? Companies are taking out loans to invest? The every day joe is not spending more, people are smarter about taking out loans, yet companies are posting record profits? Or are companies just hoarding cash?

    Or is this the first signs of inflation?
  5. S2007S


    Looks like this market could never be fairly valued, no matter who is interviewed or what article is written there is never a person who says stocks are fairly valued at any point in the game, Im sure if you go back to 1999 or 2007 there were many saying the rally was going to continue that stocks had more room to move.....so when does every one come out and say the market is fairly valued? Never!


    The New York Fed found that risk premiums ahead remain high, justified by, if nothing else, exceptionally low bond yields, which will probably continue as long as the Fed can justify them.

    Another rule of valuation being tossed around is the so-called Rule of 20-developed by Jim Moltz at ISI- which states that an S&P 500 P/E plus the rate of inflation at 20 equals a fairly valued market. The 15 P/E plus the sub-2 percent inflation rate indicates this market has room to run before becoming fully valued.

    "By that metric, I would argue that it makes the S&P 500 attractively valued," said Art Hogan, managing director at Lazard Capital Markets. "The tricky part is when you go 177 days without a pullback, everybody scratches their heads and says this can't be."
  6. This rally is sick, and not sustainable in the long term. I expect a pull-back of at least 10% from today's levels before the end of the year!
  7. Visaria


    Well, I think it is cheap and undervalued. I think everyone should buy now before prices go even higher.
  8. Why do you need to know?
    Does it really matter anyways?
    As a trader you make money no matter what the market does. As long as the volatility is there, who cares?
  9. the1


    Volatility? What volatility?

  10. It is not that high, sure some indices have made all time highs, but if you do some inflation/usd adjustment then it's not as high as it seems.

    Either way, keep telling yourself too high or in the case of something downtrending hard, too low, and such bias could cloud your judgement to trade price.
    #10     May 14, 2013