here you go: So where do 3%+ declines usually occur during bull and bear markets? We looked at all bull and bear markets going back to 1962 to find out. If a bear market has indeed started, the 3%+ decline just 5 days in, will be the earliest yet. As shown in the first table below, most come well into bear markets. If the bull market continues, past data shows that there are plenty more days to come before the end of the cycle. In all instances of 3%+ declines, the averages show that the S&P 500 rises in the month and three months following. When the 3%+ declines come during bear markets, the average gain over the next month is 3.40% and 4.35% over the next three months. When the 3%+ declines come during bull markets, the average gain over the next month is 2.95% and 9.32% over the next three months.
It looks like a vicious bounce started in the US after hours market right around 6 PM EDT. Currency turmoil, especially in yen, abated. Conditions are oversold and we are on a trendline http://stockcharts.com/charts/indices/McSumNYSE.html It seems like the real story this last week was currency related just as it was last May.
I READ YOUR POST BACK THEN AND I WAS SHOCKED AT THAT AMOUNT OF MONEY ON MARGIN. I WISH I HAD ACTED ON IT BUT GOT STOPPED OUT ON SOME PUTS A FEW DAYS EARLIER. WHAT FRIGHTENS ME MORE THAN EVER AS I KEEP ON MENTIONING IN OTHER POSTS IS THAT I THINK WITH THE YEN CARRY TRADE AND THE SPILLOVER INTO STOCKS I THINK THIS IS ' TOO BIG TOO FAIL'. THERES TOO MUCH AT STAKE AND THE CONSEQUENCES ARE HUGE FOR EVERYBODY. NO WAY THEY LET THE MARKET FALL. AS MUCH AS IT GRATES ME IM GONNA PLAY FROM THE LONG SIDE.
<i>"I THINK THIS IS ' TOO BIG TOO FAIL'. THERES TOO MUCH AT STAKE AND THE CONSEQUENCES ARE HUGE FOR EVERYBODY"</i> There is no <i> "they" </i>who can hold up an entire market determined to trend lower. Outside forces can influence markets on a short-term basis only. Unannounced interest rate cuts and PPT antics are designed as a spark to cause bonfires. When those attempts get sold into, the result is even greater volatility and selling. Go back and review the Nasdaq from 2000 ~ present and see how that "too big to fail" scenario held up. I doubt we'll see any repeat of the 2000 - 2002 bear market, but be prepared for more selling ahead in 2007. The next leg down to follow any potential double-top or lower-high failure will fall faster, harder and further than the initial selloff has.
Dow futures up today and we might get a bounce (I doubt it, but we might) Now the bulls will be back saying Goldilocks Economy all over again Kudlow this.... Rogers that .... Gold at $1000...Oil at $100 blah blah *yawn* They can't (won't) see the danger signals Be very careful playing this market fellas...best just leave it for a month or two Remember the old adage:- "Fools rush in where angels fear to tread"
The "too big to fail" idea that people like to throw around.... Don't count on it. Anyone on this board who is a student of financial market history can point to several occurrences where whole segments crashed and burned, and all was lost. And that includes institutions. The current market global and sector action was a long time in coming. It will be interesting to see which global macro players had their bets right going into 2007. Somebody took the other side of the popular trades, or at the very least, exited early - and is up huge.
NasdaQQQ was mostly down like others; premarket ; its now about even ,near open. R.Prechter [Mr. elliot wave]sent me a post card , kept it because it was several year early, lots earlier than mark Cook's November 06-March-2007 bear call. 2004 post card i think , i need to find it again. It said''Question, what the purpose of a bear market rally???; Answer -to sucker in investors for the kill'' Good warning; even if all details arent 100% accurate
What if those who were sitting on fat profits since July 2006 suddenly wanted out when the trend was broken Feb 26th, but unfortunately they all wanted out at the same time? They may have wanted to book some profits but unfortunately it got hyped as usual by the media and got out of hand? Just the old fear? not saying this is the case, just wondering. Unfortunately, now everyone is on edge and some people suffered huge losses in carry trades (as noted on my blog on the Goldman Sachs warning about "dead bodies"). these traders will want to sell whatever they can to balance books and reduce the "open losses", and this is what will cause some pain for next few months. if it trickles into housing then things could get very interesting. My blog address is part of my signature, so do not click unless you are interested in the GS warning! http://lauristonletter.blogspot.com/