Joined: Oct 23, 2004 Posts: 5897 Location: New Jersey
Posted: Sun Mar 30, 2008 10:38 pm Post subject: Re: Stock Market crash?
Kaj wrote:
I've been lurking at this site for a few years now. I notice that the level of alarmism about a stock market crash has gone down, even as the economy stumbles. A couple of years ago, it seemed that the majority here were clamouring about the impending crash. It had me convinced (I don't know the nuances of the market myself). Now I'm unsure. Has anyone changed their mind?
I can say for certain that I like pie.
Well, I was never clamoring for a market crash, and frequently stated that you would do well by investing in energy stocks or oil. Because natural resources are a signficant and growing part of the market as a whole, it would be difficult to have a market crash without a commodities crash too.
Many have predicted that, and a week ago, it seemed like almost everyone thought it would happen. So far the FED/FHLBB have lent $450 billion in three months, or a $1.4 trillion annual rate. A trillion $ here and there, and soon we will have real inflation - which will drive the market up. Maybe not up as much as the true rate of inflation, but possibly up anyway.
Inflation occurs with a lag, so I expect at least six more months of downhill in the stock market - mostly due to bankruptcies of many companies.
Posted: Sun Mar 30, 2008 10:42 pm Post subject: Re: Stock Market crash?
Kaj wrote:
I've been lurking at this site for a few years now. I notice that the level of alarmism about a stock market crash has gone down, even as the economy stumbles. A couple of years ago, it seemed that the majority here were clamouring about the impending crash. It had me convinced (I don't know the nuances of the market myself). Now I'm unsure. Has anyone changed their mind?
I can say for certain that I like pie.
Read other threads... I think this community went to 2 phases recently:
first, the 99% of posters became doomers. then, to mantain the mental sanity and not become depressed the conclusion of some of this doomers is: laugh your way out of frustration and anger...
proof: the pie option is the most voted... lol _________________ anagami.net
Joined: Mar 12, 2007 Posts: 1004 Location: As close as I can get to the beginning of the pipe.
Posted: Sun Mar 30, 2008 10:48 pm Post subject: Re: Stock Market crash?
Gandalf_the_White wrote:
Enough I say. Lord how much longer must we wait?
By my widget calculation, we must wait 295 days for the reckoning. Maybe then we'll call a halt to the craziness. Then again, maybe not. History suggests that once we head down this path, it's hard to claw your way back up it.
I see I'm not the only one thinking this way, Tex. Glad to get some reinforcement for my thinking, since a budding Weimaresque stock market is counter-intuitive and way outside normalcy. The only way to understand it, I think, is to look at history. _________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Posted: Mon Mar 31, 2008 2:41 am Post subject: Re: Stock Market crash?
3aidlillahi wrote:
...
A nice decrease, but it's hardly a crash. It even appears that we're leveling out right now for the past couple of months due to the involvement of the Fed. A pretty big sell-off in past 6 months but no crash.
This "leveling out" that you mentioned is what day traders call "consolidation". Personally I prefer the term "moving sideways" b/c the term is pretty self explanatory. This is a VERY important concept to day traders even though mainstream media hardly ever mentions it, because "break outs" quite often happen after a sideways trend. A break out is a violent and fast movement.
If it's a bull market the trend will be up.
If it's a bear market the trend will be down.
Notice the "break out" to the downside on your chart which began at the end of December and carried through to mid January. A good way to start off the new year huh? If you're retirement nest egg was tied to the stock market you got to see 15% of everything you've been saving up go downhill in 1 month. It's a pretty exciting time to be a baby boomer don't you agree?
The next question is where do we go from here now that the market has been moving sideways fore over 2 months?
Posted: Mon Mar 31, 2008 6:03 am Post subject: Re: Stock Market crash?
I swear I saw the Head Lemming on TV a couple of days ago telling everyone that the war was good, and the economy was steady. Ha ha ha ha ha. Where were Moe and Curly? I think he forgot to tell everyone that the paper notes called Dollars are going the way of the Zimbabwe currency.
Joined: Mar 12, 2007 Posts: 1004 Location: As close as I can get to the beginning of the pipe.
Posted: Mon Mar 31, 2008 12:33 pm Post subject: Re: Stock Market crash?
cube wrote:
This "leveling out" that you mentioned is what day traders call "consolidation". Personally I prefer the term "moving sideways" b/c the term is pretty self explanatory. This is a VERY important concept to day traders even though mainstream media hardly ever mentions it, because "break outs" quite often happen after a sideways trend. A break out is a violent and fast movement.
If it's a bull market the trend will be up.
Cube, are you trying to explain peak oil in day trading terms? Don't you think that your level of scale is a bit backwards?
Zensui, black humor is one of my favorite coping mechanisms. I am a critical care nurse from way back. In that business, when the going gets tough, the tough make really bad jokes.
Mommy22, I have a girlfriend who makes the best chicken pot pie with roasted chicken, a can of chicken soup, and some mixed vegies in a pastry crust. I don't think she has to off anybody to do it, though. _________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Posted: Thu Jun 26, 2008 4:07 pm Post subject: Re: Stock Market crash?
This is the dow jones back in 1929 and leading into the 1930's depression:
Notice it took 3 years 1929 - 1932 for the dust to finally settle.
Much like n the past I expect the media to be in total denial.
"Stock prices have reached what looks like a permanently high plateau." - Irving Fisher, Ph.D. in economics, Oct. 17, 1929 http://www.sharelynx.com/chartsfixed/USDJIND1930.gif
Last edited by cube on Fri Jun 27, 2008 2:14 am; edited 1 time in total
Posted: Fri Jun 27, 2008 1:57 am Post subject: Re: Stock Market crash?
Quote:
wonder what the stock market index is in Zimbabwe ? (i also wonder if there is a hint of racism in using Zimbabwe as an example of hyper-inflation.)
No, it would not be politically incorrect to call a spade a spade. Oops! ; - ))
Kaj, if the US dollar is falling it means some other currency is rising. If energy prices are high then that is a wealth transfer from consuming nations to producing nations. No money is being lost. Merely transfered from one account to another. Some 45% of the S&P500's income/profits comes from overseas sales.
Oversea buyers are still buying because high commodity and energy prices have put money in their pockets. They may however not necessarily be buying from US firms even though US exports are at historical highs in absolute terms. It is just that due to the price of oil imports are also historically high.
Cube, we appear to be in a blow-out phase of the current broad market correction. My next target is 1172 for the S&P500. But to be honest I look at the S&P500 (and gold as well as crude) in euros to adjust for US dollar weakness. However, each time the market approached my next technical level the Fed intervened. They must be looking at the same charts. If this rout gets bad enough I expect them to somehow intervene once again. The latest $4 trillion rabbit they (Congress) borrowed to pull out of their hat may not be the last.
UPDATE:
Quote:
The most-watched gauge of price swings in U.S. equities indicates stocks have further to fall after the Dow Jones Industrial Average declined to the lowest level since September 2006.
The Chicago Board Options Exchange Volatility Index, or VIX, rose 13 percent to 23.93 yesterday, leaving it 26 percent below the 2008 high. The Dow is poised for the worst June since the Great Depression after record oil prices and credit-market writedowns sent the average to its biggest drop in three weeks.
(continued)
The volatility index, which traders sometimes use to forecast price changes in the Standard & Poor's 500 Index, closed above 30 for the first time this year on Jan. 22 after stocks retreated to a 16-month low. The VIX reached a five-year high of 32.24 on March 17 when the S&P 500 traded at its lowest level of 2008, the day after the Federal Reserve led a bailout of Bear Stearns Cos.
`Pure Measure'
The VIX is derived from the cost of options used to protect against declines in the S&P 500 and usually increases when stocks slip. Its climb above 30 in January and March marked bottoms for the benchmark index for American equities and preceded rallies of 3.3 percent and 7 percent in the following months.
``The VIX is a pure measure of risk aversion in the market which has in the past almost always shown a good negative correlation with equities,'' said Cyril Castelli, head of global macro research at Louis Capital Markets LP in London.
Joined: Aug 03, 2006 Posts: 4292 Location: Graceland
Posted: Fri Jun 27, 2008 9:08 am Post subject: Re: Stock Market crash?
I would like to see a chart from 1925 to the present tracking world oil production and the S&P 500.
The thesis would be that more oil meant more growth in the share price of these companies, and that flat or declining oil will mean flat or declining values of the share prices of these companies.
The wild card, of course, is the unstable value of the U.S. dollar. Or maybe that's not a wild card at all. Maybe that's just another moving part in this Rube Goldberg device we have created for ourselves.
It seems obvious, though, that the stock market crash has already occurred, it's just that the Fed used inflation to conceal it. Over the past ten years, the dollar has lost how much of its value? Maybe 50%? And over the past ten years, the U.S. stock market is basically flat or maybe down a little. Isn't that the same thing as a 50% market crash in a stable dollar environment?
I think that we are in about 1930 or 1931 to use the 1929 stock market crash as a guide.
1979 is probably a better guide, though.
There is simply nothing to drive the markets higher. There is no propellant.
No more cheap oil
No more rate cuts
No more big domestic government spending
No more wars to start
No more increases in government deficit spending
No generation following the Baby Boomers to keep the pyramid scheme going.
No propellant = No upward movement.
No upward movement for long enough and fear sets in and money goes elsewhere. _________________
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