DOW: Set up for a big sell-off (massive profit taking)?

[grubs50]

DOW: Set up 4 a big sell-off (massive profit taking)?

As a Novice in this business, i just want to know the opinion of other ppl with regards to the current trend of the DOW. It seems to be way 2 high and seems that the big boys(institutions) r taking advantage of d low volumes and setting it up 4 a big sell-off to make massive profits. Am i being naive? Is the US economy recovering so fast to justify the high price of the DOW?

 

[lockstock]

Inclined to agree,


posted a while ago top for INDU would be circa 9,450.

Just a waiting game now



Ls

 

[grubs50]

what do u base that figure of 9450 on?, if u don't mind me asking

 

[2468steve]

Could even reach 9600,previous range 9000-9300=300pts
New range 9300 + 300

 

[grubs50]

I'll be absolutely shocked if it goes that high in d short-term i.e within the next 2 weeks

 

[genti]

grubs50+10.

you shouldn't really be surprise, if you short might be worth it looking to hedge your positions.

 

[2468steve]

grubs,
To be honest i'm totally shocked we're even this high today.Can't see the justification for it myself.
Cheers

 

[oatman]

I was convinced we were in for a sell off thru 9400. Sat looking at sideways all bloody evening. What a bore

 

[JE2000]

If we get a 500 (or greater) point movement in one week i.e. back in march when the dax, cac and ftse100 make new lows before starting the new uptrend. Will this be a signal of a top. Something similar happen during late may and early June and the markets have traded sideways ever since.

 

[fudgestain]

I can never quite understand why a market level should shock or alarm anyone at anytime. The market is at that price because thats the market price, period. Is the Dow high? Not if the alternative is keeping cash when the USA base rate or key Fed rate is 1%. But take your choice from other rationales, if that one doesn't suit you.

Its rather like those 'bears' that lurk about on financial BB's .. its like (or is) a permanent personality disorder: they are bears when its a bear market, bears predicting a bear market when we've only just got over the last one, bears when its a new bull market, bears when they are being bulldozed over by a growing bull market, bears during a long lasting bull market and bears (if they are still alive) when eventually another bear stock market arrives after years (or even a decade or 2) of waiting! Life on the planet Earth .. what can I say!

 

[2468steve]

fudgestain,
I'm surprised we're at this level because i really can't see what's changed in the US to be greeted with such euphoria.We're not too far away from the level where the bear market started.
You answered it yourself by saying what else is there to invest in to get a return.
I'll trade the market whichever way it goes,but if i was investing instead i wouldn't want my pension fund buying US stocks

cheers

 

[grubs50]

Thx steve, that was exactly my point, what is d justification 4 it being at dat obviously (IMO) unrealistic price. Nobody is saying the Price can't be at any level!!

 

[lockstock]

Morning Grubbs,

Primarily extrapolating the bear resistance line from the 11th May
2001, catching the high & reversal, 13th march 2002 & then on to today c. 9450.


On the bigger picture looks like a right shoulder forming at present of a H&S pattern- possible long term target of c.6800 imho




Cheers Ls

 

[lockstock]

Do have an open mind on this, if you look at the chart below- action just coming upto the indexia 1000 ma, also illustrates the RH shoulder etc, if it does bust thru' this area next major resistance looks to be c.9900

 

[BramleyMan]

Bull or bear..we haven't taken highs out of June 17th yet...so technically can call it whatever fits you and your style, all I know from my experience is if you allow yourself to THINK into a state of over or under value....the market will get you.....and as we all know it takes no prisoners....my style and indicators etc prefere to short, but getting used to going long sometimes.....

 

[Dr Mike]

Have to agree with Bramleyman on this - as an accountant I consider the US market to be ridiculously overvalued - Bloomberg, CNBC, Fisher and Cramer all think stocks are going higher. You can guess who US investors listen to.

What's important is the overall market mood and at the moment that seems "slightly" with the Bulls.

 

[rglenn]

I agree with what fudgestain has said.

It amazes me how people tend to forget what happens in the markets on a regular basis. The markets will go up and down regardless off where people think it should be.

A few years ago before the markets went down for 3 years on the trot a commentator said that no one needed to worry about their money in the stock market as if the stock market went down it will eventually go back up again.

This was in fact a true statement - however due to the 3 years of downward movements - a change of heart ensued.

It was no longer a sensible thing to keep your money in stocks after all as you will loose all your money.

The only weakness in investing in stocks long term is that you have to wait an awful long time to recover as many people already know - if things go against you.

Trading the indices and short term movements in stock does not require any fantastic brain power as if you are wrong you can cut your losses fairly quickly and reverse your trade if necessary.

 

[oatman]

It's easy to be bullish of stock markets, ignore the drops and say you're in for the long term. How many commentators had seen a bear market before this one? Not many. Bear markets do not turn when "you think they've done enough".
I don't care about price (apart from my pension funds, and it's too late for them) because I can trade any market. It's only a number.
What I see, though, is not good news, but news that is better than it was, which was terrible. When companies start hiring and investing and showing steady profits, you will know the bear market is over. Not many will pick the bottom.
Long term I remain bearish.

Good luck

 

[grubs50]

So d majority of u guys still believe it is over-valued at this present moment when one considers the fundamentals then?.....like i stated earlier i'm a newbie who is just guaging other ppl's opinions against mine to get a better perspective.

 

[rglenn]

grubs50

A market is only overvalued when those that are buying stocks think the price they are paying is too high.

The market could easily go up another 500pts or down by 500pts.

This does not mean the companies have suddenly increased profits by a huge amount or if it fell vice versa.

It is just how people have been reacting to the markets.

Just go with the flow and you won't get hurt!