Where is the Dow & others heading in 2005?

Thanks kriesau that is very worrying!!

Below is an interesting read as well for those who don't know about it.

The Midas Formula
BBC2 9:30pm Thursday 2nd December 1999
NARRATOR: In August 1998 something happened no-one had considered possible: the biggest country in the world suddenly and without explanation refused to pay all its international debts and now all the calculations in LTCM’s models were finally, hopelessly out of kilter.

MYRON SCHOLES: August 1998 after the Russian default, you know all the relations that tended to exist in a recent past seemed to disappear.

MERTON MILLER: Models that they were using not just Bachelier’s models but all kinds of models, were based on normal behaviour in the markets and when the behaviour got wild no models were able to put up with it.

ROGER LOWENSTEIN: Although their models told them that they shouldn’t expect to lose more than 50 million or so on any given day they began to lose 100 million and more day after day after day till finally there was one day 4 days after Russia defaulted when they dropped half a billion dollars, 500 million in a single day.

NARRATOR: In Greenwich LTCM faced bankruptcy, but if the company went down it would also take with it the total value of the positions it held across the globe. These were now staggering. For LTCM’s models had led them to bet a total of a trillion dollars. The equivalent of a year’s turnover of the American government was about to be wiped out. The world’s top financial regulators met in crisis.

ROGER LOWENSTEIN: Suddenly they seemed to be staring at this nightmare where one firm linked up to every major firm on Wall Street was going to be seized up and markets might just stop working. That was the great fear.

NARRATOR: In order to prevent a global, economic collapse the American Central Bank, the Federal Reserve, had no choice but to organise a bail-out of LTCM. The terms were humiliating. Merton and Scholes lost millions. So did their investors. Among them pension funds, the Central Bank of Italy and Britain’s Barclays Bank lost an average of $200 million each. Then the public recriminations began.

BERNIE SANDERS (Congress Committee Representative): We expect that they’re going to explain to the members of this Committee why the Federal Reserve has organised the $3½ billion bail-out for billionaires, why Americans should be worried about the gambling practices of the Wall Street elite.

ALAN GREENSPAN (Federal Reserve Chairman): How much dependence should be placed on financial modelling which for all its sophistication can get too far ahead of human judgement.

CAROLYN MALONEY (Congress Committee Representative): If the Nobel Prizewinners of Long Term Capital Management didn’t fully understand what they were doing or the risks involved who else could be expected to understand these activities?

ALAN GREENSPAN: Sometimes, and I suspect it was part of the LTCM case, human beings get bedazzled by the people with whom they are working.

PAUL KANJORSKI (Congress Committee Representative): Who’s going to pay these losses that this fund incurred and these investors incurred? Every senior citizen that’s relying on savings account. We just tapped into their funds because these high-flying dude billionaires went at risk.


Read the full article here
 
Below is an interesting read as well for those who don't know about it.

Thanks Racer, that's a very interesting article. Shame I never saw it on TV but I wasn't trading back in 1999.

Justyn.
 
elliot wave reports

This week www.elliottwave.com offers free access to their subscriber section.

I have downloaded the following reports which I attach for anyone that is interested.

The first one is their forecast for Monday 23rd May and the second is the May monthly report. Both for european markets.(PDF's)
 

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Let's hope the current problem doesn't cause such ructions as to make us all fall between two stools. If you see what I mean. This in my opinion is by far the most interesting thread on T2W.
Every thread needs a certain critical mass to survive i.e. contributors. Is it a good plan to split the topic ? Only if 1 or both can survive.
Surely it would have been better to privately warn over excited contributors first off privately. If they continue then publicly on the board ( yellow card ). If they still won't behave then stop them from posting for progressively longer periods ( red card ).
If all that fails-------pistols at dawn ( at least one would get the message )
All a bit of a storm in a teacup really
a relevent quote from Dr Elder "Arrogance is a deadly sin in trading"
Wot me guv ??
 
Thanks for the support from T2W members and participants. Thanks also to barjon for helping us clean a few of the 'problems' that we had.

TheBramble has opened up a new thread relating to the Dow Jones. Members can view and participate in either thread. I'm sure participants in both threads will be eager to answer any queries from 'newbies' related to the Dow or other indicies.

Hopefully we can all work together and make the threads informative and educational for the viewer.

We hit around 100,000 views over a week ago. Last week was a little poor by this threads standard. Hopefully we can forgive and forget and move on to the week ahead as I'm sure we as 'traders' we need to be on our toes to maximise our potential gains.

The advanced traders should try to find a 'little' bit of time from there hectic schedules and hopefully share their views and post charts so that beginners can benefit from a little technical analysis. We don't mind fundemental analysis either. I'm sure most traders will agree that it is always a little difficult when starting to trade as a beginner.

New members or members who are on the sidelines please don't be put of by the length of the thread. Please participate freely and lets get more members participating in information sharing and a little debating from time to time.

Good luck in the week ahead. Interesting to see if the Dow will travel UP :arrowu: DOWN :arrowd: or SIDEWAYS :arrowl: :arrowr: Lets try and make the direction a little clear on this thread. Thank You.
 
dbphoenix said:
I haven't participated in the thread because of its nature, but if as you say there are a lot of beginners reading it and posting to it, I suggest they scroll back to gmca's post which, to me, is central to the difference between predicting and planning and which also prompts so much of the flaming that goes on in threads of this type.

Predicting involves the ego. I think this or I think that. The X will go up to wherever then down to wherever else before bouncing and doing thus and so. Once one steps onto this particular path, he puts himself into the position of being right or wrong, and that's where an enormous number of beginners' problems begin.

gmca plans. He anticipates. He considers every contingency he can think of. In this way, when the trading day begins, he can -- with practice -- trade objectively and rationally, not by suppressing or repressing emotion but through nullifying the typical emotional triggers. By being available to whatever happens, he can act while others dither and deny and rationalize.

The desire to know what's going to happen next is for the vast majority of people a need, and not just in the trading arena. But in the markets, it's death, whether trading technically or fundamentally. One doesn't learn how to let all of that go in a weekend seminar or correspondence course, but it's essential to long-term success.

Well said - could you either post the link to gmca's post or provide the message number.
 
User,

In post 4337 you mention the fact that you do not mind contributions from fundamental traders. I take this to mean that we are more than welcome to make our contributions whenever we feel we have something to offer. You mentioned this at an opportune time when the objective is to take the thread back to where it was a few weeks ago - The most popular, most viewed and highest number of posts. Unfortunately, there seems to have been a misconception that fundamental traders need not post (certainly not espoused by the likes of you) and some of the newer members have suffered as a consequence.

Those that have read the posts from the outset and on a regular basis will realise how useful it is and why so many individuals log on in the course of a day, there tends to be a divergence of opinion, charts to back up analysis, news flow updates and even a breakdown of DOW internals and volume (I am sure the list is longer). That some feel that the thread has passed it's sell by date or is of no use to members means that they do not read the posts or observe how active it is.
 
Mixed opinions LION63 in regards to this thread. Obviously looking at the number of replies and views and looking at the number of members that log into the thread for long intervals during the trading week it is not surprising to see some sense of controversy.

Barjon has even started a new thread in debating the implications of this one. Good thinking Barjon, should be an interesting debate.

Personally when I sometimes make posts and say words like 'I think' or 'it should' or 'it could' in regards to the Dow, it is obviously a prediction in the sense that the outcome is not known. However these predictions are STRONGLY supported by technical analysis or seasonal trends etc. Reasons are given. For e.g. When I said the Dow should be topping out soon and 11,000 wouldn't occur. Yes its a prediction but it was supported by technical analysis as levels of resistance was seen and the VIX was at all time lows. Or when I said the Dow should hold at 10,000 as its a psychological round number and solid support. This was supported by the double bottom set-up etc. My main point is: reasoning is given in regards to my posts. I can't speak for others though but in most circumstances I have reason to believe that individuals provide mixed but educated opinions.

Fundamental and technical analysis along with opinion is welcome. Members can read and learn and at the same time the information provided can help them make a better trading choice. I can certainly say that I personally share and obtain some decent information from others on this thread, such as Rogue traders volume checks etc. Sometimes I even find this thread in providing a faster service then big charts for breaking market news. All in all I would say the thread does provide benefit.

Moving on, once again I request the advanced technical traders to please find time to post some charts from time to time as I'm sure it'll helps beginners. Traders that are trying to familiarise themselves with Technical analysis sometimes find it difficult to identify areas such as support and resistance lines etc. By posting up to date charts they can learn by looking at how others analyse.

New week and fresh start :!: :devilish:
 
user said:
Mixed opinions LION63 in regards to this thread. Obviously looking at the number of replies and views and looking at the number of members that log into the thread for long intervals during the trading week it is not surprising to see some sense of controversy.

Barjon has even started a new thread in debating the implications of this one. Good thinking Barjon, should be an interesting debate.

Personally when I sometimes make posts and say words like 'I think' or 'it should' or 'it could' in regards to the Dow, it is obviously a prediction in the sense that the outcome is not known. However these predictions are STRONGLY supported by technical analysis or seasonal trends etc. Reasons are given. For e.g. When I said the Dow should be topping out soon and 11,000 wouldn't occur. Yes its a prediction but it was supported by technical analysis as levels of resistance was seen and the VIX was at all time lows. Or when I said the Dow should hold at 10,000 as its a psychological round number and solid support. This was supported by the double bottom set-up etc. My main point is: reasoning is given in regards to my posts. I can't speak for others though but in most circumstances I have reason to believe that individuals provide mixed but educated opinions.

Fundamental and technical analysis along with opinion is welcome. Members can read and learn and at the same time the information provided can help them make a better trading choice. I can certainly say that I personally share and obtain some decent information from others on this thread, such as Rogue traders volume checks etc. Sometimes I even find this thread in providing a faster service then big charts for breaking market news. All in all I would say the thread does provide benefit.

Moving on, once again I request the advanced technical traders to please find time to post some charts from time to time as I'm sure it'll helps beginners. Traders that are trying to familiarise themselves with Technical analysis sometimes find it difficult to identify areas such as support and resistance lines etc. By posting up to date charts they can learn by looking at how others analyse.

New week and fresh start :!: :devilish:

Hmmm....I think that there is a slight danger in getting twisted up with semantics here.

Gmac makes a very good point when he says that if the market does X then I'm going to do Y insofar as that it indicates that he has already analyised the trend or price action and has made a predetermined decision on what he will do if a given set of circumstances occur. The key here is that he is making a rational, analyitical deduction as distinct from an emotionally based, and egoistic reaction, to unfolding events.

This really is no different from User saying I think that the next move will be Z since its also based upon his analysis of the market trend or price action and he is just providing his reasoned deduction of the potential consequence of this.

Both are being predictive based upon their analysis of the market - they are just expressing themselves in a different way. The real issue concerns the utilization of the analysis of whatever technical or fundamental signals that either one of them are using in order to try and determine the next market move. There is no fool proof technical system for achieving this, since there are a variety of technical signals available that often do not provide a coherent or conclusive indication. Everyone provides their own weighting to the the potential strength that they give to a number of different signals. That's why different people come up with different conclusions about where the market is now and what it is likely to do next and that makes threads like this both interesting and productive.

The irrationality of the market will always be the achillies heel of any technical and/or fundamental analysis. The true role of all forms of analysis in this context is to filter the quantifiable information available, in order to optimize the chances of the consequent predictive conclusion being able to pre-empt the markets next move. Often this boils down to what appears to be "fence sitting" by saying if A then B but if C then D.

I guess that this might even be considered to be the dividing line between the informed trader and the opportunistic gambler, hence the nomenclature 'Spread Betting' ! However lets not get bogged down in semantics when essentially both are approaching the issue from the same direction.
 
dbphoenix said:
Actually, the two approaches couldn't be more different, but I responded to user's post in the other thread in order to avoid deflecting this one.

Edit: Incidentally, I suppose I should point out, in case it isn't obvious, that the "wise words" aren't mine . . .

Well, I see it very differently so I have responded to you on that other thread.
 
DOW weekly and daily charts, along with total market volume for NYSE and Nasdaq
 

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Great stuff RT.

Thanks for sparing your time and sharing your charts....
 
Stocks take a breather after big week
Nasdaq logs biggest weekly rise in nine months

By Susan Lerner, MarketWatch
Last Update: 5:02 PM ET May 20, 2005

NEW YORK (MarketWatch) -- U.S. stocks finished mixed Friday capping off a week that saw the major indexes post their strongest gains in months.

The Dow Jones Industrial Average ($INDU: news, chart, profile) closed down 21.28 points, or 0.2% at 10,471.91, snapping a four day win streak. But the blue chip index remained up about 332 points, or 3.3% on the week -- its biggest weekly point gain since early November.

The Nasdaq Composite Index ($COMPQ: news, chart, profile) made it six winning sessions in a row as it rose 3.84 points, or 0.2%, to 2,046.42. With gains of about 70 points, or 3.5%, for the week, the Nasdaq was looking at its biggest weekly point gain since mid-August.

The S&P 500 ($SPX: news, chart, profile) fell 1.80 points, or 0.2%, to 1,189.28. For the week, the S&P was up about 35 points, or 3.1%.

Decliners led advancers by an 18-to-15 margin on the New York Stock Exchange and by 15 to 14 on the Nasdaq. Big Board volume was about 1.28 billion shares, while just over 1.52 billion shares moved on the Nasdaq.

The Dow's losses were paced by declines in E.I. du Pont de Nemours & Co. (DD: news, chart, profile) , Home Depot Inc. (HD: news, chart, profile) , Exxon Mobil Corp. (XOM: news, chart, profile) and 3M Co. (MMM: news, chart, profile) .

Smith Barney recommended investors swap out of 3M and into General Electric Co. (GE: news, chart, profile) due to GE's relatively more attractive growth and higher incremental return on invested capital. 3M shares fell 1% while GE shares, also a Dow component, lifted 0.2%.

American International Group Inc. (AIG: news, chart, profile) , Boeing Co. (BA: news, chart, profile) , Intel Corp. (INTC: news, chart, profile) and General Motors (GM: news, chart, profile) were among the other Dow stocks gaining ground.

"You don't have a ton to work with on a Friday session like today," said Bryan Piskorowski, market analyst at Wachovia Securities.

"We've had a decent amount of data and we have more on the way next week so I think by and large we're kind of stuck in a holding pattern." Listen to an interview with Piskorowski.

John Caldwell, investment strategist at McDonald Financial Group, said investors should be encouraged by the fact that the market traded up this week without a whole lot of news.

"Everybody sort of came to the realization that earnings were good; growth is going to be revised higher next week from a GDP standpoint; the inflation picture is still mixed and if it moves a little bit higher it's not as bad as they anticipated; and maybe the Fed keeps raising rates but now there's more talk that maybe they'll take a pause and that does seem to have put people in a buying mood," Caldwell said.

Others, however, were concerned about the lack of volume that accompanied the week's rally.

"We've had a tremendous week but volume levels really haven't picked up as much as you would expect," said Paul Nolte, director of investments at Hinsdale Associates.

"I'm a little suspect, too, for the reasons [for the gains] -- the Fed not having to raise rates and oil prices coming down -- both of which point to a slowing economy."
 
My 'prediction' for the week ahead is supported by my 'analysis'. I call this attachment a prediction as the result is simply unknown. A weekly chart is attached, hope it helps the newbies as it shows some simple technical analysis. Good luck for the week ahead.....
 

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Very good stuff User. As I have stated, I do not use technical analysis but posts such as these are very enlightening. Keep up the good work and have a great week.
 
user said:
My 'prediction' for the week ahead is supported by my 'analysis'. I call this attachment a prediction as the result is simply unknown. A weekly chart is attached, hope it helps the newbies as it shows some simple technical analysis. Good luck for the week ahead.....

Great Chart and commentary User.

It's clear that 10500 is a major point of resistance. The Dow reached it on Wednesday and has hovered just below it since then. The question is whether it can breach it and go through to try and test 10700 or whether this is the ceiling and it turns south again. We appear to be in a short term trading range of 10400 - 10500 and these would appear to be the thresholds for a potential200 pt move on either side.

Nothing much scheduled in the way of news this week except for a consumer confidence survey and April jobless claims until the QI GDP figures on Thursday. Bit of sabre rattling by North Korea might have some impact but it's a little early to discern this.

As you point out the direction could go either way. Since volumes were relatively low (apart from Wednesday) last week and 10500 was not breached then we may see some further consolidation or a move down to retest 10400. Could go either way but the indications seem to point more towards a dip than a successful push through 10500.

Good luck.
 
LION63 said:
Very good stuff User. As I have stated, I do not use technical analysis but posts such as these are very enlightening. Keep up the good work and have a great week.

Hi Lion - what are the main indicators that you use for the Dow ?
 
If you have to use something like this,it might be better to ask bonsai on the spx thread.
 
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