Where is the Dow & others heading in 2005?

Racer said:
Have been reading the news comments on the rise today and I don't think they have thought of a proper reason for it yet

hmmm, think computers and a bit of 'we don't want to let the US go down cos of the tourrrrourrrists'
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Temporary Open Market Operations

Is there a correlation between these liquidity injections and the rise in the indices ? Is it any more unreasonable than a correlation between the price of oil and the direction of the Dow. Except the media like a nice simple explanation. Oil up, Dow down and vice versa.

This article from 2003 gives a good explanation. More here.

I am not saying how it is, rather looking for opinions on this.
 
From briefing.com weekly wrap:
'there is no specific fundamental data to account for the rally' (last week)

So even they couldn't find a proper explanation for it!
 
Nice early push to start the week, tagets remain the same SPX tagged 1220 intraday, INDU will likely continue to struggle a bit with the consolidation range discussed above, needs to clear 10,656. The early push this week gives some clearance above support for a pullback without inflicting too much damage, would look for INDU to hold above 10,450 on any pullback, COMPQ 2100 and SPX to hold above 1205.
 
I'd be interested to know how an out and out fundamental trader views the current situatlon with the indices. Clearly technical traders find technical justification to trade the markets in this envoironment, but what is the fundamental trader doing? Perhaps you would be willing to comment Lion?
 
roguetrader said:
I'd be interested to know how an out and out fundamental trader views the current situatlon with the indices. Clearly technical traders find technical justification to trade the markets in this envoironment, but what is the fundamental trader doing? Perhaps you would be willing to comment Lion?
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I am twiddling my thumbs and counting the cars go by.

It is a bit difficult to judge which direction the markets may head in the short term. On the one hand we have high oil prices which have been discounted in the short term (it seems). On the other, we have the London terror attacks which have perversely acted as a catalyst for rising markets. Every day seems to herald bad economic numbers but the markets (at least in Europe) continue to hit new 3 year highs.

I am bearish but will not put my money on the line until things get worse or there is another catalyst to send them south. Those who trade to the upside would be well advised to keep stops in place at all times as a correction might well be violent.

For what it is worth, the markets are fully or even over valued on a fundamental basis and earnings are unlikely to act as a tailwind for further price spurts.

RogueTrader, you have the best of both worlds as a day trader, where the markets may or may not go next week is of little or no significance to you whatsoever.
 
Good post Lion. I too am a little confused by things and don't know which way to put my money. Seeing as I can't work out whats going on I have started looking at Coffee, thats how bad its got!!
 
Verno,

I wonder if you will still have the same opinion about it being bad if you make a few Pounds or so trading coffee, as for me, I will stick to watching the cars as it does not cost anything.
 
True, I should probably stick to simply drinking it. Today there is cricket and then the British Open from thursday so maybe some sports betting........
 
Racer,

That is a great chart. Unfortunately from a fundamental view it shows that the indices are unlikely to go much higher in the short term unless there is a surge in earnings. Furthermore, it shows why the markets have moved sideways for the last few months and why they are likely to remain so for a while.

The lower Dollar that had helped spur earnings has now reversed the trend and for most of the big US exporters it will translate into lower earnings which means higher PE ratios/valuations and that in turn means shares remain expensive. Fund managers will find it hard to justify buying at such levels and we will continue to rely on corporate activity.
 
Lion63 yes I agree with you!

Also if oil and other inputs such as copper etc are at/near all time highs and they can't pass on the costs that is not going to help. Interest rates are still going up.
Consumer in UK is already cutting back on spending, how long before the US do the same?
 
Hi all, I have the Dow & the S&P 500 in an uptrend that may last for 8 trading days more ( 22nd July ) but only if the Dow can close EOD above 10,540 .
The Dow may stay in a repeating range of 10,430 to 10540 (110 points ) again, if it cannot break above 10,540 EOD
If it breaks up I see 10,633 as the next resting point (small consolidation )before it moves higher until 22nd July then retracement down.
this is just my view from my indicators and not trading advice for anybody.
Best Regards to all
 
NEW YORK (AFX) -- General Motors was falling 1.3% to $35.32, and was the biggest percentage decline among Dow industrials components, after Deutsche Bank raised concerns about the stock as the automaker prepares for a confrontation with the United Auto Workers union on healthcare cost issues. 'GM could capitulate, reach a compromise of modest cost savings, or stick to its guns and likely endure a strike,' said Analyst Rod Lache. 'All three scenarios could put pressure on GM's shares.' Lache added, however, that GM must address the healthcare issue soon, as costs are expected to rise by $450 million to $550 million a year, especially given recent market share deterioration and credit downgrades.
 
Trade and budget figures tomorrow - any thoughts as to effect ?

Also options expiry on Friday.
 
Minder said:
Trade and budget figures tomorrow - any thoughts as to effect ?

Also options expiry on Friday.
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Figures? They will give figures? Are you sure it will not be a number that will at a later date (yet to be determined) be revised in some such way as to confuse the confused? :confused:
 
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My activity;

I was short the last time the Dow was at these levels and I accumulated a massive stake by the time the DOW had reached 10600+ area. (Live trade that was posted on here with a 200 point stop loss).

I then cashed out near the lows and then later I decided to go long at the start of this month. I did however get cashed out as the futures spiked down due to the horrific events in London. I then turned long the same day and made back most of the loss. However my original stance on the market was to stay long for the first two weeks of July but I was put off by the attacks in London and decided to stay neutral. These are the original levels that were anticipated when I decided to go long. (But I stayed neutral for most of the rise).

I am now extremely sceptical once again as I normally am near market tops and do have a tendency to get the tops pretty spot on in relation to my trading timeframe.

Current scenario.....

I cannot see a 'significant' rise from here. Selling into strength should be theme to adapt to at this moment in time as these rises are not being supported by institutional activity. The 'big boys' are selling.

I cannot not see the Dow hitting new highs for the year.

Will we take out 10623? Not likely, however not impossible. 11,000. NO CHANCE.

Will we take out 1225 on the S&P. You would think so as we are only 3 points away. However we could see tremendous resistance short term.

Will the NASDAQ 100 hit new highs for the year. I don't think so.

One things for certain, I will be accumulating some HEAVY shorts with the S&P500 target of 1140 seeming HIGHLY likely before the end of this year. Will I panic if we head higher? No. I'll simply add more like mad. All the bulls are probably thinking I've lost the plot....

Let me put it into another BLUNT perspective: This is not the last chance to BUY! This is the LAST chance to SELL......We're not hitting all time highs we will definitely be hitting new lows for the year........The media will try to get the smallest of suckers into the market by making out the last chance to buy........This is not going to be pretty.

However we do have the chance of seeing sideways to higher action for the next month or so. Which would mean we could see current to higher levels until the middle of August. The markets are trying to suck dumb money in.....Wow we didn’t collapse at the attacks, wow we got strong bottoms at 10250, wow we've got an even better bottom at 10,000, wow we're definitely hitting 11,000 this time......Most are probably thinking this way now........a few more weeks of sucking in and then everything starts to tumble and oh my god we can't snap 10,000 can we?

I haven't been updating much as I simply do not get the time.
Obviously we'll see what happens. I don't want to say 'I told you so', but this is just an update on my stance.....

Oh and has anyway noted the 'little' problems like oil lately? Yes $60 and higher prices to come......Why is the market ignoring bad news.....?

Well this is the perfect attitude of market tops.....

What will happen when the market falls? Oil will probably fall as well.....What will most say? Why is oil down today and why is the market down today?

Well what I say is: Why is the market up today and Oil is also up today? Danger? Yes! We can't see it yet but major danger ahead! As I'm sure we'll all find out.........

Kind Regards
Thank you and Good Luck
User
 
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