Salty Gibbon
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If that's what DirtyB says then that's good enough for me my friend.
See what exactly RudeBoy ?
Salty Gibbon
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Was that in WW2 Dirt ?
Salty Gibbon
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Ouch ?
Salty Gibbon
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Actually DirtyB, I have to admit that I do still suffer a lot from trenchfoot from the 1916 campaign.
Racer
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A problem I have about market going higher.
The S&P P/E after the 2000 bubble never became cheap at all it has only dropped to the high limit of average where it is now.
Lots of rate cuts, money being printed, asset withdrawal from housing kept the consumer spending more than they have when they should have been tightening their belts.
So are we entering a new bubble? How high will it go? There are virtually no bears left.. apart from on this thread perhaps 😉 The market is in euphoric state and sees no concerns, see all news with rose tinted glasses and if they can't find a snippet that is good to overshadow the bad they totally ignore it saying it was a error or a one off, or that statistic can't be relied on very well!
The housing market will be important to watch because when the US consumer sees his net worth falling and realises what he has not saved and how much debt he has built up, then they will have to tighten their spending very quickly.
Jobs are not being created as they should in a properly growing economy, you just have to look into the figures to see they aren't at all.
Why aren't wages going up? People can't get jobs so the ones that have got one can't push for higher or they will not have a job. They take money out of their houses, so what happens when they can't afford the payments because interest rates start to bite?
A lot of mortgages are now deferred interest, they expect the value of the house to go up to cover the cost. They will be in very serious trouble if the market even stays flat!
Markets can be insane and irrational longer than you think so despite the fact that it is overvalued it could go higher before eventually falling
An argument against it going lower
It is in the interest of the US to keep the market going, to feed the enthusiam in the economy, to say all is well and it is different this time.
Because the reality of the situation is such a crisis they cannot afford not to let the plates stop spinning and they are doing whatever they can to keep them spinning!
An LTCM situation is probably no where near what could be on the cards!
The S&P P/E after the 2000 bubble never became cheap at all it has only dropped to the high limit of average where it is now.
Lots of rate cuts, money being printed, asset withdrawal from housing kept the consumer spending more than they have when they should have been tightening their belts.
So are we entering a new bubble? How high will it go? There are virtually no bears left.. apart from on this thread perhaps 😉 The market is in euphoric state and sees no concerns, see all news with rose tinted glasses and if they can't find a snippet that is good to overshadow the bad they totally ignore it saying it was a error or a one off, or that statistic can't be relied on very well!
The housing market will be important to watch because when the US consumer sees his net worth falling and realises what he has not saved and how much debt he has built up, then they will have to tighten their spending very quickly.
Jobs are not being created as they should in a properly growing economy, you just have to look into the figures to see they aren't at all.
Why aren't wages going up? People can't get jobs so the ones that have got one can't push for higher or they will not have a job. They take money out of their houses, so what happens when they can't afford the payments because interest rates start to bite?
A lot of mortgages are now deferred interest, they expect the value of the house to go up to cover the cost. They will be in very serious trouble if the market even stays flat!
Markets can be insane and irrational longer than you think so despite the fact that it is overvalued it could go higher before eventually falling
An argument against it going lower
It is in the interest of the US to keep the market going, to feed the enthusiam in the economy, to say all is well and it is different this time.
Because the reality of the situation is such a crisis they cannot afford not to let the plates stop spinning and they are doing whatever they can to keep them spinning!
An LTCM situation is probably no where near what could be on the cards!
Last edited:
roguetrader
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My concern remains as I pointed out in Post #5943, the lack of euphoric buying for a major top, and as such I see it simply as at or near a range top.
With regards to the 2000 top that you mentioned investors poured $132 billion into the market in the first 4 minths of that year compared to the $24.8 billion in 6 months this year..
With regards to the 2000 top that you mentioned investors poured $132 billion into the market in the first 4 minths of that year compared to the $24.8 billion in 6 months this year..
Racer
The reason being that on "average" the index contained far less "bubble" stocks than did the NASDAQ, that contained all manner of stocks completely devoid of earnings........ever!
While there are undoubtably many economic, social, and geo-political problems, "businesses" are currently on average, from a balance sheet perspective strong currently.
Now I am not advocating a screaming buy, as real bargains are relatively scarce. However, the market is not so overpriced that a large % correction is required to provide some real bargains.
Therefore, buying support will always blunt declines somewhere around the 10% mark.
In otherwords it is a rangebound market, and will remain so probably for a while. One salient fact of rangebound markets however is...........when the break finally arrives, it will be significant.
Currently, business conditions favour an upside break when it arrives
I would disagree with you here. I would say currently the market is "efficient", and reacts to news somewhat randomly, indicating that it is neither grossly over or under priced currently.
Has both a positive and negative connotation.
For the businesses, reduces costs, and impacts the bottom line positively.
From a different slant, will that be reflected in the topline, viz. reduced revenues?
Currently it would seem not.
However, with "Inventories" having been drawn down this quarter, there may be an increase in hiring to replenish said inventories.
Wages are linked to productivity and as inventories have been high, productivity must be low. As (if) productivity ramps up, so wages will follow.
You also need to look at average wages in respect to the industry.
The US runs 30yr Fixed rate mortgages, so anyone could, if they chose, lock in a very low rate for the duration of their mortgage. Whether they have, is another question.
However I remain conservativly bullish.
Cheers d998
The reason being that on "average" the index contained far less "bubble" stocks than did the NASDAQ, that contained all manner of stocks completely devoid of earnings........ever!
While there are undoubtably many economic, social, and geo-political problems, "businesses" are currently on average, from a balance sheet perspective strong currently.
Now I am not advocating a screaming buy, as real bargains are relatively scarce. However, the market is not so overpriced that a large % correction is required to provide some real bargains.
Therefore, buying support will always blunt declines somewhere around the 10% mark.
In otherwords it is a rangebound market, and will remain so probably for a while. One salient fact of rangebound markets however is...........when the break finally arrives, it will be significant.
Currently, business conditions favour an upside break when it arrives
I would disagree with you here. I would say currently the market is "efficient", and reacts to news somewhat randomly, indicating that it is neither grossly over or under priced currently.
Has both a positive and negative connotation.
For the businesses, reduces costs, and impacts the bottom line positively.
From a different slant, will that be reflected in the topline, viz. reduced revenues?
Currently it would seem not.
However, with "Inventories" having been drawn down this quarter, there may be an increase in hiring to replenish said inventories.
Wages are linked to productivity and as inventories have been high, productivity must be low. As (if) productivity ramps up, so wages will follow.
You also need to look at average wages in respect to the industry.
The US runs 30yr Fixed rate mortgages, so anyone could, if they chose, lock in a very low rate for the duration of their mortgage. Whether they have, is another question.
However I remain conservativly bullish.
Cheers d998
Bloody taxi drivers! It's O.K. when your waiting for them......but when there waiting for you it's a different story?...........Anyway! Jill, we will have to go out one of these nights? We can go round town......talk about trading (yawn).......have a laugh........get drunk......and at the end of the night......i'll give you one.......one of those KEBABS! All the best, Sweetheart! Sincerely, RUDEBOY.
Post 5999, RT. This is what is needed to be understood. Large amounts of money flooding the market or changing hands is not nessecarily calibrated immediately. Maybe a simplistic bare bones money management plan doesn't really hit the spot in realistic terms? It's not the market.....it's how we go about it, and i have my own serious doubts about my own trading at times......can i seriously compete with these guys? It's all down to money i suppose? RUDEBOY.
In the short term the Dow is has been ranging 10550 - 700 for 2 weeks now. So far it has failed to convincingly breach 10700 and the SPX has also failed to breach 1252. There does not appear to be any heavy buying but there is even less selling.Racer said:
The longer the Dow/SPX fail to breach the current resistance levels the more likely we are to see a break down through current resistance at 10550 - 570. We need to see an upside break through resistance this week toward 10800 but if this does not materialize there could be a break down through the existing support level and at least a 300 pt decline.
