HOLY SMOKES : Did i read this right? Dow below 10,000 S&P;1,100 Nasdaq 1500. Is this possible by October?

The world powers wants a strong dollar even if there is no fundamental reason for the strength. They want Euro down and USD up, but it will not last.



Just about every Euro bank is being mindlessly supported they have stopped short of a coordinated intervention as that look too much like panic and anyway they don't have the money for it. Latin America is now in trouble too and they are rushing to treasuries. In fact, look at how the world is rushing to treasuries. In a sewer the most desirable place is the rock without so many rats. It's not that it's desirable place to be per se. We caused it and temporarily we have a strong currency.



Watch as the Dow continues to crumble as we work out how badly we screwed ourselves. The mysterious reason for the tumble? Well about 100M of us are somehow involved in the market and the smart ones don't wish to play anymore. Treasuries and the dollar will be King for a very short while as they also pile into treasuries and then PROOF! Watch our dollar sink like a rock.



Gold will be King in times of instability like we are in now.



Trojan, we may be in a deflation right now, but how long will it last? Probably just til after November 4th when Mr. Paulson will start firing his deflation fighting bazooka. He will have enough ammunition to fire seven million million, 7,000,000,000,000 dollars of liquidity directly into the markets with pinpoint accuracy. HELLO Inflation.
 
[quote author="PANDA" date=1222989032]

The Stock Market is SO EVIL. Muzie, I agree with 100%, you could of totally bought yourself a brand new 700 series BMW instead of losing 15% in the stock market this year. Atleast you can enjoy that loss by driving in style. I think you told me that you are 66% in cash right? I am still 50% Cash / 25% Foreign Currencies / 25% Gold and my (25/25 allocation) is getting eaten alive today. Not selling any of my holdings though... Still holding tight.

</blockquote>


To be honest a lot of that 15% loss was because of my poor attempts to time things and I let myself get driven by emotion. As I said I covered my shorts at the peak of the current shorting ban.



I've come to realize the daily price price fluctuations have NO VALUE WHATSOEVER and I've stopped reading news about the market/economy daily, focusing on weekly updates. Had I done that I wouldn't have been whipsawed and probably would have walked away with gains instead. Don't even know if I'm up or down this week, really, and don't think it matters. If you have a store, just because the store in front is having a special one day sale with 50% off doesn't mean you need to mark down your whole inventory 50% for the year. Or, coming back to the stock market, just because one day some mo-mo traders think your stock is worth 10% less doesn't mean the other 95% of market participants would be willing to transact at that price. Keep that in mind.



As for what we are now, I think now the picture is getting muddled. Frankly there's too much panic on the market indices right now and I'm thinking for me shorting again is getting a bit dangerous - at least on the general index. We're at the point where everybody knows house prices are going down, and the most exposed banks have failed already. Regional banks seem overvalued still, but there's few of the big banks let, all of which are under the government's protection.



I wish government hadn't intervened in the markets. All they achieved was more overall wealth destruction. Many shorts were burned, and hedge funds who relied on neutral strategies were as well. The implicit government put fooled a lot of people into investing in banks too early as well. The impossible volatility they created made people suffer on both sides.



I'm still trying to figure out what my strategy will be. The bull market isn't coming back. But as for the bear market, I'm thinking this is the point where we discover whether this is a normal bear market and a recovery begins soon or if this IS the great depression type of crash that will shoot things down another 30%. There are way to make excellent profits in any type of market environment, if one can read what the environment is.



One good thing is I learned much more in this bear market than the bull market. About the markets, the government, and myself.



And one thing I've learned is I need to spend a bit more. It's OK to be a big saver but when you save almost all of it you put your entire future at the mercy of other market participants, no matter what you invest in.
 
[quote author="usctrojanman29" date=1223231836]

Last time I checked the US dollar has been rallying while gold has been flat. But I'm talking about commodities excluding gold...check out the price charts for oil, gasoline, wheat, corn, sugar, copper, etc. All that stuff got shot up to the moon by speculators just like housing prices but a lot quicker and now they are crashing back down to earth. You can talk about inflation all you want, but if you look at the charts you'll see that inflation just isn't there. Just please don't tell me that the rest of the will not enter into a recession like the US because so goes the US so goes the rest of the world.</blockquote>


Usc,



There is no doubt that commodities are heading down according to the charts you provided from bloomberg. But this is merely price movement in reaction to deleveraging and repatriation of the us dollar in order to service debt. We should shift our focus away from the short-term charts and think about the fundamentals. Has there been a major oil discovery which has been put online and is providing the world markets with enough supply to drive down prices? Copper? How about the harvests for corn and wheat?



I believe the definition of 'inflation' that I am referring to is "an increase in the money supply". We can see this through the coordinated global efforts to lower interest rates to give the dollar buffering from a collapse. I'm sure the world will enter recession, but it will be experienced differently based on the dynamics of each country's economic situation. And for the US (debtor nation owed to foreign countries, service sector), the amount of pain will be harsh.
 
<a href="http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSHA10179120081005">China to launch stocks margin trade, short sales</a>



Say what you will, and I don't always agree with Panda's ideas, but I find this development very bullish for Chinese equities (especially allowing shorts, which I think can have a stabilizing effect).



China's coming in from a situation where it's getting NO benefit of the doubt and everybody's giving the US market way too many chances. To put this in perspective, the US financial sector, which now even the mainstream acknowledges as potentially insolvent as a whole, is down less than the entire Chinese market. The worst of our market is better than the best of theirs? Right.



This looks to me like a clear movement towards freer markets. Not saying I'm going to buy chinese equities tomorrow... but this is interesting.
 
Dow hit under 10,000 today. Dow below 10,000 S&P;1,100 Nasdaq 1500 is the title of my thread has now come to pass in the month of October.



I recommend all of you to get out of the U.S. stock market before it is too late. Be in Cash if that is what you need to do. Keep as much reserve as you can as unemployment numbers will continue to rise, be frugal, cut down on costs, and don't get laid off. I prefer hard currencies over the dollar, and Gold/Silver over hard currencies, but being in the U.S. dollar right now is much better than being eaten alive in Stocks. Good luck and may God bless all of you.
 
PE ratios still about 20, in the bottom of a recession PE ratios run around 10.



This means DOW 5000 is possible.



Be afraid, be very afraid.
 
[quote author="alan" date=1223330151]PE ratios still about 20, in the bottom of a recession PE ratios run around 10.



This means DOW 5000 is possible.



Be afraid, be very afraid.</blockquote>


PE Ratios for the equities markets at the bottom is usually related to the returns in competing investments. The bottom in 1981 had a PE around 6 because interest rates were very high so it made more sense to put your money into debt than into equities. With interest rates and bond yields at historic lows, there are no competing investments paying higher yields. There is a lot of cash on the sidelines sitting in short-term treasuries making next to nothing. The first hint of economic stabilization will probably knock this cash off the fence and back into equities before PEs get anywhere near 10.



That being said, the carnage in the equities markets right now is breathtaking...
 
[quote author="IrvineRenter" date=1223330819]



That being said, the carnage in the equities markets right now is breathtaking...</blockquote>


Yes, i've seen about 30% change in some of my accounts. One account lost 300k before I just yanked it all out and am letting it settle. So now i have a little bit of money burning a hole in my pocket.... oh oh oh ... let buy! :lol:



-bix
 
[quote author="lendingmaestro" date=1223331453]Just think, some people are still oblivious as to what's going on. They're out there shopping for 600k HOUSES!!!</blockquote>


I am embarrassed to say that even knowing what might be coming down the pike, we got pretty close to buying a house this summer. I was disappointed off and on that we didn't until the $^!# hit the fan. The cash that is our down looks far better in CDs than it does locked into a house.
 
Just take a deep breath. It's pretty nerve-racking, yes. My heart is pumping even though I have 66% in cash. Without shorts, my losses are pretty substantial even with only a 33% position. Pulling everything out when the market is already down 6% isn't the best plan.



Even if we go lower, there's bound to a bounce here soon.
 
[quote author="muzie" date=1223338790]Just take a deep breath. It's pretty nerve-racking, yes. My heart is pumping even though I have 66% in cash. Without shorts, my losses are pretty substantial even with only a 33% position. Pulling everything out when the market is already down 6% isn't the best plan.



Even if we go lower, there's bound to a bounce here soon.</blockquote>
looks like when all the hopes for bounce will fade then only it will happen. now to me looks like fed is gonna come up with a emergency cut of 50 pts.
 
What is the real story here?



Is this an opportunity due to the credit crunch. Are institutions such as colleges that can't access their money market funds which were frozen now dumping their long term equities to pay bills. Are hedge funds selling to pay off their investors pulling out money. Isn't this just one aspect of a big bank run?



Why didn't Roubini call this, did he miss something?
 
We are entering the "Panic" stage at this point.

The Equity Markets "Capitulation" point is still down the road.

It may be weeks away. This is very dangerous indeed.
 
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