How do you interpret the recent market rally?
konsole
Posts: 788 ✭✭✭
With the DOW 1300 points off its low of 6,500, how do you interpret what this rally is?
Is it a slightly larger then normal bear market rally?
Are people getting a little bit too optimistic with the recent "ok" news?
Do people genuinely think the economy is starting to recover?
Is it a slightly larger then normal bear market rally?
Are people getting a little bit too optimistic with the recent "ok" news?
Do people genuinely think the economy is starting to recover?
0
Comments
Seriously, the market fell an average of 1% a day for 20 straight days just before this rally. Did anyone ask whether that was normal?
I'm not trying to be rude, just placing perspective as I think it makes the picture much more clear.
Knowledge is the enemy of fear
Edited to be safe...
If they think 'recovery' is here, perhaps the other attendees won't be pushing so much for another reserve currency, or gold and silver backing.
I think its for keeps. The stock market will lead this country out of the recession. People can feel a little better once that rule is back in place, it lessens the impact hedge funds can have shorting the market.
Over.
roadrunner
<< <i>How do you interpret the recent market rally?
Over.
roadrunner >>
LOL, POTD!
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<< <i>The very DAY that it was announced that there ia a good possibility the 1934 uptick rule was coming back was the day this rally started. ....People can feel a little better once that rule is back in place, it lessens the impact hedge funds can have shorting the market. >>
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A one-cent rule will not really have any impact.
An 8-cent rule - maybe even a five-cent rule - would slow the
momenetum that is necessary to destroy share prices.
The LONGs in the market like such "rules," so they have reacted
favorably to the sundry contemplations.
I have been trading for decades. When I first started, I thought I
was getting a great deal when my broker said I could do round-trips
on the phone for less than $60.00. (Now, the same trades can be
made for a lot less than $8.)
The US markets would collapse w/o SHORTs. I do not want to harm
them; I am one of them, when it is appropriate. Some companies
are so bad that they need to be killed. Blaming the SHORTs for the
recent crash is like blaming the iceberg for sinking the Titanic.
BUT, if I was legally allowed to do what I know how to do, I would
be a dangerous trader. Today, HUNDREDS of traders/marketmakers
illegally conspire to defraud the system with NO fear of being busted.
To revitalize the markets and get J6P encouraged to play , MANY perp
walks need to happen. Not Madoff characters going down, but ordinary
traders and small/midsize MMs. They are the players who have caused
the damage to the system. The folks hired to police them were either
incompetent or complicit; I dunno which.
Naked SHORTs
................................
My "bold" prediction is that this rally is "real." The sentiment is still VERY
bearish; this gives me confidence that the trend is UP. The crowd is almost
always wrong.
Folks who like to buy stuff and hold it for a bit, can likely feel safe if they
start to accumulate on new weakness. The bites need to be SMALL and steady,
until their basket is as full as their comfort level allows.
Traders can get rich during this period, if they are willing to work hard at the JOB.
<< <i>How do you interpret the recent market rally?
Over.
roadrunner >>
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<< <i>How do you interpret the recent market rally?
Over.
roadrunner >>
Surely roadrunner isn't running out of words. Tell me again how every major bank is going to collapse. Haha.
BOA is making money hand over fist and will pay off the tarp money late this year or next year. They could even pay a nice dividend again except their keeping more capital on hand to be safe.
<< <i>The very DAY that it was announced that there ia a good possibility the 1934 uptick rule was coming back was the day this rally started.
I think its for keeps. The stock market will lead this country out of the recession. People can feel a little better once that rule is back in place, it lessens the impact hedge funds can have shorting the market. >>
I'm not sure how you mean the uptick rule will answer the nagging question...is this rally for real? And the stock market will not get us out of recession. It's the confidence required by business to keep and hire, to produce, to plan for the future, to expand... And that confidence won't come until business can figure out this administration's intentions. And right now they are holding back. Also, confidence needs to come from other countries. They need to see that we are not just going to print our way out of this. Bigger government is not the answer to a recovery...not even this one. Let the bad banks and businesses go out of business. I'd rather have lots of pain now instead of decades of pain for my children. Hold the politicians responsible. Term limit them. Scale back government. Promote savings and paying off debt. Deport illegal immigrants...they cost us more than what they are worth. And, repeal all amendments that were put in place in 1913.
We are going sideways for years. Right now the market is looking for a new trading range. Just like 1966-1982 markets, trading is the only game. Buy and hold may be ok if you're 18 years old.
Comrade Renski
I am a trader and as I have stated a dozen times, there are MANY, MANY ways to get around it. I know, I've done so. The repeal made it easier, but thats all. LEH, BSC, C were going to collapse, just as SCMR, JNPR, MSTR were going to collapse 8 years ago---incidentally when WE DID have an uptick rule.
Knowledge is the enemy of fear
all downhill since then.
http://www.businessinsider.com/uptick-rule-legislation-goes-to-sec-2009-3
them; I am one of them, when it is appropriate. Some companies
are so bad that they need to be killed. Blaming the SHORTs for the
recent crash is like blaming the iceberg for sinking the Titanic.
Maybe so. Naked short selling is the real concern since it acts as a means to dilute the company's stock and harm the real shareholders. But shorting via momentum (naked or otherwise) certainly helped GS and others who planted the seeds of CDS/MBS failure in so many companies, then shorted the crap out of them via their own "stress tests" knowing that they could not survive. It was a sure bet.
Tell me again how every major bank is going to collapse.
Considering that half of the big boys have already collapsed and the balance sheets of JPM, BoA, and Citi are in even worse shape, it only stnads to reason that just because the FED/Treasury and helping these guys stand up like "A Weekend at Bernie's," doesn't mean they haven't for all intensive purposes collapsed. There isn't a major league bank left is not technically insolvent following GAAP style accounting and M2M rules, not a single one.
That's funny to think BoA is making money hand over fist.....yeah, just as fast as the Treasury can shovel it to them, either through AIG or via another one of the alphabet soup 4 letter word accounts. The FED certainly wants to give all the appearance that the banks are making money. But those off-balance sheet derivatives will drag them right back to insolvent reality. Let them publically state that they are making a few billion meanwhile they have hundreds of billions to trillions in toxic assets attached to them. I think there are better long term bets out there. But I did learn one thing from the major banks the past 2 weeks: bankruptcy can be a means to success, esp. in one's share price.
I don't really see the bearishness that Storm888 sees. From my point of view there has yet to be a washout mentality in this market. The put/call ratio is very low Volatility still low to medium. Most people still think "highly" of stocks and real estate and can't wait to be back in the market with both feet, if they aren't already. And that's not the way to start a true bull market. What we need is the "I'll never buy stocks again" mentality that was prevalent in 1932-1933 and in 1982. Those were washouts. What we likely have is a bear market rally - a corrective "B" wave back up. Reggie Middleton had a good article on this at safehaven.com today. We've already had the fastest and largest move up ever....over 20%. RM notes that the last few times a move like this occurred during a cyclical bear, the next move retested lows or went lower. We never had the real washout back in 2002-2003 and we haven't seen it yet in 2008-2009.
roadrunner.
<< <i>Pretty interesting BUT how do you explain that the raging bull market was killed in mid july 2007 when the uptick law was done away with?
all downhill since then.
http://www.businessinsider.com/uptick-rule-legislation-goes-to-sec-2009-3 >>
Purely coincidence.
Did you know that the repeal of the uptick rule was actually done piecemeal? It didnt come off all at once. It was done in series, during a testing process that lasted almost a year.
Housing peaked about a year earlier --2006. It was only about a year after that this that mortgages started to default in earnest which created stress in the credit markets. THIS is what started the stock market on its slide. It was further compounded by a massive spike in energy prices which further taxed individuals and corporations. THAT is why the market is down, not because of the repeal of the uptick rule.
Knowledge is the enemy of fear
Buying GE today boys, get in or get left behind.
There's extreme bearishness on this board, but out in the real world where most people spend their time there's a lot more optimism.
It would be great to know when you sell too!
On another note, I was just wondrin'...............
The Treasury puts up 7% and a private investor/fund puts up 7% to buy a toxic asset. The "government" puts up the remaining 84%.
If the darned thing goes up, the Treasury and the private investor/fund split the gains, right? And if the darned thing goes down............
The Treasury and the private investor/fund split the losses, right?
That's dandy for the first 14% of downside. After the first 14% of downside, the taxpayer eats it. All of it.
The way it looks to me, the taxpayer is providing free leverage to both the Treasury and some private investor/fund for the downside protection with no benefit on the upside.
This, my friends, is what Geithner and Congress can do for you.
Added: another thought - what's the difference between the Treasury's 7% and the "government's" 84%. Some of this utter nonsense just escapes me entirely.
I knew it would happen.
time to pool up money before it bottomed. I thought it would take
until the next spring.
I can't believe that nobody called me on that quote.
I knew it would happen.
to it more then a few times in the future. What Cramer saw,
as a bottom, was probably his belly button.
Camelot
<< <i>Buying GE today boys, get in or get left behind.
It would be great to know when you sell too! >>
I'm in no hurry. GE earned 18.1 billion in their just completed fiscal year. Yet the stock has been hammered unmercifully.
I've got a good game plan. Load up on high quality stocks, most with a decent dividend, which I reinvest, then simply wait.
I bought some John Deere shares a couple weeks ago at 28, already have a good profit there. So that's when the choices come in, sell quickly or just hold since its a high quality company anyway there's virtually no risk holding.
Knowledge is the enemy of fear
<< <i>no risk
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ditto
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Edit To Add.
I have been on the GE ride, too.
I will dump it, if it gets to $12+. I don't care if it goes to the moon after I dump.
It was beaten up for good reasons.
GE has about as much "toxic" paper as any medium-sized bank could.
$5+ was too cheap. $12+ might be a little rich.
.......................
I love DE, too.
I am just not sure if folks will buy a new machine, or buy parts for the 10-year old models
.
Um, I bought my X340 last year. Nice machine, but I don't know if I'll be buying another model anytime soon.
I knew it would happen.
Since it appears that the business economy and the administration in DC have severed ties...........it will be interesting to see WHAT DC says and WHAT DC does in the next 6 months. Frankly, I do not trust DC at this moment and reinstating trust will be next to impossible.
Good luck guys.
CNBC has dumped Dylan Ratigan.
Allegedly, the parent company, GE was under pressure from one of its bankers; GS.
Ratigan repeatedly refused to drop his ongoing rant about AIG's $15B+ payment to GS.
Ratigan called it, "The greatest financial fraud in history."
Reports say Ratigan is quickly headed to FOX Business News.
Takes me back to my Wisconsin summers as a ute.
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Parts are certainly a great savior for truck makers; civilian and military.
Government buyers are now asking third-party makers to bid for parts
contracts, and cutting back on the higher priced OEM parts.
Civilian outlets also often offer non-OEM stuff at a discount.
The trend can harm machinery makers' revenues.
There's extreme bearishness on this board, but out in the real world where most people spend their time there's a lot more optimism
Also in the real world --people's IRA's are down 35-50%. The value of their home is 10-30% down. The value of their cash savings is down 5-10% per year. That's just the financial side of the current problem.
I think that they must be too busy living life to realize what a hit they have taken the last couple of years. I'd say that some have confused optimism with surrender.
Many younger people in this day and age are very care free. I attribute this to many of them never experiencing anything but an upward trend in the US economy. They have never known what it is like not to have anything less than plenty.
Geithner's new PPIP plan will probably require the "investors" to pay well over actual value for the "illiquid" but "ready to perform like gangbusters" toxic assets. They will be then be moved off the banks balance sheets and forgotten about for a while as they are deposited in a dust bearing account. They will end up being losers for the taxpayers and the govt, but the "investors" will probably get some back door benefits far exceeding their initial donation for having "helped out" in a time of need.
roadrunner