The volume to price patterns indicate that it is still bear sentiment. I am betting Wednesday it will be another down. Looking for support coming to previous lows to buy in to good investment that has been dragged further into under value. I am looking at India because it is still suffering from that Santya scandal which will be over and done with soon and China if it comes down in sympathy with this Dow drop. Year 2009 is the Chinese Calendar Year of the Ox … a time to make the big bucks. The US economy can only look to recovery well into next year … unlikely Barrack-O can anything about that. However, favourable sentiment in the stocks will hopefully get a boost from all this Obama optimism. B
Asian Equities, Gold, Oil and Agriculture … **Buy Low and Sell High **opportunities abound. For most the buy low sell high thing is so easy to say but impossible to do.
lots of money being made by those that like to sell high and buy low as well… The trade service I use called for a short on Regional Bank HOLDR (RKH) on Jan 9 as it broke through its $69.46 low in December…today it closed at $41 and some change…very nice…also called for TWM (2x short on Russell 2000)…again very nice…I think this Obama guy is doing great!..now if he will just let me keep my guns to protect all this money…
And good luck to you Mate. Selling short is usually on margin leveraged intruments … and I’ll admit I don’t have the bollocks to play that game with consistent success. I’ve been there done that in the old days and whilst I have made some I have also got myself slapped silly. 1987 Black Monday I was trading the Nikkei Stock Index Futures holding both buy and sell positions. Unfortunately more buy than sell.
Did you notice how everything tends to happen in October?
You might think again on China. I did some reading on this today: http://www.economist.com/...fm?story_id=12833897
Now the experts are trying to understand China? How well did that go with our financial system? Whatever they say just do the opposite.
No need to think. It’s this kind of news that creates opportunity. When prices come down we go in bargain hunting into the intrinsictly strong investments with good values and good earnings and continued growth. News comes and news goes. What is a permanent thing for the next few years is that China is and will be the world’s largest and fastest growth region. That’s the safety net.
Also consider this - Credit Crunch and Liquidity problems are limited to America and the West. In USA you’ve had an overall drop of about 40% + on the Dow. In Asia the Governments and corporations have tons of cash. No liquidity problems. But stock indexes here fell by more than 60%! It didn’t take bad economic data and situation to make that happen and it won’t take good economics for these severely under values to rally. Bring on the bad news. Some of the strong investments already have PE ratios so extreme, you would have to go back to the 1930s to find similar figures.
The way I trade is to try to buy on technical support levels on down movements such as now that the Dow looks to be going down to test support again. When I am right the rebounds usually give fast returns and these are actualized for money still hot and back safely in the pocket. Since October last year a few nice trades have already come and gone and I’mm looking now again after tonight’s trading (your Wednesday) to get a better indication. If I happen to be wrong, I am buying at over all lows anyway into investments that won’t collapse but will hold value until they recover. It’s not so much of a money risk as a time risk. I’ll bet even Warren Buffet has to hold paper losses at times.
The markets are regarded as a beast out to get you when the masses get caught in the bears. I reckon the markets are a blessing available to us to make “free” money. We can work all our lives doing the daily grind dance and be just paying them bills each month. This kind of “free” money is what makes the difference. When Equities have done it’s cycle around end 2012 and reached new highs and most are feeling really good are happily and greedily buying up more, that’s the time to get out and start looking at property and other investments if they happen to be relatively low. Even if I miss out another 6months in the final rally, that’s fine. Main thing is to avoid the major down cycle. These days it’s getting even more difficult to predict a bear. In this last Bear market the market looked to be supported strongly at several levels on the way down not indicating technically that it was a continued major bear run. The last October week plunge was a blessing, because at least after that, we’ve got a much better idea of where the bottom level is and where the market will be by end first quarter this year. To many this plunge instilled fear believing that the market was like a bottomless black hole. To me the plunge is the bear blow out … at last. Markets have never plunged drastically and then immediately continued to just free fall after that. It has never happened and it is highly unlikely now. One of the main reasons is due to under values created which will form a basis of support. Now we have lot’s of under values. Even after the Tech Bubble burst where after the plunge most stocks were still over bought, there was support followed by a significant rally 2 months later up to the 6 month point.
For those who have cash, I reckon it must be an excellent time to pick up some gems in property around America right now. The more smack and bad rhetoric based on data interpretation the media puts out the better the opportunities. All this bad talk creates bad vibes which temporarily pushes the prices even lower than where they should be. Chances are you would only have to wait a year or so to get some pretty sizeable profits. If it doesn’t pan out then it’s just a waiting game but that money in will make money back … if not sooner then a little later.
Where I’m at I’ll do the Equities (China, India, Singapore, Malaysia) and other stuff (Oil, Gold, Precious Metals, Commodities) and look at property a few years down the road. If this short-term down can pull down some of the strong oil stocks of the bigger established high profitability companies over in your market … these may just be the ones to buy into when the Dow approaches previous lows. Just a generic example which may or may not be viable.
I’m a finance guy so I hear what you’re saying but the China ETF’s I tracked were only down 47% in 2008. If you want deep discount, you could always go with the Russian market which was down 74% last year
In the US we currently sit with almost $4 trillion in money markets (http://www.reuters.com/article/marketsNews/idUSN0743361420090107). With rates damn near zero, and the 10 year Treasury at 2%, I think we’re going to have a massive market movement here in the next 3-4 months. If you believe late 2009/ early 2010 is the economic turn around then that would be about right for the market.
You really want to play that game? The S&P 500 dropped 30% during Bush’s years in office (in nominal terms, the drop is much greater when adjusted for inflation). If you think it will do worse under Obama, please name your stakes Tex.
So Obama gets credit for the 280 pt gain in the Dow today, his first real day in office? Just curious.
AND ITS RAINING HERE IN CALIFORNIA!!! THE DROUGHT IS OVER!!!
I am in the markets for a job, and have been for a long time. I think it is fairly safe to say that political administrations have very little to do with the “macro” economy. Politicians are paid ~$100k and wall streeters are paid millions. Who attracts the smart people??? Presidents get credited or discredited for economies, and I think it is more luck or lack thereof. Not saying that have NOTHING to do with it, but the economy has natural ebbs and flows…lots of blame to go around on all sides for the ebbs AND the flows. Impossible for a politician to be all knowing and protecting…impossible. They are a human without a crystal ball.
Politicians are paid ~$100k and wall streeters are paid millions. Who attracts the smart people???
If you are one of the smart people then surely you know that the $100K is just the icing. Unless you are really deluded.
Of course I understand that…but you have to get to the absolute TOP in politics to get the “rest”. Wall Street pays their support this amount and doesn’t bat an eye…of course this is all changing, just like everywhere. But the fact remains that politicians cannot compete with the talent and have very little power over what is going to happen in the economy. Unintended consequences.
Money is not the primary motivator for a lot of people. POWER, something you really never have in finance. At least not like political power. There are just as many smart people in politics as finance, maybe more. To assume otherwise would be foolhardy.
You’re funny…the guy has been in office for one day, and the abysmal behaviour of the market is his fault and you compare that to him criticising Bush for the lousy economy when Bush had been in office for 8 long years…Hilarious.
