Calling the bottom!

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In my view, this is no longer a market . . . it's a casino -- speculators are driving the market, not investors. I don't view this as a healthy sign. When we start climbing 50, 75, or maybe 100 points a day I will be much more impressed than I am with a 900 point spasm, triggered by gamblers betting that an expected rate cut is good for a temporary bounce. If "buy on the rumor, sell on the news" still has any validity, I wouldn't be surprised to see some spirited selling once the rate cut is actually announced. What continues to worry me is that the underlying cause of this mess is still humming along unabated, i.e., the price of houses is still falling and the American consumer is still tapped out. Until we turn the corner on housing, I can't help but feel than any rally will be difficult to sustain. Bottom Line: I'm looking for some news that firmly suggests that houses have bottomed out -- until then, I'll probably just sit on the sidelines and watch the high-rollers play out their hands.
 
looking at the 5 day charts on Yahoo for the SP and they refresh every few minutes. looks like we are setting up a nice bearish divergence. i just hope we get one last push up to 970 or so on the SP 500 before it falls apart
 
Steve O said:
Anyone still think we've seen the bottom yet:(
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Were a long way from zero.
img_746718_0_63a18a1c7f3248ff7f22ad65f253b77c.gif
 
But it can't ever go to zero--the torture will just continue with 3 to 4 percent down every day, but mathematically zero won't ever get reached--it will just be Groundhog Day the Movie for the rest of our lives.
 
I fear it really is different this time:mad:

Dow just went under the closing low on Oct. 10
 
It's Zeno's paradox for stocks. At 3-5% a day, you never reach zero, but that's only if the percentages stay at 3-5% and don't go up. Those looking for total, classic capitulation haven't seen it yet, you know.

My head tells me anything can happen, but my gut says that the recent lows are roughly the bottom. We may pierce them, but not by far. Bad news at an "end of the world" level has been priced into every sector and every country. Nothing has been spared, leaving no more huge shocks left. Valuations are at reasonable levels by almost any measure. Things will improve given time.
 
I read an article (I don't recall where) that spoke to calling a market bottom and it has stuck with me. It goes like this: "You know you have hit a market bottom when NO ONE is interested in stocks anymore." So (based upon that remark) either this group is an exception or we are not yet near a bottom. :(
 
I'm thinking we are heading toward a much worse than 74, but much better than the great depression scenario. I'm thinking the bottom of the S&P will be about 800 for this year. Next year the low will be 700. And the following year the low will be 600. After that we'll be stating the slow climb up.
 
Grep said:
It's Zeno's paradox for stocks. At 3-5% a day, you never reach zero, but that's only if the percentages stay at 3-5% and don't go up. Those looking for total, classic capitulation haven't seen it yet, you know.

My head tells me anything can happen, but my gut says that the recent lows are roughly the bottom. We may pierce them, but not by far. Bad news at an "end of the world" level has been priced into every sector and every country. Nothing has been spared, leaving no more huge shocks left. Valuations are at reasonable levels by almost any measure. Things will improve given time.
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Grep: Interesting perspective -- about market equilibrium.

Equally interesting is the testimony today by George Soros to Congress. His take: it's different this time: markets equilibrium is a paradigm, but deep fundamental flaws in market mechanisms have capitulated to perfect storm pressures (my interpretation, he didn't use the 'perfect storm' phrase). He puts what we have seen in perspective and points to the original start of the problem (de-regulation or lack of regulation), also recommends some alternatives for regulation.

http://online.wsj.com/public/resources/documents/georgesoros.pdf

-- Rita
 
Bestwifeever said:
But it can't ever go to zero--the torture will just continue with 3 to 4 percent down every day, but mathematically zero won't ever get reached--it will just be Groundhog Day the Movie for the rest of our lives.
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Actually it can. Too many more days of -3% to -4%, and the bankruptcy judge will make it so.
 
My broker yesterday stated that he doesn't think things could go below 7200---something about the companies being valued exactly at their amount (their assets like buildings). We will see if his MBA in economics results in an accurate prediction!

I was trying to google 7200 and stumbled upon an article from May 5, 1997 that said the Dow set a new record: 7200! What a difference eleven years can make: jubilant at 7200, despondent at 7200.
 
Gotadimple: Thanks, I read the testimony.

The source of his "this time it's different" scenario is the explosion of credit that started decades ago, causing a "super bubble" that by turns engulfed and inflamed all other facets of financial life.

I view this as a somewhat similar argument to the gold and bullets crowd's denouncement of our fall off the gold standard. But there's no going back now, either to gold or to life before credit. We will not be back to "ninja loans" any time in the next 30 years, but we will be back to life as we view as normal one day. Indeed, the Fed is now focused on pumping credit back into consumer hands by any means necessary.
 
Culture, just because everyone is selling a stock and no one is buying, hence the price of the stock goes down, it does not mean that the company is going bankrupt. The health of a company and the price of its stock as traded publicly can be (and often is) entirely disconnected.
 
Grep said:
Culture, just because everyone is selling a stock and no one is buying, hence the price of the stock goes down, it does not mean that the company is going bankrupt. The health of a company and the price of its stock as traded publicly can be (and often is) entirely disconnected.
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Grep,

Certainly correct. What I was jokingly referring to is that if the market keeps falling, eventually everyone will go out of business because it takes customers to stay in business.
 
market is up

good chance this was finally the bottom, and i'm dumping one of my idiot newsletters this week
 
will probably check up on Dow Theory

Dow made a new closing low, but not intraday low. wonder if that's enough based on historical record or if it needs to make a new intraday low
 
So was the bottom today at about 1:45 pm??

image;size=239x110
 
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