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Why the big swings?
Old 10-15-2008, 02:58 PM   #1
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Why the big swings?

One thing that seems strikingly different this time is the number and frequency of multi hundred point swings up and down. Why? The market is at levels of 2003 and the late 90's. We saw a 50% drop in equities in the '01 and '02 bear market but not such wild swings outside of the post 9/11 attack. Bull vs. Bear, fear vs. greed, good news vs. bad news we have seem it all before but not with such big swings up and down in terms of numbers and percent on the Dow and S&P, what gives?
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Old 10-15-2008, 03:00 PM   #2
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Simply put -- people don't know whether to panic about what might happen or to rush in because it feels like a bottom and stocks look so cheap right now.

Fear and greed are very powerful investing emotions, but fear usually trumps greed in uncertain times.
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Old 10-15-2008, 03:04 PM   #3
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Because nobody thinks the economy will be worth a crap for the next couple of years. Doom and gloom for several months to come. My 5 day play is now a 5 year plan. Stocks suck!
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Old 10-15-2008, 03:08 PM   #4
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I have no answer for you but I am blaming the hedge funds... It's always fun to blame rich people...
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Old 10-15-2008, 03:09 PM   #5
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I heard/read and believed that institutional investors are "deleveraging" and have to sell to raise cash. In addition perhaps people are now opening their quarterly 401k statement and scream to their account custodian "SELL"...

I believe the story because I have been watching stocks that are traditional safe haven for a recession: consumer staples and utility stocks. They are all being sold now.

Too late to sell, too early to buy, in my opinion. Hang in there, keep your powder dry. Dawg, why aren't you golfing?
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Old 10-15-2008, 03:11 PM   #6
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Too late to sell, too early to buy, in my opinion. Hang in there, keep your powder dry. Dawg, why aren't you golfing?
Just back from golf. I guess I need to pitch a tent on the golf course and not look at the market for the next couple of years.
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Old 10-15-2008, 03:14 PM   #7
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But if you don't look, you may miss the market bottom
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Old 10-15-2008, 03:15 PM   #8
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See i knew we would have a big rally. I was just a couple days late.
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Old 10-15-2008, 03:16 PM   #9
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Because nobody thinks the economy will be worth a crap for the next couple of years. Doom and gloom for several months to come. My 5 day play is now a 5 year plan. Stocks suck!
Dawg, as someone with absolutely no medical training, I strongly advise you to stop looking at the market on a daily basis. I know it's like watching a train wreck, but really, you've got to give yourself a break.
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Old 10-15-2008, 03:20 PM   #10
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Dawg, as someone with absolutely no medical training, I strongly advise you to stop looking at the market on a daily basis. I know it's like watching a train wreck, but really, you've got to give yourself a break.
Where's my medicine?
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Old 10-15-2008, 03:20 PM   #11
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You guys are all wrong. It's a sign of the apocalypse.
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Old 10-15-2008, 03:24 PM   #12
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Oh, and one other thing: As soon as you see Bush, Bernanke or Paulson start to speak, short the crap out of the market immediately and cover at the end of the day. Might be a way to get some of the losses back. The market is clearly showing no confidence in this trio. Every time they talk, the market goes into a death spiral.
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Wild Swings
Old 10-15-2008, 03:25 PM   #13
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Wild Swings

My guess is Greed is still at work and those that rode the 900 point wave two days ago are cashing in. Chances are tomorrow or Friday they will jump back in and we will see another good uptick followed by another drop next week. There is money to be made in the short swings. The wide swings will eventually settle down and the long slow plod back to 14000 will begin again...
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Old 10-15-2008, 03:28 PM   #14
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Quote:
Originally Posted by shotgunner View Post
One thing that seems strikingly different this time is the number and frequency of multi hundred point swings up and down. Why? The market is at levels of 2003 and the late 90's. We saw a 50% drop in equities in the '01 and '02 bear market but not such wild swings outside of the post 9/11 attack.
The previous time period focus was primarily a market segment - tech stocks (although other stocks got caught up in the overvaluation)

Currently the focus is macro - world wide liquidity, recession, it is/will (today's focus on retail sales) focus on micro issue over time resulting in the swings.
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Old 10-15-2008, 03:29 PM   #15
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Originally Posted by Notmuchlonger View Post
See i knew we would have a big rally. I was just a couple days late.
Maybe you were a couple days early and the markets are trying to get as low as possible to make the NML rally look even bigger....
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Old 10-15-2008, 03:32 PM   #16
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The previous time period focus was primarily a market segment - tech stocks (although other stocks got caught up in the overvaluation)
I think unlike when the tech bubble popped, there were still undervalued segments of the stock market -- small caps and REITs in particular never much participated in the run-up from 1998 to early 2000. So when the tech bubble popped and spread to large cap U.S. stocks, some of that fleeing money went into small caps and REITs for redeployment. Folks who diversified asset classes didn't get badly hurt if they weren't overweight tech.

The only thing that works this time is government-guaranteed cash.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 10-15-2008, 03:35 PM   #17
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Just thinking out loud: Could it be the increased number of people on the Internet? More people checking online throughout the day, watching analysis, easily selling or buying shares?



True, people could do that in 2003, but now it's easier than ever, and even grannies have their computers.
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Old 10-15-2008, 03:40 PM   #18
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Where's my medicine?

Dawg, if you could do me a favor? I've got a buy order in for BUD at $50, and I suspect if you took the weekend off from medicating yourself I'd get the price drop I need. Thanks.
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Old 10-15-2008, 03:41 PM   #19
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Just thinking out loud: Could it be the increased number of people on the Internet? More people checking online throughout the day, watching analysis, easily selling or buying shares?

True, people could do that in 2003, but now it's easier than ever, and even grannies have their computers.
I believe that is EXACTLY it! I think when people could only check stocks once a day, and usually in hindsight, it tended to smooth out this sort of thing. Now that anyone can be a daytrader everyone is trying to be faster ,and faster at timing the market. Plus there all of those automated software engines out there now that will automatically buy and sell stocks once predetermined limits are set.
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Old 10-15-2008, 03:42 PM   #20
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what big swing? i didn't notice any big swing...
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